08-08-2016 Council Packet* - Laserfiche WebLink

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COUNCIL MINUTES July 25, 2016 DRAFT 3 - How a TIF district is created (including creation of a development district, a TIF district, 91 requiring a public hearing and certification of the district); 92 - A map was shown indicating the area of the proposed TIF district; 93 - A map was shown indicating the development district proposed (the entire city); 94 - Certain costs are eligible for tax increment, including public improvements, land acquisition, soil 95 work, etc.. 96 - Public improvement costs are allowed and the types were reviewed; 97 - Common methods for financing costs (G.O. bonds, Pay-As-You-Go Notes, or revenue bonds – 98 the city is looking at Pay-As-You-Go); Council Member Kusterman asked if there is any risk 99 related to value not growing as predicted and Ms. Huot explained the risk would fall to the 100 developer; 101 - Types of TIF districts (the type determines the time frame and the City is looking at economic 102 development that allows a 9 year term); 103 - Statutory findings to approve a TIF District; 104 - City use of TIF – the City should look at feasibility, decide on a term and amount of assistance 105 and have a but-for needs analysis. Ms. Huot responded to a question about risk and the result of a 106 lack of reimbursable funds to the developer. Mayor Reinert asked for further explanation on the 107 cost to taxpayers of tax increment financing. Ms. Huot explained that when tax increment is 108 utilized, the value of a property is frozen and the taxes attributable to the new development are 109 reserved for the tax increment process – therefore, there wouldn’t be a loss to taxpayers since the 110 project wouldn’t have occurred “but-for” the availability of tax increment. The council heard the 111 level of taxation currently on the subject property (that would divided among all taxing districts – 112 city, county, schools, special). Ms. Huot explained the impact of tax increment on fiscal 113 disparities. Council Member Manthey noted that the area being discussed in this case is without 114 infrastructure, the development adds that to the area and that is an important consideration. 115 Council Member Kusterman outlined this case where there wouldn’t be a business but for the 116 increment plan. 117 - The approval process, the City’s authority, and the lack of an obligation to issue bonds by just 118 establishing a district; 119 - A review of the United Properties TIF proposal/request (size, jobs, use of green acres property, 120 total estimated private investment, tax increment financing costs, total projected market value of 121 about $18.2 million in land and building value amount and total proposed increment revenue, 122 amount to be provided to the developer); 123 - The actions items requested of the council (public hearing, plan consideration). 124 125 Council Member Maher received an explanation of how the property is considered once the increment of 126 $1.2 million is fully paid. It will be a normally taxed property of all taxing districts. Ms. Huot 127 explained the terms and schedule. 128 129 The mayor asked about the possibility of modification in the future. Ms. Huot reviewed the TIF district 130 map, noting that there is additional area already included within the boundaries. 131 132 Regarding the twenty percent pool of funds allowed to the city, Ms. Huot explained that the law 133 specifically requires eighty percent to be spent within the district. That leaves the twenty percent for 134 other expenditures (by the City). 135