CC_Minutes_2003_0818 - Laserfiche WebLink

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(1) Municipal evelo ent istrict loo. 1, created by the City under M.S. 469.126 of the City Development District Act using its City powers; (2) Redevelopment Project, created by the City pursuant to M.S. 469.012 of the I-~[RA Act using its port authority powers; and (3) Industrial evelop ent district, created by the City pursuant to M.S. 469.058 and 469.059 using its port authority powers. These powers enable the City to create a Development Program and spend tax increment on housing programs within each project area. As a port authority, the City has HRA powers. The newly-established HRA also has HRA powers, but has no relationship to project areas or progz-alns that the City has already created. Following enactment of the EDA Act (M.S. 469.090 to 469.108), M.S. 469.108 gave cities such as Roseville who had port authority powers under special law the ability to elect to use EDA Act powers rather than their port authority powers. Following such an election, the EDA Act would preempt the special law and a city could no Longer use the special law for the creation of new project areas. City staff do not believe that the City has made this election, and the analysis of the City's TIF districts done by Kennedy & Graven in 1995 does not indicate that the City had made all election. If the City had made such an election, M.S. 469.094 of the EDA Act would allow the City to transfer the control and operation of specified existing "programs" and "projects" (mcluding Municipal Development District No. 1, the Redevelopment Project, and the Industrial Development District) to the EDA. That section would also allow the City to divide the economic development, housing, and redevelopment powers granted by the HRA Act and EDA Act between the EDA and any other authority (such as an HRA) established for those purposes. Reading M.S. 469.094 and 469.174 together, however, seems to indicate that the City could not elect to transfer a single TIF district or just the housing component of a project to the EDA but, rather, would have to transfer an entire project area to the EDA. hl the absence of such an election., the City has no statutory ability to transfer projects to an authority. The City would have to elect to come under the EDA Act as noted above. City staff have indicated that it is not likely that the Council would choose to transfer administration of one or more project areas to an EDA or the HRA. Even if this were to occur, a project area would have to be transferred in its entirety, not just the housing portion or a housing TIF district. AN ALTERNATIVE The City could achieve its objective of transferring tax increment dollars to the HRA without having to make the election discussed above. The City may contract with the HRA to administer the housing and other programs which the City is authorized to operate under its city and part authority powers. 'The City would then transfer to the HRA the funds necessary for program and administrative costs. The HRA would be required to account for expenditures in the same fashion that the City does. The HRA would also have to be careful not to spend tax increment for any purpose that the City would not have been able to. Page 2