09/23/1998 Council Minutes - Laserfiche WebLink

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CITY COUNCIL WORK SESSION SEPTEMBER 23, 1998 been 1/3 the cost of the penalties. The Legislature will not allow the City to pay the local donation now. Mark stated the City has the following options: 1. Change the Legislature. 2. Remove some parcels from the TIF districts. 3. Lessen increase in penalty over the next five (5) years by extending the term of the districts. 4. Renegotiate agreements with developers. Mark stated the City's TIF Districts are not aggressive. Kim suggested that all options be pursued. Mark stated there is the risk of a higher interest rate regarding extending the term of the districts. Kim stated she would like to know if staff was aware of the penalty before this time. Brian stated the TIF Program began in 1995-1996. He assumed the penalty was not made because staff was instructed to follow another policy. Jerry stated the best bet is to convince the Legislature that the penalties are very unfair to communities. Kim asked why this is an issue two (2) years after the district was established. Jerry explained there is a lag time regarding the value of projects and the tax roll. John asked if this is the first time the City has faced a penalty. Mark stated there was a small penalty in 1998. Jerry stated that when the tax increment plans were put together HACA should have been discussed. Kim stated that staff should have been aware of the City paying the penalty and then reviewed the rest of the plans to ensure it did not happen again. Brian stated he is aware of discussions between the previous City Administrator and Finance Director. He said he was unsure of the reasoning to go this route. Mark stated the Department of Revenue made a ruling that the penalty will continue after the five (5) year period and go against the City's account. Jerry stated the City must absorb $155,000 with available funds. Kim suggested the City do all it can to mitigate the penalties. She asked for Council approval for staff to proceed with all the recommendations and discuss them at the next work session. John noted there is a risk involved with the option of extending the term of the district. He asked Mark to give Dave a recommendation regarding that option. It was the consensus of Council to direct staff to proceed with all options and direct Mark to give special consideration for the option of extending the term of the district. Kim asked this issue be on the agenda for the next work session. Dave stated that if the City wants to increase the tax capacity rate the Council must act on it Monday night. Chris noted that if the City makes a mistake it should not be passed on to the tax payer. Jerry stated that the City may be able to recover some costs from TIF 2 • • •