07-22-98 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL JULY 22,1998 Mis. Scalze introduced the followii~g resolution and moved its adoption: KE.S'07,[ITION NO. 98-7-773 -AAPOINTINC TFIE DE73T LEVY XEDUCTION CO~YIrY17TTEE AS IZECOMMEND~l) BY TFIE CITY ADNIINISTR~I 'lOlt "Che fore~oing resolution was duly seconded by LaValle. Ayes (5) Sc11ze, LaValle, Morel~n, Pedersen, Pahey. Nays (0). Resolution declared adopted. KANDICE The City Administr~tor review his memo dated July 17, 1998 HEIGFITS recoinmending elimination ofthe guarantee oftax increment shortfall TIF fi~om the Kandice I-teights I and [I Development Agreements. The GUARANTEE Adininistrator indicated that staff had been concerned tl~~t witl~ a reduction in class rates tl~ere would be insufficient incremenY to cover debt service. However, upon an~lyzin~ Yhe TIF district, even witl~ a reduced class rate, the district still has sufficient clsh flow to retire debt service payments. However, the City will not be generating a sur}~lus of fax increment }~roceecls until after debt is retired to f~ind any fiu~ther pro~erty acquisitions in this area unless there is a project associated with the purchase. The Administrator further pointed o~it~ Chat the sales price of I{andice Heights 1 will lil<ely incre~se the marl<et val~ie that will ~enerate more TIF. The Administrator su~gested thaC IetCing normal inarl<et factors worl< will notjeopardize the Pinancial well bein~ ofthe CiCy, will not create a com~efitive disadvanta~e for the propeity, 1nd will allow for the elimination of the guarantee of a"C1F~ sllortfal(. Fahey aslced if the increment would equ11 the reduced eiass rate. The Administrltor replied thlt the iucrement is calculated at a frozen tax rate of l 12% for this district. The Admi~~istrator pointed out that the ICandice I-Ieights properties pay taxesjust Iil<e any other property. However, with the chan~es in the property tax system, no one envisioned the effect on this project. The Administrator reported the property l~as not cash-t7owed, and the owner has been required to mal<e up the difference to clsh flow the debt service. Scalze asl<ed if the chan~e in e(ass rates is having the same effect on other TIF projer,ts across the State.