Donjek :: The Cents of Place Blog

Donjek Tools: Advocating for Local Stimulus

Federal and state efforts to spur creation of jobs and economic activity have dominated news in the last year. The American Recovery and Reinvestment Act of 2009 (“ARRA”) constitutes stimulus funding to states and local governments. Funding resources are made available in some cases by formula, and in others, by competitive process.

Donjek is working with school districts and cities to:

• Identify stimulus-related funding sources that address their needs. As part of this evaluation, we also identify long-term operating costs;
• Partner with school district and city staff to apply for those funds to be awarded on a competitive basis, and to ensure that funds awarded on a formula basis are effectively distributed;
• Advocate for appropriations for school districts and cities at the state and federal levels. 

As described in further detail below, execution of the ARRA provisions will be large scale and necessarily complicated; as program details emerge, this expectation has been confirmed. Large municipalities are effectively pursuing these resources, and Donjek is proposing to create additional capacity in stimulus funds procurement for municipalities large and small.

Stimulus funds are, generally, to be appropriated in two ways:

• From federal agencies to states, either for state-level investments or state distribution to local governments;
• Directly from federal agencies to local governments or other end users.

The first tranche of stimulus funding for Minnesota school districts took the form of stabilization funds. The State of Minnesota is exchanging these dollars ($500 million) with state funds, meaning that Minnesota districts will not receive new money through this program.

School districts do have an opportunity to access a range of additional stimulus programs, including those in the following general funding categories:

• ARRA Title I;
• ARRA Title II;
• Individuals with Disabilities Act (“IDEA”);
• McKinney-Vento Act;
• Expansion of qualified bonding authorizations;
• Rural Community Facilities program.

Cities may also have access to stimulus funds designated for various uses, and associated with different allocation processes and mandates:

• Broadband Access;
• Brownfield Remediation;
• Energy Efficiency in Public- and Private-Sector Buildings;
• Fire and Emergency Response Staffing;
• Highway Infrastructure;
• Housing Finance and Retrofitting;
• Public Building Renovation;
• Rural Business Development;
• Rural Community Facilities Investments;
• Solar Cities Program.

School districts and cities are financially pressed currently. Evaluating which stimulus sources are worth pursuing in a competitive process will reduce the potential waste of chasing programs as their resources and provisions are unveiled. 

Donjek Tools: Tax Increment Financing Made Visual

Planners, architects and developers have long been masters of the visual.  It’s difficult to deny the power of a colorful drawing to communicate design, use and how changes to the landscape can improve the spirit of a place; projecting the image on a large scale can further amplify this kind of communication.

The financial mechanics that underlie any plan are not only more difficult to convey in a physical sense – they also place a presenter in jeopardy of alienating and boring an audience.  Still, an understanding of how master plans and site plans will be financed, and how their development will affect the larger financial health of a community, are critical issues that require public discussion before moving ahead.  Full understanding of these issues by key members of your audience will streamline your process and align expectations with reality. 

Tax increment financing (“TIF”) districts are a redevelopment tool employed in every U.S. state except Arizona.  While publicized abuses have tarnished the political image of this tool, it remains a critical mechanism, trapping incremental property tax revenue from redevelopment for repayment of the debt used to finance the improvements in the first place.  Structuring a TIF district requires a discussion of variables ranging from the state’s tax treatment of different types of property to the post-redevelopment value of parcels, projected appreciation rates, absorption of redeveloped space into the market, and the cost of capital.  See the eyes of the audience glazing over?

The Donjek InstanTIF decision tool allows audiences to engage TIF in an interactive way thanks to a number of attributes.  The tool:

• Allows a presenter to show the various parcels in a proposed TIF district as a map on a screen, with colors to reflect assumptions about appreciation in the future.

• Illustrates the essential items for calculations, allowing a presenter to convey more detail if desired.

• Gives members of an audience real-time feedback about how changes to one or more variables would change TIF cash flows and consequently the amount of borrowing the district can sustain.

• Can be presented in tandem with graphic data layered through GIS software, to illustrate demographic and market trends of significance.

The InstanTIF tool is custom tailored for each proposed TIF district.  Moving forward, consider this decision tool for future discussions with investors, public officials or community members, and extend the communicative power of pictures to project finance.

InstanTIF software design, text, graphics, and mechanics are Copyright 2007 by Jon Commers. ALL RIGHTS RESERVED. Any use of this software, including reproduction, modification, distribution or republication, without the prior written consent of Jon Commers, is strictly prohibited.