A city task force studying tax increment financing is debating whether the public should be allowed at meetings where TIF applications are reviewed.TIF committee meetings were open to the public until 2006, when the policy changed to prevent one applicant from benefiting by overhearing another applicant's proprietary information.

Some have been critical of that change, saying the policy prevents transparency of the TIF approval process and creates the perception that the committee acts as a rubber stamp on applications.

To eliminate the concern, city staff proposed allowing the public to attend and observe TIF meetings though it would be possible to go into a closed discussion if necessary to discuss an applicant's proprietary information.

The task force met Friday and could not agree on the recommendation.

"There are enough places to get public comment than at a TIF meeting," Alderman Bill Okrepkie said. "First of all, it's not required. Second of all, they're going to have opportunities to speak at the planning commission, legal and finance or public works committee meetings and during city council meetings."

Alderman Sam Kooiker disagreed, saying the entire process should be open to the public, and applicants for TIFs should justify their requests for public funding.

The task force also debated eliminating the TIF committee entirely and letting the planning commission handle all TIF applications and discussed adding a public meeting between TIF committee approval and a hearing at the planning commission.

The committee is scheduled to meet again Thursday. After the committee finishes its work, it plans to hold a public hearing about its recommendations. Eventually, the group's recommendations will go to the city council for consideration.

Also Friday, the group said more discussion is needed on issues including the definition of blight, application requirements, acceptable interest rates and nearly a dozen other items before it can make recommendations.

The city's use of TIFs has been under greater public scrutiny this year because Mayor Alan Hanks and other candidates made it a campaign issue during municipal elections.

Hanks appointed the task force in August, and the group met twice in October and held a public hearing to gather public input.

Some critics believe the city is too loose in approving TIFs and does not provide enough transparency about the process.

The group's only decision Friday was to revamp the make-up of the committee that reviews TIF projects by removing elected officials as voting members and making the committee meeting essentially a staff meeting.

City staff would review all TIF applications and forward recommendations to the planning commission for debate.

It was left unclear whether the staff meetings would be open to the public or whether representatives of the school district, county, city council and economic development foundation would be added as nonvoting members.

Alderman Malcom Chapman, a member of the task force, said city staff members meet with people all over town in meetings the public is not privy to and has no interest in.

He said the presence of city council members at TIF project review committee meetings elevates public interest and politicizes the process.

"If we elected officials aren't here, nobody comes," Chapman said.

Task force members emphasized that the group's vote is only a recommendation.

The public will have opportunities to comment on all of its recommendations at a future public meeting and again when the final list of recommendations goes to the city council.

What's a TIF?

A tax increment financing district is an economic development tool in which property tax valuations in the district remain frozen at a pre-development base value for a number of years. During that time, improvements are made that increase the property's value. Property owners continue to pay all of the taxes based on the higher value, but taxing entities, like the city, receive taxes based on the original value.

The difference between the two - the increment - goes to pay off the cost of the improvements. After those costs are paid off, local governments receive all of the property tax revenue.

Contact Scott Aust at 394-8415 or scott.aust@rapidcityjournal.com