Jim Carson sent the following to Dan O’Leary in response to his reasoning on the need for a TIF Refinance. It is so good, I thought it best to add it as its own post.
For too long, the City of Keller has treated its Town Center TIF [TIRZ] as some ne’er-do-well brother-in-law to whom we grudgingly loan money in hopes that maybe someday he’ll pay us back. The Town Center TIF was, is and always will be a project of, by and for the City of Keller. Everyone understands that the school district gave up 20 years of incremental tax revenue in return for a Natatorium. The Tarrant County entities signed on as a calculated bet that their tax revenues would be dramatically higher after twenty years of forebearance.
But it was the City of Keller that held all the cards. It was we who took the risk. It was we who would have reaped the rewards. And it is we who must now accept responsibility for its failure. The first order of business is for the city council to dispense with this talk of “subsidizing the TIF” and replace it with “paying for our losses.” It is just wrong to say “the TIRZ design has not paid the costs for this debt.” Intellectual honesty requires that we now say “our TIRZ design has not paid the costs for our debt.”
You did not create this mess. Neither did I. And sadly, neither did the voters of Keller, as they were never offered a vote in the matter. But the voters, and you, and I, inherited this problem. It is not fiscally responsible to punt our problem to a council and taxpayers a decade from now. Nor is it a “no brainer,” as the mayor suggested.
Many of the arguments you and the council members have offered in favor of this proposal amount to “these are conservative estimates, and if the TIF outperforms then we’ll be able to call the debt early and not incur so much interest.” This argument is both circular and specious. If the TIF begins to outperform, you’ll be able to make up the very shortfall you’re trying to wish away with debt. You will have solved a non-problem.
Your final paragraph disappoints me greatly. If the TIF had succeeded, would some other entity have provided the fire, police and other services? It is ridiculous to call this a subsidy. Again, we have met the TIF, and he is us, not our brother-in-law.
I strongly supported you as city manager, and still do, but it hasn’t escaped my notice that your only proposed solution to the TIF shortfall is the one that makes your job easiest. I would suggest that it is your responsibility to offer alternatives to the city council, and the people of Keller, that include cost-cutting measures in lieu of additional debt. I would be happy to offer some off the top of my head, or even sit down with you and the mayor and staff and go through the budget.
Several times in Keller’s recent history we have had Town Hall meetings to discuss specific spending increases. Is it not time to hold some Town Halls to discuss specific spending decreases?
Update: My commentary above won’t make a lot of sense to those not well-versed in TIF issues. For background, read Doug’s prior post, Let’s Just Refinance It Again.