6.4. EDSR 03-17-2014 - Laserfiche WebLink

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El Elk River comprer-en_•e pan River Tools for City Actions Tax Abatement The Community Development section of the Tax abatement acts like a simpler and less powerful Comprehensive Plan presents items that serve version of tax increment financing. With TIF, the city as a focus for city actions. These actions seek controls the entire property tax revenue from new to achieve the vision for the future of Elk River development. Under the abatement statute (Minnesota in areas where market forces alone will not be sufficient. State Law provides a broad array of Statutes, Sections 469.1812 through 469.1815), the powers and tools that may assist the city in these City, County and School District have independent initiatives. The following section provides a brief authority to grant tax abatement. discussion of the tools currently available to the city. This information is designed as a point of Special Assessments reference in continued community development planning. Public improvements are often financed using the power to levy special assessments (Minnesota Finance Tools Statutes Chapter 429). A special assessment is a means for benefiting properties to pay for all or Community development actions require a framework part of the costs associated with improvements, for financial decision-making. The investment of and to spread the impact over a period of years. public dollars to achieve community development This tool can be applied to both the construction of objectives should be guided by several key principles: new improvements and the rehabilitation of existing Financial resources are limited. The City improvements. has limited funding to apply to community development initiatives, so the use of resources Utility Revenues must be targeted to achieve the greatest effect on community needs. The City operates three municipal utilities: water, Financial decisions require a long-term perspective. sanitary sewer and storm water. The revenues from The current use of financial resources may reduce the operation of these utilities are available to pay monies available in the future. In evaluating for capital improvements in support of community short-term opportunities, it is important to question development initiatives. State Law (Minnesota the long-term impact on community development. Statutes, Section 444.075) gives the authority to Public funds should lead to private investment. pledge these revenues to general obligation bonds for While this section focuses on public finance utility system improvements. actions, the Comprehensive Plan cannot become reality without private investment. The use of Capital Improvement Bonds public funds should be targeted to actions that encourage private investment in Elk River. Cities may issue capital improvement bonds (Minnesota Statute, Section 475.521) for specific Tax Increment Financing purposes. Tax increment financing (TIF) is the primary development finance tool available to Minnesota Mieroloans cities (Minnesota Statutes, Sections 469.174 through 469.179). TIF is simple in concept, but The Microloan program provides low interest, long- complex in its application. Through tax increment term (i.e. greater than one year) loans as incentives to financing, the property taxes created by new encourage the following: development (or redevelopment) are captured and used to finance activities needed to encourage Industrial development that supports the tax base the development. The challenge in using TIF lies and brings quality jobs to the city with the complex and ever changing statutory Rehabilitation of existing buildings in the Central limitations. The City has utilized TIF sparingly in Business District the past, and it is expected that it will continue to Energy Efficiency improvements to businesses and do so in the future. manufacturers Chapter 12: Community Development 1 129