11-08-1989 Council Agenda - Laserfiche WebLink

Home Browse Search

4. Tax Levy. An Authority may have its City levy a tax of .75 mill times the assessed valuation of taxable property in the City for the benefit of the Authority. The City may increase this levy by following the "reverse referendum" procedure specified in the statute. In addition, the EDA could exercise its HRA powers and levy a tax of one third of one mill times the assessed valuation of taxable property in the City for the benefit of the Authority. This levy also requires City Council approval. The money obtained from the levy could be used for any purpose for which the City's general fund moneys could be used. 5. Reimbursement Tax Increment Money. Even if excess tax increments are restricted as to use, that restriction is removed once the tax increments are used to reimburse the City for general fund expenditures (including administrative costs) which could have been paid from tax increments. 6. Utility Taxes. We are unaware of any authority under which the City may impose any "utility tax" as a surcharge on rates and charges imposed for sewer and water to help finance economic development projects. Rates and charges may be increased, however, or a surcharge used, to raise the money required to expand the sewer and water system to accomodate economic development. On the other hand there is at least some authority for including a reasonable profit relating to the City's utility system. This "profit" could be transferred to the City's general fund and inturn used in the same manner as other general fund monies. Similarly, any franchise fee charged for the granting of a franchise to an investor owned utility (e.g., NSP) could be contributed in the same manner as other general fund moneys could be used. 7. Miscellaneous Sources of Revenue. The City could use developer payments in lieu of taxes or developer loan repayments for any purpose for which the City's general fund moneys could be used. Despite the broad interpretation given the public purpose doctrine, it remains crucial to demonstrate that public funds will be used for a public purpose. Public benefits such as the addition of jobs, the retention of jobs, the addition or retention of tax base, or the prevention or cure of blight will demonstrate that a project has the requisite public purpose. In any given project, providing for penalties if certain job or tax base criteria are not met will bolster a public purpose argument. Dated March 9, 1988. 25 Page 27