Using district-specific TIF dollars towards Eagle Grove Elementary expansion project

When Eagle Grove Area Schools Superintendent Jess Toliver asked the Wright County Supervisors to include them in an Urban Renewal district set up pertaining to the Prestage Foods facility (which would allow some of the property taxes to go toward expansion for the EG Elementary school building project),  it left other Wright County school superintendents asking, when will they get their cut?  But Toliver says there is a misconception out there that he would like to clear up.

He is not using county taxpayer money to fund the $1 million request.  He is asking for a TIF (Tax Incentive Financing) from the Prestage Foods land, something only Eagle Grove Schools can access because it is located in our school district.  It is not available for Clarion-Goldfield-Dows or Belmond because the entity is not located in their district.  It’s the same as Eagle Grove can not ask for TIF dollars from Hagie/John Deere or Belmond’s Hotel/Motel tax.  

“School districts are not equitable...Prestage came into this district...and I’m the only one that can TIF it,” said Toliver.  “We’re doing something well within the law...we’re just thinking outside of the box and how to use it.”

He described it like this.  If person A owns a home and person B owns a home, they can both take out home equity loans - but person A can’t take it out on the value of person B’s home.  Equity is never equal, and that includes in the case of school districts.  Clarion-Goldfield-Dows and Eagle Grove have comparable student enrollment, but because the CGD School District occupies more land than the EG School District, there’s less tax valuation for Eagle Grove.

“We all have the same mechanisms to use if we wish...but we can’t use what’s not within our district,” Toliver said.  “So I believe you shouldn’t hamper another school districts ability to use it just because you can’t...and if others have a request and look for ways to TIF, I’ll write a letter of support.”

“My whole issue behind it all is when a City is successful, a county is successful, the other cities are successful and we all need to stand together for any progress we can sustain or obtain,” added Eagle Grove Mayor Sandy McGrath.  “The existing tax base will not decline because of the new business in the Urban Renewal area, instead, the tax base will increase.  The incentive that is being offered is only taking a small portion of the increase in taxes that that business in the Urban Renewal area has generated.  I believe there’s a lot of confusion on how Urban Renewal and TIF work.  Here’s a simple example. If you have “land” valued at $1,000, and you build a business or increase the value for any reason, that land is now worth $10,000.  If you offer back (TIF) $1,000 of that increase in value, you not only still have an increase of $8,000, you have also incentivised success for the Urban Renewal area and the future.”

“I have to use the resources I have,” said Toliver.  “I have to make decisions based on what is best for our school district.”

Again, he stresses this isn’t anything “extra” he’s asking for instead of splitting it between the three schools, but rather he’s asking to use money that is available in his district and for this district’s use only.

“The others can ask for TIF dollars from whatever economic development may come their way,” said Toliver.

The money will be used to help facilitate the cost of adding on to the elementary school.  While some community members question why the elementary is being added on to when it is the newest building, and a new high school, which is the oldest, is being built instead, Toliver said the answer is easy.  A facility study was done at the very beginning of the Prestage Foods announcement.  It verified that the elementary was the location that, even if no students came, needs more room for students.  It was constructed 10 years ago to hold classes of 65 - 70 kids, with three sections of each class.  The high school, on the other hand, can facilitate 100 kids per grade.  

“We want a new high school, but we need more room at the elementary,” Toliver said.  “We need to be prepared for Aug. 2018 (when the 2018-2019 school year starts) since Prestage is slated to be up and running later this year.”  

In the future, if the community continues to feel a new high school is necessary, then the district can bond for it.

Both Toliver and McGrath encourage the other Wright County School Districts, if the need arises, to look for opportunities like this in their district.

“We all have the same opportunity to use the same mechanisms...but we shouldn’t hamper each others abilities to use it just because others can’t, or choose not to use it,” said Toliver.

McGrath said that she welcomes community members to come and support this measure at the public hearing scheduled for Monday, Jan. 8.  She also praised Toliver for thinking ahead and the Board of Supervisors for listening.

Wright County Monitor

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