Last modified: February 9, 2024

Policy No. 1940: Tax Increment Financing

Download Policy No. 1940: Tax Increment Financing

The purpose of this policy is to provide a consistent framework for considering tax increment financing projects in our communities. Provo City School District has considered the following general criteria to provide a consistent framework for considering projects in our communities:

Grow wealth – investment from outside the State
Job growth in our community – wages that exceed the county average • Avoid projects that include retail or housing
Support from Utah County, City, and other taxing entities
Partnership opportunities – supportive of public K12 education

Provo City School District will hire a third-party consultant to report on the financial metrics of the project. The report will include:

An analysis of return on investment, including net present value calculations;
An analysis of the impact of District participation versus non-participation; and
An analysis report regarding whether participation in the tax increment project is in the best interests of the district.
This analysis will then be submitted to the finance committee for the final evaluation. If the finance committee deems the project or amended project is worthy of the full board’s consideration, it will be brought to the board.

Considerations of Solution: (including previous attempts)

PCSD will base its support for increment projects on whether the project:
Grows the commercial tax base within the Provo School District
Increases the assessed valuation while minimizing the impact on services required
Emphasizes office, industrial, and hotel/convention over retail and residential
Increases the concentration of office and high-skilled labor job opportunities
Includes Dollar, NPV, Housing Unit, and Housing Acreage caps for projects longer than 10 years
Triggers within 2 years of the base year
- If circumstances arise requiring the trigger date to be postponed, the base year is also amended so the two are not more than two years apart
Provides partnership opportunities supportive of education
Gains the support of other taxing entities
Considers the pay-back period for the district
Requests more contribution from the city than the district
Has an administrative fee lower than 3%
Considers the ratio of the city’s assessed value in tax increment projects to the city’s total assessed value, 5% cap.
Provides the district some financial benefit other taxing entities do not receive (e.g. land, dollars, percent increment, mitigation payment, etc.)
Reflects a lower term (years of increment) for higher percent of increment given (e.g. 10 year term = 100%; 15 year term = 80%; 20 year term = 60%; 25 year term = 40% increment)
Contemplates every percent of the project that includes housing, a proportionate increase in increment is given to the district (e.g. 5% housing = 5% more increment District to receive)
Offers mitigation payments over non-mitigation payments

Projects seeking approval of an extension:

Projects that provide better terms than the original project and other existing projects will be given much higher scrutiny

Approved by the Board

December 12, 2023