City staff reviews TIF 2 and 3 projections; DART reimbursement requests still pending

City staff reviewed draft budgets and projections for Tax Increment Financing (TIF) Reinvestment Zones 2 and 3 at the July 16 Richardson board meeting, outlining revenue and expense assumptions ahead of certified tax values expected the following week.

For TIF 2, staff reported a projected taxable value for the coming fiscal year of "a little over $1,300,000,000" and estimated city taxes finishing the current year at about $4,600,000 and rising to roughly $4,800,000 next year based on the current tax rate. County contributions were projected at about $966,000 this year and just under $1,000,000 next year.

On expenses, staff said the board has allocated a developer payment of roughly $4,900,000 for the current fiscal year and projects that payment to grow to about $5,300,000 next year based on value increases. Staff explained that DART was projected to receive an allocation this year (previously estimated at more than $6,200,000) but has not submitted a formal payment request with supporting documentation; the city is carrying that DART-eligible allocation forward until DART submits paperwork.

Staff noted the TIF fund balance projections reflect the unspent DART allocation: "we have rolled that forward and put it into next fiscal year," the presenter said. If DART ultimately submits eligible expenses, the city intends to pay from available TIF fund balances and then draw down future increment allocations in subsequent years as tax revenue arrives.

For TIF 3, established alongside TIF 2, staff reported a base value of $11,000,000 and a projected coming-year value of about $279,000,000. City tax receipts were projected at roughly $955,000 for the current year and $970,000 for the coming year. Developer payments there represent 55% of the increment (from the city's 66.67% contribution); staff projected paying about $1,300,000 to DART next year if DART submits its packet of eligible expenses.

Board members questioned how appraised values and the eventual city tax rate would affect revenue estimates; staff reiterated that certified values and the citywide tax-rate decision will refine the numbers and that the staff will incorporate final figures into the city manager's budget presented to council.

A board member asked when TIF 2 and 3 end; staff said both zones expire in 2036 (TIF 1 expires in 2031). Staff said that once all obligations are satisfied, any remaining, non-contractual balance could roll back to the general fund, subject to the developer agreements and applicable state statute.