Webb Memo/West Side TIFCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
July 23, 2009
TO: Mayor & City Council
FRM: Interim City Manager
Re: Workshop 27 July- Westside TIF
The council will have some interesting and important decisions regarding the Westside TIF. As
you know this TIF district will expire at the end of FY2010. Whatever funds are in the district
accounts will be distributed to all the taxing entities associated with the area. The city's portion is
about 25%.
There are other options and two of those options will discussed during this workshop. Of course
any TIF funds used for a public improvement project will mean less going to the general fund
when the TIF district ends.
TIF districts are formed to encourage development which will grow the local economy, create
good jobs, and expand the tax base. In this the Westside TIF has been successful. There are three
basic questions I think you should ask yourself when considering the use of TIF funds:
• Does the business activity asking for the funds acquire its revenue from outside MT? An
economy will only grow if it is successful in acquiring revenue from outside its own
economic region.
How many good jobs will the activity create or retain? A good job by definition makes at
least $15/hour which can include the worth of benefits. Anything less than $15/hour will
be a drag on the economy rather than a stimulus. The creation of good jobs means the
revenue coming into the activity is being equitably distributed to the economy thru wages
and benefits to its members.
• Does the project improve or preserve the tax base? Business improvements that involve
both structures and equipment pay taxes on both. Tax revenue from business activity
usually exceeds the cost of public services.
The more income a business project acquires from outside the state, the more good jobs
it creates/retains, and the more it improves/preserves the tax base, the more deserving it is of
public support.