The Warren County Downtown Economic Development Authority is considering hiring a consulting firm to help ensure the area is getting all the state TIF revenue it is entitled to receive.
At a recent authority meeting, representatives of Commonwealth Economics of Lexington made a pitch for their consulting services.
Tax Increment Financing districts allow local governments and businesses to get a portion of the increased tax revenues that are a result of new projects and business activity in the state-approved districts. Bowling Green’s 325-acre TIF district, which spans from the Western Kentucky University campus to the riverfront and includes projects such as Bowling Green Ballpark, Stadium Park Plaza and the Southern Kentucky Performing Arts Center, is the largest in the state.
“It’s also the most complicated TIF out there (with) numerous stakeholders,” said Tom Howard, a partner with Commonwealth Economics.
The state has returned more than $8 million to local entities since the local TIF was formally started in 2007, with increasing amounts every year.
But the formula used to determine how much revenue is returned to local entities that are part of TIF projects is extremely complex.
“The reporting requirements for the state are very laborious and time consuming,” said authority chairman Doug Gorman. “It’s also very exact – it’s not just pushing a button.”
An example of the complexity came last year.
“TIF revenue typically comes in mid-July. We waited till October because we were going back and forth with the state” on the amount that should be returned locally, Gorman said.
As a result, the TIF revenue returned to the area was increased by almost $100,000 to $2.1 million.
Glasgow’s Alliance Corp. was the TIF district’s master developer, responsible for much of the accounting work, but that contract ended in 2014 with most of the major construction projects in the TIF complete.
The authority is a volunteer board with no employees, and while Bowling Green Chief Financial Officer Jeff Meisel and Warren County Treasurer Greg Burrell recently were named to the authority board because of their financial expertise, “it’s a hard learning curve,” Gorman said.
During last week’s presentation, Howard said his firm was the state’s leader in TIF consulting and related work, with clients and projects including the Omni Hotel in Louisville, Lexington Convention Center renovation, the University of Kentucky, city of Owensboro and University of Louisville Foundation, among dozens more.
Commonwealth Eco-nomics founder John Farris was secretary of the state’s Finance and Administration Cabinet in 2006-07.
“Their background and experience is what we are very interested in,” Gorman said.
The consulting contract would be for about $99,000 a year for a wide range of TIF-related services, including reporting, working with state entities and project assessments.
Mesiel asked if it was expected that the firm could get more than that returned locally in extra TIF revenue.
“Without all the data, we don’t know. I would hope you get more,” Howard said.
“That’s what we would shoot for,” Gorman said of recouping the entire contract cost in additional TIF revenue.
Meisel echoed that sentiment Wednesday. “That would be my goal,” he said.
The authority took no action on the proposal. Instead, Meisel and Burrell were slated to meet with Commonwealth Economics officials this week to gather more information before making another presentation at a future authority meeting.
“I think they can be very useful. We have to figure out exactly what they’d do for us,” Meisel said.
Gorman said an ultimate decision will be based on what’s best for the area.
“We want to make sure we are getting 100 percent, and not a penny more or penny less, of TIF revenue,” he said. “This is money that helps our community.”