02-03-1988 CC MIN - SPECIAL-JOINT

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Page 2 Special Joint Minutes February 3. 1988 e --------------------------- The Finance Director then distributed a handout dated 2/3/88 that displayed the effects of the creation of TIF #4 on County and City taxes. The figures used in this handout were received from the Sherburne County Auditor's Office and the methods of computation for taxes when there is a TIF District have been confirmed by the Department of Revenue. Ms. Johnson stressed in her presentation that the amount of tax revenues generated by the City and County does not change because of a TIF district being created. The amount of monies available is determined by State Statute and in 1987 the State Legislature took action to limit the amount of monies available. The City Finance Director indicated that the creation of TIF #4 simply did not allow the mill rate for the typical City property owner to decrease. The material presented by the Finance Director indicated that the TIF #4 has a potential captured assessed value of 1.79 million dollars and the County has a total assessed value of approximately $347 million dollars. Without TIF District #4 being created. the County.mill rate would have been 26.62 and the City mill rate 25.18. With TIF #4 being created. the County mill rate is calculated at 26.78 and the City mill rate at 26.28. This results in the homeowner paying approximately $5 more in taxes on a $50.000 home with TIF #4 being created than without. e Commissioner Smith indicated the hard work and effort of the Tri-County Solid Waste Group in attracting the RDF proposal and all of the related expenses that this group incurred in attracting the RDF proposal. Mr. Smith also indicated that the County was upset over the loss of the assessed value that would be generated by the RDF Plant. County Finance generate increments deletion of of the area Attorney. John McGibbon. reviewed the figures presented by the Director. Mr. McGibbon indicated that the RDF Plant would over five million dollars in assessed value and that the captured would be approximately $250.000 per year. The these funds from the tax base would be a significant detriment in the eyes of the County Commissioners. The Finance Director reiterated the effect of the 1987 State Law on Levy Limits and the effect of the assessed value on the amount of dollars available to local units of government. The Mayor indicated the belief of the City that the creation of TIF #4 would greatly benefit the County and School District through greater population growth and development in the western area of Elk River. Commissioner Johnson indicated that such improvements taking place on the west side of the City should be assessed to benefitted property owners in its entirety. This was done in one of his districts in Zimmerman. Minnesota. Mr. Johnson also indicated that TIF should be used only for a project that is directly benefited by the captured revenues and that TIF #4 in Elk River does not follow this pattern. Commissioner Smith concurred with Commissioner Johnson that past Elk River TIF Projects were acceptable but this TIF #4 is a variation from past projects and the TIF #4 does not benefit the immediate district. e City Attorney. Peter Beck indicated that everything the City did in the creation of TIF #4 complies to State Law. Also. the City has had approved development districts and that improvements can take place within this development district using funds derived from any TIF district that is created.