5.16. SR 06-19-1995 - Laserfiche WebLink

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with a Redevelopment and Housing TIF District, the aid loss is phased in over time. For the first six years after the original assessment year of the District, there is no aid loss. Beginning in year seven, the loss is only 6.25 percent of the maximum possible loss. Each year thereafter, the loss increases in 6.25 percent increments, until the full penalty applies in year twenty-one. Economic Development TIF Districts generate LGA/HACA reductions in their first increment year. Their entire retained captured value is used in determining aid reductions. In the June 12 EDA memo, an illustration was utilized to help estimate the LGA/HACA reduction associated with the Mowry/Neos TIF request. In this illustration, the project's total net tax capacity estimated at $15,650 was used instead of the project's retained captured value. To estimate the retained captured value of the Mowry/Neos project, the following calculation is required: Total net tax capacity of a $375,000 project (land and building value) $15,650 Less original net tax capacity (Lots 6 and 7) $ 2.300 Retained captured value $13,350 • Retained captured value of $13,350 times 1995 tax capacity rate of 1.04247 equals $13,917 times 35 percent equals an estimated LGA/HACA loss of approximately $4,871 per year. It is estimated that the Mowry/Neos TIF District would generate tax increment payments for a period of six years (from 1997 through 2002, inclusive) in order to repay a TIF grant of $80,000. Therefore, total LGA/HACA losses are estimated as follows: $4,871 per year times six years equals $29,226. Additional information on LGA/HACA reductions can be found in various attachments from Publicorp, Inc., and the law firm of Briggs and Morgan. A recent legislative change enables cities/EDA's to opt out of the LGA/HACA reduction by making a "qualifying local contribution" of 10 percent of the Tax Increment Financing assistance requested. It is understood that the contribution must come from unrestricted monies of the tax increment authority or municipality (or other local • jurisdictions). The cap on the total of these contributions is 2 percent