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06-24-2019 Council Packet
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06-24-2019 Council Packet
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City Council
Council Document Type
Council Packet
Meeting Date
06/24/2019
Council Meeting Type
Regular
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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In <br />specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member <br />of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly <br />Virchow Krause, LLP <br /> <br />meetings to diligently meet that request. The following table provides a summary of the proposed financing <br />package to the developer. <br /> <br />Type of TIF Eligible Cost Financial <br />Assistance <br />Package <br />Initial request $5,300,000 <br />Reduction of request based on financial review $(1,400,000) <br />Reduction based on fee credits $(300,000) <br /> <br />Net Assistance through TIF (est. 9.5 years) $3,600,000 <br /> <br />Pooled TIF from Housing District 1-5 $382,000 <br /> <br />Proposed TIF Assistance to Developer from TIF 1-13 <br />(New Housing TIF District) over 8.5 years $3,218,000 <br /> <br />We were able to reduce the original request of assistance from 15 years to lesser term by lowering the total <br />reimbursable amount of eligible costs. We further reduced the term through the provision of City fee credits, as <br />standard practice. And lastly, by including the value of the town homes (additional $6.0M) and utilizing pooled <br />TIF dollars already on-hand resulted in a further reduced term estimated to be 8.5 years. In summary the <br />following steps were followed to meet the Council directives: <br /> <br />1. Review and application of fee credits through City policy <br />2. Including town homes in boundaries of TIF District <br />3. Use of pooled TIF from existing Housing District 1-5 <br /> <br />1. Review and application of fee credits <br /> <br /> Using information submitted by the developer in the development application, City staff was able to <br />determine the estimated fee credit amount that is consistent with City policy. The City will provide credit <br />in the amount of approximately $300,000 to the developer for park dedication and trunk utility fees for <br />work on public trail and trunk utility oversizing improvements. This number is an estimate and may <br />change based on actual improvements and contract costs. <br /> <br />2) Including town homes in boundaries of TIF District <br /> <br /> At the May 6 City Council work session, there was a request to include the town home development <br />within the boundaries of the TIF district to increase the projected revenues and ultimately result in a <br />reduced term of assistance. The total estimated value of the taxable portion as provided by the County <br />for the senior care building is approximately $22.9M. The preliminary value estimates for the town <br />homes is about $300,000/unit resulting in an additional $6.0M of value. This provides more revenues in <br />the TIF District as it captures all incremental taxes of the taxing entities, as opposed to the City’s share <br />only should the town homes not be included in the TIF District and go on the general tax rolls. The <br />inclusion results in one less year of needed tax increment assistance reducing the term from an original <br />10.5 years to 9.5 years to meet the recommended total of $3.6M. <br /> <br />Use of pooled TIF from existing Housing District 1-5 <br /> <br /> We did additional due diligence to understand potential alternate funding sources that may be available <br />to reduce the term of the TIF District and determined the City has existing funds from its’ Housing TIF <br />District No. 1-5 (Willow Ponds). The available amount is approximately $382,000. The funds from TIF <br />1-5 may only be used on other eligible affordable housing projects within the City. If the funds are not <br />used, they will be redistributed to the County and the city could expect to receive only its share of the <br />total (approximately 1/3). By using these funds for the proposed project, the amount of TIF from the
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