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Mounds View Planning Commission July 5, 2006 <br />Regular Meeting Page 18 <br />________________________________________________________________________ <br /> <br />development construction costs and the infrastructure to allow a development to move forward. The <br />City is able to pledge future tax dollars for a project to encourage and provide assistance to a <br />developer to bring in that development. It establishes a base value in terms of the value of the <br />property and any valuation increase from the date the TIF district was created. Any increase or <br />construction past the date the TIF was created would be captured tax value and would go into a <br />separate pool. Based on today’s legislation, the dollars are designated to pay off the obligation <br />incurred to assist the developer. There is a “but for” this assistance, the development would not go <br />forward. There must be rational bases for the assistance provided. TIF is a development tool a City <br />or County can utilize to redevelop an area so as not to lose what is there now and utilize the increased <br />value to pay off the cost of the project. These dollars are initiated from the property owner that <br />creates the project. <br /> <br />Commissioner Hegland said the three districts have different rules because dollars are reallocated to <br />other projects as opposed to future projects that can only be dedicated for the assigned project. The <br />Planning Commission needs to have the whole picture. <br /> <br />Coordinator Backman clarified what TIF can be used for. It can be used for such things as parking, <br />utilities, water and sewer and things that pertain to the site. It cannot be used for operational expenses <br />or putting up office spaces. Think of it as from the ground down. <br /> <br />Commissioner Hegland asked for an explanation of the length of time a TIF district is established. He <br />asked how this is determined and what fiscal impact it has on the City. <br /> <br />Coordinator Backman said legislation establishes the TIF districts. This particular district is <br />established for 25 years. The projects within the districts can be for less time. <br /> <br />Commissioner Hegland asked if once the TIF districts are retired at the end of 2015, is this the end. <br /> <br />Coordinator Backman said that is correct. The one exception is if decertification is done. It is <br />possible to shorten the TIF but not lengthen it. We could, in theory, decertify parcels from any of the <br />districts. But if there are financial obligations pertaining to that district, these obligations must be <br />kept in mind. The obligations continue on. The risks are on the developer, not the City. The City is <br />not obligated to pay off the note. This is true of Medtronic also. <br /> <br />Commissioner Hull said that by decertifying a TIF district, it is quicker on the tax rolls and better for <br />the taxpayers. <br /> <br />Director Ericson said theoretically there is a reduction in the tax levy and how it is spread among the <br />taxpayers. Property taxes collected by properties in the TIF district are not paid into the tax fund. <br />They are taxed according to the tax rate established. <br /> <br />Coordinator Backman said the City could not hoard TIF dollars. If the TIF dollars are coming in and <br />the City sits on them, Ramsey County would say you either use them or lose them. Within a specified <br />period of time, the City must show Ramsey County these dollars would be used. <br /> <br />Commissioner Scotch said the key is to know the districts.