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Home My WebLink About2015-030 Council Resolution• • • CITY OF LINO LAKES, MINNESOTA RESOLUTION NO. 15-30 RESOLUTION APPROVING PROPERTY TAX ABATEMENT RELATED TO FIRE HALL AND PUBLIC INFRASTRUCTURE IMPROVEMENTS IN THE CITY OF LINO LAKES BE IT RESOLVED By the City Council (the `'Council") of the City of Lino Lakes, Minnesota (the `City"), as follows: Section 1. Recitals. 1.01. The City has contemplated granting a property tax abatement in order to aid in the acquisition, construction, and equipping of a fire hall in the City, including the construction of necessary public infrastructure (the "Project"), which will benefit certain property in the City, all pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (the "Act"). 1.02. Pursuant to Section 469.1 813, subdivision 1 of the Act, the City may grant an abatement of all or a portion of the taxes imposed by the City on a parcel of property to pay for all or part of the cost of acquisition or construction of public facilities and to finance or provide public infrastructure, whether or not located on or adjacent to the parcel for which the tax is abated. 1.03. The City has identified fifty-three (53) parcels located in the City, identified in EXHIBIT A hereto (the "Abatement Property"), which will be benefitted by the Project and from which the City proposes to abate a portion of the City's share of taxes to help finance the Project, subject to all the terms and conditions of this resolution (the "Abatement"). The Abatement Property is not located in a tax increment financing district. 1.04. The City intends to issue its general obligation bonds, a portion of which will be designated as tax abatement bonds in the approximate aggregate principal amount of $495,000 (the "Abatement Bonds") and will be issued to pay the costs of the Project pursuant to the Act. The Abatement Bonds are expected to be paid primarily through the collection of Abatement revenues. 1.05. On the date hereof, the Council conducted a duly noticed public hearing on the Abatement at which the views of all interested persons were heard. Section 2. Findings. 2.01. It is hereby found and determined that the benefits to the City from the Abatement will be at least equal to the costs to the City of the Abatement for the following reasons: (a) The Abatement will help finance the Project, which is necessary to provide or help acquire or construct public facilities in the City, help provide access to services for residents of the City, and finance or provide public infrastructure in a way that will strengthen the local economy, preserve natural resources, and ensure a high quality of life for residents of the City. 458392v1 JAE LN140-115 • (b) The Project will help preserve and increase the value of the Abatement Property, thereby helping to generate additional City tax revenues over the long term after the expiration of the Abatement. 2.02. It is hereby found and determined that the Abatement is in the public interest for the following reasons: (a) The Abatement will increase or preserve tax base by stimulating development and helping to maintain values in the area, as set forth above. (b) The Abatement will provide or help acquire or construct public facilities in the City, help provide access to services for residents of the City, and finance or provide public infrastructure, which will protect the general health and welfare of the community and contribute to the quality of life in the City by maintaining public infrastructure and facilities in proper working order. Section 3. Actions Ratified; Abatement Approved. 3.01. The Council hereby ratifies all actions of the City's staff and consultants in arranging for approval of this resolution in accordance with the Act. 3.02. Subject to the provisions of the Act, the Abatement is hereby approved and adopted subject to the following tenns and conditions: (a) The term "Abatement" means the City's share of the real property taxes generated from the land and improvements on the Abatement Property, in the amounts described in this Section: (1) The aggregate Abatement paid by the City during the tenn of this resolution will not exceed the amount necessary to pay 105% of the principal of and interest on the Abatement Bonds, up to a maximum of $585,806.35. (ii) Notwithstanding anything to the contrary herein, the Abatement payable on any August 1 and subsequent February 1, combined, will not exceed the amount produced by extending the City's total tax rate for the applicable year against the tax capacity of the Abatement Property, as of January 2 in the prior year. (iii) In accordance with Section 469.1813. subdivision 8 of the Act, in no year shall the Abatement, together with all other abatements approved by the City under the Act and paid in that year, exceed the greater of 10% of the City's levy for that year or $200,000 (the "Abatement Volume Cap"). The City may grant any other abatements permitted under the Act after the date of this resolution, provided that to the extent the total abatements in any year exceed the Abatement Cap, the allocation of Abatement Cap to such other abatements is subordinate to the Abatements under this resolution. (b) The Abatement will be for a term of ten (10) years, and the City will pay the Abatement in semiannual installments each August 1 and February 1, commencing August 1, 2016, and continuing through August 1, 2025. The City will pay the Abatement solely to finance the cost of the Project, through application of Abatement amounts toward debt service payments on the Abatement Bonds (including any bonds issued to refund the initial Abatement Bonds). 458392v1 JAL LN140-115 2 • • • (c) This resolution may be modified only with the prior written approval of the City, and any modification is subject to Section 469.1813, subdivision 7 of the Act. (d) In accordance with Section 469.1815 of the Act, the City will add to its levy in each year during the term of the Abatement the total estimated amount of current year Abatement granted under this resolution. 3.03. The Mayor and City Administrator are authorized and directed to execute and deliver any agreements, certificates or other documents that the City determines are necessary to implement this resolution. Approved by the City Council of the City of Lino Lakes, Minnesota, this 23' day of March, 2015. The motion for adoption of the foregoing resolution was introduced by Council Member Kus terman and was duly seconded by Council Member Roeser and upon a vote being taken thereon, the following voted in favor thereof: Kusterman, Roeser, Rafferty, Stoesz, Reinert The following voted against same: none 458392v1 JAE LN140-115 Jeff Reinert, Mayo/ • • EXHIBIT A ABATEMENT PROPERTY Parcel Identification Numbers: 27-31-22-41-0029 27-31-22-41-0040 27-31-22-41-0049 27-31-22-44-0030 27-31-22-44-0020 27-31-22-44-0011 27-31-22-41-0030 27-31-22-41-0041 27-31-22-41-0050 27-31-22-44-0031 27-31-22-44-0019 27-31-22-44-0010 27-31-22-41-0031 27-31-22-41-0042 27-31-22-44-0023 27-31-22-44-0032 27-31-22-44-0018 27-31-22-44-0009 27-31-22-41-0032 27-31-22-41-0043 27-31-22-44-0024 27-31-22-44-0033 27-31-22-44-0017 27-31-22-44-0008 27-31-22-41-0033 27-31-22-41-0044 27-31-22-44-0025 27-31-22-44-0034 27-31-22-44-0016 27-31-22-44-0007 27-31-22-41-0034 27-31-22-41-0045 27-31-22-44-0026 27-31-22-44-0035 27-31-22-44-0015 27-31-22-44-0006 27-31-22-41-0035 27-31-22-41-0046 27-31-22-44-0027 27-31-22-44-0036 27-31-22-44-0014 27-31-22-44-0005 27-31-22-41-0038 27-31-22-41-0047 27-31-22-44-0028 27-31-22-44-0022 27-31-22-44-0013 27-31-22-44-0004 27-31-22-41-0039 27-31-22-41-0048 27-31-22-44-0029 27-31-22-44-0021 27-31-22-44-0012 458392v1 JAE LN140-115 A-1 • • • STAFF ORIGINATOR: MEETING DATE: TOPIC: VOTE REQUIRED: INTRODUCTION CITY COUNCIL AGENDA ITEM 2A Al Rolek March 23, 2015 Public Hearing to Consider Resolution No. 15-30 Approving Property Tax Abatement Related to Fire Hall and Public Infrastructure Improvements in the City of Lino Lakes Simple Majority As part of the fire station project turn lanes and extension of the sewer trunk utility is necessary along Birch Street and Centerville Road. It is proposed to use the tax abatement process to finance these improvements. A public hearing has been scheduled for this evening to gather public input on the proposed tax abatement. BACKGROUND At the March City Council work session, Mikaela Huot of Springsted, Inc., made a presentation to the Council regarding the use of Tax Abatement as a financing mechanism for external street and utility improvements related to the new fire station facility. The process of tax abatement is an economic development tool used to finance city improvements. It identifies benefitting parcels with sufficient tax capacity to generate the amount needed to service the debt on city improvements. Property taxes are not actually `abated' on these properties, but the calculated amount of city property tax is then levied across the entire tax base of the city for payment of debt service. Terri Heaton of Springsted, Inc. will be in attendance to do a brief PowerPoint presentation to explain the tax abatement process to answer any questions that the City Council and/or the public may have. Mayor Reinert will then open the public hearing to take public comment on the proposed tax abatements. Following public comment the Council will consider Resolution 15-30 approving the property tax abatement related to the fire station and external public improvements. RECOMMENDATION Staff is recommending approval of Resolution No. 15-30. ATTACHMENTS Resolution 15-30