HRA Agenda 01-26-1995 SpecialAGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
SPECIAL MEETING, Thursday, January 26, 1995 - 7:00 p.m.
City Hall
MEMBERS: Chairperson Al Larson, Vice -Chairperson Ben Smith,
Everette Ellison, Tom St. Hilaire, and Brad Barger.
STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Koropchak.
GUEST: Dan Lindl, Presbyterian Homes.
1. CALL TO ORDER.
2. CONSIDERATION TO APPROVE MODIFICATION OF THE BUDGET OF THE TIF
PLAN RELATING TO TIF DISTRICT NO. 1-19.
3. CONSIDERATION TO REVIEW FOR APPROVAL AN EQUAL
DISBURSEMENT/PAYBACK AGREEMENT BETWEEN THE HRA, HOSPITAL
DISTRICT, AND ALLIANCE.
4. OTHER BUSINESS.
5. ADJOURNMENT.
NRA AGENDA
JANUARY 26, 1995
Consideration to aoorove modification of the budUet of the TIF
Plan relating to TIF District No. 1-19.
Reference and Backaround:
Since agenda items 2 and 3 rr.late to the Senior Housing
Project, HRA members Ben Smith, Everette Ellison, and Tom St.
Hilaire are to consider the items for action.
At the January 11 HRA meeting, Tom St. Hilaire made a motion
to adopt the resolution modifying the plan relating to the
Redevelopment Project No. 1, modifying the plana relating to
TIF Districts No. 1-1 through 1-18, and approving and adopting
the plan relating to TIF District No. 1-19. The motion
approving and adopting the plan included a budget total of
$210,830 (Net Present Value (NPV) @ 8.O%), a reduction of
$169,000 from the proposed budget of $379,830. The land
acquisition of $120,000 was eliminated, and the contingency
and administration costs were reduced to $20,000 each.
Everette Ellison seconded the motion and the motion passed on
a 3-0 vote.
The land acquisition was eliminated because:
1. The HRA members understood the Hospital District was
donating the land as equity Into the project.
2. The HRA members heard the concern rained by city
staff relating to the potential release of odors from the
Waste Water Treatment Plant. Staff did not support the
uric of TIF for land write -dawn at this site location.
3. The HRA members were informed that the All iancc
requested the archltact to Incorporate opecial filters
into the deolgn of the building to decrease the potential
intake of outoidv air and that the Alliaucp viewed tho
number of reported odors from the Treatment Plant as
Insignificant.
4. On December 7, the HRA members approved a resolution
authorizing PRO to prepare a TIF Plan relating to TIF
District No. 1 -19 and viewed the potential odors from the
Treatment Plant as insignificant ou it relatco to the urge
of TIF and the propooed olto of the senior housing
project .
5. On December 15, a meeting was hold between Kirocht,
Lindl, Bubul, Wolfotollor, and Koropchak to dioeuou the
oenlor housing project coutu and the financial
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Pago 1
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HRA AGENDA
JANUARY 26, 1995
structuring as it related to TIF and the issuance of
bonds. Although the elimination the land acquisition
from TIF Plan would keep the project cleaner, the
decision to include the land acquisition in the TIF
budget was left undecided until the list of itemized
project costa were available.
6. On January 11, the TIF Plan was presented to the HRA
for adoption.
The contingency and administration costs were reduced to
$20,000 each because:
1. Previously, the HRA approved the estimated Holmes @
Graven and PRG costs of $7,500 for creation of District
No. 1-19 and the re -imbursement of $5,600 for the Housing
Market Study Analysis as Administrative Expenses.
2. The HRA felt a contingency of $20,000 was a
sufficient amount for over -runs.
3. The HRA felt once the budget was approved, dollars
would be expended to the maximum of the budget amounts.
6. The HRA recognized the option to modify the budget at
a later date if an increase to the budget was necusoary.
Kuropchak noted that a budget within a TIF Plan is a guideline
of identified and qualifying TIF expenditures of which the
total expenditures does not exceed the projected tax increment
from the district. The proposed budget allows room for
flexibility. As in the case of the Soils Correction District,
a Housing District must expend 100% percunt of the increment,
less 10% for administrative couts, within the district. The
TIF enforcement tool for dioburuement of TIF expenditureo lies
within the Private Redevelopment Contract between the HRA and
thu developer, not, with the approved TIF budget. In other
words, the pay -au -you -go TIF auslutance for thu site/public
Improvements will be paid to the Alliaucu au outlined In thu
Contract. The general criteria for payment has been upon
certification of completed improvvmunto and/or certification
of payment by invoice.
Modification of TIF Budpct
In order for the Senior Housing prujoct to cauhfluw, to
provide and maintain moderate rental rates, and to meet the
low/moderate income roquiremento of a "Qualified Housing
Diotrict"; the HRA lu roquestud to conoider modifying the TIF
y
Pago 2
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HRA AGENDA
JANUARY 26. 1995
budget. The new proposed budget maximizes the projected 25
years of increment less 10% administrative costs. The new
budget of $406,000 is the Net Present Value at 8.0%. Mr. Dan
Lindl of Presbyterian Homes will be present to further explain
the need to maximize the use of TIF.
The appraisal of the property for the proposed senior housing
project is underway; therefore, the value of the land has nuc
been established. It is my understanding, the Hospital Buard
will consider donating the land in an amount equal to the
difference between the appraisal and the $220,000 TIF land
acquisition assistance.
B. Alternative Actions:
1. A motion to approve modification of the budget as
proposed at $406.000 (NPV 6, 8.0%).
2. A motion to deny modification of the budget.
3. A motion to approve modification of the budget at a
negotiated dollar amount.
4. A motion to table any action.
b C. Staff Recommendation:
Staff recommunds approval of the modified TIF budgut because
the senior housing facility complimentu the previous land uuu
study completed for the Hospital District, the project hau
generated interest and support from the public, thu project
compliments the Monticol:o Comprohencive Plun, the projuct
s.itlsfyu the TTF "but for" tout and the Statutes, and 100%
less 10%; of the Increment must be expondud wlthin the
diuti•let. Romember, the budget lu a guide and the dollar
amount paid to tttu Alliunco Io outlined Sn the Privatu
Reduvolopment Contract. The HRA will adopt a resolutlon
approving the contoxt of the Privito Redovulopmunt Contract
butween the HRA and the Alliancu at their February 6 meeting.
Contractu are generally agreed upon and uxuuuted by both
parties prior to the City Council approving the TIF Plan and
Diotrlct.
More Importantly, the ability to maximize the dollar amount of
the qualifying TIF expendlturuu is critleal to cash flow the
project. Additionally, the utilization of TIF, both, reduceu
thu routal rateo allowing affordability and au uiutu to meet
the requlremento of low/moderate income levels of a "Qualified
Page 3
HRA AGENDA
JANUARY 26, 1995
Housing District". The "Qualified Housing District" waives
the City's projected HACA Loss of $215,000 ($78,700 NPV
5.5%) and the amount is applied to the project.
Suoportino Data:
Copy of the proposed budget submitted for approval on January
11 and copy of the budget approved on January 11 and the
proposed budget submitted for modification on January 26.
Also, is a copy of the tax increment projections.
Page 4
TIF DISTRICT NO. 1-19 BUDGET
aq
m
APPROVED
MODIFICATION
LAND ACQUISITION
$120,000.00
DEMOLITION/REMOVAL
$ 7,500.00
7,500.00
SITE IMPROVEMENTS
STORM SEWER
15,440.00
15,440.00
SANITARY SEWER
18,950.00
18,950.00
WATER
3,400.00
3,400.00
PUBLIC IMPROVEMENTS
UTILITY REALIGNMENT
12,000.00
12,000.00
FIRETRUCK PATH/HYDRANTS
10,000.00
BIKE/PED PATHWAY BRIDGE
10,000.00
10,000.00
SITE PREPARATION
39,208.00
39,208.00
OTHER PREPARATION FOOTINGS
15,675.00
15,675.00
PARKING/PAVING/LANDSCAPING
48,657.00
48,657.00
SUBTOTAL
$170,830.00
$300,830.00
CONTINGENCY
20,000.00
61,170.00
ADMINISTRATION
20,000.00
44,000.00
TOTAL
$210,830.00
$406,000.00
m
:av-11-'95 61ED 15:25 ID:BDS INC. 1¢ ru:Rb—A&A »», —
District No. 1.18
(As adopted November 28, 1994)
Soil Corrections
S102.000.00
Subtotal
5102,000.00
Administration
11333.00
TOTAL
$113,333.00
(As adapted November, 1982)
Tax inereejCW District No: 1- 9
g1CGWS
(As adopted February 27, 199
Land Acquisition
1120,000.00
Demolition/Removal
7,500.00
Public Improvements
Storm Sewer
15,440.00
Sanitary Sewer
18,950.00
Water
3.400.00
Utility Real;—ent
12,000.00
site Preparation
39,208.00
Otha Prcperatlon Footings
13,673.00
Parking/Pav way
59,657.00
subtotal
$290.830.00
Contingency
45,000.00
Administration
41.000.00
Total
5379,830.00
Subsection 1.11. tArA Me. All new and/or eriatiadevelopment on land
idendfiW on Exhibits I -C through I -F as 'property to be acquired- or `posu'ble
acquisition* will be subjoct to the following uses and requirements:
1. Uses Permitted in Designated Areas.
1.42
TAX NCRE8IENT FINANCING
ESTDiAATE OF LOCAL GOVERNAMNT AM PENALTY
Cm:
11074TICELLD
SALESRATIO'.
0.912
SCHOOL DMT:
eat
EST TAX RATE
39.28%
TYPE OF DIST:OAIN-. HOUSING (Hag Alliance)
TAX CAP RATE
1.129
0
,n
CAPTURED
OUALFYM SCHOOL
ADJUSTED
TAX tj
TAXES
TIF TAX
PHASE -N
TAX SALES
QUALIFYING
PENALTY
INCREMENT in
PAYABLE
@�CAPACITY �D
PERCENTAGE
CAPACITY RA71D
�^
TAXCAPACRYTARAIE
Q
PENALTY J
1993
0.00%
0.00
0.972
0.00
39.28%
0.00 i_i
1994
0.00%
000
0.072
0.00
39.28%
0.00 ;;,
1995
0.00%
0.00
0.972
0.00
39.29%
0.00 ui
19%
0.00%
0.00
0.972
0.00
39.28%
0.00
1997
37,454.00
0.00%
0.00
0.972
0.00
39.28%
0.00
1998
37,454.00
0.00%
0.00
0.972
0.00
39.28%
0.00
1999
37,454.00
0.00%
0.00
0.972
0.00
39.28%
0.00
2000
37A`4.00
0.00%
0.00
0.972
0.00
39.29%
0.00
2001
37,454.00
0.00%
0.00
0.972
0.00
39.28%
0.00
2002
37,45/.00
0.00%
0.00
0.972
0.00
39.28%
0.00
2003
37,4.54.00
0.00%
0.00
0.972
0.00
39.28%
0.00
2004
37,451.00
0.00%
0.00
0.972
0.00
3918%
0.00
2005
37,454.00
0.00%
0.00
0.972
0.00
3918%
0.09 j l
2008
37,454.00
0.0c%
0.00
0.972
0.00
3918%
0.00
2007
37,454.00
0.00%
0.00
0.972
0.00
3918%
0.00
2008
37,454.00
0.00%
0.00
0.972
0.00
3918%
0.00
2009
37,454.00
0.00%
000
0.972
0.00
3918%
0.00
2010
37,451.00
0.00%
0.00
0.972
0.00
39.28%
000
2011
37,454.00
0.00%
000
0.972
0.00
39.28%
0.00
2012
37,454.00
0.00%
0.00
0.972
0.00
39.28%
0.00
2013
37A51.00
0.00%
0.00
0.972
000
30.28%
0.00
2014
37,454.00
0.00%
0.00
0.972
0.00
3919%
0.00
2015
37A54.00
0.00%
0.00
0.972
0.00
3928%
0.00
2018
37,4L1.00
0.00%
000
0.972
0.00
3928%
0.00
2017
37A54.OD
0.00%
0.00
0877
0.00
3928%
0.00
2018
37.454.00
0.00%
0.00
0.972
0.00
3928%
0.00
2019
37ASCOD
0.00%
0.0o
0.972
0.00
3928%
0.00
2020
37,451.00
0.00%
0.00
0.972
0.00
3918%
0.00
2021
37,451.00
0.00%
ODO
0.972
0.00
3918%
0.00
2022
0.00
0.00%
0.00
0.972
0.00
39.28%
0.00
-MEr NCREJAW AFTER LOSS OF
LOCAL COVERR7fM A=
TAX ESTIMATED 11AX ADURSOTRATIVE NQtEMtENT
TA)MB CAPACR7 TQTAL llC11tE11" P COME LESS
PAYA13E RATE DIIiENENT FENALTY ADMIN
c 1703
104
1907
INS
1907
INS
19911
7000
7001
2092
1003
204
2DD5
1000
1007
2008
20011
2010
2011
2012
2013
2014
7017
2014
7017
2016
7019
2a7D
2021
2022
o.00
0.00
0.00
ODD
1.179
0.00
1.129
0.00
000
1.120
0.o0
000
1.129
0.00
000
1.129
42206.57
000
1.120
42256.57
000
1.129
42285.67
000
1.129
422117.67
000
1.170
422155.57
000
1.129
422115.67
000
1.129
4226531
000
1.129
4228537
000
1.120
42285.51
000
1.129
42,78557
000
1.120
4226557
000
1.179
4226537
a00
1.170
422".51
ow
1.120
422es57
0,00
1.129
4229567
0,00
1.129
4228651
000
1.170
42,76651
0 00
1.129
42.268.57
0 00
1.120
47.206.61
000
1.120
42286.61
000
1.129
47,265.57
000
1.129
42285 51
0 00
1.120
4229557
000
1.120
42211667
000
1.170
4227551
000
1126
000
0,00
o.00
0.00
0.00
0.00
000
0.00
0.00
0.00
000
4226511
30,067.81
4220.66
50,057.01
1270.64 •
38,057.01
4X10.65
36,05701
4228.58
35.057.01
4225.56
35,057,01
4,270.56
35.06701
427a.56
31,05701
1,220.58
38.05701
4,220.56
36,067 01
4.228 66
30.067 01
4,220.66
30.05701
1228.611
30.067.01
422e56
18.057.01
422956
39067.01
4228.56
30.057.61
4225 58
3e.057,01
4220.56
31.057.01
4220.56
36057.01
4270.66
38,057.01
4220.66
35,05701
4270 as
33.651.01
4.770.58
33,667 01
4.228.66
31,06► 01
4228.58
38067 Of
0A0
000
106,713 07 1151,425.21
LGANET
.ICREFENT o
PRESM
MET PRESEN►
VALUE
VALUE
0 8.80111
� ODI%
10.00
60.00
10.00
$0.00
10.00
$36217.9/
10.00
187.aWn
10.00
"S.07s 90
{0.00
1170D49.64
10.00
1151.50.42
60.00
1175.032.01
$0.00
1198,139 a/
60 00
1219.699 51
6000
6217,n1.e1
10.00
673s.3es a5
6000
$771,697.63
60.00
$758.800 51
1000
6300.101 94
1000
1313,751.00
$000
1325.744 11
$000
133OA66 64
10 00
$341,14271
1000
13615.55 00
10.00
$365,494.71
10.00
1373.49.33
60,00
1361200.51
60 0o
$355.209 so
$000
$34,091.41
6000
6400,09305
1600
3406250.04
1000
14015.730 O4
0,00 400260 06
NPV
ADMIN
COSTS
® 5-9^
1D.Do
$000
64,o0e.11
$7.80727
$11.408.35
$14.621.n
116.057.14
$21.173 65
$24,030.15
326.7ae.01
S29,30115
331.8 n 28
$11219 15
336,443 M
$36=.08
310.85031
$47,444 4a
$44.73984
$45.94101
341,364 66
$49,08362
650.637 a/
651.90e ee
363.705 as
331.42 95
356.812 10
665.7-216?
356.771 5r
64,1`2157
"L-
HRA AGENDA
JANUARY 26, 1995
3. Consideration to review for approval an Equal
Disbursement/Pavback Aareement between the HRA. Hospital
District, and Alliance.
A. Reference and Backqround:
Upon approval of the Loan Agreement between the HRA and the
Alliance on January 11, an HRA member inquired if the
agreement included an equal disbursement/payback clause
relating to the Hospital District and HRA loans, Attorney
Bubul responded no and suggested if the HRA was concerned a
separate agreement be prepared. The HRA member felt it
necessary. Attorney Bubul will FAX a copy of the prepared
agreement for distribution and review at the meeting.
Allow me to explain. TIF involves no risk to the HRA;
however, the approved Loan Agreement of $40,500 is a risk to
the HRA as it is unsecured. The loan funds must be tranferred
from of the HRA account, not from the TIF Surplus Fund
account. No loan dollars have been disbursed as per the
advise of the Attorney Subul. First, Bubul recommended the
City Council re -adopt a resolution to reimburse certain
expenditures from proceeds of the bond (re -adopted January 23)
and secondly, the HRA should approve the Equal
Diobursement/Payback Agreement. In other words, the $40,500
loan becomes a greater risk to the HRA If the TIF assistance
is not allowed to maximize the qualified project coots.
B. Alternative Actions:
A motion to approve the Agreement as prepared by Attorney
Subul .
2. A motion to deny approval of the Agreement.
3. A motion to table any action.
C. Staff Recommendatlon:
If the HRA approved modification of the TIF budget under
agenda item no. 2, staff recommendo Alternative Action No. 1.
D. Sunvortina Data:
Copy of the agreement to be dlotributed at the meeting.
r
r Pago 1