2000-09-13 Packet - Laserfiche WebLink

Home Browse Search

orthern Forest Products �� f�RN F� 050 Main Street Centerville, Minnesota 55038 3 ?hone 651-429-9990 rex 651- 429 -99 tember 6, 2000 P Mt Jim March rIaDUCeC City of Centerville 1880 Main St. Centerville, MN 55038.9794 Dear Jim: 1 would like to express my concerns regarding the proposed documents for the Clty Council meeting on September 13, 2000. There has been much discussion regarding the reasons for the tax Increment available being less than the amount shown on the original payment schedules. I would like to comment briefly on each item 1) Reduction in commercfal- industrial rates. It has been stated that "most of the decrease" in the avallable tax increment is related to this area. I do understand that the crass rates have decreased from 1997 through 1999. but 1 also see that the Local Tax Rate multiplier has progressed from 134.036% in 1997 to 153.788% in 1999. This multipiter has effectively negated the reducton in the class rates. The bottom line is that my property taxes have not gone down, if you evaluate the taxes in 1997 through 2000 assuming a flat market value. I would imagine If I had the time or energy to delve Ito the formula for defining available tax increment., I may discover that the Local Tax Rate multiplier has no bearing on the calculation. This does not make sense to me but maybe this is how It Is defined in the "Tax Increment Act I de know that this is In direct contradiction td the soirit of how the Tit incentive was presented to mt by the former city administration. I did understand that available tax Increment could be lowered by my taxes being lower, but that seemed like a pretty even trade at the time. 2) 1997 market value of $327,700 vs. minirnum 5527,700 This item is very straightforward. Northern Forest Products obviously received the benefit of paying a lower property tax than was assumed in the T1F documents for the first year. It especially makes sense that Rehbein's payment schedule should not be impacted by this set of circumstances. I do have ar issue with how Eh ens computed the $17,255,72 "back taxes amount" I may not be looking at this correctly, but I would think my additional taxes for the extra 3200,003 of market value would have been approximately $12,331 (5200,000 x .046 x 1.34036), It seems that this amount would then be reduced by some magic formula to come up with the available tax increment that would have been generated from my additional payment. If my calculation is correct, this will only make the ending balance at the end of the TtF district larger than currenty presented. It would also make me even more skeptical tan 1 eiready am of whether the most recent Ehler's schedules are represented with current and accurate information (the 2 and 8/11/98 payments to developer should be shown on the proper (Ines). 3) Larger- than - expected base value inflation factor I believe that It was estimated at an earlier meeting that thls "small portion" of the shortfall was approximately $3000. This appears to be an area that no one wants to spend much time discussing, maybe because of the so- called insignificant amount, but maybe because of the continued embarrassment to Ehlers and the way they handled this situation 10003 siana01Id SS31I03 Kd2B.LEOM C866 BZt TS8 TVd CZ : t1 OA 00/00/80