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Home My WebLink About2014-09-16 URA MinutesREGULAR MEETING CALDWELL URBAN RENEWAL AGENCY SEPTEMBER 16, 2014 12:00 P.M. The regularly scheduled meeting of the Caldwell Urban Renewal Agency convened at 12:00 p.m. on September 16, 2014 in the Caldwell Police Department Community Room with Chairman Hopper presiding. Roll was called by the secretary. Present: Chairman Rob Hopper, Commissioner Dennis Callsen, Commissioner Mike Pollard, Commissioner Jim Blacker, and Commissioner Shannon Ozuna. Absent: Commissioner Terrence Biggers. Staff Present: ElJay Waite, Steve Fultz, Mark Hilty, and Maren Ericson. (APPROVE AMENDMENTS TO THE AGENDA) MOVED by Pollard, SECONDED by Callsen to amend the agenda by adding Item #3 to read: "Executive Session pursuant to Idaho Code, Section 67 -2345, Subsection (c) for the purpose of discussing the acquisition of or an interest in real property not owned by a public agency." MOTION CARRIED (APPROVE THE AGENDA) MOVED by Callsen, SECONDED by Blacker to approve the agenda as amended. MOTION CARRIED (PUBLIC HEARING PURSUANT TO IDAHO CODE SECTION 50 -1002 FOR CONSIDERATION OF THE AMENDED BUDGET FOR THE FISCAL YEAR THAT BEGAN OCTOBER 1, 2013 AND ENDS SEPTEMBER 30, 2014) E1Jay Waite, 411 Blaine Street, provided the staff report and outlined the contents of the budget amendment. FUND General Fund FUND General Fund FUND General Fund TOTAL All Revenue * Use of Fund Balance, R.E. or Balance Sheet Changes Revenue to meet PAGE 1 OF 4 FY 2012 FY 2013 FY 2014 FY 2014 Actual Actual Budget Proposed Amended Expenditures Expenditures Expenditures Increase Expenditures $ 5,772,449 $ 6,186,647 $ 5,774,500 $10,801,378 $16,575,878 FY 2012 FY 2013 FY 2014 FY 2015 Actual Non- Actual Non- Budget Non- Amended Non - Tax Increment Tax Increment Tax Increment Proposed Tax Increment Revenue Revenue Revenue Increase Revenue $ 346,109 $ 259,288 $ 274,500 $ 9,288,080 $ 9,562,580 FY 2012 FY 2013 FY 2014 FY 2015 Actual Actual Budget Amended Tax Increment Tax Increment Tax Increment Proposed Tax Increment Revenue Revenue Revenue Increase Revenue $ 5,665,617 $ 5,652,356 $ 5,500,000 $ 5,500,000 6,011,726 5,911,644 5,774,500 9,288,080 15,062,580 239,276 (275,004) 0 (1,513,298) (1,513,298) $ 5,772,449 $ 6,186,647 $ 5,774,500 $10,801,378 $16,575,878 Expenditures Chairman Hopper noted that no one signed up to speak at the public hearing. MOVED by Blacker, SECONDED by Ozuna to close the public hearing. MOVED by Callsen, SECONDED by Blacker to accept the amended budget as presented. MOTION CARRIED MOTION CARRIED (PRESENTATION BY ATTORNEYS MAREN ERICSON AND MARK HILTY REGARDING TIF FUNDING AND FINANCING) Attorneys Mark Hilty and Maren Ericson of Hamilton, Michaelson, and Hilty located at 1303 12 "' Avenue Road, Nampa, provided information concerning TIF Funding and Financing. Ms. Ericson provided a hand out with the following information: PLAN: A private lender /developer will finance the development of property. The URA will reimburse the developer by paying to him the increment of taxes that is generated by the development above and beyond the base tax that would have been collected without the development. Reimbursement payments from the URA to the developer will be made according to a predetermined schedule, and at the end of the term (the URA's life), the URA will stop paying regardless of the payoff amount remaining. The developer will bear the risk of loss. IS THIS LEGAL? Yes. The URA has the power to create and carry-out this type of plan as long as it meets the usual requirements in Idaho Code Title 50, Chapters 20 and 29. This type of financing is known as tax increment financing, and is covered by the Idaho Code sections addressing revenue allocation areas. TAX INCREMENT FINANCING ( "TIF ") • URA may establish a revenue allocation area as outlined by Idaho Code. This area is also known as a "tax increment financing district" ( "TIF district "). • Usually, the tax increment used is the difference between the increased value of all taxable property within a TIF district and the base tax value before development (reassessed annually). Therefore, development within the district will create revenue allocation proceeds by increasing the value of all property within the district. • Considerations: • Want diversity in commercial, industrial, and residential makeup in the TIF district in order to generate revenue. • Want a large area where there is undeveloped or underdeveloped land for new construction that will facilitate growth in the increment. • Monitor tax revenues for the surrounding areas to determine what the best reimbursement plan will be. TIF - ECONOMIC DEVELOPMENT PROJECTS / SYNTHETIC TIF VS. TIF DISTRICTS • Some states use TIF Economic Development Projects, or "synthetic" TIF, which are the same as TIF Districts in procedure and plan, but instead of pledging increment revenue in the district as security, the actual asset or specific development that is being financed is the source of the reimbursement. This focuses the tax increment values on the revenue that the development alone generates, instead of the general property values throughout the district. • Therefore, TIF funds are available in the amount of future increased tax revenues that can be expected as a result of the private investment. LOGISTICS • Estimates: ■ Cost — work with developer to estimate cost of design and construction ■ Economic Change — estimate how many construction jobs and long -term employment opportunities will be created • City Development — determine whether the City's water systems, roadways, utility services, etc. are adequate to support the development PAGE 2 OF 4 ■ Revenue — estimate the increase in value that the development will generate and compare it with the cost of development Plan Approval: same procedure as other URA projects Financing: ■ The private investor /developer will obtain the needed financing for the project. ■ Timing for when the URA will begin making reimbursement payments will be agreed to between the parties. ■ URA will provide all of the tax increment funds generated from the development for reimbursement to the private investor /developer. To the extent that revenue exceeds actual costs, the URA may apply those funds to other project costs not originally covered or other improvements needed in the surrounding area. ■ If the revenue does not meet the actual costs, the developer will bear the loss. The URA will only pay to the extent excess revenue is generated. ■ URA and the private investor /developer will agree to the terms of reimbursement. Payments will be based on a predetermined schedule. ■ A term for repayment will be identified. ■ At the end of the term, the reimbursement payments will cease regardless of payoff amount remaining. ■ If other improvements are needed that were not covered in the original financing agreement, the URA and developer should cooperate and modify the plan as needed. Execution: once the agreement is in place, the plan may be carried out according to the same procedures used for other URA projects (City approval, etc.) Timing: • Because the URA is not providing funding up front for the financing of the project, the timing will be different than most URA projects. • URA and the developer will negotiate and agree to a financing plan. The developer will obtain the needed financing and will fund the development project according to that plan. ■ Time for construction will be estimated and agreed to. ■ URA shall have the project approved and set up an "Economic Development Project" or "Synthetic TIF" for URA Financing that will monitor all revenue generated from the development itself. That revenue will be assigned to the URA's project fund in order to make reimbursement payments. ■ Timing of reimbursement payments will be executed according to the agreement. Discussion followed. No decisions were made or action taken. (EXECUTIVE SESSION PURSUANT TO IDAHO CODE, SECTION 67 -2345, SUBSECTION (C) FOR THE PURPOSE OF DISCUSSING THE ACQUISITION OF OR AN INTEREST IN REAL PROPERTY NOT OWNED BY A PUBLIC AGENCY) MOVED by Pollard, SECONDED by Callsen pursuant to Idaho Code, Section 67 -2345, Subsection (c) for the purpose of discussing acquisition or interest in real property not owned by a public agency at 12:42 p.m. Roll call vote: Those voting yes: Pollard, Blacker, Ozuna, and Hopper. Those voting no: none. Absent and/or not voting: none. MOTION CARRIED MOVED by Callsen, SECONDED by Blacker to reconvene into the Regular Session MOTION CARRIED (ADJOURNMENT) MOVED by Callsen, SECONDED by Blacker to adjourn at 12:53 p.m. MOTION CARRIED PAGE 3 OF 4 SNd9Dl9 KOISSIWWOD l� NAS"I"IVD IdANO1SSIW WOD t7 AOvADVd .••`• IDAHO '�'•. S7 S M ti� 0d�0��.'�iy°:••' ,G aaoaS Vdfl `jo, oD aiQ9aQ Ilk Not...fi1., ••••. :.LSd1,.Ld 'Ud H MANOISSIWWOD i f b10Z `dAgO.I.DO AO AVG H,L SIHI NA- L.LI21M SV MAO'dddV - . / 4e } \