10-24-88 Council Special Minutes

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MINUTES City Council October• 24, 1988 Wilson pointed out that TIF does more for• the City than just reduce taxes through an increased tax base, pointing out that the fiscal disparities pool also gives the City its shar~e of taxes generated fr•om growth in the Metro area. Blesener~ pointed out that TIF is also a means of attr•acting better development to the City. The City Auditor pointed out the various justifications for the use of TTF, pointing out that outlying cities use it to attr•act development to their area. The Auditor r•eported that some first-ring subur•ban cities do not use TIF since their~ land values are such that they feel it is not necessar~y. Dlesener stated that he was in favor of using TIF as long as it is needed for• a good reason such as land correction, redevelopment, etc. The City Auditor~ pointed out that once a City offer•s TIF assistance there will be no fur~ther projects in the City that do not need this assistance. Developer~s are awar~e of cities offer•ing TIF and they will put together the numbers to prove that the assistance is needed. The Auditor r~ecommended that the best appr•oach the City can take is to put together a r•igid set of guidelines that must be followed. The Auditor• pointed out that the Larry Lee project will be an exception, however•, since that pr•oject has already been negotiated and the City should stand by its commitment. Wilson pointed out that Option B will wor•k for the Lar~r•y Lee pr•oject if the City is willing to accept the consequences in that a portion of the debt ser~vice is not covered and there will have to be a levy each year~ to cover it. However, Wilson stated that his r~ecommendation is that the City live up to its commitment that was made based on a$1.4 million value. That commitment was made last March. Wilson pointed out that the project was put together the way it would have been in ever•y other community. Blesener pointed out that the 10% guideline does not follow. Wilson pointed out that the difference is the actual cost versus assessed valuation. Blesener~ pointed out that ther•e was supposed to be monies left for public pur~poses. Under• a$1.4 million valuation there were monies for public purposes, but if a$1 million valuation is used, the money for public purposes has been eaten up. The City Auditor~ agreed, but pointed out that the process that was used was no different than what would have been used by any other• City. The Auditor• reported that the impor•tant thing is to get the City's policy related to 10% of the taxable value for a pr~oject. Blesener• felt that the City should adopt Option A with regar~d to the Lar•r~y Lee project, but that in futur•e pr•ojects 10% of assistance should be pr•ovided based on the taxable value of a pr•oject. Page -4-