HRA Agenda Packet 10-05-1983HRA AGENDA
Wednesday, October 5, 1983
Monticello City Hall - 7:00 P.M.
Chairperson: Phil White.
Members: Don Cochran, Jack Reeve, Vic Vokaty, Bud Schrupp.
1. Call to Order.
2. Minutes of the September 7, and September 13, 1983, meetings.
3. Consideration of Tax Increment Finance Plan Relating to T.I.F.
District 04 (FSI).
4. Consideration of a Proposal to Participate in a Joint Powers
Agreement to Issue Mortgage Revenue Bonds.
5. Consideration of Stuart Hoglund's T.I.F. Proposal.
6. Other Business.
7. Adjournment.
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MINUTES
C SPECIAL MEETING - HOUSING a REDEVELOPMENT AUTHORITY MEETING
September 13, 1983 - 7:00 A.M.
A special meeting of the Monticello Housing 6 Redevelopment Authority
was duly held at 7:00 A.M. on Tuesday, September 13, 1983, at the
Perkin's Restaurant. Members present were: Schrupp, White, Vokaty,
Reaves and Cochran. Also present was City Administrator Eidem.
Members Absent: None.
The purpose of the special meeting was to review the proposed Tax
Increment Finance Plan 43, which had been presented originally at
the September 7 HRA meeting. At the meeting on September 7, Eidem
requested s delay in action so that some modifications could be made
in form and content. Eidem presented to the members at this time
the revised Tax Increment Finance Plan. Eidem provided a brief
summary of the plan and answered specific questions for the members
of the Authority. Mr. Brad Larson, one of the developers, was
present to review the plan with the Authority and to further
delineate the developer's proposals. On s motion by Schrupp with
s second by Vokety and unanimously carried, the following resolution
was adopted:
The Resolution is 483-4 and is on file at the
office of the City Administrator.
There being no other business to be conducted for the special meeting,
Chairperson White adjourned the meeting.
Thomas $idem
City Administrator
MINUTES
HOUSING 6 REDEVELOPMENT AUTHORITY MEETING
September 7, 1983 - 7:00 P.M.
The regularly scheduled meeting of the Monticello Housing s Redevelopment
Authority was duly held at 7:00 P.M. in the City Council Chambers on
Wednesday, September 7, 1983. Members present were: White, Reeve, Vokaty,
Schrupp. Members absent, Cochran.
The meeting was called to order by Chairperson White.
1. Motion by Reeve, seconded by Schrupp, and carried to approve the Minutes
of August 3, 1983 as read.
2. Motion by Vokaty, seconded by Schrupp, and carried to approve the Minutes
of August 9, 1983 as read.
3. Chairperson White convened the Public Hearing for the purpose of accepting
public comment with respect to the Disposition of Public Lands. He explained
that the proposal before the NRA from Motcalf and Larson Law Firm was for
the HRA to purchase the north 50 feet of Lots 8, 96 i 10 in Block 50, original
Plat, rase the existing blighted structure, and sell to Metcalf end Larson
to assist in their construction of a new facility. He noted that the land
in question for purchase and disposition would becom a parking lot ad3aininq
the now building and was required to meet the zoning requirements. Brad
Larson, representing the developers, was present to affirm that no significant
changes had occurred in their development proposal at this time. Thoro
being no other persons present desiring to be heard or make cement, Chair-
person White closed the Hearing.
The Authority considered the tax increment finance plan for a proposed
rodovelopment district in the downtown area, said area to include the proposed
project by Metcalf and Larson. Administrator Eidom indicated that the draft
of the plan was prepared by another staff person other than himself and
that he had not had time to review the final document. The Authority oiu nt
a short amount of time reviewing the plan. Eidem indicated that through his
preliminary review he did see come difficulties in the language and the
structure of the plan, and requested that the matter be postponed to a later
data so that he would have time to rework the document and include all of the
data he thought was necessary. By concenous of the Authority, a special
meeting was oat for 7100 A.M., Tuesday the 13th of September at Perkin's
Restaurant. The Authority directed Eidom to roviso and distribute the tax
increment plan by Friday, September 9.
Eidem indicated that if the plan, as revised, is adopted on Tuesday morning
the 11th, then the City Council would oat a public hearing for the tax
/ incromant plan for Monday, Soptember IG. Eidem also indicated that upon
adoption of the plan by the HRA copies would be distributed to the County
and school district for their review with a request for early sign off.
The Authority also indicated to Eidem that he should arrange for a private
plaeamont of tax exempt securities with Wright County State Bank in the
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HRA Minutes - 9/7/83
amount of $32,000.00.
A brief discussion followed concerning a letter of credit from the
developers. kr. Larson indicated that he understood why the HRA
would request such a letter, but felt that placed an additional financial
strain on the developer since letters of credit from a lending
institution require an annual fee to reserve the funds. Schrupp
indicated that he understood the Authority had taken action that would
require a letter of credit from all tax increment finance projects.
Eidem explained that action taken at the June 22, 1983 meeting of
the HRA was that a letter of credit was deemed essential for the
James Lower's proposal, and that by consensus the Authority felt that
a letter of credit should be a necessary requirement for future projects.
He noted that the letter of credit requirement was not made a formal
requirement by adoption of a resolution. This issue was left unresolved
with the intent to resume discussion on this matter at a future meeting.
5. Eidem reported to the members that at the August 22, 1983, meeting of
the City Council the HRA's request for a loan of $154,000.00 was approved.
Motion by Schrupp, seconded by Reeve, and carried unanimously to purchase
Lots 5 c 6. Block 3, in Oakwood Industrial Park.
Eidam went on to explain that IXI, Inc., had requested permission to
begin landscaping and borming around Lots 5 c 6. Block 3, Oakwood Industrial
Park, prior to their assuming ownership. They explained that for economic
reasons it wan more coot effective to have all of the landscaping done
at a single time rather than hiring a contractor to come in after each
parcel acquisition. Eidem explained that Dee Johnson, Vice President of
IXI, had agreed to enter into a written agreement stipulating that, should
IXI not fulfill their obligation to purchase all of the land, they would
return the lots to their original condition at their own expense. Motion
by Oaehran, seconded by Vokaty, and carried unanimously to prepare and
enter into an agreement with IXI, Inc., which would allow IXI to landscape
and berm around the perimeter of Tote 5 c 6 in Block 3, Oakwood Industrial
Park, prior to their, IXI's, assuming ownership of that land.
6. Eidam introduced to the Authority a proposal from the City of Delano that
would entail a joint powers agreement betwoon four cities who would then
issue 10 million dollars in mortgage revenuo bonds. He explained that
the idea had just been proposed to him and that he had very limited informa-
tion available at this time. Basically, ho explained that the program wan
to address a housing need. Eidem stated that, based an the limited informa-
tion he had, he understood the program to work as followoi The bond
proceeds would be handled directly by a lending institution. Duvolopera/
contractors, on a first came, first serve basic, could reserve a certain
amount of dollars in mortgage money. Pirst time home buyers meeting certain
income guidelines would then be eligible for application for the mortgage
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HRA Minutes - 9/7/83
Cmoney reserved by developers/contractors. The mortgage money would
be intended to be loaned at an interest rate below that which is
available through conventional mortgage financing. The intent of the
program is to provide incentive for new housing startb as well as
providing financing for low and moderate income families in the purchase
of their first residence. Eidem noted that an infozmational meeting
was being held at the Delano City Hall and that he would try to attend
to secure further information if the HRA so deeired. The Authority by
consensus informed 8idem to acquire as much additional information about
the program as possible. They indicated that such a program might
have substantial impact on the housing stock within the City and definitely
warranted an extensive review.
7. There being no other business. the seating adjourned.
Tbomss 61dam
city Aftinistrator
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41
AGENDA SUPLEMENT
October 5, 1983
3. Stan Kohl, or a representative from the Law Firm of Holmes a Graven,
will meat with Tom Eidem. Discussion will primarily deal with Monticello's
possible participation in a joint powers agreement to issue mortgage
revenue bonds.
The meeting is scheduled for October 5, 1983, at 2:00 P.N. After hearing
the mortgage revenue bond information, Monticello must answer two
questions 1- Do we want to participate in mortgage revenue bonds? and
2- if so, do we want to participate jointly?
After the informational meeting the City must have a public hearing in
regard to accepting public comments on mortgage revenue bonds. A determin-
ation must be made as to whether the City wants to further pursue mort-
gage revenue bonds.
In the event Monticello wants to pursue mortgage revenue bonds, an appli-
cation must be submitted by Janury 2, 1984. There are two types of mortgage
revenue bonds to apply for. 1- mortgage revenue bonds for rental housing,
and 2- mortgage revenue bonds for single family housing.
At present, there are no limits for mortgage revenue bonds dealing with
rental property. However, there is a limit on single family housing mort-
gage revenue bonds. $200,000,000 is the maximum that can be issued
in Minnesota each year. The two hundred million is further broken down
into throe areas. 1- $145,000,000 for Minnesota Housing Finance Agency,
2- $27,500,000 for St. Paul and Duluth, and 3- $27,500,000 for compotetive
allocation.
The oinglo family mortgage revenue bondo are scheduled to expire December
31, 1983, unless congress onacto law to continue mortgage revenue bonds
for single family housing in 1984 and beyond.
Exporto in the bond field fool that there io a good chance of having
mortgage revenue bonds for oinglo family housing continued in some form.
In any event, we muot proceed with our determination and application
prior to January 2, 1984.
4. Fulfillment Sytomo, Inc. (PSI), has recently applied for a Urban Dovol-
opment Action Grant (U.D.A.G.) from Housing and Urban Development to
help aid them in rolocating and expanding within the Monticello City
Limito. The Grant Application has boon procccood by the Minn000ta office
in Minnoapolio and advanced to Machington with the Minnoapolio word of
approval. The application will be undor review in Washington for approx-
imatoly the next 30 to 45 days.
A
The Minneapolis HUD office commented on how complete the application
was, especially in such a short period of time.
Because of the time element, the HRA was not contacted formally. The
figures originally used in the application were not very concrete. In
fact, they were very flimsy and only served the purpose of getting the
application in on time. As the HUD review progressed, we assembled a
definate package for revision to the UDAG file.
At present, the FSI plan is to erect two (1- 10,000 sq. ft office Bldg.
and 2- 20,000 sq. ft. production 6 10,000 sq. ft. warehouse facility)
buildings on lots 6,7, b 8 , Blk 2, Lauring Hillside Terrace. The
total estimated market value is $874,815.00. This will provide an annual
tax increment of $30,741.00. A more detailed description is presented
in the tax increment economic development finance plan for FSI.
5. Mr.Stuart Hoglund has expresaed interest in developing a triangular
shaped piece of property he owns near the Silver Fox Inn. His pro-
posal would be to build a 39 unit motel and use tax increment financing
to help finance the land.
At the present, Hr. Hoglund owns the land. He proposes to sell the land
to the HRA for approximately $75,000 to $100,000 and then have the HRA
subsidize the land, under T.I.F., to a corporation which he may be a
partner in.
The purpose of this discussion is to determine if Mr. Hoglundb project
meets the Central Minnesota Development Plan Objectives.
I. The property in question is located in the project boundaries.
II. Redevelopment objectives.
The role of the HRA will bo to coordinate, facilitate, and implo-
mont proposals and commitments to undertake redevelopment in
accordance with the following objectives,
1 -To provide the maximum opportunity for redevelopment by
privato enterprise, consistent with the objectives not forth
in thio plan and for the City as a whole. (NO)
2 -To encourage redevelopment of the area in a manner that will
increase the financial baso of the City and improve the
source of public revenue. (YES)
3 -To provide increased employment opportunities through con-
atruction jobs and permanent businesses located in the area. (YES)
4 -To provide adequate atroota, utilities, and other public improve -
menta and facilities to enhance the area for both existing
and now development. (N/A
5 -To coordinate planning and dovolopment of projects with the
potential rodiaign and reconstruction of Truck Highway 25
and the Mississippi River Bridge. (N/A)
6 -To redirect the development of both housing and co®ercial
enterprise in an orderly manner thus eliminating conflicting
land use. (N/A)
7 -To develops high density elderly housing in immediate prox-
imity to public and commercial facilities. (N/A)
8 -To achieve a high standard of rehabilitation of buildings
that remain in the project area. (NO)
9 -To provide land for the needed expansion of existing busi-
nesses in the area in appropriate locations consistent
with other objectives of this project. (N/A)
10 -To develops public open space compatible with and complement-
ary to commercial development. (N/A)
11 -To eliminate blighting influences which impede the potential
development of the area. (N/A)
12 -To provide redevelopment sites of such size and character to
assure development of the area. (N/A)
13 -To acquire and remove buildings that aro structurally sub-
standard and/or buildings that are economically or func-
tionally obsolete and infeasible of being rehabilitated. (N/A)
14 -To acuiro land and/or buildings that are under utilized to
facilitate development. (YES) land may be under utilized.
15 -To strive to accomplish the optimum quality of development
for the project through site planning and landscape archi-
tocture, the treatment of open space, building design, the
use of materials, scale, appropriateness, and functional
utility. (YES)
16 -To remove incompatible land use. (N/A)
17 -To accomplish convenient and adequate parking to servo the
needs of the area. (YES)
18 -To otcabliah development incentives to facilitate now in-
dustrial construction on vacant land. (NO)
III. INDUSTRIAL - ECONOMIC DEVELOPMENT
1 -Proportion will be acquired in order to accomplish one or more
of the followings
a)Provido land for now otrooto, eidawalka, utilitioo,facilitiens (NO)
b)Induca private industrial development for expanded tax baoa and
and expanded employment opportunity; (YES)
c)Encourago orderly relocation of oxioting industrioo currently
creating a land use conflict in their present location thereby facilitating
the objectives of the Housing and Commercial Rodevolopment sections
of this plan; (N/A)
d)To induce orderly industrial development within the confines of the
City and discourage encroachment into adjacent prime agricultural
land. (N/A)
After reviewing all objectives of the Central Monticello Rodevelopment
plan and areas concerned with industrial development, It is my
opinion that this project does not meet enough of the criteria to
qualify for Tax Increment Financing.
TAX INCREMENT ECONOMIC DEVELOPMENT FINANCE PLAN
A. STATUTORY AUTHORITY
The City of Monticello is authorized to establish a tax increment
district pursuant to Minnesota Statutes 273.71 - 273.78.
B. STATEMENT OF OBJECTIVES
1) Provide incentive for the retention, expansion, and relocation
of Fulfillment Systems, Inc., (PSI) in the City of Monticelloi
2) Create temporary construction employment, retain 135 present
jobs and create 65 new positionsi
3) Provide an impetus for the expansion of industryt
4) Provide expanded tax baser
5) Eliminate the need for a Conditional Use Permit because of
non -conforming use.
C. DEVELOPMENT PROGRAM
In accordance with Minnesota Statutes Section 273.4 Subdivision 1,
a description of the development program for the tax increment
financing district is provided.
1) The City of Monticello will acquire Lots 6, 7, s 8, Block 2,
Louring Hillside Terrace.
2) The City will convoy to FSI, tho developers, the above described
parcels in a condition suitable for construction.
3) PSI, a local clearing house for refunds, samples, and awcepstakcs,
will construct two buildings on Lots 7 6 B. The office facility
(ono story) will be 12,000 eq. ft. The production facility (ono
story) and atorago facility (one story) will be 10,000 eq. ft.
and 20,000 eq. ft, respectively.
D. PROPERTY ACQUISITION
The City shall acquire Lots 6, 7, c 6, Block 2, Lauring Hillside
Terrace, City of Monticello. Property identified for acquioition
will be acquired by the Monticello Authority in order to accomplish
one of the following,
a) Provide impetus for induatrial development and oxpanoionj
7
b) Assemble land for development= and
c) Carry out development to accomplish the uses and
objectives set forth in this plan.
E. DEVELOPMENT ACTIVITIES COVERED BY AGREEMENT
All activities planned are delineated in the development agreement
which is attached as Appendix A. To date, a purchase agreement has
been executed between FSI and G 6 E Properties, the present owner,
and said agreement has been assigned to the HRA.
F. DESCRIPTION OF PROPERTY IN THE TAX INCREMENT FINANCING DISTRICT
Lots 6, 7, a 8, Block 2, Lauring Hillside Terrace, City of
Monticello, according to the plat on file and of record in the
office of the County Recorder in and for said Wright County,
Minnesota.
G. CLASSIFICATION OF THE TAX INCREMENT FINANCING DISTRICT
The tax increment financing district to be established within the
area designated as the Central Monticello Redevelopment Areae is
classified as an economic development district. The property is
currently vacant but with City utilities. No housing will be con-
structod. No blighted structures exist. This proposal has boon
found to be in the public interest because it will discourage
commorce, industry, or manufacturing from moving their operations
to another state, it will result in increased employment in the
municipality and will result in the preservation and enhancement of
the tax baso of the municipality. Expansion and relocation of Ful-
fillment Systeme, Inc., (FSI) will save 135 jobs, will add 65 now
jobs, and increase the assessed value of the City of Monticello by
6363,510.00. Therefore, the tax increment financing district will
be classified as a tax increment economic development district.
H. ESTIMATE OF COSTS
The estimate of public coots associated with this project and to be
rocovorod by tax increment financing arc as followas
Land Acquisition
S 84,550.00
Assessments - 1984 c Beyond
45,450.00
Subtotal
8130,000.00
Legal, Contingency, Admini-
stration (80
10,400.00
Total HRA Cost
$140,400.00
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I. ESTIMATE OF INDEBTEDNESS
V
The HRA, by action taken at an October 5, 1983, meeting, authorized
a private placement of tax exempt securities in the amount of
$130,000.00. The HRA intends to retire this debt over a period of
eight years. The interest rate on this issue is estimated at 10%.
J. SOURCE OF REVENUE
The primary source of revenue to be used to retire the bond issue will
be tax increments generated as a result of the development. The other
source of income will be the proceeds for the conveyance of the land
from the HRA to the developer. In any given year that the tax in-
crement is not sufficient to retire the debt, the developer will issue
directly to the HRA an amount equal to the shortfall.
K. ORIGINAL ASSESSED VALUE
Pursuant to Minnesota Statutes 273.74, Subdivision 1 and 273.76,
Subdivision 1, the Original Assessed Value (OAV) for the Monticello
District N4 is based upon the original assessed values placed on the
property provided by the Wright County Assessor in 1983. This value
is $8,160.00. Individual parcel assessed values are as follows:
(155-029-002069) $2,720.00
(155-029-002070) $2,720.00
(155-029-002080) $2,720.00
Total Original Assessed $8,160.00
Value
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
dovelopmont district to calculate the tax increment payable to the
Monticello HRA. Each year the County Auditor shall also add to the
original assessed value of the development district an amount equal
to the original assessed value for the preceding year multiplied by
the average increase in the aosc000d valuation of all property included in
the tax increment development district during the five yearn prior to
district certification. In any year in which there is an increase in
total aseoased valuation in the tax increment development district
above the annual percentage increase, a tax increment will be payable.
In any year in which the total assessed valuation in the tax increment
development district is Ices than the original assessed value, no
assessed valuation will be captured and no tax increment will be
payable.
The County Auditor ohall certify in each year after the data the
original assessed value was cortiflad, the amount the OAV has
increased or decreased as a rcoult of any of the following,
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1) Change in tax exempt status;
2) Alteration of the geographic boundaries of the district; and
3) Change due to stipulations, adjustments, negotiated or court
ordered abatements.
L. ESTIMATED CAPTURED ASSESSED VALUE
Pursuant to Minnesota Statutes 273.74, Subdivision 1 and 273.76,
Subdivision 2, the estimated Captured Assessed Value (CAV) of the
tax increment development district will be $363,510.00. Changes in
assessed values are shown in Exhibit A. The City of Monticello
requests 100% of the available increase in assessed value commencing
in 1985 for taxes payable in 1986 be captured for repayment of debt
and current expenditures.
M. DURATION OF DISTRICT
The City of Monticello expects to terminate the Monticello Tax
Increment Development District #4 on December 31, 1993.Tho ton year
duration of the district is based on the ability of the City to
collect tax increments for 6 years commencing in 1986 and ending in
1993. Pursuant to Minnesota Statutes 273.75, Subdivision 1, the
maximum duration of the tax increment development district is 8 years
from the date of receipt of the first increment, or ton years from
the data of approval of the plan, whichever is lose. Thus, the City
of Monticello requests the available tax increment for a period of
8 years.
N. INPACf ON OTHER TAXING JURISDICTIONS
It is anticipatod that $30,741.00 in tax increment will be captured
annully as a result of the proposed development during the districts
8-yoar life.
For taxes payable in 1983, the City of Monticello comprised 24.6% of
the mill rate (21.0), School District 4882 comprised 42.8% of the
mill rate (36.2), and Wright County comprieod 28.3% of the mill levy
(23.9). The Monticello -Big Lako Community Hospital District made up
the final 4.1% with a mill rate of (3.4). A mill rate of 84.5 mills
has boon used throughout the debt retirement schodulo used in this
tax increment financing plan. Applying tho appropriate percentage
of the total mill Tato levied by each taxing jurisdiction to the
projected mill rate and the annual tax increment of $30,741.00 ro-
voals the annual forfeit of tax dollars by each taxing jurisdiction.
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The amount of tax dollars foregone by each taxing jurisdiction is
v. listed in the table below:
TABLE I
Percent of tax increment attributable to taxing jurisdiction.
Estimated Annual
Tax Jurisdiction Mills Percent Tax Increment
City of Monticello 21.0 24.6 $ 7,623.77
School District 0882 36.2 42.8 13,157.15
Wright County 23.9 28.3 8,699.70
Hospital District 3.4 4.1 1,260.38
Totals 84.5 100.00% $30,741.00
The following table represents the additional mills that would have
to be levied by each taxing jurisdiction to compensate for the tax
dollars captured as tax increments. The tax increments derived from
the project alluded to in the tax increment economic development
district would not be available to any of the taxing jurisdictions
were it not for the public intervention by the City of Monticello.
Although the increases in assessed value due to the economic development
plan will not be available to the other jurisdictions for the
application of their mill levy for the duration of the tax increment
financing Bistrict, this now assessed value will eventually be applied
to all jurisdictions assessed valuation and could conceivably permit a
mill levy decrease. If it in assumed that the captured assessed value
would be available for each taxing jurisdiction, the amount of tax
dollars, represented so tax increments, which would not be received by
the other jurisdictions can be computed. Thio computation is facilitated
by estimating how much the mill levy for property outside of the tax
increment financing district would have to be incroacad to raise the
same amount of tax dollaro in each jurisdiction had the project occurred
without the assistance of the City of Monticollo.
g
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a
TABLE II
Impact on taxing jurisdiction if development occurred without
public assistance:
Payable 183 Required Annual
Tax Jurisdiction Assessed Value Mills Tax Increment
City of Monticello 58,492,537 .0130 7,623.77
School District
#882 79,049,159 .0166 13,157.15
Wright County 340,696,792 .0255 8,699.70
Hospital District 92,564,703 .00136 1,260.38
30,741.00
All assessed values exclude the amount of assessed valuation already
found in tax increment financing districts in other municipalities
in Wright County.
0. MODIFICATION TO TAX INCREMENT PLAN
In accordance with Section 273.74, Subdivision 4 of the Tax Increment
Financing Act, the geographic area of the project or tax increment
financing district, increase in the amount of bonded indebtedness
to be incurred, including a determination to capitalize interest on
debt if that determination was not part of the original plan, or to
increase or decrease the amount of interest on the debt to be
capitalized, increase in the portion of the captured assessed value
to be retained by the City, 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 upon
the notice and after the discussion, public hearing and findings
required for approval of the origin plan. The geographic area of the
Monticello Tax Increment Financing District 04 may be reduced, but
shall not be enlarged after five years following the date of
certification of original assoseed value by the office of the County
Auditor. Tho Monticello Tax Increment Financing District 04 may,
therefore, be expanded until 1988.
P. LIMITATION ON ADMINISTRATIVE EXPENSES
In accordance with M.B. 273.73, Subdivision 13 and 273.75, Subdivision 3,
the administrative expenses means all oxpendituroo of an authority other
than amounts paid for the purchase of land or amounts paid to contractora
or others providing materiala and corvicoo, including architectural
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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 M.S. 237.77. Administrative expenses include amounts paid for
services provided by bond council, fiscal consultants and planning,
economic, or legal consultants. No tax increment shall be used
to pay any administrative expenses for a project which exceeds
10% 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.
Q. LIMITATION ON DURATION OF TAX INCREMENT FINANCING DISTRICTS
Pursuant to M.S. 273.75, Subdivision 1, "No tax increment shall be
paid to an authority three years from the dace 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:
(3) the authority has constructed or caused to be constructed public
improvements within the district..." The City of Monticello must
therefore acquire the property so stipulated in this plan by October 1,
1986, or the office of the County Auditor may dissolve the tax
increment district.
R. LIMITATION ON QUALIFICATION OF PROPERTY IN TAX INCREMENT DISTRICT
NOT SUBJECT TO IMPROVEMENT
There is no property within the proposed Monticello Tax Increment
Financing District 04 that is not subject to improvement.
S. LIMITATION ON TRE USE OF TAX INCREMENT
All rovonuo derived from tax increment shall be used in accordance
with tho tax increment financing plan. The revenue shall be used
to flnanco or othorwico pay the capital and administrative cost of
a development district pursuant to M.B. 472A. These revenues shall
not be used to circumvent existing levy limit law. No revenue derived
from tax increment shall be used for tho construction or renovation
of a municipally owned building used primarily and regularly for
conducting business of tho municipalityl this provision shall not
prohibit the use of rovonuo dorivod from tax incremontD for the
construction or renovation of a parking structure, a commons area
usod as a public park or a facility used for social, recreational,
or conforenco purposes and not primarily for conducting the business
of the municipality.
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T. NOTIFICATION OF PRIOR PLANNED IMPROVEMENTS
Pursuant to M.S. 273.76, Subdivision 4, the City has reviewed and
searched the property to be included in the tax increment economic
development district and found that no building permit has been
issued during the 18 months immediately preceding approval of the
tax increment financing plan by the County. 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 3 month period immediately
preceding said approval of the tax increment financing plan, as
certified by the assessor.
U. EXCESS TAX INCREMENTS
Pursuant to M.S. 273.75, Subdivision 2 of the Tax Increment Financing
Act, 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
M.S. 475.61, Subdivision 3, the City shall use the excess amount in
order selected by the Authority to;
1. Prepay outstanding Bonds;
2. Discharge the pledge of tax increment, therefor;
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 amount to the County for pro rata distribution
to the affected taxing jurisdictions.
V. REQUIREMENT FOR AGREEMENTS WITH THE DEVELOPER
No more than 10% by acreage of the property to be acquired by the
City in the economic development district shall be owned by the City
as a result of acquisition with the proceeds of the bonds without
the HAA having prior to acquisition concluded an agreement for the
development of the property acquired.
W. ASSESSMENT AGREEMENTS
Purouant to M.S. 273.76, Subdivision 8, the City may, upon entering
into a development agreement, anter into an agreement in recordable
form with the developer of property within the tax increment financing
district which establishes o minimum market value of the land and
completed improvements for the duration of the tax increment
Redevelopment District. The aoocosment agreement ohall be presented
to the County A000asor who ohall review the plane and opocifications
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for the improvements 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 judgement of the assessor to be a reasonable
estimate, the assessor may certify the minimum market value agreement.
X. ADMINISTRATION AND MAINTENANCE OF THE TAX INCREMENT ACCOUNT
Administration of the tax increment financing economic development
district will be handled by the City of Monticello Housing and
Redevelopment 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 economic development 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 as amended.
Y. ANNUAL DISCLOSURE REQUIREMENTS
Pursuant to M.S. 273.70, Subdivision 5, an authority must file an
annual disclosure report for all tax increment financing districts.
The report shall be filed with the school board, county board,
and the Minnesota Department of Energy, Planning and Development.
The report shall include the following information:
1. The amount and source of revenue in the account;
2. The amount and purposes of expenditures from the account;
3. The amount of any pledge of revenues, including principal
and interest on any outstanding indobtednaso;
0. The original assessed value of the districts;
5. The captured assessed value retained by the authority;
6. The captured assessed value shared with other taxing
districts;
7. The tax increment received.
Tho annual disclosure report is designed to be a two-way medium
of information dissemination for both the office of the County
Auditor and the City Council. Should the auditor request additional
information from the City regarding the tax increment financing
activities, ouch information should be requested prior to submission
of tho annual disclosure report by the City. Similarly, the City
Council may utilize the annual disclocuro report as a moano for
roqueoting information from the office of the County Auditor.
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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
indebtedness, and any additional information the authority may
deem necessary.
Z. ASSUMPTIONS
It was necessary in the preparation of this plan to make certain
assumptions regarding income, costs, and timing of the economic
development district. These assumptions are listed below:
1. INCOME
a. Original and Assessed Valuation of Tax Increment District
d4, Lots 6, 7, i 8, Lauring Hillside Terrace (provided
by office of Wright County Assessor).
Market Value 44,000
Assessed value 8,160
b. Now Market and Assessed Valuation of Tax Increment District
04, Lots 6, 7, i 8, Lauring Hillside Terrace (provided by
office of Wright County Assessor).
Market Value 874,815.00
Assessed value 371,670.00
Loss OAV 8,160.00
Total CAV 363,510.00
Mill Rate x .084566
Annual Tax Increment 30,740.59
*Rounded to $30,741.00
i. EXPENDITURES
All expenditures have boon pro-dotorminod excepts
a) Consulting foe - estimate by Holmoo c Graven.
b) interest on loan.
t - 10
BLOCK 2
l Lots 6, 7, 6 8 Lauring Hillside Terrace
KV $8,000 EA. (3) - $24,000.00
OAV $2,720 EA. (3) _ $ 8,160.00
(NAV)
ENV Land
138,000.00
Building
736,815.00
TOTAL
874,815.00
lot 50,000 0 .34
$ 17,000.00
Thereafter 824,815 0 .43
354,670.00
NAV
$371,670.00
Lass OAV
- 8,160.00
CAV
$363,510.00
Kill Rate
x .004566
Annual Increment
$ 30,740.59
I FORMAT FOR PRELIMINARY T.I.F. PROPOSALS
Original Estimated Market Value : $24,000
Original Assessed Value $8,160
LAND $138,000
NEW ESTIMATED MARKET VALUE : $874,815 BLDG. $736,815
COMPUTE NEW ASSESSED VALUE : (34% 5 43%)
34 x 50,000 - 17,000
CAPTURED ASSESSED VALUE s
371,670
8,160
$363,510
TOTAL : $874,815
824,815 x .43 - 354,670
♦ 17,000
371,670
(NEW ASSESSED VALUE - OLD ASSESSED VALUE
CAPTURED ASSESSED VALUE)
CAPTURED ASSESSED VALUE x MILS. RATE a INCREMENT.
$363,510 x .084566 0 30,741
HRA EXPENSE
LAND ACQUISITION
130,000
SITE PREPARATION
-0-
LEGAL,
10.400
FINANCE
TOTAL
140.400
ADMINISTRATION
(5% of Admin.) 7.020
L. TOTAL PROJECT COST : 8147,420
TAX INCREMENT FINANCING WORKSHEET
INCREMENT AMOUNT 30,741
TOTAL PROJECT COST 147,420
PRINCIPAL +
1 16,250
2 16,250
3 16,250
4 16,250
5 16,250
6 16,250
7 16,250
8 16,250
PRINCIPAL 130,000
TOTAL INCREMENT 245,928
INTEREST 93,600 TOTAL 223,600
DIFFERENCE + 22,328
101 INTEREST RATE
8 4 OF YEARS
INTEREST
TOTAL AMOUNT
13,000 CI
13,000 CI
13,000 Cl
13,000 CI
13,000
29,250
11,700
27,950
10,400
26,650
9,100
25,350
7,800
24,050
6,500
22,750
5,200
21,450
3,900
20,150
INTEREST 93,600 TOTAL 223,600
DIFFERENCE + 22,328