No pain in the pocketbook

City Commission maintains taxing status quo, discusses future for TIF zones

Drivers on Broadway Street in downtown Mount Pleasant pass by the construction zone for the revitalized Town Center project on Wednesday, May 15. The $2.3 million project is located inside one of three city Tax Increment Finance (TIF) zones established in the city.

Rising costs have impacted how the City of Mount Pleasant has prioritized some big projects, but not enough to warrant hitting the taxpayers in the pocketbook. 

That was the takeaway from a pair of taxation and development-related conversations at Monday’s meeting of the City Commission. At issue were whether the commission should adjust the millage – or property tax rate – mid-way through the calendar year to potentially bring in more operating dollars, and whether to keep of dissolve three Tax Increment Financing (TIF) districts.

The first question was a relatively simple no. The second took a little more discussion. 

‘A pretty good, even keel’

“Overall, staff feels very strongly that we can continue to operate with the millage rate we have,” City Manager Aaron Desentez told the board.

On Monday, the commission weighed whether to adjust the city’s 16.25-mill tax levy for the second half of 2024. 

A mill is the equivalent of $1 per $1,000 assessed value of a home. For the owner of a $100,000 Mount Pleasant property, it means $1,625 in property taxes each year goes to the city coffers. 

The tax rate has been in place since 2014, Desentez said.

While inflation has had an impact on the city’s spending powers, he said staff have leveraged grants, adjusted priorities and made fiscally responsible decisions to keep within the financial blueprint. 

“Obviously you do see some costs go up, I know I talked about that with the city commission during our budget discussion,” Desentez said. “A lot of what staff has done is just handling inflation on our end … being able to make those adjustments. 

“We’ve had a hard time in some instances, especially with our streets department. … Being able to keep up with some of these bigger projects has required us to push some of the capital improvements further back. But I don’t think it would make sense to do anything with the millage rate to address that. We’ll continue to look at the long-term implications of this.”

City Finance Director Chris Saladine told commissioners the city’s coffers are more-or-less on track with where they were predicted to be at this point in the year. 

“We’ve had this millage rate for a long time, and we’re at a pretty good even keel with our finances,” he said. 

That was met with praise and appreciation from the board. 

“Because we are experiencing a lot of economic pressures in all directions, thinking about increasing the millage rate at this moment would seem, to me, a bit traumatizing for some people,” Commissioner Maureen Eke said, “I am open to maintaining it as it is right now. Manager Desentez says there isn’t an urgent need to increase the millage rate, and you have acknowledged that the grants have been helping.” 

“We should be making national news right now, because what household or municipality isn’t having trouble?” Commissioner Elizabeth Busch added. “I feel a lot of gratitude.” 

The commissioners unanimously agreed there was no need for a change to the tax rate; however, the same was not necessarily true for the three TIF areas on the city’s roles. 

"We’ve got to build for the future. Hopefully, with the investment we’re making, we’re saying we believe in our downtown."

-- Mount Pleasant City Commissioner Bryan Chapman

In a TIF

Tax Increment Financing – or TIF – is a funding mechanism that allows municipal governments to designate an area for investment and redevelopment. When they establish the district, the government has the authority to levy a set tax rate. As the district is redeveloped and improved, the theory goes, the value of its properties increases, and the taxes captured by that set rate will follow. 

During a non-voting work session Monday, Downtown Development Director Michelle Sponseller told commissioners that the city has three districts in place: the Central Business District, the area known as Industrial Park North and the Mission/Pickard Street corridor. 

At issue was whether the commission wanted to keep and renew the districts, whose expiration dates are approaching, or dissolve them. 

This artist rendering of the proposed Town Center Civic Space at the corner of Broadway and Main Streets showcases expanded green space, enhanced parking areas and more space for events like farmers markets. [Courtesy image | Darcy Orlik | City of Mount Pleasant]

The Central Business District zone, city documentation shows, follows North Main Street  from East Pickard Street south to roughly East Illinois Street, wraps around Island Park to the railroad tracks on the west, and follows Michigan, Illinois and Broadway Streets to the eastern terminus at North Franklin and North Fancher Streets, respectively. 

It includes much of the downtown business district, including the Mount Pleasant Town Center project currently underway at the corner of Broadway and Main (that $2.3 million project is financed via a $1 million grant and general fund dollars, rather than TIF funds).

The downtown district was formed in December 1984 with a primary focus of paying down streetscaping debt and reconstructing parking lots, and has levied no tax rate since 2019, Sponseller told the board. 

“We are almost at the end of the infrastructure (work), rebuilding a number of our parking lots,” she said. “We have a couple of more … then, most our very large-ticket items for downtown will be taken care of.” 

If the zone were to sunset, any additional work in the area, she said, could be covered by the city’s capital improvement plan. The TIF zone is slated to expire in December 2025. 

Commissioner Bryan Chapman worried that dissolving the district could short-change future improvements. 

“We can’t overlook the fact that once the Town Center is … done, there’s plenty of more projects we could do if we want to have a thriving downtown,” he said. “I can’t imagine we would not want to have a thriving downtown.” 

Sponseller asked why, if the funds coming into the city’s general operating fund were outpacing costs, any additional downtown work couldn’t be covered by that account.

Chapman pointed to the flexibility of general operating funds, which can be tapped for any municipal bills, and noted that a designated TIF board is responsible for maintaining oversight of and advocating for zone-specific improvements to the downtown district. 

“Instead of having this high-level oversight to say, ‘hey, we have this downtown,’ there’s a group of people looking at that specific area and saying, ‘How can we best use these funds?’” Chapman said. “We’ve got to build for the future. Hopefully, with the investment we’re making, we’re saying we believe in our downtown. 

“I just don’t think it’s wise to say we’re not going to focus on that … and trust the general fund dollars are going to do that.” 

Commissioners tabled their decision on the Central Business District zone until fall. 

Industrial Park North, a commercial zone east of North Mission Street that includes Industrial Drive and is bounded by U.S. 127 on the east, was also formed in December 1984 and has not captured taxes since the mid 2000s, Sponseller said. 

Its primary focus was to fill the industrial park and create a retention pond for the area, all of which has been completed. 

The district work is “fairly well wrapped with a bow,” Sponseller said. “It is completely built out, the infrastructure is taken care of for 40 years. … There really isn’t anything to do and (it hasn’t) had a capture rate in 20 or so years.” 

If left to its own devices, the zone would expire on Dec. 31, 2027; the commission unanimously directed city staff to begin the work to dissolve the zone sooner. 

Drivers pass through the intersection of Mission and Broadway Streets on Wednesday, May 15. The Mission Street corridor is currently being reviewed by a steering committee for ideas to improve pedestrian and cyclist safety, to reduce congestion and to improve accessibility, among others.

The Mission-Pickard DDA is the newest of the city’s three TIF districts, having been created Nov. 26, 1990, and with a scheduled sunset date of Dec. 31, 2025. Since the 1990s, it has maintained a 28 percent capture rate, Sponseller said, to support a slew of improvements, including alleyway reconstruction, corridor redesign, access management, lighting and user safety improvements. 

Vice Mayor Mary Alsager pointed to a recently formed Mission Street project steering committee that is tasked with developing a plan to address traffic congestion, pedestrian and bicycle safety, accessibility issues and more on the roadway. 

“I don’t think it would be good to dissolve it when we have plans for it,” Alsager said of the funding mechanism that could support the redesign work. 

Sponseller and Desentez agreed. 

“I don’t see the sense at this particular time of changing that capture rate,” Sponseller said. “There’s flexibility in it for all the things we hope to do on Mission Street, so that would be my recommendation there.”

“Anything that would be constructed above what is currently there would be at the expense of the city,” Desentez continued. “The captured dollars that have come from the Mission/Pickard DDA group could be utilized for that.” 

The steering committee is currently weighing a range of options to make the five-lane road more friendly to non-motorized traffic, Desentez said. In April, the group released a survey to gather opinions on the three-mile project that stretches from the Mission/127 roundabout, south to East Bluegrass Road.  

“Right now the group is talking about would boulevards make sense, would roundabouts make sense? … How do we make the environment more pedestrian friendly?” Desentez said. 

Any of those improvements, he noted, could be funded using TIF-captured dollars 

Convinced, the commissioners unanimously directed city staffers to renew the district for another five years.