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Mounds View EDA January 23, 2006 <br />Regular Meeting Page 2 <br /> <br />EDA is to finance development using TIF. <br /> <br />President Marty stated not necessarily but TIF is controlled by the EDA. <br /> <br />Mr. Glidden asked if the EDA is the overseer of TIF utilization. President Marty answered in the <br />affirmative. <br /> <br />Mr. Glidden asked whether TIF is a tool for economic development in the City. President Marty <br />explained that as the EDA sees fit, it can be. <br /> <br />Mr. Glidden stated he is puzzled a bit at how that benefits the citizens and taxpayers of the City. <br />He stated the EDA is an organization established to carry out economic development in Mounds <br />View but he didn’t hear one word in that description that related to the benefit of the taxpayers of <br />Mounds View. He asked what is the purpose of economic development, and what is the gain for <br />doing it. <br /> <br />President Marty explained that by encouraging and assisting business with some TIF districts, the <br />City has encouraged them to move into Mounds View and develop land that was vacant. So, <br />once that property has been decertified it has a much greater tax value than it did previously to <br />the development. <br /> <br />Mr. Glidden suggested that the tax value only is of benefit if the taxes are available for general <br />use. If the taxes are tied to the development paying it, then there is no benefit to the taxpayer, <br />only benefit to the corporation or organization being economically developed. <br /> <br />President Marty explained that when a district is in effect, there are payments and obligations to <br />developers and businesses. But, in 2004 the City was able to decertify a number of parcels that <br />either did not use TIF but happened to be within the TIF district or their TIF obligation had <br />already been satisfied. By decertifying, those businesses and parcels went back on the tax rolls. <br /> <br />Mr. Glidden stated he understands this and that it is the legal requirement and definition, which <br />is why the district is limited to eight years. At that point, the taxes then go into the general fund <br />and are available for general use. <br /> <br />President Marty explained that when the districts were first set up the law and the requirements <br />were different. <br /> <br />Mr. Glidden suggested that the definitions for the typical term of TIF or economic redevelopment <br />have not been recently changed in the State statute. He stated that the maximum term for TIF is <br />eight years. <br /> <br />Commissioner Thomas explained that there are several different types of districts and for <br />redevelopment districts it is eight years. She stated that while there are limited benefits in TIF <br />districts with the tax base, there are other benefits when you encourage development such as the <br />jobs that come into the City. In addition, there are TIF administrative fees that are used for City