7.2.
CC Regular Session
- Meeting Date:
- 10/08/2019
- By:
- Sean Sullivan, Community Development
Information
Title
Adopt Resolution #19-245 Approving Authorization to Add Back Parcels Into TIF District #14
Purpose/Background:
Purpose:
The purpose of this case is to authorize Staff to begin a process to correct a tax collection error within Tax Increment Finance (TIF) District #14. Taxes have been collected, but new increment generated from increased values has not been captured for all eligible parcels. Original base value continues to be distributed to City, County, and School District.
Please note that this is NOT an establishment of a new district. This is a correction to a district already in place.
Background:
City Staff was in the process of reviewing current and future revenue for TIF District 14 and identified numerous tax parcels that should have been included in the district 'capture'. The impetus behind this error originates with a 4-year knock down period. This essentially states that if there are no eligible activities (new construction) on a parcel, it is no longer calculated as new increment captured within the district. Parcels can be added back in once an eligible activity occurs, as is the case with this request. See the memo from Ehlers financial/municipal advisors for detailed information.
The purpose of this case is to authorize Staff to begin a process to correct a tax collection error within Tax Increment Finance (TIF) District #14. Taxes have been collected, but new increment generated from increased values has not been captured for all eligible parcels. Original base value continues to be distributed to City, County, and School District.
Please note that this is NOT an establishment of a new district. This is a correction to a district already in place.
Background:
City Staff was in the process of reviewing current and future revenue for TIF District 14 and identified numerous tax parcels that should have been included in the district 'capture'. The impetus behind this error originates with a 4-year knock down period. This essentially states that if there are no eligible activities (new construction) on a parcel, it is no longer calculated as new increment captured within the district. Parcels can be added back in once an eligible activity occurs, as is the case with this request. See the memo from Ehlers financial/municipal advisors for detailed information.
Notification:
No formal notification is required.
Observations/Alternatives:
These parcels should be added back to the district to maximize the amount of TIF generated by the district and to fulfill prior, current and future obligations within the District. Of key note, the City has a TIF Agreement with Affinity at Ramsey and this parcel needs to be added back to the TIF Calculation to be able to meet this obligation. Another significant obligation proposed to be funded by this district is the reconstruction of Bunker Lake Boulevard between Ramsey Boulevard and Armstrong Boulevard, an obligation under a Joint Powers Agreement (JPA) with Anoka County.
Ehlers, the City's Financial Advisor for TIF Projects, has drafted a memo outlining the process to add back parcels into the district. This process includes issuing a Writ of Mandamus that would allow Anoka County to bring the parcels back into the district with the appropriate base values for the year qualifying activity occurred. Qualifying activity includes land acquisition, demolition, site improvements, and/or road installation.
In 2014, Ehlers completed a study that identified over $39 Million in TIF eligible reimbursements within the district that encompasses a majority of The COR Area. Eligible activities include, but are not necessarily limited to, include land acquisition, future site improvements and reimbursement of public improvements installed prior to the establishment of the district. Maximizing the revenue captured in TIF District #14 will allow the city to fund more of these items through TIF District #14, rather than the General Fund. TIF District #14 is a redevelopment district and it is scheduled to be decertified on December 31, 2040.
The City Council could do the following:
Staff recommends Option 1, adding back all parcels that had qualifying activity and to move forward with the Writ of Mandamus court action to allow Anoka County to add back these parcels. The estimated cost provided by Briggs and Morgan to add back these parcels is $25,000 to $30,000. This cost is a TIF eligible expense and staff recommends it be funded from TIF District #14.
Ehlers, the City's Financial Advisor for TIF Projects, has drafted a memo outlining the process to add back parcels into the district. This process includes issuing a Writ of Mandamus that would allow Anoka County to bring the parcels back into the district with the appropriate base values for the year qualifying activity occurred. Qualifying activity includes land acquisition, demolition, site improvements, and/or road installation.
In 2014, Ehlers completed a study that identified over $39 Million in TIF eligible reimbursements within the district that encompasses a majority of The COR Area. Eligible activities include, but are not necessarily limited to, include land acquisition, future site improvements and reimbursement of public improvements installed prior to the establishment of the district. Maximizing the revenue captured in TIF District #14 will allow the city to fund more of these items through TIF District #14, rather than the General Fund. TIF District #14 is a redevelopment district and it is scheduled to be decertified on December 31, 2040.
The City Council could do the following:
- Adopt Resolution #19-245 Authorization to Add Back Parcels into TIF 14. This action would include filing the Writ of Mandamus and commencing court action to allow the Anoka County to add back all of the parcels identified by Staff and Ehlers that had qualifying activity.
- Adopt an amended resolution that would only add back a portion of parcels that had qualifying activity.
- Do nothing and not add back any parcels that had qualifying activity.
Staff recommends Option 1, adding back all parcels that had qualifying activity and to move forward with the Writ of Mandamus court action to allow Anoka County to add back these parcels. The estimated cost provided by Briggs and Morgan to add back these parcels is $25,000 to $30,000. This cost is a TIF eligible expense and staff recommends it be funded from TIF District #14.
Funding Source:
TIF District #14
There is no material change to the proposed 2020 General Fund Budget as a result of this correction.
There is no material change to the proposed 2020 General Fund Budget as a result of this correction.
Recommendation:
Staff recommends that the City Council adopt Resolution #19-245 approving authorization to add back parcels into TIF District #14.
Action:
Motion to adopt Resolution #19-245 approving authorization to add back parcels into TIF District #14.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Kurt Ulrich | Tim Gladhill | 10/03/2019 08:27 AM |
| Sean Sullivan (Originator) | Kathy Schmitz | 10/03/2019 09:13 AM |
| Brian Hagen | Kathy Schmitz | 10/03/2019 09:14 AM |
| Diana Lund | Diana Lund | 10/03/2019 09:27 AM |
| Kurt Ulrich | Kurt Ulrich | 10/03/2019 02:54 PM |
- Form Started By:
- Sean Sullivan
- Started On:
- 09/27/2019 08:34 AM
- Final Approval Date:
- 10/03/2019