Mill River Park Group intends to stop seeking Stamford funding

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STAMFORD — The amount of money the Mill River Park Collaborative will receive from tax hike funding is expected to skyrocket in the next fiscal year as it repays money it owes the city.

The nonprofit plans to use a portion of this TIF revenue, which comes from taxes on land around Mill River Park, to pay back a bank on a bridging loan that helped fund construction new Whittingham Discovery Center. The loan will take a few years to repay, the co-op’s chief executive told the finance committee this month, but then the group will be ready to stop receiving a funding source that has become the subject of heated debate during fiscal season: an annual grant from the operating budget of the city.

CEO Nette Compton made a presentation to the Finance Committee showing that the cooperative, which maintains, implements programs and oversees construction of the park under a contract with the city, will seek grants of $500,000 over the next three fiscal years . Then she wants to stop asking for funding altogether.

“It’s not that soon for the current board, but it’s a big change,” Finance Committee Chairman Richard Freedman said during an Oct. 13 meeting.

In recent years, elected officials have targeted the size of the co-op’s grant when proposing cuts to the city’s budget.

This year, for example, Mayor Caroline Simmons proposed allocating about $700,000 in the city’s operating budget to the group. The Board of Finance reduced that amount by $25,000. The Assembly of Representatives reduced it further – by about $175,000. Representatives who advocated the cut noted that the collaboration will be funded by TIF and private donors, and said other city parks need more investment.

Through tax raise funding, the city and the cooperative share a portion of tax revenue collected from owners of land near the park.

“The concept of a TIF district is that investing in infrastructure – like revitalizing the park – increases tax revenues. It increases property value,” Compton said during the finance committee meeting.

In the early 2000’s, an ordinance set a baseline level of tax revenue for properties in the Mill River TIF District at nearly $3.2 million. This number is subtracted each year from the total tax payments the city receives from the properties based on their current value, yielding what is known as the “increment” revenue.

For the fiscal year ended June 30, the city collected approximately $9.5 million in tax revenue from real estate in the district. The additional revenue was approximately $6.4 million.

Half of the proceeds went to the city’s general fund. About $1.8 million went toward paying debt service on bonds and repaying the city Misallocations of TIF revenue in 2012 and 2015. The remainder — about $1.4 million — was retained by the cooperative for use in capital and operating expenses for the current fiscal year.

Its debt service payments will continue through 2033, Compton said. However, the cooperative expects to complete the repayment of past misallocations to the city by the end of this fiscal year.

For this fiscal year, the collaboration has forecast that it will receive approximately $1.7 million in TIF revenue. In the next fiscal year, with no other outstanding payments to the city, she is expected to receive approximately $2.3 million.

“That’s where the rubber meets the road as far as the city and the Treasury Committee are concerned,” Freedman said.

In addition to repaying the $3.5 million bridge loan it received for the Whittingham Discovery Center, Compton said the collaboration will use the increased TIF revenue to cover a “significant increase” in operating costs when the park grows.

Compton told The Stamford Advocate that the co-op is currently using its annual city grants for “essential operations” — like mowing, snowploughing, planting and invasive species management — and to support free programming.

When the bridging loan is repaid, the cooperative can use more TIF funds to operate, eliminating the need for the city’s subsidy, she said.

Under its contract with the Mill River Park Collaborative, the city must “use reasonable efforts to pay the Collaborative a minimum of $500,000 per fiscal year.” Since the 2016-17 fiscal year, the city has provided between $500,000 and nearly $700,000 to the group each year.

The collaboration has now raised approximately $600,000 to $1.5 million in private funding for operations each year. It also raises private dollars for capital projects.

“If the city cuts our operating funds, that doesn’t mean we can replace that with private dollars,” Compton told The Advocate. “And I think there are two key reasons for that. One is that private foundations, organisations, etc. want to see them invest in a space that the city is also investing in.”

Second, she said, private funding is “based on individual donors and the things they want to support,” which doesn’t cover all community needs.

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