2019-10-09 CC Minutes - Approved

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City of Centerville Council Meeting Minutes October 9, 2019 it is estimated that the annual tax increment revenue of $100,189 would be within the first year or upon completion of the development. She said that this figure is calculated by the following factors: the estimated market value after completion, classification of the property being 4a (market-rate apartments), the net capacity value of the TIF District being set based on the current market value of the property for taxes payable in 2019 (property’s taxable market value multiplied by the relevant class rate set by state statute). Ms. Omdal stated that for the reports the estimated local tax rate of 134.74% in the TIF Plan is based on tax rates for taxes payable in 2019, includes the City, County, School and other taxing jurisdictions tax rates pursuant to the provisions in the TIF Act and is used to estimate future tax increments. Once requested to certify the TIF District, the County Auditor is anticipated to utilize the local tax rate for taxes payable in 2020 due to timing. She also stated that the actual estimated market value of the property will be set by the Assessor upon completion of construction. She reviewed the estimated project costs of $350,000 for the land; $33,840 for construction of affordable housing; $350,160 for improvements related to adjacent public streets, trail re-route/extension, public boulevard improvements; and utilities $616,000. She stated that the City has the right to reserve 10% of the increment to reimburse itself for administrative expenses but may agree to a lesser amount of 5%, reimbursement of project costs would be on a pay-go basis which is bonded indebtedness and not the same as a General Obligation Bond. She said that the City could loan or advance money from its General Fund or any other fund to finance administrative costs associated with the TIF District to reimburse itself with a portion of the tax increments collected. She stated that the plan provides for up to $70,967 in these costs. She reported that the duration of the TIF District could be 26 years but staff is recommending 20. She also stated that the estimated first receipt of tax increment would be July, 2022 and would end December 31, 2041. Ultimately, the base-line conclusion of Ms. Omdal’s analysis is that but for this financial assistance, this project would not go forward. This finding is a necessary prerequisite for the establishment of the TIF District. Council Member Love questioned the maximum amount the City would have to pay would be $1.35 million and the 20 year period and whether that was an either or whichever comes first. Ms. Omdal stated that there is not yet an agreement with the developer but that is the planning number. If it were to go forward as planned, the City would agree to pay $1.35 million of actual project costs from 95% of the tax increment generated and if everything went as outlined in plan which she stated it would not, it would take 20 years to reimburse the developer. If the increment is more than $100,189 per year you would pay it off sooner and decertify the district earlier. She stated that if the increment is less, the City would not pay the developer more than collected and the City would not exceed the 20 years per the agreement. She also stated that City would not be obligated to pay more than collected. He also questioned the “area wide” regarding median income. Ms. Omdal stated the rates are published by the Federal Government, published by area annually and the metro area is $100,000 and each year it changes. Finance Director DeJong stated it is called the Standard Metropolitan Statistical Area or the 7-county metro area. Page 3 of 16