TIRZ stands for “Tax Increment Reinvestment Zone.”  A TIRZ is used to implement tax increment financing, an economic development tool that has been used by Texas cities for many years.  The purpose of the TIRZ is to incentivize both development and redevelopment in areas identified by the city as integral to improving the economic base and, ultimately, the quality of life for local residents.

A TIRZ does not create a new tax.  Instead, it establishes a “base tax value” for a designated geographic area when the Tax Increment Reinvestment Zone is created. Once that base tax value is established, the City of Dripping Springs and Hays County will allocate 50% of the future incremental property tax revenues realized within the TIRZ area to fund infrastructure improvements within the zone. 

When the TIRZ was created in late 2016, the tax base of the TIRZ was established using appraised tax values in place as of January, 2016.  Each year, within the TIRZ, the property taxes collected up to that “base tax value” number continue to go into the City and County general funds, respectively.  Then, as properties in the TIRZ develop and become more valuable, 50% of the property taxes collected, over and above that “base tax value” number, go directly into a TIRZ fund. Those TIRZ property taxes can only be used for projects approved by the TIRZ board under the established guidelines approved by the City.

A TIRZ is an ideal way to leverage rising property values for civic improvements in a rapidly developing area without increasing property taxes.

The established time period for the TIRZ duration is 30 years, an investment and commitment spanning several decades.  Like most investments, the full potential and public benefit of the TIRZ will be realized gradually and increasingly as development occurs and the tax increment supporting the TIRZ matures. 

 A TIRZ district is focused on areas of a city that are otherwise challenged to attract private investment. They are founded on the idea of improving the economic development and vitality of the City or tax entity that creates the district. Improvements such as roadways, utilities and housing infrastructure are a natural fit for a TIRZ district, as well as improvements like increased way-winding and signage, sidewalks, bikeways, parks, and other features which combine to improve the economic future of an area.  In Dripping Springs, the focus of TIRZ 1 and TIRZ 2 includes necessary civic infrastructure, transportation and pedestrian systems improvements, increasing parking capacities, and regional drainage and water quality strategies.  

 

There are two TIRZ districts in Dripping Springs.  View this map to see extents of the TRIZ districts.  TIRZ 1 includes the area that encompass the current City Hall, Dripping Springs Independent School District administration building, Mercer Street, and Old Fitzhugh RD.  TIRZ 2 includes the area subdivisions an areas around Bunker Hill and Arrowhead Ranch west of Downtown Dripping Springs.   

The two districts have different projects which are prioritized based on community need and available funding.  Learn more about the TIRZ 1 and TIRZ 2 priorities.  The overall priority and goal of the TIRZ is to foster civic improvements, enable desired business and spur economic development within the City of Dripping Springs TIRZ zones (see maps).

The TIRZ board plans to focus initial efforts on the Town Center Project, Old Fitzhugh Rd, Downtown parking, and opportunities the Dripping Springs “Triangle”.  These projects are identified as priorities by the TIRZ board. 

TIRZ revenues and project planning are overseen by a board appointed and approved by City Council with representation by the project stakeholders.  These stakeholders include the City of Dripping Springs, Hays County, the Dripping Springs Independent School District, and the Dripping Springs Community Library.  Each of the stakeholders are represented by respective board members..  A full list of the current Dripping Springs TIRZ board members can be found here.  
The appointed board is advised by legal staff and consultants to move the prioritized projects of the TIRZ forward.  By in large, the TIRZ oversight is a volunteer board.  

• TIRZ – Tax Increment Reinvestment Zone (TIRZ) – a public sector financing and development tool.  Cities use a portion of future property tax increases to plan and implement civic infrastructure and economic development improvements.

• Priority Projects – projects identified by the Dripping Springs TIRZ board that advance civic infrastructure and economic development needs.  The four priority projects include 1). Town Center, 2). Old Fitzhugh Road, 3). The “Triangle” and 4). Downtown parking.  These projects are currently in the visioning, conceptual planning and feasibility study stages.

• Town Center – one of four current priority project of the Dripping Springs TIRZ.  This proposed project would benefit the stakeholders who are partners in the TIRZ, provide public benefit by boosting civic infrastructure and amenities and government services, and improve economic development prospects for the city at large.  The purpose of the Town Center project is to redevelop underutilized property that is currently owned by the City of Dripping Springs and the Dripping Springs Independent School District near the western end of Mercer Street.  The redevelopment of the area will potentially provide space for school, county, community library, and city administration as well as private commercial space.  Additionally, the idea of the Town Center will strengthen the economic vitality of the Mercer Street Historic District and Downtown Dripping Springs as a destination, and provide a new focal point for the citizens of Dripping Springs.  The TIRZ Project Team has developed a conceptual plan of this Town Center vision which the Board and Project Team is currently advancing with “proof of concept,” market feasibility, and Stakeholder engagement and outreach efforts.

• TIRZ Board – the group of seven Dripping Springs and Hays County citizens representing the stakeholder groups with a partnership interest in the Dripping Springs TIRZ.  The board does research, sets priorities, promotes conceptual planning & engineering projects, and develops recommendations where are presented to city council for approval.

• Stakeholders – the community partners involved with the Dripping Springs TIRZ.  The partners include the City of Dripping Springs, Hays County, Dripping Springs ISD, and the Dripping Springs Community Library.  The City of Dripping Springs and Hays County are the principal taxing entities and primary contributors of tax incremental for the TIRZ, as governed by an executed Inter-local; Agreement. Other identified partners are either principal property owners, community institutions or civic entities within the TIRZ and will be partners and beneficiaries in the outcome of the project.  For example, the Dripping Springs ISD and the City of Dripping Springs are principal land owners in the area of TIRZ 1 and so  stand to be will be major participants in the Town Center Project.  Also, both the City and Hays County are providing up front funding, to be reimbursed by future tax dollars to get the TIRZ “moving.”