3.2. SR 07-13-1998 - Laserfiche WebLink

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Sherburne County Response ISSUE IV. THE COUNTY DISAGREES WITH THE LENGTH OF THE TIF DISTRICT. The County recognizes that the TIF will capture revenues of the project to repay the City for the infrastructure. However, each governmental unit is struggling to retain taxes at the lowest possible rate. To capture the rates displaces the burden from the property onto others in the community. The benefit to the private sector developer appears to be greater than the benefit to the public. The essential services required by the project such as law enforcement, prosecution of criminals, ambulance services, fire protection, maintenance of public access, etc. will not be paid over a 25 year period. ISSUE V. THE COUNTY DOES NOT ACCEPT THE "BUT FOR" TEST IN THE PLAN. The County was not provided with the facts to support the "but for" test in the plan. This places the County at a handicap in our response. However, given the concerns that are set forth in this memorandum, the County strongly questions the rational that may be given to justify not only the project but also the "but for" test." ISSUE VI. THE COUNTY HAS CONCERN ABOUT THE TOTAL CAPTURED VALUE THAT THE CITY HAS IN TIF DISTRICTS. Assuming the same rate of growth that has occurred in the last five years, the Sherburne County Board is concerned that nine percent of the city's tax base will be involved in TIF Districts. The impact is the displacement of the tax burden onto others. The rule of thumb is that ten percent of a captured base is considered fiscally risky. This is particularly true with the proposed elimination of the personal property tax base ( including the UPA plant located in the City of Elk river and the loss of the Sherco plant which would lose 38% of the County revenue stream), the change in the classification rates for commercial and industrial properties which has shifted the onus onto the residential and agricultural properties, the sensitivity of the market to the change in interest rates which directly impacts the growth of both residential and commercial development. Any one of these shall have an adverse impact which shall be compounded with the inability of the city to use these "captured" revenues outside the district. If the District fails or is adversely impacted, then any bonds issued shall be added to the total underlying debt of the County. In essence, this then becomes a debt that all residents of the City and will directly effect the County's bond rating. (This has in fact been true in the past as well.) Further, is it in the best interests of the City to finance this district in the event that an industrial project comes along? Industrial jobs have a proven track record of paying livable wages. To attain that opportunity for our citizens is one that we should be prepared to welcome. Page 2