Bonham, Texas -- To a growing city like Bonham, the acronyms just keep coming. Bonham will soon have its first PID -- Public Improvement Districts are created to finance public infrastructure. Residents who live within the PID will typically pay an additional assessment that is based upon the improvements that were made for the development, but receive better amenities that often include walkways, parks, public swimming pools, boat docks or other public infrastructure which must be open to the public, built to city or county specifications and eventually deeded to the corresponding city or county.
A TIRZ is another mechanism cities and counties use to strategically generate improvements in a designated part of the city. Tax Increment Reinvestment Zones (TIRZs) are special zones created by city council, or commissioners court, to attract new investment in an area.
According to Comptroller.Texas.gov, A Tax Increment Reinvestment Zone (TIRZ) project jumpstarts development to get things moving a bit faster and, ultimately, to generate new tax revenue. The benefits of a TIRZ include: building needed public infrastructure in areas lacking sufficient improvement to draw businesses; boosting development, which grows property values and long-term property tax collections; and lessening the cost of private development by providing reimbursement for qualified public improvements.
These zones help finance costs of redevelopment and promote growth in areas that would otherwise not attract sufficient market development in a timely manner. Taxes attributable to new improvements (tax increments) are set-aside in a fund to finance public improvements within the boundaries of the zone.
To initiate a TIRZ (Tax Increment Reinvestment Zone) the city will determine a base amount of property tax and sales tax revenue from a base year and then reinvest the additional property tax and sales tax revenue in subsequent years back into the specifically designated TIRZ area.
"Downtown Bonham has always been interesting to me and BEDCo [Bonham Economic Development Corporation] has taken the initiative to hire HH Architects to develop our TIRZ concept," says Sean Pate, Bonham City Manager. "Our shared goal is to create a vibrant downtown with a focus on the 1888 courthouse. We have a historic downtown square and we want to capitalize on that."
The architect's study is necessary to prepare a preliminary financing plan, which is the first step in this process. Business owners and a steering committee will provide input to the architect.
The second step is to publish a public hearing notice.
The third step would be to hold a public hearing in order to discuss benefits to the municipality and to property in the proposed zone, as well as allow all interested persons to speak for or against the designated zone.
A majority vote of the governing body at an open meeting is required to approve the ordinance or order.
Once the downtown plan is adopted later in the year, a list of projects will be identified within the plan to be used to create the TIRZ and those will be part of the Capital Improvement Plan within the TIRZ. Then, over time, the TIRZ funds can be used to pay for the improvements either thru capital financing, development agreements, and straight cash-flow payments. A TIRZ typically lasts 20 to 25 years.
Termination occurs when all project costs, tax increment bonds and interest on those bonds, and other obligations have been paid in full; or the city that created the TIRZ can terminate it by approving an ordinance that designates a termination date.