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HomeMy WebLinkAbout08-25-2003PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting August 25, 2003 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 6:30 P.M. 1. CALL MEETING TO ORDER 2. ROLL CALL: Stigney, Quick, Marty Gunn, and Linke NOT PRESENT: None. 3. APPROVAL OF AGENDA MOTION/SECOND: Marty/Stigney. To Approve the August 25, 2003 Agenda as Presented. Ayes – 5 Nays – 0 Motion carried. 4. APPROVAL OF EDA MINUTES A. August 11, 2003 Minutes MOTION/SECOND: Marty/Stigney. To Approve the Minutes of August 11, 2003 as Presented. Ayes – 5 Nays – 0 Motion carried. 5. CONSENT AGENDA None. 6. EDA BUSINESS A. Consideration of Revisions to the Mounds View Economic Development Authority’s Tax Abatement Finance Policy & Application. Economic Development Coordinator Backman reviewed with the Authority the differences between TIF and TRF. He then reviewed with the Authority the Tax Rebate Finance Policy and Application proposed changes. Commissioner Marty asked if the district could be extended if two of the taxing districts opted Mounds View EDA August 25, 2003 Regular Meeting Page 2 out. Economic Development Coordinator Backman indicated that the City could still do 15 years. Commissioner Marty indicated he liked the change from $100,000 to $25,000 on Page 6. Commissioner Marty asked whether the City’s costs referenced on 7a could be recovered if they are more than the amount listed. Economic Development Coordinator Backman indicated the costs were considered but the Committee wants to encourage development but he said the wording could be changed from the $1,000. Commissioner Marty indicated that he did not want the City to pay for legal costs to redevelop. Commissioner Marty asked how the public facility and infrastructure projects referenced on Page 8 could be done. Economic Development Coordinator Backman indicated the City of Golden Valley recently used funds for redoing the overpass and traffic lights leading into the General Mills complex and that work was not directly on the property. Commissioner Stigney indicated he would like the policy to state that this is to be used if TIF is not applicable and the City should strive to use TIF whenever possible. Commissioner Stigney indicated he would like to strengthen the language to require that two or more objectives be met rather than one. Economic Development Coordinator Backman indicated that other cities policies on TRF were reviewed and most have been one or more. He then said that for many years TIF was the main game in town and now TRF is getting more attention as it does have less administrative cost to cities. Commissioner Stigney indicated it also has the potential for recovering far less as well. He then said he feels the City should utilize TIF wherever possible because it has more overall benefit to the City. Commissioner Stigney indicated he would like to see the language concerning costs amended. Economic Development Coordinator Backman indicated he would amend the language. Mounds View EDA August 25, 2003 Regular Meeting Page 3 B. Set a Public Hearing for 6:35 p.m. Monday, September 22, 2003 to Receive Public Input and Pass Upon the Revised Tax Abatement Finance Policy & Application. David Jahnke of 8428 Eastwood Road commented that he feels TIF was abused by the City and he has never gotten a report on how that was worked out with the state auditor. Commissioner Quick indicated that he took exception to the use of the word abuse as the City did not abuse the TIF system it was simply a matter of missing documentation. He then said that a staff member forgot to incorporate some information on tax increment and the state said the school district was not notified but the superintendent was at the meeting. Commissioner Stigney commented that the other part was that the City did not specify what parcels. Mr. Jahnke indicated that he feels when the district has served its purpose it should be closed to get the money back on the general tax role. He then gave an example of a City that sacrificed tax money to create one job at $4.50 per hour. Commissioner Quick asked what happens to the taxes that are being paid on the property when a property is placed in a TIF district. Finance Director Hansen indicated that if a property is put into a TIF district and is paying $10,000 in taxes before development that amount is split according to the formulas some to the City, some to the County, and some to the school district then, after development if another $15,000 is generated in new taxes the new taxes are captured by the TIF district. Commissioner Quick asked what would happen to the $15,000. Finance Director Hansen indicated that the $15,000 comes to the City. Mayor Linke indicated there is also 10% off the top for administration. Commissioner Quick asked if a TIF district is allowed to continue forever. Finance Director Hansen indicated there are limits in state law and the maximum is 26 years but something less can be set up. Finance Director Hansen explained that case with the state auditor was settled about three months ago and it was referred to the attorney general for mediation after other venues and the basis of the settlement was the City admitted no wrong doing and agreed to create no new TIF district for a few months and promised to comply with all TIF laws in the future. He then said Mounds View EDA August 25, 2003 Regular Meeting Page 4 that if the attorney general settled for that there was not what could be called abuse. Commissioner Quick asked Mr. Ericson what has been built with TIF in the City. Community Development Director Ericson indicated the City benefited to a great extent from using TIF as both business parks, a number of businesses within the park, infrastructure and the Sysco build out. He then said that Sysco may not have located in the City if TIF had not been available and Sysco is the City’s largest employer. He also indicated that TIF helped with the expansion of the Mermaid. Commissioner Quick commented that all major development within this City has been done utilizing TIF and the City used TIF as it was meant to be used. He then said that using the word abuse is a slam and he feels that is inappropriate. Commissioner Stigney commented that once a property is in a TIF district the amount of the tax is frozen. He then said that this City has 22% of its properties in TIF districts and that is in excess of many other cities. He further commented that the amount of TIF money coming in sounds like a lot but it is to be used within the TIF district or pool district and does not benefit the City’s general fund. He also commented that there are indirect costs to the City because the money does not go to the general tax base. Mayor Linke commented that it does not take much to reach 22% when your City is only four square miles. Commissioner Stigney indicated that parcels can be closed out as soon as they have met their purpose. He then said that TIF can be useful but there are two sides of the coin and he wanted to present the other side of TIF. Community Development Director Ericson indicated that Mounds View is only four square miles so it does not take much to reach the 25% figure. He then said that other cities percentages are lower but they actually have more acreage in TIF districts. He then said that funds from the TIF district are 100% captured by the City to be used for uses that are spelled out by the TIF laws many of which benefit the whole City such as trailways, infrastructure, and aesthetic improvements such as the Highway 10 landscaping, lighting, and trail. He further commented that he feels it is a mischaracterization to say the money does not come to the City because while it does not come to the general fund the funds are available to benefit the City on the whole. Commissioner Quick asked how many jobs were created in the community utilizing TIF funds. Community Development Director Ericson indicated there were at least 1,000 jobs created, if not more. Mounds View EDA August 25, 2003 Regular Meeting Page 5 Commissioner Marty thanked Mr. Backman and the EDC for working on this project for the City. MOTION/SECOND: Quick/Gunn. To Set a Public Hearing for 6:35 p.m. Monday, September 22, 2003 to Receive Public Input and Pass Upon the Revised Tax Abatement Finance Policy & Application. Ayes – 5 Nays – 0 Motion carried. 7. REPORTS None. 8. NEXT EDA MEETING: September 8, 2003 9. ADJOURNMENT President Linke adjourned the meeting at 7:15 p.m. Respectfully submitted, Recorded and transcribed by: Joan Lenzmeier TimeSaver Off Site Secretarial, Inc.