Review of COR Expenses and Funding Sources and Recommendation of Reimbursement of City Funds Via Land Sales and TIF #14 Reimbursement to Draft a Reimbursement Policy

Purpose:  The city has expended several millions of dollars in not only acquiring the COR land, but also for several improvements within it:  Northstar Rail stop, parking ramp, roads, etc.  The COR TIF 14 analysis conducted by Ehler's shows that the area is estimated to generate more than enough in land sale proceeds and Tax Increment to reimburse the city back for all of the city funds that have been expended (or are proposed to be expended:  County Road #116 & Armstrong Interchange). A reimbursement policy needs to be drafted outlining the funds to be reimbursed.

Background:  As noted in the COR TIF analysis that will be reviewed at tonight's work session, the City has expended or will expend an estimated $42.7M in the COR area.  An itemization of costs by project is attached with the respective City funding source.

As noted in the analysis, the COR area is estimated to generate enough revenue in land sales and tax increment to reimburse the city back so that it can use these funds for future needs such as road improvements.  

The city has expended over eleven million dollars from Tax Increment Districts #1, #2 and #4.  These districts are what is termed pooling districts, meaning that their funds can be spent anywhere within the City's Development District #1 (basically all area south of Alpine Drive).   This pooling feature is no longer allowed in current TIF districts, so the city would want to reimburse these funds back to retain this pooling allowance.

The city currently has two internal loans on its financial statements in the water and sewer utility funds which were used to acquire the COR land in 2009.  The current principal amount of these loans are $4,594,000.  As these loans have been outstanding for a few years, it is recommended that land sale proceeds generated will be applied to this debt.

The reimbursement of city funds  from tax increment would occur over the life of the TIF #14 district or up to a period of twenty five years. 

The Strategic plan under the Strategic Imperative:  Financial Stability calls for the city to recoup at least 100% of the city's net costs for those funds that are to be reimbursed.


 

15 minutes

COR Land proceeds and Tax Increment District #14 tax increment to reimburse city funds expended.

Finance Director

To review COR expenditures and respective city funding sources and make determination of reimbursement of city funds based off of Ehler's COR TIF #14 analysis.