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EDA Minutes 12-12-2012MINUTES ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, December 12, 2012 - 6:00 p.m. Commissioners Present: President Bill Demeules, Matt Frie, Rod Dragsten and Council Member Tom Perrault Commissioners Absent: Council Member Brian Stumpf, Vice President Bill Tapper, Treasurer Tracy Hinz Staff: Executive Director Jeff O'Neill, Angela Schumann, Wayne Oberg 1. Call to Order 2. 3. 4. 5. President Bill Demeules called the meeting to order at 6:00 p.m. Approve Meeting Minutes TOM PERRAULT MOVED TO TABLE THE OCTOBER 10TH, 2012 AND THE NOVEMBER 14TH, 2012 REGULAR EDA MEETING MINUTES. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 4 -0. Consideration of additional agenda items None Consideration of approving payment of bills Angela Schumann confirmed that the cost oven-tin for the wetland delineation invoice presented for approval last month had been related to the boundary adjustment requested by the TEP panel. Rod Dragsten asked about McComb Group expenses and Campbell Knutson attorney fees. Staff indicated that the last McComb Group invoice had been authorized for payment. Jeff O'Neill pointed out that the EDA will continue to see invoices related to attorney services as Campbell Knutson provides ongoing legal assistance to the City. Tom Perrault asked about a number of downtown expenses. Staff indicated that these had been coded to the EDA because they are eligible business relocation costs. TOM PERRAULT MOVED TO APPROVE PAYMENT OF BILLS THROUGH DECEMBER 12TH, 2012. ROD DRAGSTEN SECONDED THE MOTION. MOTION CARRIED 4 -0. Consideration to adopt resolution 2012 -115 adopting the TIF Analysis and Management Plan for TIF District No. 1 -22 and approving return of tax increments Economic Development Authority Minutes — 12/12/12 from Tax Increment Financine District No. 1 -22 to Wrieht Count Tammy Umdahl presented the TIF 1 -22 Management Plan prepared by Northland Securities. The plan provides an overview of the district's history, function, obligations and future capacity and accomplishes the objectives originally intended by the EDA. TIF 1 -22 is a redevelopment district required to decertify by the end of 2024. Two existing obligations (3 parcels subject to PAYG agreements) will remain in place. The TIF knock down analysis indicated that $42,000 in increment must be returned to Wright County to be in compliance with statutes. The City will receive approximately $17,300 through redistribution of the increment as General Fund tax revenue. The percentage of the distribution is based on current tax rates. There was some discussion about qualifying activities which would allow for the reinstatement of a parcel into the TIF District. Each parcel should be evaluated based on current site circumstances and future revenue potential. Parcels are added back at current tax value. Bill Demeules asked if there was a timeframe involved in reinstatement. Umdahl clarified that a parcel could be reinstated into the district to capture increment at any time. Jeff O'Neill asked about the Cedar Street Garden Center. It may be an option to consider reinstating the parcel into the district as it is no longer a redevelopment site. Rod Dragsten asked if the EDA could reinstate a parcel in anticipation of a qualifying activity. Umdahl suggested that there is no downside to doing so. The parcel would only generate increment if there are improvements. Another option might be to create a new redevelopment district on a qualifying parcel. A parcel might qualify, for example, if there was an old building on the site and an expectation that the parcel would create increment as a separate TIF District. Umdahl summarized that pooling capacity, or the ability to spend a portion of existing and future tax increments, depends on the number of parcels kept in the district. The existing fund balance in TIF 1 -22 is $2.97 million. A portion of this balance can be spent for TIF - eligible expenses. Seventy -five percent of the tax increment must be committed or obligated within the first five years. Twenty -five percent of TIF collected from property can be pooled (including administrative expenses). Tax increment revenue not collected from property (investment income and land sale proceeds) is not subject to 5 year rule and pooling limits. Dollars can be spent in the district or within the development project area. The EDA can choose to increase pooling by 10% but the funds must be spent on housing or returned to the colmty for redistribution. Use of existing fiords must be authorized in the TIF plan and spent on the cost of correcting Economic Development Authority Minutes — 12/12/12 conditions that allowed the city to create a redevelopment district. If funds are used for housing, the project must be qualified as affordable. Future tax increments would be subject to the same restrictions. Only a portion of future revenue is usable. All other revenue is considered excess and is subject to redistribution. Umdahl presented three financial scenarios for EDA consideration: a. No decertification of parcels and use current and future funds as allowed by pooling b. Decertify parcels and retain "usable" funds c. Decertify parcels and redistribute all funds Scenario A maximizes dollars available for economic development in that it opts to retain the tax base as long as possible. Northland recommends these next up steps: • determine if there is a reason to collect future increment • determine if any parcels should be reinstated • determine if usable funds should be retained or redistributed • make a spending plan for usable funds and modify TIF plan • act to decertify parcels if needed • determine funds for redistribution Matt Frie asked if it would be an option to use TIF funds for transportation projects such as reconstructing an intersection. Umdahl clarified that such a use would not be eligible. ROD DRAGSTEN MOVED TO ADOPT RESOLUTION 2012 -115 ADOPTING THE TIF ANALYSIS AND MANAGEMENT PLAN FOR TIF DISTRICT 1 -22 AND APPROVING RETURN OF TAX INCREMENTS FROM TIF DISTRICT 1 -22 TO WRIGHT COUNTY. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 4 -0. 6. Consideration of 2013 EDA Appointments City records indicate that the EDA term held by Bill Demeules expires in December 2012. Demeules agreed to serve another term. Staff noted that the EDA commissioner tern schedule will be corrected so that all terms are appropriately staggered as required in the bylaws. ROD DRAGSTEN MOVED TO RECOMMEND THE APPOINTMENT OF COMMISSIONER DEMEULES FOR A SIX -YEAR TERM ON THE MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED 4 -0. EDA Agenda — 12/12/12 City Council will ratify appointments as recommended by the EDA on January 14th, 2013 and appointments will be retro- active to January I". The EDA will appoint officer positions at its annual meeting in February per EDA bylaws. The enabling resolution will also be updated at that time. Consideration of Director's Report Fred's Auto -A Request for Proposal for locates of front yard underground storage tanks was posted on the City's website and sent to qualified contractors. Danville, Virginia Broadband Conference -Jeff O'Neill attended an out -of -state telecommunications conference promoting economic development through use of broadband systems. The City of Danville, Virginia utilized funding from a tobacco settlement and their electric utility to jumpstart their technology investment. They've established an open access fiber optics network serving businesses and schools and a high tech cyberpark. Their business incubator approach has been successful in developing jobs in underutilized buildings. Telemedicine, education, and utility system applications are also becoming a viable way to utilize high speed and save public money. Bristol, Virginia provides IT related support for local businesses at its head end building. There are elements in place to create a data center in Monticello. This would involve a financial and human resource investment to expand and market the scope of local technology. Mark Pultusker continues to work with staff to find opportunities to ensure the success of FiberNet Monticello. 8. Adiournment Bill Demeules indicated that the EDA Workshop scheduled to follow the regular meeting would be postponed until January due to the number of Commissioners absent. Staff noted that this would enable the City Council to participate in the workshop as well. ROD DRAGSTEN MOVED TO ADJOURN THE MEETING AT 7:05 P.M. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED 4 -0. Recorder: Kerry T.Burri �D Approved: January 9, 2013 Attest: 2 Jeff QA e , xecutive Director