SAN ANGELO, Texas (Concho Valley Homepage) — The City of San Angelo's City Council reached a deadlock during its Jan. 7 meeting after discussing potential nonprofit policy updates to the North Tax Increment Reinvestment Zone. Here's why the deadlock occurred.

As part of its regular agenda for the meeting, the City Council took up an item calling for "discussion and possible action" regarding a "North TIRZ Non-Profit policy update." The agenda item included a proposal for a new nonprofit policy for the City's north TIRZ area.

According to the meeting agenda, the new policy would dictate that nonprofit organizations "are not eligible for TIRZ incentives in the South Zone, with the exception of government entities." The northern area, meanwhile, would have an "annual $100,000 of the North TIRZ funding" set aside for nonprofits "beginning January 1 of each year."

The agenda stated that, under the proposed policy, nonprofits would be eligible for TIRZ incentives in the north zone by meeting the following criteria:

• One applicant up to $75,000 or multiple applicants up to the $100,000
• No Match required, payment of funds will be standard reimbursement process
• TIRZ Board will make a finding the project can make a significant neighborhood impact
  • Historic refurbishment
  • Neighborhood enhancement
  • Facade and building improvements to assist with occupancy
  • Other
• Projects must include public improvements such as but not limited to public sidewalks, ADA ramps in Right of Way, transit shelters, and streetscaping
  • TIRZ Board and/or City Council can waive this requirement if these features exist
• Annual Funding does not roll over year to year; any remainder goes back to incentives
• Approval will require a simple majority vote of TIRZ Board and City Council

Planning & Development Services Director Aaron Vannoy gave a presentation to the City Council regarding the policy, concluding it by stating that City staff recommends approval of the annual set-aside of north TIRZ funding for nonprofits. He also said that the City's TIRZ Board recommended a unanimous vote in favor of setting aside the funds.

Mayor Brenda Gunter raised concerns regarding the proposed policy, however, citing the Texas Comptroller's Tax Code Chapter 311. The chapter, according to the Comptroller's website, "governs tax increment financing" and states that "tax increment financing redirects property tax" in a TIRZ area "to pay for improvements in the zone."

Gunter said the chapter specifies that TIRZ projects are meant to "jumpstart development" in order to generate "new tax revenue." She also detailed two of the benefits of a TIRZ listed in Chapter 311: "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."

Gunter said she believes that, since the tax revenue used for TIRZ improvements comes from taxing units such as "the City of San Angelo, the county and the school districts" and because nonprofits do not necessarily fall under the permitted uses for TIRZ funding outlined in Chapter 311, nonprofits should not be considered eligible for TIRZ funding.

"Let's be clear: You cannot loop the City of San Angelo, Texas, into the conversation of all nonprofits," Gunter said. "It is a taxing entity. It separates itself from all others, so the fact that you might have given approval to public improvement projects does not open the door for other nonprofit conversations."

The City Council further deliberated the proposal, with one council member finding the community assistance nonprofits potentially bring to be a good reason to instate the policy.

"As long as these people, these nonprofit organizations, are helping the people that are not as fortunate as other people in this community ... I do not see a problem when the north side has two-point-something million dollars and takes out $100,000 set aside to help," District 4 Council Member Lucy Gonzales said.

Other council members advocated for delaying a decision on the proposal until more details regarding the policy could be clarified.

"I think this item, today, is not clear enough for people to make the decisions they need to make," District 3 Council Member Harry Thomas said.

Following the discussion, District 2 Council Member Tom Thompson made a motion to amend the current TIRZ incentive policy to remove all nonprofit eligibility. The City Council voted 3-3 regarding the motion.

In response to the deadlock, the City Council chose to postpone making a decision while the policy proposal is revised.

News Source : https://www.conchovalleyhomepage.com/news/local-news/should-nonprofits-benefit-from-local-property-tax-dollars/