2019-10-09 CC Minutes - Approved

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City of Centerville Council Meeting Minutes October 9, 2019 that the City could capture less than 100% allowing the City and other taxing authorities to receive more funds than projected in the plan to cover the additional expenditures. She stated that this would then be less increment to go to the developer if that was agreed upon. Administrator Statz stated that there were two (2) choices, offer less TIF and keep the 20 year duration of the district or offer the $1.35 million for a lengthier period of time. He stated that the desire was to reduce the duration of the TIF District so staff recommended 5% rather than the 10% which reduced it from 26 years to 20 years. Mayor Paar stated that the City owns the property and the Council in general have had concerns regarding TIF and is the project going to happen without this assistance. He stated numerous years ago there was an agreement with the Beard Group for a project in the area and if the property had been developed seventeen years ago utilizing TIF it would nearly be decertified and complete. He also stated that twenty (20) years is a lengthy period of time, he understands that the developer is in business to make money and discussions have taken place regarding offering to waive fees, give the property, etc. in an attempt to reduce the amount of assistance the developer is requesting and shorten the length of the District. He requested that Finance Director DeJong speak to this issue. Finance Director DeJong stated that if the City were to provide incentives, they would not be taking advantage of utilizing the other taxing authorities’ captured tax dollars and incur all expenses. Mayor Paar questioned whether the dollar amount of rent affected the length of the District. Ms. Omdal stated that rent does not always cause the taxable market value to increase as operating expenditures may also offset the rent. She stated that there is a relationship between the two. She also stated that if the taxable market rate were to increase faster than projected during the 20 year period it would shorten the length of the District. Mayor Paar asked if the reverse would also have an effect on what was paid to the developer over the period of the District. Administrator Statz stated that the City would only pay what is collected over the period of the District (20 years) and the City is protected in that respect. He also stated that not all units will be rented immediately and that growth rate of the valuation is part of the assumption. He requested that Ms. Omdal review the assumptions of the plan. Ms. Omdal stated that for purposes of the plan the taxable value was increased annually by 1.5% annually over the 20 years, assumed tax rate of 134.7% for 2019 and if that rate is higher the additional taxes collected would be the taxing jurisdictions and not payable to the developer and the plan assumes capturing 100% of the taxes and do something different. She stated that she did not believe that the developer would agree to that. She also stated that the present value of $1.4 million assuming a 5% interest rate over the term of future cash flow and 53 units and $120,000 would be $6.5 million but the assessor would be placing this value and may be different. Mayor Paar stated that the City needs more commercial and the only thing that will gain commercial development is households and population growth. He stated the growth is for retail and governmental funding. He stated that TIF is his least favorable option and was disappointed that the developer was not at the meeting. He questioned Administrator Statz whether discussions have taken place with the developer regarding alternative options. Administrator Statz stated that several discussions have been had and staff has reviewed Page 5 of 16