The Council of Development Finance Agencies last week unveiled its recommended practices for managing an effective tax increment finance program, which aims to establish "a set of guiding principles" based on "common procedural elements" for finance officials running such programs.
Toby Rittner, the group's president and chief executive officer, said CDFA created the five-page document with the intention of providing a solid foundation of established practices for these types of programs.
"When communities are using this tool, they're faced with a bunch of procedural question and hurdles, things they need to be aware of when going through the process of issuing TIF bonds and running these programs," he said.
The CDFA document recommends that local governments considering TIF establish a step-by-step process to determine when it is appropriate to use the financing technique, and emphasized the importance of educating the public on how TIFs works and on the specific project in question.
"Communities that have been the most successful in building support for a proposed project have engaged key stakeholders early in the process, marketed the proposed development, and managed media coverage," the document stated.
In addition, governments should be prepared to be ultimately accountable for any projects funded with TIF. An accountable local government should determine the appropriate amount of public resources to devote to a TIF project, establish the size of the TIF area, and have in place policies for dealing with developers on projects.
Rittner said Friday that CDFA aims to get into further detail and elaborate on the document with additional releases in the future.
"This [first recommended practice] is the big picture," he said.
CDFA has previously released recommended practices on the use of industrial development bonds, and is currently working on establishing recommended practices for tax credit bond programs.
Another TIF project in the works for CDFA is a summary document that will detail all the TIF laws in the 49 states and that District of Columbia that currently have TIF-enabling statutes. Rittner said the organization is planning on releasing that project around the end of October.
And in the beginning of September, CDFA finished work on its national volume cap resource center Web site, which provides a state-by-state breakdown of the yearly private-activity bond allocation, issuance, and carryforward for every state for the last three years. The data used on the site was accumulated by CDFA for 2007. The 2005 and 2006 numbers were compiled by The Bond Buyer.