07-22-1987 Council Agenda - Laserfiche WebLink

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:Little Canada City Council 14 July 1987 Page Two The Thunder Bay TIF District has the potential of generating between $400,000 and $500,000 over the life of the district. A case can be made that those funds could be better used by the City to encourage other development, rather than returning then to the County, School District and City for distribution under the normal tax policy. . In order to accomplish this goal of using the surplus funds whenever the oppor- tunity presents itself, we would have to make a major change in the Development District boundaries. Presently, there exists seven different municipal development districts. Thunder Bay would be the eighth. Tax increment funds can be utilized anywhere within its development district. The procedure to accomplish our goal would be to: 1. Abolish all seven previous development districts. This is not a problem because no TIF districts were ever established in any of these districts. 2. Create one large district that includes all the property formerly included in the eight separate districts. 3. Establish Thunder Bay as TIF District #1. We would have to create a new development district plan and hold a public hearing. The TIF District #1 is acceptable as is, but would require the new public hearing as well due to it being in a new development district. Ms. Ippel approved this format change and use of surplus TIF funds. The City need not capture all of the increment. You could elect to return a portion to the County, School District and City. This could help answer potential critics who point out the rising cost of police, fire, schools, etc. The TIF statutes have partially addressed this problem by requiring the frozen base to increase annually by a five year average annual adjustment factor. In this project, the County has established the adjustment factor to be 1.3 %. The City would be able to accumulate the funds for four years before they must be utilized for some eligible project. If there were none, the City would simply return the funds. The proposed structuring change is a very aggressive use of TIF. It does depart from the philosophy of utilizing funds for projects which create them or for similar or like projects. Some critics of TIF would object to using TIF funds generated by a single family residential subdivision on an industrial project across town. I believe Mr. Voto will be present at your meeting of July 22nd to encourage your support for restructuring the project. I too will be in attendance. I would have no objections to such a change. Page 25