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2004_0719_Packet
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2004_0719_Packet
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GAP STRATEGIES <br />1V� . 12 <br />r�mb��e"�i�a of � Strate�ies 4,7 and �� <br />Several of the gap strategies, when used together, will have an effect that is greater <br />than their individual parts. This is particularly true for gap strategies 4(Reduce <br />City Admin. Fees), 7(Issue G,O. Bonds), and 10 (Fiscal Disparities Outside <br />District). In the chart shown on page 5, the low range of the three individual gap <br />strategies amounts to $5.19 million while the upper range amounts to $11.20 <br />million. However, if all tllree strategies are utilized, the available amounts at the <br />low end will increase by $0.54 million and at the upper range by $1.Q9 million. <br />This compounding effect occurs because fiscal disparities taken from outside the <br />tax increment district will substantiallyincrease the amount of available tax <br />increment. If admin. fees are reduced from 10% to a lowerpercentage, this will <br />also increase available tax increment for the project expenses. Because a lower <br />percentage is being applied to a higher number, the resulting product is greater that <br />if the calculations were done separately. <br />An example demonstrates the impact of the compounding effect. Tf the fiscal <br />disparities is taken from within the tax increment district, then in our hypothetical <br />Example 1 the tax increment generated is $70.00. In Example 2, the fiscal <br />disparities is taken outside of the tax increment district, thus increasing the tax <br />increment to $100.00. If the admin. fee in example 1 is 10%, then the available t� <br />increment would be $70.00 less $7.00, or $63.00. If the adn�ill. fee in example 2 is <br />reduced to 5%, then the available tax incrementis $100.001ess $5.00, or $95.00. <br />As demonstrated, if only fiscal disparities is altered, the available tax increment <br />increases $30.00 (100 - 70 = 30). If the admin. fee is also reduced, the available <br />tax increment increases $32.00 (95 - 63 = 3� . <br />When Gap Strategy 10, the use of G. O.bonds is used, a lower interest rate is then <br />applied to an increased revenue amount which results in even more present value <br />dollars generated for project expenses. <br />�� �f � <br />
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