4.6. SR 20-18-1996ITEM 4.6. a-b
MEMORANDUM
City of
River
FROM:
DATE:
Mayor & City Council
Pat Klaers, City Adn~Wator
October 28, 1996 ~
SUBJECT: Surface Water Management (SWM)
Issues
A. Funding Options for Recent Projects
The need to fund recent 1995-96 projects has been discussed by the
staff and City Council at a number of meetings in the past six months
including the April 15 CIP meeting and the September 9 budget
meeting. Highlighted at these meetings was the city's need to fund the
SWM component of the Western Area Phase II project, the Main/Evans
project, and the north Joplin Street frontage road project (1997). The
cost for these projects is estimated to exceed $750,000. Additional
bonding is one funding option to consider, but the city has already
issued bonds in excess of $1 million for SWM projects that were
completed in the early to mid 1990's. After extensive discussion,
review, and analysis of this situation, it is staffs recommendation that
the city dedicate funds from TIF No. 2 and No. 3 to these SWM
projects. This expenditure for these types of projects is consistent with
state law and if approved it is then planned that the city would amend
the budgets for these districts. Please see the attached memo from
Director of Economic Development Paul Steinman regarding this
district amendment issue.
Recommendations
It is recommended that the City Council approve the expenditure of
TIF No. 2 and No. 3 funds for SWM projects which do not have another
funding source; these may include Fresno, Westwood, Western Area
Phase II, Main/Evans, and North Joplin Street frontage road.
It is recommended that the City Council call a public hearing for
December 16, 1996, to amend TIF Districts No. 2 and No. 3.
B. Review 1997-98 Projects
It is anticipated that the SWM projects for the next few years will
include the upgrade of Ditch 28 from the railroad tracks to the river,
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
an upgrade of the Ditch 10 railroad crossing east of Highway 169,
redevelopment work at the 4th Street and Norfolk area, and work
associated with major development projects in east Elk River near
County Road 12. All of these projects may not happen in the next few
years, but they need to be evaluated and considered at this time.
Additionally, it can be assumed that some unexpected projects that are
not known at this time will be deemed a high priority by the City
Council and will be authorized. At this time staff is getting cost
estimates for the above projects for City Council review. We will
discuss the financing and funding of these projects at the January and
February CIP meetings and also at the 11/25/96 budget worksession.
council\swmiss.doc
City of
iver
TO:
MEMORANDUM
Mayor and City Council
Patrick D. Klaers, City Administrator
FROM:
Paul T. Steinman, Director of Economic
Development
DATE:
October 28, 1996
SUBJECT: Proposed Budget Modifications for TIF
District 2 & 3
PURPOSE OF MEMO
The purpose of this memo is to provide an explanation of the action
which the Council took at its meeting on Monday, October 21, during
which they called a public hearing to, in part, modify the budgets in
Tax Increment Financing District No's. 2 & 3.
II.
0 VER VIEW
The primary purpose of the Council action was to call a public hearing
for the creation of Tax Increment Finance District No. 16 (King and
Main).
The secondary purpose of the action was to call a public hearing in
order to modify the budgets in Tax Increment Finance District No's. 2
& 3. The purpose of this action is because we are planning to
undertake expenditures from TIF Districts 2 & 3 which have not been
identified within the budgets of those TIF plans.
III.
PRIMARY ISSUES TO CONSIDER
What is the purpose of modifying the budgets in TIF
Districts 2 & 3 after the funds have been expended?
It appears as though the timing of this issue is somewhat
contradictory, due to the following factors:
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
Mayor and City Council
Pat Klaers
TIF District 2 & 3
TIF Districts 2 & 3 have been decertified.
We will be holding a public hearing to amend the budget after
the dollars have been spent.
The primary purpose for amending the budgets in these two
districts is to satisfy an administrative detail regarding the city's
TIF reporting requirements to the state auditor. As you are aware,
the finance department undertakes a fairly complex task of filing
reports to the state auditor prior to July 1st of each year on all of
the city's tax increment districts. In order to provide an accurate
report on TIF Districts 2 & 3, regarding the expenditures from such
districts, it is necessary to amend these budgets to reflect the
dollars spent from these districts (even after the fact) on surface
water management issues.
Although it appears as though the order of these events is not
logical, City Attorney, Peter Beck, has indicated it is necessary in
order to avoid raising questions about TIF District 2 & 3, and
possibly other districts unrelated to this issue, when the city
submits its annual disclosure statements on July 1st, 1997.
IV.
CONCLUSION
In conclusion, cities have become a bit nervous over the past year
regarding the details of their tax increment district reporting
requirements. The state has hired three full-time auditors to examine,
review, and research if necessary, the details of numerous city's tax
increment financing districts. If simple questions are raised or red
flags appear in our reports, it may lead to an audit of all our districts.
Therefore, we are taking extraordinary measures to assure that we are
abiding by the new reporting requirements.
If you have any questions, please feel free to contact either me or Lori
Johnson.
RECOMMENDATION
Staff recommends the Council call for a public hearing to be held on
Monday, December 16, 1996, to amend the budgets for TIF District
No's 2 & 3. City Attorney, Peter Beck, recommended that these budget
Mayor and City Council
Pat Klaers
TIF District 2 & 3
amendments be approved prior to year end 1996. The public hearing
for creation of TIF District No. 16 (King & Main) will proceed as
scheduled on January 27, 1997.
VI. ATTACHMENTS
Schedule for budget amendments
s:\eda\tif2&3mm.doc
ELK RIVER CITY COUNCIL
FOR THE
MODIFICATION OF TAX INCREMENT DISTRICT NO. 2 AND 3
Schedule
October 28, 1996
City Council calls for a public hearing to be held on
December 16, 1996, to amend the budgets in Tax Increment
Financing District No. 2 and 3
October 28, 1996
Letter sent to County Commissioner of the area within
which the Tax Increment Financing District No. 2 and 3 are
located (at least 30 days prior to publication of public
hearing notice)
November 1, 1996
Complete draft of budget amendments
November 8, 1996
Budget amendments forwarded to School District and
County Board (at least 30 days prior to public hearing)
November 25, 1996
Send public hearing notice and map to local paper
December 4, 1996
Date of publication of hearing notice and map (at least 10
days but not more than 30 days prior to public hearing)
December 16, 1996
City Council holds public hearing on the budget
amendments to Tax Increment District No. 2 and 3 and
passes resolution approving such amendments
December 17, 1996
Distribute amendments and resolution to appropriate parties
TIbudmod