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nav- . - =•cr hlc'N 1 4 : 2 . <br />F' -'3 <br />A possible alternative is to structure projects so that the tax <br />increment account can reimburse the general fund. Projects would <br />have to work with approximately 2/3's of the dollars we formerly <br />had. The problem is that cities have no authority to use tax <br />increments in that way. <br />The alternative structure would have to use developer repayments, <br />which technically are not tax increments. A 2/3 grant, 1/3 loan <br />arrangement could be structured. This would only work on bonded <br />projects and would not work on pay as you go projects. <br />The problem with this idea is that your bond counsel is not sure <br />if they will be able to give a bond opinion on such a structure. <br />If the deal appears to be just "laundering" of funds, we could <br />not get approval. <br />I believe the City Council should discuss the local government <br />aids impact before I spend a great deal more time on this <br />project. Economic tax increment is no longer a matter of waiting <br />eight years to receive the benefits of an increased tax base. <br />Now it involves an annual loss out of the general fund. <br />Redevelopment /housing districts have a five year delay before <br />there is a reduction in local government aids. Then the <br />reduction is phased in at a lesser rate. <br />Page 7 <br />