05-28-2019 Council Packet - Laserfiche WebLink

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CITY COUNCIL WORK SESSION May 6, 2019 DRAFT 4 - Next steps if the council were to move forward with tax increment establishment; 135 agree on district framework; anticipated schedule); 136 137 The mayor asked why the cottages/townhomes are not included in the proposed district. 138 Ms. Huot explained that there are income requirements. On the skilled care area that is 139 exempt from the district, the units are not considered housing units because they are short 140 term. The mayor suggested that including additional area (increment) in the plan would 141 act to shorten the term of the district by reaching the financial assistance goal quicker. 142 143 The mayor said he is disappointed with the county valuation but he knows there will be 144 more information after building occurs. Is there an option for the county to guarantee a 145 valuation? Mr. Grochala suggested that there could be an agreement up front that 146 establishes a minimum value. 147 148 The mayor pointed out that the plan, including financing, is based on estimates. He wants 149 to protect the City in case it comes in low. For instance the contingency needed may be 150 less. What is the future auditing procedure for determining those final numbers? Ms. 151 Huot said, in some cases, cities have hired a third party to keep track, with the hardest 152 part of that establishing the methodology that will be used. The mayor said it makes 153 sense to him to have someone involved along the way. 154 155 The major also asked about value appreciation. All the numbers are based on a static 156 valuation; what if the value goes up during the term. Ms. Huot agreed that the valuation 157 will impact the amount of increment. 158 159 Community Development Grochala said staff would also intend to watch the land costs. 160 161 Mayor Reinert asked about the five percent allocated annually to the City. Ms. Huot said 162 state law allows the City to capture a certain amount of funding to cover administrative 163 costs. 164 165 Mayor Reinert asked about $11.6 million in financing costs. It was explained that it 166 includes capitalized and construction interest, working capital, issuance fee, and payment 167 for skilled nursing beds. 168 169 Council Member Stoesz asked if expanding the TIF district ensures the development of 170 an area. Ms. Huot said she understands development of all elements will begin 171 simultaneously. Council Member Stoesz noted that some elements within the current 172 boundaries won’t be included in the TIF plan and he wonders if they should be removed 173 from the district. Ms. Huot explained that the entirety building must be included in the 174 TIF district but they are allocating increment based on only the eligible areas within the 175 district. 176 177 Staff should report back on including the cottages within the district. Mr. Grochala said 178 staff is comfortable that can be done. 179