12-14-1998 EDA Packet - Laserfiche WebLink

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DEC 08 '98 02:41PM EHLERS & ASSOCIATES P.4/9 TIF District Overview Administrative fee: Up to 10% of annual increment, if costs are justified. L G A / H A C A The City elects to make the annual local contribution to the project to exempt penalty: itself from the LGA-HACA penalty. Contribution for an economic development district is 10% of annual tax increment. The contribution can be made annually or in larger contribution throughout the life of the district. 3 Year Activity Rule (§469.176 Subd. la) At least one of the following activities must take place in the District within 3 years from the date of certification: o bonds have been issued o the authority has acquired property within the district ❑ the authority has constructed or caused to be constructed public improvements within the district The estimated date whereby this activity must take place is December, 2001. 4 Year Activity Rule After four ycars from the date of certification of the District one of the (§ 469.176 Subd 6) following activities must have been commenced on each parcel in the District: ❑ demolition ❑ rehabilitation O renovation o other site preparation (not including utility services such as sewer and water) If the activity has not been started by the approximately December, 2002, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity. 5 Year Rule (§ 469.1763 Subd 3) Within 5 years of certification revenues derived from tax increments must be expended or obligated to be expended. Tax increments are considered to have been expended on an activity within the District if one of the following occurs: o the revenues are actually paid to a third party with respect to the activity ❑ bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party, the revenues are spent to repay the bonds, and the proceeds of the bonds either are reasonably expected to be spent before the end of the later of (i) the five year period, or (ii) a reasonable temporary period within the meaning of the use of that term under §. 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund o binding contracts with a third party are entered into for performance of the activity and the revenues are spent under the contractual obligation o costs with respect to the activity are paid and the revenues are spent to reimburse a pay for payment of the costs, including interest on unreimbursed costs. Any obligations in the Tax Increment District made after approximately December, 2003, will not be eligible for repayment from tax increments. The previous summary contains an overview of the basic elements of the proposed Tax Increment Financing Plan for Tax Increment Financing District No. 1-9. More detailed information on each of these topics can be found in the complete TIF Plan. Page 2