Monticello city council members have taken the next step in the creation of a business district, a sales-tax funded development tool that would provide an estimated $400,000 annually for downtown area investment.
“We're focusing on an area where we could use new investment,” consultant Keith Moran told aldermen on Monday, noting the downtown business district had dropped in assessed value about 5 percent between 2017 and 2018.
If the full 1 percent business district sales tax is implemented, Moran's revenue figure is much rosier than earlier ones generated by city staff – more than twice their estimates, although the city admitted to being conservative in early studies.
The city council approved creating a business development district plan, the next step in getting the sales tax on the state's books by this fall. That would allow collection to start on Jan. 1 of next year and money to start rolling in monthly beginning in April of 2020.
A public hearing is required before the formal adoption of a business plan. No date has been set, but plans are to schedule it for late July in preparation for an August vote by the council.
If approved at 1 percent, it would increase the city's overall sales tax to 8.25 percent, still less than Decatur and Champaign, the same as Cerro Gordo and a percent more than Farmer City, said Moran. The tax would not be applied to vehicle purchases, groceries or pharmaceuticals.
As currently proposed, the district would encompass the downtown business district and several blocks around it, encompassing 190 parcels. To be eligible for the designation – which can last up to 23 years – the area needs to, overall, fit state designations as “blighted.” Even though just one blighted criteria needs to be met, Moran said the proposed area for Monticello actually fits four: Defective, non-existent or inadequate street layout; unsanitary or unsafe conditions (sanitary sewer and drainage issues); deterioration of site improvements; and improper subdivision or obsolete platting.
City officials say the dollars will give them a revenue source without resorting to the city's general operating fund. Projects could range from building upgrades to streetscape work. A long-studied Wabash Plaza to point people from the Wabash train depot downtown could also receive funding.
New building construction can also be funded by business district funds, something that is not allowed in Tax Increment Financing Districts.
“You're going to see wholesale changes occur. Your streets are going to be more walkable, your utilities are going to work that much better, you're going to have beautification efforts; you're going to see those directly from business district proceeds,” added Moran.
“Anything we can do to bring revenue to the business community is positive, in my way of thinking,” added Mayor Larry Stoner. “If all of this beautification, development, etc. happens to make this a place people want to come, that's what we want.”
The city now needs to formally set a date for a public hearing on the business district. That action will likely come at the June 24 meeting of the city council.