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Minutes of the Arden Hills Regular Council Meeting, September 12, 1988 Page 4 .. CASSERLY (Cont'd) Casserly outlined Tax Increment Financing history, how it works, problems and the city role in development process. The Financial Consultant explained some concepts relative to TIF: -People approach tax increment as an assistance to a user/developer; the only reason for involvement in tax increment financing should be due to municipal 4If goals or objectives to be achieved. TIF is a planning device and a tool for development. -Tax Increment is a source of funding to provide for development/redevelopment for cities. -Tax Increment Was originally designed to assist mature or substantially developed cities fill out available land or redevelop underutilized/blighted areas and encourage a higher density of development. Mary Molzahn displayed tables that identified how TIF is generated; Cash Flow with traditional bond sale and the "Pay As You Go" plan with limited revenue tax increment notes. She explained the major differences between the two plans and noted the "pay as you go" plan reduces the risks to the City. Casserly reviewed problems that could be incurred and specifically problema relating to the Round Lake study area. He explained some alternatives for working through the problems and services he could provide: -Set up a development program, explore State Statutes that would be applicable. -Design a "Master Plan"; create multiple tax increment districts in the same area on a parcel by parcel basis. -Develop each parcel on its own merits and the project could support each other. -Prepare a development agreement; what the City is requesting and what it is willing to offer as incentive to the developer. -Minimal issuance of General Obligation Bonds. -Explore other public financing opportunities; special assessments or joint powers opportunities. . Casserly stated he does not offer financial consulting in the conventional sense, they are not paid from the issuance of bonds, the services are paid at an hourly rate. He explained they have no incentive for the City to go into debt; the objective is to accomplish the goal with maximum security_and financial creativity. Casserly praised the Land Study report that was prepared by the Task Force relative to the site. Council questioned the feaSibility of this project being successful. Casserly stated it was clear from the study report the Round Lake area project would be very feasible and the projected figures would work as outlined; he explained he could not guarantee when or if the development would begin. There was Council discussion relative to proceeding with the project as follows: . -Review other financial consultants proposals. -Prepare and set a clear policy for proceeding with the project. -Development of a zoning district. -Extent of developer interest in the site. -Imposing a moratorium on development in the area until the zoning district has been determined. -Informing property owners in the area of the plans for the project. Clerk Administrator Berger advised that the staff, Task Force and Planning Commission dp not have the expertise to work with the legalities and other aspects of the project; he recommended a financial consultant be retained to begin putting the plan in action. Task Force Committee members Probst and Malone agreed there would be a demand for development at the site. Probst commented he could not guarantee the precise mix of uses and the valuation predicted for the site, however in his opinion there would be activity on the site once Arden Hills declares a policy for development of the site; what the City is willing to offer as incentive for development. .