GRANITE FALLS — When there are Tax Increment Financing (TIF) funds left over they go back to the city, Yellow Medicine County Recorder/Registrar of Titles Janel Timm told the YMC Board at Tuesday’s meeting.

“The excess TIF in Canby Farmers Grain example is $3,776.10,” Timm said, showing the board the for Payable 2018 YMC TIF Countywide TIF District Inventory sheet. “That $3,700+ will go back to the city of Canby once the account is closed.”

According to the financial online dictionary InvestorWords, TIF is defined as a financing procedure used by many local governments for redevelopment and improvement projects on existing structures. The cost of the improvements is assessed to future tax revenues by each taxing unit that levies taxes against the property.

Timm demonstrated the concept on a poster pad.

The taxing unit at the local level is responsible for determining how much of the increase in property tax due to the improvements will be used to repay the construction costs. The property that is seeking to use tax increment financing must be located with the city’s jurisdiction, according to InvestorWords.

“The new tax dollars they generate go back to pay the expenses,” YMC Administrator Peg Heglund said.

These types of community improvement projects tend to span 25 to 30 years, with the typical length of time being 26 years, said city of Canby Financial Consultant John Meyer, who was also at the meeting. It is typically used to motivate property owners to improve the condition of their property and increase property values.

“Most of them are on substandard properties,” Meyer said. “TIF districting allows us to fix them up.”

“HRA (Housing and Rehabilitation Authority) would purchase those homes, tear them down and make it ready for a new buyer,” Timm said.

Canby is an active participant in TIF, they said.

Timm was there to get a two-day waiver for the 30-day comment period on the request of the city of Canby because the 30-day comment period expires two days after the meeting at they want to take action. The YMC Board unanimously approved the two-day waiver of the time line.

About eight of the 14 parties with TIF agreements are businesses. One agreement is in Clarkfield while the other 13 are in Canby. The range of the value of the minimum agreements runs from $70,000 to $3,344,200.

The TIF agreements were entered into under various types, such as HRA (6), redevelopment (6), economic development (1) and soil condition (1), depending on what the participant wants to use it for.