10-12-2016 Workshop Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL WORKSHOP OCTOBER 12, 2016 where the risk is on the City, but less risky. The City borrows money from itself and receives the increment to pay itself back with interest. Ms. Vogt explained that the current TIF rules are that when the debt is paid, the district must be decertified. She noted that older districts, established prior to May 1, 1990, can remain in effect even when there is no debt. She stated that Little Canada is right in the middle when comparing the percentage of the gross tax base captured in TIF Districts to other similar cities in the area. She noted that bond ratings vary and studies have shown that there is no comparison in how much TIF is used and the ratings. Ms. Vogt noted that it is not complicated to decertify all or parts of TIF districts, and cities must complete TIF reporting to the state annually. Ms. Vogt stated that after completing the financial analysis of Little Canada's TIF Districts, there are recommendations for the Council to consider. TIF District 2-1 (Kandace Heights) is a pre -1990 district, which means that it is not subject to the five year rule that prohibits new expenditures later in the life of the district. Ms. Vogt stated that this district will expire December 31, 2017 since by law it cannot exist any longer. She explained that the $1,000,000 in extra TIF dollars that are projected for this district do not have to be spent before it is decertified, the City will simply have to file annual TIF reports for as long as the City has the money. She noted that the City could use the money in this district for road reconstruction since it is a pre -1990 district. TIF District 3-2 (Rice Street Development) will have sufficient funds on hand in the district to pay off the 2001A bond at the end of 2016. Ms. Vogt noted that the opinion of the State Auditor's Office is that once there are sufficient funds to pay off a bond, it should be paid in full. She stated that it looks like there will be additional funds in this district. She explained that Sherman, the developer in this district, has made some TIF shortfall payments, and if there is surplus left in the district at the end of its life, per the developer's agreement, the developer will be reimbursed the shortfall amount paid plus interest. She stated that the City could use this increment money to replace the paver sidewalk along Little Canada Road instead of using infrastructure funds. The City Administrator noted that Sherman is not eligible to receive increment associated with Parkview Court or the Goodyear project. TIF District 3-3 (The Lodge & Garden Terrace) is a housing district and the PAYGO Note is expected to be paid in full by 2027. Ms. Vogt stated 2