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Elk Elk River Comp ehensive Plan R1Ver Tools for City Actions The Community Development section of the Comprehensive Plan presents items that serve as a focus for city actions. These actions seek to achieve the vision for the future of Elk River in areas where market forces alone will not be sufficient. State Law provides a broad array of powers and tools that may assist the city in these initiatives. The following section provides a brief discussion of the tools currently available to the city. This information is designed as a point of reference in continued community development planning. Finance Tools Community development actions require a framework for financial decision - making. The investment of public dollars to achieve community development objectives should be guided by several key principles: Financial resources are limited. The City has limited funding to apply to community development initiatives, so the use of resources must be targeted to achieve the greatest effect on community needs. Financial decisions require a long -term perspective. The current use of financial resources may reduce monies available in the future. In evaluating short -term opportunities, it is important to question the long -term impact on community development. Public funds should lead to private investment. While this section focuses on public finance actions, the Comprehensive Plan cannot become reality without private investment. The use of public funds should be targeted to actions that encourage private investment in Elk River. Tax Increment Financing Tax increment financing (TIF) is the primary development finance tool available to Minnesota cities (Minnesota Statutes, Sections 469.174 through 469.179). TIF is simple in concept, but complex in its application. Through tax increment financing, the property taxes created by new development (or redevelopment) are captured and used to finance activities needed to encourage the development. The challenge in using TIF lies with the complex and ever changing statutory limitations. The City has utilized TIF sparingly in the past, and it is expected that it will continue to do so in the future. Tax Abatement Tax abatement acts like a simpler and less powerful version of tax increment financing. With TIF, the city controls the entire property tax revenue from new development. Under the abatement statute (Minnesota Statutes, Sections 469.1812 through 469.1815), the City, County and School District have independent authority to grant tax abatement. Special Assessments Public improvements are often financed using the power to levy special assessments (Minnesota Statutes Chapter 429). A special assessment is a means for benefiting properties to pay for all or part of the costs associated with improvements, and to spread the impact over a period of years. This tool can be applied to both the construction of new improvements and the rehabilitation of existing improvements. Utility Revenues The City operates three municipal utilities: water, sanitary sewer and storm water. The revenues from the operation of these utilities are available to pay for capital improvements in support of community development initiatives. State Law (Minnesota Statutes, Section 444.075) gives the authority to pledge these revenues to general obligation bonds for utility system improvements. Capital Improvement Bonds Cities may issue capital improvement bonds (Minnesota Statute, Section 475.521) for specific purposes. Microloans The Microloan program provides low interest, long- term (i.e. greater than one year) loans as incentives to encourage the following: Industrial development that supports the tax base and brings quality jobs to the city Rehabilitation of existing buildings in the Central Business District Energy Efficiency improvements to businesses and manufacturers Chapter 12: Community Development / 129