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II. HOW INCREMENT MAY BE USED A. TIF Plan. The use of increment must be spelled out in a TIF Plan approved by the City Council after public hearing, with 30 -day notice to the County and School District, ten days published notice, and review by the planning commission. TIF Plans describe the estimated tax increment projections, financing budget and maximum debt to be issued. When approving the TIF Plan, the Council or Board must find (among other things) that the proposed development would not reasonably be expected to occur solely through private investment in the reasonably foreseeable future (the "but for" finding). For housing and redevelopment districts, must notify the county commissioner who represents the area of the TIF District at least 30 days before the date of publication of the public hearing notice. TIF Plans may be modified using the same process as for approval of the initial plan. Generally, modifications that do not increase expenditures or debt or call for new land acquisition may be approved simply by resolution. B. General Restrictions, 1. In addition to the specific limitations for each type of TIF District, tax increment may be spent only for specified purposes permitted in the underlying development statutes. Such purposes include, generally: land acquisition; site improvements; public and on -site utilities, demolition; relocation; and administration. If the authority owns a Project, increment may be used to finance essentially any aspect of the Project. Because the development statutes are often ambiguous, whether a particular activity is TIF- eligible may depend on the facts in each case. 2. Administrative expenditures are limited to 10% of the expenditures authorized in the TIF Plan, or 10% of actual increment expenditures, whichever is less. 3. Increment may not be used to finance buildings that are used "primarily and regularly for conducting the business" of any unit of govenunent, except for parking structures, a commons area used as a public park, or a facility used for social, recreational or conference purposes. C. Geographic Restrictions. 1. For districts created after April 30, 1990, no more than 25% of the increment may be spent outside the boundaries of the TIF District. 2. Increment from older districts may be spent anywhere within the Project boundaries, which permits "pooling" of increment from more than one district. Tax Increment Financing Basks - City of Centerville Page 4