08-09-1999 EDA - Laserfiche WebLink

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August 5, 1999 To: Honorable Mayor and City Council From: Chuck Whiting, City Administrator Re: August 9, 1999 City Council Meeting Council will note that the EDA meeting precedes the Council meeting on Monday. This is what we have: EDA- 5A- Public Hearing re: 6991 Pleasant View Drive Sale to Vista Construction, Inc.: The Council has seen this item before and is familiar with it. Staff will give a short recap at the hearing if necessary. EDA-5B -Resolution 99-EDA-117 Decertifying TIF District#2 Parcels: The discussion at the work session and over the last couple of meetings certainly indicate diverging thoughts on this matter. Realistically, the decertification of the Holiday and Realife parcels will not result in any significant problem for the district if done. Ideally, a policy would be in place. Regardless of the decision on this item, the longer discussion is essentially of determining the Council's preference for determining future uses of collected but not budgeted for tax increments. Decertifying parcels eliminates increments collected from those parcels for consideration in development costs in the future,but the full value of the property would then be part of the general tax base supporting the city. Continued collection of tax increments with no designated purpose is essentially over taxation. Returning increments to the county for inclusion against the general levies of the city, county and school is an option that does allow for periodic review and consideration by the Council in future years. (Remember, this is not a one to one shift of increment to levy, it is property valuation added to the existing general property value base. The tax rate would decrease as a result,but the same levy would be collected in the general fund). The city can decide to budget increment for eligible uses, as we do now for economic development and housing programs, and of course the debt obligation of the tif districts. The city simply collects much more increment than it budgets for these uses, so a policy decision of how much, likely as a percentage, should the city collect over its budgeted expenses for the district. If the city is satisfied that its debt obligations and programs are being met,perhaps returning all additional increment collected aside from a 20% (name the figure)unallocated reserve would be a policy. If the city chose to increase its programming budget, like doing a highway 10 redevelopment, or contributing to the Mermaid or a pedestrian bridge(name the eligible public improvement), the budget would be adjusted by the Council and the policy would stay in place. The option of decertifying parcels would be a approach logical to get more currently developed property back on the general fund tax base. This option would have the affect of lowering the general fund tax rate, something that benefits property tax payers, and meet the objective tif had in the first place, growing the tax base. It is a viable choice. The Council's policy could be something like"all newly developed parcels within a district will be decertified within a period of time (name the time)." Each Council can watch for classification rate changes over time to determine whether the policy should continue if budgeted obligations and programs are covered.