11/02/2009 Council Packet - Laserfiche WebLink

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• • • If a TIF project calls for issuance of general obligations bonds, where the City's full faith and credit is pledged, then City Council action is required. In fact the City itself must issue the bonds and the EDA pledges the tax increment revenue back to the City in order to pay debt service. Also, keep in mind that the City still has its own development powers. That is, the City could create its own tax increment districts, and use development powers under the development district statute (Section 469.124 to 469.134). The only difference is that for TIF districts that have been created by (or transferred to the EDA), the Council no longer has control. Abatement under Sections 469.1812 to 469.1815, by contrast, is a power given only to the City Council. The EDA may make recommendations, but it has no powers to actually approve an abatement. Likewise, only the City can issue abatement bonds (as in the case of the bonds issued for the YMCA). If the enabling resolution were revised to include non - council members on the EDA board, and the resolution were not otherwise revised, the EDA would have the authority to buy and sell land, and use tax increment revenues (for districts approved by the City Council) without Council action. Moreover, the Council would have no authority to direct the EDA to spend or not spend EDA money or undertake certain actions (other than by amending the enabling resolution again to take EDA powers away). However, when non - council members are added to the EDA board, the common practice is to add some limitations on the EDA's activities in the enabling resolution. The most typical limitation is to require City Council approval for issuance of any bonds by the EDA. But this is entirely a matter for the City Council to decide. I am aware of at least one City where the EDA board has a majority of non - council members, and virtually all EDA actions (including all land acquisitions and contracts) require prior Council approval. That type of enabling resolution means the EDA functions more like an advisory body. More common is a limited set of actions requiring Council approval. Following is an example of some limitations used by one City: 6.01. The following limits apply to the EDA and its operation: (a) The sale of bonds or other obligations of the EDA must be approved by the City Council. (b) The EDA must follow the budget process for City departments in accordance with City policies, ordinances, and resolutions and the City charter.