07-26-1999 CC - Laserfiche WebLink

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/D ('T City of Mounds View Staff To: Mayor and members of the City Council From: Bruce A. Kessel, Finance Director Item Title/Subject: Decertify parcels within TIF District 2 Date of Report: July 22, 1999 Attached is a City Council Resolution that was requested to remove two parcels from the TIF District. While the issue was requested to be placed on the City Council agenda, I believe that it is actually the Economic Development Authority who has the authority to take such action. Other staff members or our TIF attorney or City attorney would be better able to address the proper entity that is able to adopt such a resolution. Regardless of the actual entity that adopts the resolution, you may wish to authorize the mayor and clerk -treasurer to modify it if necessary and then to execute it for and on behalf of the City in order to meet any County requirements. Prior to adopting this resolution, I feel that it is my duty as the City's Finance Director to express my concerns relating to this resolution. ❑ At the present time, the City has three outstanding general obligation bond issues totaling $5,780,000 that are backed by the full faith and credit of the City. In lay terms, this translates into the City pledging to increase its property tax levy to make up any shortfall in revenue collections from tax increments. ❑ The City uses tax increment funds to pay for a portion of three City employee's salaries, for housing programs, Highway 10 redevelopment, business retention and expansion, etc. If there are not sufficient TIF dollars to pay for such costs, they will either have to be shifted to the general fund or be eliminated. ❑ The City Council, Economic Development Authority, and Economic Development Commission have not developed a long-term plan for the use of TIF. To arbitrarily select several parcels to remove from the district without first developing such a plan is not fiscally responsible. As has been stated in the past, the City has several options to deal with funds in excess of what it deems it needs within its TIF District including: ❑ Collect the funds and return a portion back to the County to redistribute to the County, School District and the City (the other misc. jurisdictions such as Rice Creek, Library, etc. do not receive any of portion of such payment); ❑ Decertify an area or an entire District. If the City completes a plan and determines that an area or an entire District is no longer in need of redevelopment, it can then justify its decertification. However, to arbitrarily pick out several parcels without it being a part of a long-term plan is not fiscally responsible. The County has indicated that there is a short time table to decertify a parcel for next year. If the Council wishes to complete a long term plan that addresses the issues raised above, it could wait to adopt the attached resolution and return to the County the increment collected on said parcels in 2000 and achieve the same results. If you have any questions, please feel free to contact me.