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Pooling: <br />Some aspects of the redevelopment plan may be financially feasible (estimated <br />revenues exceed expenditures) while some projects must close a financial gap before <br />they occur. Ideally, projects that produce financial surpluses should be used to support <br />those with gaps. This distribution of financial recourses can occur if the projects are <br />located within the same TIF district. If not, then State law limits the flow of funds <br />between TIF districts. <br />The need to carefully plan the boundaries of the project area and TIF districts is tied <br />to the issue of pooling. The term refers to the statutory limitation on spending tax <br />increment beyond the boundaries of the TIF district. Items to be funded by TIF must <br />be located within the TIF district or be an amount that falls within pooling limits. <br />For redevelopment TIF districts, not more than i5% of tax increment may be spent <br />outside of the district. The actual application of pooling limits is often more restrictive. <br />Administrative expenses of the TIF district count against the z5% maximum. The <br />amount of revenue available to support eligible costs outside of the district may fall <br />in the ~5% to zo% range. <br />Time Constraints: <br />In a perfect world, the City would establish a TIF district and wait for redevelopment. <br />Current State law makes this approach a risky proposition. TIF districts are subject to <br />several time limitations. The most important of these limitations is the five-year rule. <br />After five years from the date of certification of the TIF district, the use of tax increment <br />is subject to new restrictions. Generally, tax increment can only be used to satisfy <br />existing debt and contractual obligations after this date. This rule creates a five year <br />window to make commitments for the use of TIF. Additionally, the geographic area <br />of the TIF district can be reduced, but not enlarged, after five years from the date <br />of certification. Therefore, if a TIF district is established without a specific plan for <br />development, there should be reasonable certainty that development will occur within <br />five years. <br />The City has the ability to decertify all or part of a district and create a new one. This <br />action sets a new five year clock. There is a risk that the conditions used to establish <br />the original district will not be present in the future. <br />IMPLEMENTATION <br />