2018.03.19 CC Packet - Laserfiche WebLink

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t--=MWW-- CITY OF 14669 Fitzgerald Avenue North, Hugo, MN55038 • (651) 762-6300 www.ci.hugo.mn.us ��-- EST. 1106 vwm � - TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Ron Otkin, Finance Director SUBJECT: Approve Return of Excess TIF to County for Redistribution DATE: For the City Council Meeting of March 19, 2018 DESIRED COUNCIL ACTION Adoption of Consent Agenda Including Approving Return of Excess TIF to County for Redistribution BACKGROUND The Bald Eagle TIF District was established in August, 1996, and modified in February, 2000. All but one of the parcels were "knocked out" of the district after the city's bond obligations were paid off in December, 2010. The TIF generated by the remaining parcel is being used to pay the note issued in 2002 (purchased by the Carroll County Bank) for the Minnesota Union Builders project. There are only two payments left to be made on the note (August 1S1 and February 1St) after which all TIF obligations will be paid and the district can be decertified. The law requires that any monies left in the TIF Fund must be returned to the County for redistribution to the City, County, and School District. Although this requirement won't "kick in" until after the final note payment is made, we can send some of this "excess TIF" to the County at any time before then. The TIF Fund has a balance of $380,305.84. Staff is proposing we send $350,000.00 to the County (the balance will be used for cash flow) for redistribution. TIF law requires the County to redistribute these funds to the City, County, and School District in direct proportion to their respective local tax rates. Special taxing districts are not included in the redistribution. Based on 2018 preliminary tax rates this $350,000 will be distributed as follows: $141,400 to the City of Hugo $116,550 to Washington County $ 92,050 to ISD #624 (White Bear Lake School District) $350,000 Total Distribution Although the City and County may use these funds for any purpose, the School District will experience a "wash" — the Education Department will reduce their state aids by the amount of excess TIF they receive. SUCCESSFUL TIF DISTRICT The City of Hugo has attained the goals envisioned when the Bald Eagle TIF District was established. Marginal crop land was transformed into commercial/industrial property with a market value in excess of $26 million that generates over $800,000 in state and local property taxes. These businesses not only provide employment opportunities but also diversifies the City's tax base.