07-25-2016 Council Meeting Minutes

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COUNCIL MINUTES July 25, 2016 APPROVED 91 - How a TIF district is created (including creation of a development district, a TIF district, 92 requiring a public hearing and certification of the district); 93 - A map was shown indicating the area of the proposed TIF district; 94 - A map was shown indicating the development district proposed (the entire city); 95 - Certain costs are eligible for tax increment, including public improvements, land acquisition, soil 96 work, etc.. 97 - Public improvement costs are allowed and the types were reviewed; 98 - Common methods for financing costs (G.O. bonds, Pay -As -You -Go Notes, or revenue bonds — 99 the city is looking at Pay -As -You -Go); Council Member Kusterman asked if there is any risk 100 related to value not growing as predicted and Ms. Huot explained the risk would fall to the 101 developer; 102 - Types of TIF districts (the type determines the time frame and the City is looking at economic 103 development that allows a 9 year term); 104 - Statutory findings to approve a TIF District; 105 - City use of TIF — the City should look at feasibility, decide on a term and amount of assistance 106 and have a but -for needs analysis. Ms. Huot responded to a question about risk and the result of a 107 lack of reimbursable funds to the developer. Mayor Reinert asked for further explanation on the 108 cost to taxpayers of tax increment financing. Ms. Huot explained that when tax increment is 109 utilized, the value of a property is frozen and the taxes attributable to the new development are 110 reserved for the tax increment process — therefore, there wouldn't be a loss to taxpayers since the 111 project wouldn't have occurred "but -for" the availability of tax increment. The council heard the 112 level of taxation currently on the subject property (that would divided among all taxing districts — 113 city, county, schools, special). Ms. Huot explained the impact of tax increment on fiscal 114 disparities. Council Member Manthey noted that the area being discussed in this case is without 115 infrastructure, the development adds that to the area and that is an important consideration. 116 Council Member Kusterman outlined this case where there wouldn't be a business but for the 117 increment plan. 118 - The approval process, the City's authority, and the lack of an obligation to issue bonds by -just 119 establishing a district; 120 - A review of the United Properties TIF proposal/request (size, jobs, use of green acres property, 121 total estimated private investment, tax increment financing costs, total projected market value of 122 about $18.2 million in land and building value amount and total proposed increment revenue, 123 amount to be provided to the developer); 124 - The actions items requested of the council (public hearing, plan consideration). 125 126 Council Member Maher received an explanation of how the property is considered once the increment of 127 $1.2 million is fully paid. It will be a normally taxed property of all taxing districts. Ms. Huot 128 explained the terms and schedule. 129 130 The mayor asked about the possibility of modification in the future. Ms. Huot reviewed the TIF district 131 map, noting that there is additional area already included within the boundaries. 132 133 Regarding the twenty percent pool of funds allowed to the city, Ms. Huot explained that the law 134 specifically requires eighty percent to be spent within the district. That leaves the twenty percent for 135 other expenditures (by the City).