HRA Agenda 10-10-1985AGENDA
MDNTICELW HOUSING AND REDEVELOPMENT AUTHORITY
Thursday, October1c, 1985 - 7:00 P.N.
Members: Chair Gary Nieber, Bud Schrupp, Ren Maus, Roger Hedtke
and Ben Smith.
1. Call to Order.
7. Approval of the Minutes of the Regular Meeting Held September 5, 1985.
3. Consideration of Adopting the Tax Increment Finance (TIP)
Proposal and Veit's-Raindanca' Plan Proposal; and Requesting
the City Council to set a Public Hearing.
C. Consideration of Adopting the Monticello HRA's 1986 Operating
Budget.
5. Other Business.
6. Adjournment.
MINUTES
Housing and Redevelopment Authority
September 5, 1985
The regularly scheduled meeting of the Monticello Housing
and Redevelopment Authority was duly held at 7:00 P.M., Thursday,
September 5, 1985, at the Monticello City Hall.
Members Present: Wieber, Smith, Schrupp, and Hedtke.
Members Absent: Maus.
Assisting as Staff Representative was: Tom Eidem, City Administrator.
Chairperson Wisber called the meeting of the HRA to order.
Motion by Schrupp, eaconded by Hedtka and carried unanimously
to approve the minutes of Thursday. July 2, 1985.
Wieber opened discussion on the now vacated position of HRA
Executive Secretary. He indicated that based on the agenda
supplement material the options open to the HRA were to evaluate
the need of their own staff person, to evaluate the need of
a part-time staff person, or to continue working in concert
with the City and the Industrial Development Commission Mr.
Smith raised the Question with respect to how the time was
currently shared between the three bodies. Eidem gave a background
on the history of the position being created and indicated
that the Industrial Development Committee paid 501 of an established
salary and that the City Government paid the other 501. Eidem
want on to note that In 1986, while preparing the 1985 budget,
the HRA had authorized an amount not to exceed $5,000 that
could be added onto Mr. Pelvit'D salary. Eidem indicated
that the amount was not meant to reflect a percentage of duty.
It wan Dimply a lump cum decided upon to make an appropriate
salary adjustment that would put the Director of Economic
Development into comparable status with other management staff.
Eidom also noted that the monion paid out whether it came
from the City general fund or from the HRA special fund, were
generated by tax levy, and consequently was still a support
from the general public. He wont on to note that Mr. Polvit
had boon retained under the City's employment policies and
payroll system to avoid the noc000ity of the Industrial Development
Committee cotablishing a payroll system for a single employee.
He noted that the Industrial Development Committee made an
annual contribution to the City -9 general fund to offset 1/2
of the base salary for the Director of Economic Development.
Mr. Wiobor directed the quootion preference to each mom r.
Mr. Schrupp indicated that he felt it was most beneficial
to hire a single staff person who would work in concert with
all throe organizations. Schrupp acknowledged that the HRA
by itself did not always have a busy schedule, but at certain
given times the HRA probably monopolized moot of the Director's
time.
ME
BRA Minutes - July 2, 1955
Schrupp also noted that the efforts of the HRA were complementary to
the efforts of the Industrial Development Committee, the City
and the Chamber. Schrupp stated he felt that whatever work
the staff member did for one body was equally beneficial to
the other bodies he served.
Eidem provided a brief breakdown of percentages that Mr. Pelvit
had constructed before his leaving. Eidam also concurred
with Schrupp in that the services performed by this individual
were virtually indistinguishable as to whether or not they
benefitted the HRA or the IDC or the City. He noted that
there was a commoness of goal and this staff member worked
toward the exclusive goal.
Mr. Smith inquired how other cities handled this type of situation.
Eidem indicated that he was aware of the Cities of Chaska,
Granite Palle, and Paribault who utilized a similar shared
staff person. Wieber indicated that, in his experience, it
was a fairly common practice in small cities to have multi
task jobs for a single individual. Wieber noted that there
may not be other cities who have the identical formula that
Monticello has used, but the shared staff person was not at
all uncommon. Wieber indicated it was basically his position
that the shared position should remain, although the position
should be reviewed to ensure that it adequately addressee
the duties and the role desired by the body. Wiebar also
stressed that it was important that the new staff member have
a clear cut supervisor and that the various bodies come to
an agreement in tarma of establishing who gives directives.
Eidem stated that he was in general agreement that the job
required review, but noted that the staff position assiating
the IDC had grown significantly, and that perhaps the original
roles of the IDC should be reviewed as well. Eidem stated
that he felt that the original promise of hiring a staff person
to relieve the volunteer committee members was now being fulfilled
and that perhaps the committos could radofine their role.
Hodtko indicated that he favored maintaining the staff position
in light of the fact that the goal of the IDC, the HRA and
the City were virtually identical, each providing their own
mechanism for achieving that goal. Motion by Ban Smith, seconded
by Roger Hodtke, and carried unanimously to request the cooperation
of the Industrial Development Committee and the City Council
in seeking applications for a shared full -Lima Director of
Economic Dovolopmont/Executivo Director of the Housing and
Redevelopment Authority and authorising the Chairperson of
the Housing and Redevelopment Authority to moot with the Chair
of the IDC and the Mayor of the City Council to negotiate
and establish the position and call for applicants.
There being no other business the meeting was adjourned.
emae A. ISLOSM
City Adminiatrator
-2-
3. Consideration of Adopting the Tax Increment Finance (TIF)
Proposal and Veit's "Raindance" Plan Proposal; and Requesting
the City Council to set a Public Hearing. (O.K.)
A. REFERENCE AND BACKGROUND:
Veit Construction of Rogers, Minnesota, has previously met
with the Development Committee. On July 2, 1985, the HRA
approved of the use of Tax Increment Finance (TIF) for Veit's
"Raindance". The redevelopment proposal is intended for
Block 15; the City of Monticello owns .4 acres and Wilbur
Eck owns the remaining \.b acres.
Veit proposes to construct a concrete building with a total
33,000 square feet. 25,000 square feet is proposed to be
leased to Maus Foods and the remaining 8,000 square feet being
speculative.
Development staff and Veit's representative met October 2, 1985
with discussion of corrected land value versus uncorrected
land value. Concern for vacant Maus building was discussed.
Gas Veit indicating present interest from a cabinet maker
in Princeton. Development Staff will present a Tax increment
Finance Proposal and Veit's "Raindance" will present a building
and site plan for the HRA meeting October 10, 1985.
TAX INCREMENT FINANCE PROPOSAL
VEIT'S "RAINDANCE" PARTNERSHIP
TAX INCREMENT:
A. New Assessed Value (NAV) g 513,257.00
B. Old Assessed Value (OAV) 2.795.00
C. Captured Assessed Value (CAV)
(A. - B. _)
$
510,462.00
(estimated 1985 will rate)
x
.081305
Tax Increment
5
41,503.00
PROJECT COST:
Land Coot (ECK) - Lots 1 - 6
$
140,000.00
Land Coat (City) -Lots 7 - 10
90,000.00
Street Improvement
75,000.00
Plan Prop.
2,500.00
Document Prop.
3,000.00
Issuance
13, 500.00
Administration
15,000.00
Cap. Intoreat (27 moa)
70,000.00
Bond Discount
6.650.00
3
415,650.00
S 41,000.00 annually will retire $ 350,000.00 in Bonds in 1B years.
Total Cost of Project $ 415,650.00
Bonds $ 350,000.00
Required from Developer - lend Sale S 65,650.00
B. ALTERNATIVE ACTIONS
1. Approve the Tax Increment Financial (TIP) Proposal for
Veit's "Raindance" Project and request the City Council
to not a public hearing.
2. Do not approve the Tax Increment Finance (TIP) Proposal
for Veit's "Raindance" Project thus eliminating improvement
of City Block 15.
C. STAFF RECOMMUMATIONS:
Staff hes worked very hard to arrive at a project cost beneficial
to both the City and Veit'e "Raindance". Staff feels the ,
City and community would benefit from the project. We recommend
approval of the Tax Increment Finance (TIP) Proposal and request
City Council to set a public hearing.
D. SUPPORTING DATA:
Map indicating area involved: Proposed street plane.
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4. Consideration of Adopting HRA -s 1986 Operating Budget. (O.K.)
14
A. REFERENCE AND BACKGROUND:
Staff having completed the preliminary NRA operating budget
on September 28, 1985, the City Council, tentatively, has
approved the budget.
The 1986 BRA Operating Budget shows revenues over expenditures
by $ 41,900.00. This due largely to Collectable Tax Increment
of 8 69,000.00.
B. ALTERNATIVE ACTIONS:
1. Adopt the budget as presented
2. Decrease the budget.
3. If tax levy is increased a BRA representative should be
present at the City Council meeting.
C. STAFF RECOMMENDATION:
AS the City Council has tentatively approved the budget and
staff fools comfortable with the figures presented, recommendation
is to adopt the 1986 BRA Operating Budget and forward to the
City for final approval October 15, 1985.
D. SUPPORTING DATA
Copy of the tentative approved 1986 NRA Operating Budget.
t
ERA
1986 BUDGET
FUND NO. 140
REVENUE
1513 Ad Valorem
3582 Interest
1516 Pay from Developers
3090 Application Fees
Tax Increment (1986)
TOTAL REVENUE
EXPENDITURES
1985 1986
537,700.00
$10,000.00
3,000.00
1,750.00
2,050.00
0.00
2,500.00
2,500.00
200.00
69,000.00
545.250.00
$83.250.00
Personal Services
7511 Salary. Regular
S 4,450.00
$ 4,450.00
7515 PERA/Pension
200.00
200.00
7519 Social Security
350.00
350.00
$ 5,000.00
$ 5,000.00
Supplies
7521 Office Supplies
50.00
50.00
Other Services and Chargeo
7536 Professional Services
1,000.00
750.00
7549 Legal Publications
250.00
200.00
7537 Communication - Phone/Postage
50.00
50.Ou
7538 Travel -Conference -School
250.00
250.00
7539 Advertising
100.00
0.00
7541 Insurance (Non-parconal)
250.00
200.00
7548 Dueo, Memberships, Subscriptions
100.00
100.00
7555 Miscellaneous
50.00
50.00
3 2,050.00
3 1,600.00
Debt Service
n
Tra2jt8%. P6= iOt 1986Yroat
40, 400.00
0.00
,pa ((
Permanent Transfer
34,700.00
TOTAL HRA
$47.500.00
$41.350.00
Tax increment Redevelopment District Finance Plan
A. Statutory Authority
The Monticello Housing and Redevelopment Authority (the "Authority") and
the City of Monticello are authorized to establish a tax increment district
pursuant to Minnesota Statutes, Section 273.71-78.
B. Statement of Objectives
1. To provide opportunities for development and expansion of new
business;
2. To provide employment opportunities through the creation of new
jobs;
3. To provide opportunities for growth In the tax base;
4. To assist with street construction, sanitary sewer and watermain
construction, storm sewer and other public improvements to
encourage redevelopment in the area.
S. To encourage the development of additional commerical enterprise
'in-tho City.
C. Development Program
1. Description of the Development Activities:
Raindance Partnership (the "Developer") plans to construct a
concrete building with a total 33.000 square feet. 25,000
square fact is proposed' for a super market and the remaining
8.000 square feet for speculation. Substantial soil correction
is required. The developer will complete and pay for the soil
correction. The developer will be assisted with public
improvements to service the building with tax increment
revenues. The building is expected to complete construction
in 1986. The second addition to the construction of a 40
foot urban designed street (Sixth Street) by the City.
1
D. Description of Property in the Tax Increment Financing District
Lots 1-10, Block 15 original plat within the City of Monticello,
including 20 feet Highway right-of-way easement.
E. Classification of the Tax Increment Financing District
The Monticello City Council and Housing and Redevelopment Authority in
determining the need to create a tax increment financing district in
accordance with Minnesota Statutes, Section 273.71-78 inclusive, find that
the district to be established is a redevelopment district pursuant to
Minnesota Statutes, Section 273.73, Subdivision 10(x)(3). Less than seventy
percent of the parcels in the district are occupied by buildings, streets,
utilities, or other improvements, but due to unusual terrain or soil
deficiencies requiring substantial filling, grading or other physical
preparation for use at least 80 percent of the total acreage.of such land has
a fair market value upon Inclusion in the redevelopment district which, when
added to the estimated cost of preparing that land for development,
excluding costs directly related to roads as defined In Minnesota Statutes,
Section 160.01 and local improvements as describedectton ,
Subdivision 1, clauses I to 7, 11 and 12, and Section 430.01, if any, exceeds
Its anticipated fair market value after completion of said preparation;
provided that no parcel shall be included within a redevelopment district
unless the authority has concluded an agreement or agreements for the
development of at least SO percent of the acreage having the unusual soil or
terrain deficiencies, which agreement provides recourse for the authority
should the development not be completed. Since, of the parcels proposed to
be placed into a tax Increment district, less than seventy percent are
occupied by buildings, streets, utilities or other improvements, and the
totalacreage (80 percent or more) of the area has a fair market value when
added to the estimated cost of preparing the land for use exceeds Its
anticipated fair market value after completion of the preparations,
excluding costs directly related to roads and local improvements, and a
development agreement for at least 50 percent of the acreage having the
unusual soil deficiencies and Including recourse for the City should the
development not be completed, will have been concluded, prior to bond sale,
the area qualifies as a redevelopment district.
The description of the parcels that have been used to establish eligibility as
a redevelopment district are described below.
Lots 1-10, Block 15 original plat within the City of
Monticello, including 20 foot Highway right-of-way easement.
P. Parcels in Acquisition
Lott 1-1Q are Scheduled to be acquired by the HRA,
Estimate of Costa
u The estimate of public costs associated with the tax increment financing
redevelopment district are outlined in the following line item budget.
BUDGET
Land Acquisition $230,000
Street Construction 75,000
Plan Preparation 2,500
Document Preparation 3,000
Issuance 13,500
Administration 15,000
• Capitalized Interest 70,000
Bond Discount 6,650
$415,650
•The amount of capitalized interest will be equal to an amount sufficient to
pay interest on the bonds from the date of issue until the date of collection
of sufficient tax Increment revenue to meet scheduled interest payments
when due, but not exceeding 3 years as required by Minnesota Statutes,
Chapter 475. Predicting capitalized interest prior to issuance is extremely
difficult as it is a function of interest rates, constuction schedules and tax
timing; therefore, the above figure is only an estimate of capitalized
interest and is subject to change.
H. Estimated Amount of Loan/Bonded Indebtedness
An estimate of the amount of bonded indebtedness is expected to be
$350,000. The term of the issue is 18 years and the interest rate is expected
to be 9 percent. The amount of two and one-half to three years capitalized
interest is extimated to be $70,000. Debt service on the bond will be met
through a combination of tax increment revenues. The difference between
the project cost ($415,650) and the Indebtedness ($350,000) is $65,650.
I. Sources of Revenue
There are two sources of revenue to be used to finance public costs
associated with the development projects within the redevelopment project.
The majority of the public costs are to be paid with tax incrment revenues
in combination with land sale proceeds. The tax increment to
generated as a result of the taxation of the land and improvements in the
tax increment redevelopment district. Tax Increment financing refers to a
funding technique that utilizes incresos in assessed valuation and the
property taxes attributed to new development to finance, or assist in the
financing of public development costs. The facilities are expected to be
fully assessed beginning in 1987 at which time the development will
generate an annual tax increment of $41,000 collectable In 1988. The
tax increment estimate for 1988 to based upon the assumption that the
building 1s fully completed in 1986 and fully assessed on January 2, 1987.
A partial assessment in 1987 will produce a partial tax increment
payment In 1988. Not proceeds from the project are $65,650.
Original Assessed Value .
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 1 and Section
273.76, Subdivision 1, the Original Assessed Value (OAV) for the City of
Monticello tax increment financing redevelopment district is based on the
value placed on the property by the Countv Assessor in 1985. 'PhLs assessed
value is $2,795.00. Each year
the Office of the County Auditor will measure the amount of increase or
decrease in the total assessed value of the tax increment redevelopment
district to calculate the tax increment payable to the Monticello
redevelopment district fund. in any year in which there is an increase in
total assessed valuation in the tax increment redevelopment district above
the adjusted original assessed value, a tax increment will be payable. In any
year in which the total assessed valuation In the tax increment financing
redevelopment district declines below the original assessed valuation, no
assessed valuation will be captured'and no tax increment will be payable.
The County Auditor shall certify in each year after the date the Original
Assessed Value was certified, the amount the OAV has increased or
decreased as a result of:
1. change in tax exempt status of property;
2. reduction or enlargement of the geographic boundaries of the
district;
change due to stipulations, adjustments, negotiated or court-ordered
abatements.
K. Estimated Captured Assessed Value
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 1 and Minnesota
Statutes. Section 273.16,.Suodivision 2, the estimated Captured
slue CAV) of the tax. -increment financing redevelopment district will
annually approximate $510.462. it is expected that the estimated f510.462
will be captured as a result of the improvements to be constructed by
Raindance. This amount will be captured for up to twenty-five years
or until Ane project debt is retired. The Authority requests 100 percent of
the available increase In assessed value for repayment of debt and current
expenditures.
L. Duration of the District
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 1, the duration
of the tax increment district within the Redevelopment Project must be
indicated within the finance plan. The duration of the tax Increment
district will be 25 years from the date of receipt of the first tax Increment.
Thus, It Is estimated that the tax Increment district, Including any
modifications to the finance plan for subsequent phases or other changes,
would terminate twenty-five years from the collection of the first tax
Increment.
y M. Estimated impact on Other Taxing Jurisdictions
The impact of the loss of tax dollars represented as tax increments is
estimated below for each taxing jursidiction. This estimate is based on the
existing redevelopment proposals and does not include the possible tax
Increments derived from any other future development, mill changes, or
inflation factors.
Total Assessed Value
Tax Increment Finance District 1/2/85 $ 2,795.00
Latest Assessed Value of Each Government Bodv:
% of District
to Total
Wright County $ 358,798,000 .00004
School District 0882 101,128,476 .0001
City of Monticello 79,954, 554 .0002
Other 115,919,820 .0001
Considering all the districts, It can be seen from the above that the school,
city and county districts will have over 99% of each respective district
available for normal growth of tax base or valuation. Applying the
percentage of the total mill rate in 1985 levied by each taxing jurisdiction
to the projected mill rate and the estimated tax increment received reveals
the annual loss of tax dollars by each taxing jurisdiction as listed in the
table below assuming development would occur without public assistance.
The finance plan indicates we anticipate a tax Increment at build out as
follows:
Captured Assessed Estimated Tax
Valuation Increment Received
Tax Increment Finance District $510,462 $ 41,000
Based on the current mill rate, the estimated taxes received would be as
follows for the taxing bodies:
Mills Percent Tax Increment
City 18.874 23.2 $ 9,512
County 19.719 24.2 9,922
School District 1882 39.714 48.9 20,049
Other 2.998 3.7 1,517
Total 81.305 100.0% $41,000
The following table represents the additional mills that would have to be
levied to compensate for the loss of tax dollars in estimated tax increments
for each taxing jurisdiction. The tax Increments derived from the
5
comner.ical .. facility : alluded to in the tax increment district
would not be available to any of the taxing jurisdictions were it not for
public intervention by the Authority. Although the increases in assessed
value due to development will not be available for the application of the
mill levy for the duration of the tax increment financing district, this new
assessed value could eventually permit a mill levy decrease. If it could be
assumed that the captured assessed value was available for each taxing
jurisdiction, the non -receipt of tax dollars represented as tax increments
may be determined. This determination is facilitated by estimating how
much the mill levy for property outside of the tax increment financing
district would have to be increased to raise the same amount of tax dollars
In each taxing jurisdiction that would be available if the projects occurred
without the assistance of the Authority.
Adjasted•
Required
Tax
Assessed Value
Mills
Increment
School District 101,125,681
.198
$20,049
County 358,781,249
.027
9,922
City 79,937.799
.118
9,512
*Tax Increment District assessed valuation subtracted.
N. Modifications of the Tax Increment Financing District
In accordance with Minnesota Statutes, Section 273.74, Subdivision 4, any
reduction or enlargementtt a geographic area of the project or tax
Increment financing district, increase in amount of bonded indebtedness to
be incurred, including a determination to capitalize interest on debt If that
determination was not a part of the original plan, or to increase or decrease
the amount of interest an the debt to be capitalized, Increase in the portion
of the captured assessed value to be retained by the Authority, Increase In
total estimated tax increment expenditures or designation of additional
property to be acquired by the authority shall be approved upon the notice
and after the discussion, public hearing and findings required for approval of
the original plan. The geographic area of a tax increment financing district
may be reduced, but shall not be enlarged after five years following the date
of certification of the original assessed value by the county auditor. The
tax Increment financing redevelopment district may therefore be expanded
until 1990.
O. Limitation on Administrative Expenses
In accordance with Minnesota Statutes, Section 273.73, Subdivision 13 and
Minnesota Statutes, Section 273.7T,Subdivision 3, administrative expenses
means a expen cures of an authority other than amounts paid for the
purchase of land or amounts paid to contractors or others providing
materials and services, including architectural and engineering services,
directly connected with the physical development of the real property in the
district. relocation benefits paid to or services provided for persons residing
or businesses located In the district or amounts used to pay Interest on, fund
a reserve for, or sell at a discount bonds Issued pursuant to Section 273.77.
Administrative expenses includes amounts paid for services provided by bond
counsel, fiscal consultants, and planning or economic development
consultants. No tax increment shall be used to pay any administrative
expenses for a project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment financing plan or the total tax
Increment expenditures for the project, whichever is less.
Limitation on Duration of Tax Increment Financing Districts
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 1, "no tax
increment shall be paid to an authority three years from the date of
certification by the County Auditor unless within the three-year period (1)
bonds have been issued pursuant to Section 273.77 or in aid of a project
pursuant to any other law, except revenue bonds issued pursuant to Chapter
474, prior to the effective date of the Act; or (2) the authority has acquired
property within the district; or (3) the authority has constructed or caused
to be constructed public improvements within the district ... " The City or
Authority must therefore issue bonds, or acquire property, or construct or
cause public improvements to be constructed by 1988 or the Office of the
County Auditor may dissolve the tax increment financing district.
Limitation on Qualification of Property in Tax increment District Not
Subject to Improvement
Pursuant to Minnesota Statutes Section 273.75, Subdivision B, "if, after four
years from the date o cerUt etion of the original assessed value of the tax
increment financing district ..., no demolition, rehabilitation or renovation
- of a parcel or other site preparation including improvement of a street
adjacent to a property but not Installation of utility service including sewer
or water systems, has been commenced on a parcel located within a tax
Increment financing district by the authority or by the owner of the parcel
In accordance with the tax Increment financing plan, no additional tax
Increment may be taken from that parcel and the original assessed value of
that parcel shall be excluded from the original assessed value of the tax
Increment financing district. If the authority or the owner of the parcel
subsequently commences demolition, rehabilitation or renovation or other
site preparation on that parcel including Improvement of a street adjacent
to that parcel, in accordance with the tax increment financing plan, the
authority shall certify to the county auditor in the annual disclosure report
that the activity has commenced. The county auditor shall certify the
assessed value thereof as most recently certified by the commissioner of
revenue and add it to the original assessed value of the tax Increment
financing district.
A. Limitation on the Use of Tax Increment
All revenues derived from tax Increment shall be used in accordance with
the tax Increment financing plan. The revenues shall be used to finance or
otherwise pay public redevelopment costs pursuant to Minnesota Statutes,
Chapter 472A. These revenues shall not be used to circumvent exists gleTy
limit law. No revenues derived from tax Increment shall be used for the
construction or renovation of a municipally owned building used primarily
and regularly for conducting the business of the munlclpalityi this provision
shall not prohibit the use of revenues derived from tax increments for the
construction or renovation of a parking structure, a commons area used as a
public park or a -facility used for social, recreational or conference purposes
and not primarily for conducting the business of the municipality.
S. Notification of Prior Planned Improvements
Pursuant to Minnesota Statutes Section 273.76, Subdivision 4, the Authority
has reviewed and searched the properties to be included in the tax
Increment financing redevelopment district and found no properties for
which building permits have been issued during the 18 months immediately
preceding approval of the tax increment financing plan by the city. If the
building permit had been issued within the 18 month period preceding
approval of the tax increment financing plan by the city, the county auditor
shall Increase the original assessed value of the district by the assessed
valuation of the improvements for which the building permit was issued,
excluding the assessed valuation of improvements for which a building
permit was issued during the three month period immediately preceding said
approval of the tax increment financing plan, as certified by the assessor.
Excess Tax Increments
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 2, in any year in
which the tax increment exceeds the amount necessary to pay the costs
authorized by the tax increment plan, including the amount necessary to
cancel any tax levy as provided in Minnesota Statutes, Section 475.81,
Subdivision 3, the Authority shall use the excess amount to:
1. prepay the outstanding bonds;
2. discharge the pledge of tax Increment therefore;
3. pay into an escrow account dedicated to the payment of such bond;
4. repay any loans including interest on these loans; or
5. return the excess to the County Auditor for redistribution to the
respective taxing jurisdictions In proportion to their mill rate.
U. Requirement for Agreements with the Developer
Pursuant to Minnesota Statutes Section 273.75, Subdivision 5, no more that
25 percent by acreage o�tFe property to be acquired by the Authority
within a project which contains a In the redevelopment district shell be
owned by the Authority as a result of acquisition with the proceeds of bonds
issued pursuant to Section 273.77 without the Authority having prior to
acquisition in excess of 25 percent of the acreage, concluded an agreement
for the development of the property acquired and which provides recourse
for the Authority should the development not be completed. See Section E
for the development agreement requirement due to soil deficiencies.
V. Assessment Agreements
Pursuant to Minnesota Statutes Section 273.76, Subdivision 8, the Authority
may, upon entering into a development agreement pursuant to Minnesota
y Statutes Section 273.75, Subdivision 5, enter into an agreement in
recordable form with the developer of property within the tax increment
financing district which establishes a minimum market value of the land and
completed improvements for the duration of the tax increment
redevelopment district. The assessment agreement shall be presented to the
county assessor who shall review the plans and specifications for the
Improvements to be constructed, review the market value previously
assigned to the land upon which the improvements are to be constructed and
so long as the minimum market value contained in the assessment
agreement appears in the judgment of the assessor, to be a reasonable
estimate, the assessor may certify the minimum market value agreement.
W. Administration of the Tax Increment Financing Redevelopment District and
Maintenance of the Tax Increment Account
Administration of the tax increment financing redevelopment district will
be handled by the Executive Director of the Authority and the Office of the
City Administrator.
The tax increment received as a result of increases in the assessed value of
the tax Increment financing redevelopment district will be maintained in a
special account separate from all other municipal accounts and expended
only upon sanctioned municipal activities identified in the finance plan.
X. Annual Disclosure Requirements
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 5, an authority
must file an annualcsdT losure report for all tax increment financing
districts. The report shall be filed with the school board, county board and
the Minnesota Department of Energy and Economic Development. The
report shall Include the following information:
1. The amount and source of revenue in the account;
2. The amount and purpose of expenditures from the account;
3. The amount of any pledge of revenues, including principal and
Interest on any outstanding bonded indebtedness;
4. The original assessed value of the district;
5. The captured assessed value retained by the authority;
6. 'Rte captured assessed value shared with other taxing districts;
7. The tax increment received.
The annual disclosure report is designed to be a two-way medium of
information dissemination for both the Office of the County Auditor and the
Authority. Should the auditor want additional information from the
Authority regarding Its tax increment financing activities, such information
should be requested prior to submission of the annual disclosure report by
the Authority. Similarly, the city council may utilize the annual disclosure
• report as a means for requesting information from the Office of the County
Auditor. -
Additionally, the Authority must annually publish a statement in a
newspaper of general circulation in the municipality showing the tax
increment received and expended in that year, the original assessed value,
the captured assessed value, amount of outstanding bonded indebtedness and
any additional information the city deems necessary.
Y. Assumptions
It was necessary to make certain assumptions regarding income, costs and
timing of the tax increment redevelopment district. These assumption are
based on discussions with Authority, County, and fiscal consultant staff.
Z. Municipal Findings
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 3, before or at
the time of approval of the tax increment financing plan, the municipality
shall make the following findings and shall set forth in writing the reasons
and supporting facts for each determination:
1. The proposed development or redevelopment, In the opinion of the
city, would not reasonably be expected to occur solely through
private Investment within the reasonably foreseeable future and,
therefore, the use of tax increment financing Is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public improvements
to the site and without the use of tax increments to assist with the
financing of these public Improvements, the developer would not have
constructed the apartment building and manufacturing facility in the
City; and
2. The tax Increment financing plan will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the
development by private enterprise as It will enable the City to
provide the necessary public Improvements for development; thereby
encouraging redevelopment In the area.
3. The tax Increment financing plan conforms to the general plan for
the development of the city as a whole as it will result in
construction of an apartment building and a manufacturing facility
which will provide needed housing, create now Jobs and increase the
tax base of the City.
4. The tax increment district to be established is a redevelopment
districtpursuant to Minnesota Statutes, Section 273.73, Subdivision
10(aX3) in which the con t one�eacr:bed in Section E of this plan
exist.
10
RESOLUTION 1985 A
A RESOLUTION APPROVING A TAX INCREMENT
FINANCE DISTRICT AND FINANCE PLAN AND
REQUESTING THE CITY COUNCIL OF THE CITY
OF MONTICELLO TO SET A PUBLIC HEARING
WHEREAS, The Housing and Redevelopment Authority
in and for the City of Monticello (the *Authority") is
carrying out the Monticello Redevelopment Project (the 'Project")
and Redevelopment Plan (the "Plan"). pursuant to the
approval of the City Council of the City of Monticello (the "City"); and
WHEREAS, Raindance Partnership has proposed development
of a 33,000 square foot commercial building on Lots 1-10
of Block 15, Original plat, and
WHEREAS, said parcel is situated in the Redevelopment
Project Area, and
WHEREAS, said parcel is found to have substandard
soils such that the cost of corrections of the soil when
added to the Fair Market Value will exceed the Fair Market
Value of the improved lands, and
WHEREAS, the Authority recommends that the Raindance
Project be undertaken as rapidly as possible and be financed
with local funds including tax increment financing as
authorized by Minnesota Statutes, Sections 273.71 through
273.76; and
WHEREAS, thorn was presented to this meeting of
the governing body of the Authority for its consideration
and approval, a copy of a tax increment finance entitled
Tax Increment Redevelopment District B6: and
NOW, THEREFORE, BE IT RESOLVED by the governing body
of the Housing and Redevelopment Authority in and for
the City of Monticello:
1. That the project described in said Tax Incromont
Finance Redevelopment Plan No. 6 contains blighted
and dotorioratod or deteriorating areas as dofinod
in the Minnesota Municipal Housing and Redevelopment
Act, Minnesota Statutes, Section 062.421, Subdivision 13,
and requires public assistance in order to eliminate
said blighted, deteriorating and economically obsolete
areas.
a
Resolution 1985
Page Two
2. The said Plan and Project will carry out the purpose
and policy of the Municipal Housing and Redevelopment
Act of the State of Minnesota, Minnesota Statutes,
Section 462.415 to 462.711 as set forth in Section 462.415.
3. The said Tax Increment Redevelopment District and
Tax Increment Finance Plan hereby in all respects
approved and the Secretary is hereby directed to
file said Redevelopment Plan with the Minutes of
this meeting.
4. Application is hereby made to the City Council of
the City of Monticello, the governing body of the
City in which said project is located, for the approval
of said Plan and project area, and the staff of this
Authority is authorized to transmit said Plan to
said City Council, together with a copy of this Resolution,
a plan for financing the project including the adoption
of the tax increment financing plan and to take such
other action as the said otaff may deem necessary
and advisable in order to secure from said City Council
its approval of said Plan and project. Said City
Council is hereby requested to hold a public hearing
on said Tax Increment Finance Redevelopment Plan
No. 6 after giving publiched notice of the date,
time place and purpose of ouch hearing in a newspaper
of general circulation in the City of Monticello,
such notice to be published at least ton days and
no more than 30 dayo prior to the data of the hearing.
Said City Council in hereby requested to approve
oaid Plan and to find by R000lution that: (1) the
land in the project area would not be &bailable for
redevelopment without the financial aid to be caught;
(2) the plan for the redevelopment district in the
locality will afford maximum opportunity, conoiatent
with the sound needo of the locality an a whole,
for the redevelopment of ouch arose by private enterprioo;
and (3) the tax increment redevelopment diotrict
and tax incromont financing plan conforms to a general
plan for the development of the locality an a whole,
and (4) that the project will result in incranood
employment in the municipality and will raoult in
the prooervationand enhancement of the tax baoo of
the municipality.
Resolution 1955 9
Page Three
Said staff is hereby authorized and directed
to transmit to the State Department of Energy
and Economic Development, Office of Local Government,
certified copies of this Resolution, of said
Plan, and other papers and documents described
or referred to in Minnesota Statutes, Section
462.445, Subdivision 5 of said Municipal Housing
and Redevelopment Act.
Adopted this 10th day of October, 1955.
i
G Seber, (CheirH
ATTEST:
Olive M. Koropchak
Director of Economic Development
11