6.0. SR 08-02-1993
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E I\. River
ITEM 6.
TO:
MAYOR & CITY COUNCIL
WILLIAM RUBIN, ED COORDINATO~~
JULY 27, 1993
FROM:
DATE:
SUBJECT: PUBLIC HEARING - PROPOSED
AMENDMENT TO TIF PLANS NO. 1 AND
NO. 3
INTRODUCTION
At its meeting on June 21, 1993, the Elk River City Council
scheduled a public hearing for August 2, 1993, to consider a
proposed amendment to TIF Plans No. 1 and No.3.
BACKGROUND
The proposed modification to TIF Plans No. I and No. 3 would
enable the City to assist with the public library expansion by
expending tax increments from Districts No. 1 and No. 3 to
underwrite a portion of the expansion costs as permitted by
Minnesota Statutes.
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The proposed Plan
School District 728.
by both Boards.
amendment was sent to Sherburne County and
This amendment was subsequently reviewed
The public hearing notice was published in the Star News on
July 7, 1993.
The Elk River Planning Commission reviewed
amendment on July 27, 1993.
the
proposed
A copy of the proposed modification to TIF Plans No. 1 and No.
3 is attached to this memo.
ACTION REQUESTED
Following the public hearing, the City Council is asked to
complete action on the proposed amendment to TIF Plans No. 1
and No.3.
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P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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MODIFICATION OF
TAX INCREMENT FINANCING PLANS
TAX INCREMENT FINANCING DISTRICT NO. 1 AND NO. 3
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City of Elk River
August 2, 1993
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MODIFICATION OF
TAX INCREMENT FINANCING PLANS
TAX INCREMENT FINANCING DISTRICT NO. 1 AND NO. 3
PURPOSE
The sole purpose for this modification (the Modification) of
the existing Tax Increment Financing Plans (the TIF Plans) for
Tax Increment Financing District No. 1 and No. 3 (the TIF
Districts) is to provide supplemental information relating to: A)
the financing by the City of Elk River (the City) of the proposed
expansion of the Elk River Public Library, 413 Proctor Avenue NW
within Development District No.. 1; and, B) the increase in total
estimated Tax Increment expenditures authorized by the Plan. The
City proposes to assist with the Public Library expansion by
expending tax increments from Districts No. 1 and No. 3 to
underwrite a portion of the expansion costs as permitted by
Minnesota Statutes.
This Modification ratifies and
those terms of the TIF Plans and
entirety, subject only to the
provisions provided herein.
incorporates by reference all
their attachments in their
Modification and additional
MODIFICATION
The TIF Plans and Minnesota Statutes, Section 469.175, subd.
4 require Modification of the TIF Plans in the event additional
property is designated to be acquired by the City or in the event
there is an increase in total estimated Tax Increment
expenditures. Therefore, the TIF Plans are modified and
supplemented as follows:
1.) Development Program The goals and objectives
TIF Districts and City of Elk River Development District
(the Development District) are set forth in the TIF Plans
the Development Program for the Development District.
goals and objectives include:
of the
No. 1
and in
These
a.) To provide impetus for business and industrial
development by constructing public facilities.
b.) To increase employment opportunities in the City by
encouraging additional business and industrial development.
c.) To preserve and enhance the tax base of the City.
d.) To provide financing for public improvements within
Development District as found by the City Council to
necessary or appropriate to meet the purposes of
Development District.
the
be
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The TIF Plans state that tax increment generated by the TIF
Districts will be used for public improvements and facilities
determined by the City Council to be necessary and appropriate to
meet the purposes of the Development Program. The City Council
has determined that financing a portion of the Public Library
expansion with tax increment funds identified in this
Modification is necessary and appropriate to meet the purposes of
the Development District, because:
a.) The provision of adequate public facilities, including
a library facility, is a necessary and appropriate element
in the overall development of the City.
b.) The financing of a public facility (such as a public
library) with tax increment funds is consistent with the TIF
Statute which permits such an expenditure on a facility used
for social, recreational, or conference purposes.
2.) Property to be Acquired - No property is proposed to
be acquired by the City in the TIF Districts or within
Development District No. 1 as a result of this Modification.
3.) Development Activities -
a.) Private Development Activity - No private development
activities within Development District No. 1 will occur as a
result of this Modification.
b.) Public Development Activities Public development
activities will include the construction of an approximately
4,400 square foot expansion to the Elk River Public Library,
413 Proctor Avenue NW. The cost of the expansion and
limited remodeling of the existing building is estimated at
$550,000, of which approximately $177,000 will be paid by
tax increment funds (expansion expenses only).
4.) Financial Analysis of the TIF Districts -
Cost of the Public Development Activities
Financed:
to
be
Elk River Public Library Expansion (portion)
Total
$177,000
$177,000
Administrative
Interest
Contingency
-0-
-0-
-0-
Total Costs
$177,000
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Sources of Funds:
Tax Increment $177,000
Amount of Bonded Indebtedness to be Incurred: -0-
As noted in the TIF Plans, the City has elected to retain the
full captured assessed value of the TIF District No. 1 and No. 3
and to use all of the tax increment generated by the TIF
Districts for the purposes identified in the TIF Plans. As
indicated on the attached Exhibit A, the TIF Districts will
generate more than enough revenue to fund the proposed public
development activity costs. Therefore, it will not be necessary
to extend the duration of the TIF District No. 1 and No. 3 beyond
the period described in the TIF Plans or to increase the amount
of tax increment to be received, in order to fund the proposed
activities.
The City of Elk River proposes to sell bonds to finance the
rema~n~ng costs of the Public Library expansion. This bond issue
is separate from, and not related to, Districts No. 1 and No.3.
5.) Cash Flow Analysis Attached as Exhibit A to this
Modification is a revised cash flow analysis for the TIF
Districts which sets forth the impact of the proposed public
development expenditures. As shown on the cash flow analysis,
the cost of this activity will be paid from tax increment
generated by the TIF Districts in excess of that necessary to
pay existing debt service.
6.) Estimated Impact on the TIF Districts on Other Taxinq
Jurisdictions Because the proposed public development
activities will be paid for with tax increment currently retained
by the City under the TIF Plans, the estimated impact on other
taxing jurisdictions as described in the TIF Plans will remain
unaffected.
7.) Administrative Procedures and Requirements This
Modification is being made pursuant to the Modification procedure
explained in the TIF Plans and Minnesota Statutes, Section
469.175, subd. 4, solely for the purpose of providing for the
partial financing of the Elk River Public Library expansion
project. TIF funds would be used to underwrite the expansion
costs of this public development activity.
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EXHIBIT B
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PROPOSED SITE AREA UTILIZATION
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Parking
Property
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I Potential
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Existing
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Building Setback Lines
L.
4th Street
EXHIBIT C
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