05-06-2019 Council Work Session Minutes

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CITY COUNCIL, WORK SESSION May 6, 2019 APPROVED 135 - Next steps if the council were to move forward with tax increment establishment; 136 agree on district framework; anticipated schedule); 137 138 The mayor asked why the cottagesltownhomes are not included in the proposed district. 139 Ms. Huot explained that there are income requirements. On the skilled care area that is 140 exempt from the district, the units are not considered housing units because they are short 141 term. The mayor suggested that including additional area (increment) in the plan would 142 act to shorten the term of the district by reaching the financial assistance goal quicker. 143 144 The mayor said he is disappointed with the county valuation but he knows there will be 145 more information after building occurs. Is there an option for the county to guarantee a 146 valuation? Mr. Grochala suggested that there could be an agreement up front that 147 establishes a minimum value. 148 149 The mayor pointed out that the plan, including financing, is based on estimates. He wants 150 to protect the City in case it comes in low. For instance the contingency needed may be 151 less. What is the future auditing procedure for determining those final numbers? Ms. 152 Huot said, in some cases, cities have hired a third party to keep track, with the hardest 153 part of that establishing the methodology that will be used. The mayor said it makes 154 sense to him to have someone involved along the way. 155 156 The major also asked about value appreciation. All the numbers are based on a static 157 valuation; what if the value goes up during the term. Ms. Huot agreed that the valuation 158 will impact the amount of increment. 159 160 Community Development Grochala said staff would also intend to watch the land costs. 161 162 Mayor Reinert asked about the five percent allocated annually to the City. Ms. Huot said 163 state law allows the City to capture a certain amount of funding to cover administrative 164 costs. 165 166 Mayor Reinert asked about $11.6 million in financing costs. It was explained that it 167 includes capitalized and construction interest, working capital, issuance fee, and payment 168 for skilled nursing beds. 169 170 Council Member Stoesz asked if expanding the TIF district ensures the development of 171 an area. Ms. Huot said she understands development of all elements will begin 172 simultaneously. Council Member Stoesz noted that some elements within the current 173 boundaries won't be included in the TIF plan and he wonders if they should be removed 174 from the district. Ms. Huot explained that the entirety building must be included in the 175 TIF district but they are allocating increment based on only the eligible areas within the 176 district. 177 178 Staff should report back on including the cottages within the district. Mr. Grochala said 179 staff is comfortable that can be done.