Centerville Mayor Greg Fenton said the move not to collect the city’s TIFF (Tax Increment Financing) funds for the 2006-07 fiscal year will allow an approximate $100,000 in property taxes to flow into the city’s general budget. The decision was made at a special council meeting Wednesday.

Appanoose County and the Centerville Community School District will also have their share of the property taxes returned to their general budget funds.

The City Council also decided last year not to collect the TIFF funds for the current fiscal year.

As described by the Iowa Department of Economic Development, city councils or county boards of supervisors may use the TIFF property taxes, which result from the increase in taxable valuation caused by the construction of new industrial or commercial facilities, to provide economic development incentives to a business or industry. Tax Increment Financing may be used to offset the cost of public improvements and utilities that will serve the new private development, to finance direct grants or loans to a company, or to provide the local match for federal or state economic development assistance programs.

The city has been using TIFF funds to pay for bonding used to finance the city’s housing development, Bella Vista, and for improvements to the former McGraw-Edison facility.

Fenton said enough TIFF funds were collected in previous years to finance the bond payments and other current projects.

The mayor noted that since collection or not of TIFF funding has an important effect on the county’s budget, they will include the board of supervisors in future TIFF collection decisions. The school district, he noted, has its loss due to diverted TIFF funds offset by the state.

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