On September 13, 2018, the Board of Directors for Tax Increment Reinvestment Zone Number Three (TIRZ No. 3) approved a recommendation to the City Council, for approving the proposed Fiscal Year 2019 budget. The recommendation is made in accordance with City Ordinance No. 1667, the Zone's creation ordinance which grants final budget approval to the City Council.

Fiscal Year 2018 

FY18 total revenues are projected at $624,836, which is $3,109 less than anticipated. Expenditures are projected at $647,705, which is $3,047 less than budgeted based on incremental taxes received to date. The Tri-Party Agreement approved in 2016, created a $200,000 reserve to be used for TIRZ administration. The beginning reserve balance for FY18 is $65,726. After the use of $22,869 in reserve funds in FY18, this gives us an ending reserve balance of $42,856.

The Tri-Party Agreement assigns 98% of TIRZ revenues to the Imperial Redevelopment District (IRD) in support of contract revenue bonds. Based on revenue received in FY18, the IRD will be assigned $612,339 from FY18 revenue. The remaining 2% is designated for administrative costs of the TIRZ in addition to the funding noted above. The fund balance is anticipated to be $0, which is in alignment with the Tri-Party Agreement that establishes the utilization of 100% of TIRZ revenue.

Fiscal Year 2019

Revenues for FY19 are estimated based on 50% of property tax revenue collected on incremental real value in TIRZ No. 3. Based on an assumed tax rate for each participating entity, total revenues are estimated at $761,229, including interest income. The FY19 property tax revenues are based on the following incremental values - including values still under review at 95% ,as well as any abatements and exemptions - and the proposed tax rates for the City and County:

In accordance with the 2016 Tri-Party Agreement between the City, Zone, and District, 2% of all TIRZ No. 3 revenues will be allocated to administrative services for the TIRZ and the remaining 98% will be assigned to the Imperial Redevelopment District to support debt payments for infrastructure reimbursements. Total expenditures for FY19 are $785,839, of which $746,004 will be assigned to the District and $39,835 will be available to the City for administrative services under the City’s Support Services Agreement with the Zone. Of the administrative expenses, a total of $9,835 is intended for administrative support and $30,000 for legal expenses. The City will use the 2% of TIRZ revenues to fund $15,225 of the operating costs, while the remaining $24,610 will be taken from the reserve established in the Tri-Party Agreement. This will reduce the reserve’s overall fund balance from $42,856 to $18,246.

Staff recommends approval of the TIRZ #3 Fiscal Year 2019 budget, as approved by the board on September 13. The budget will become effective upon the City Council's approval.