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Mr. Burggraaff replied that developers, unless you have something very <br />special in your community, do not want to put up any front end money and <br />will look for the community that is being most fair to them. Fair is when <br />they can begin negotiations, they know the ground rules and after they have <br />spent 6 months, they will not be likely to be thrown out by forces over <br />which they have no control. <br /> <br />Chairman Heitman inquired if those forces don't have the right to exert that <br />control. <br /> <br />Mr. Burggraaff replied that you can have citizen involvement in that process <br />by public hearings but ordinarily Council or HRAmakes those final decisions. <br />At some point in time the elected representatives have to make some of those <br />decisions. <br /> <br />Chairman Heitman replied that Mr. Burggraaff's statement presumes representation <br />also. <br /> <br />Commissioner Gamec inquired if this charter would put industrial revenue bonds <br />to a referendum also. <br /> <br />Mr. Burggraaff replied that he did not know. Industrial Revenue Bonds are <br />essentially revenue bonds issued by local government and local government has <br />no legal obligation to pay'debt service. <br /> <br />Chairman Heitman stated that Industrial Revenue Bonds and Tax Increment Financing <br />are two modes of financing and attracting business; what is their intent? <br /> <br />Mr. Burggraaff stated that Tax Increment Financing is a tool available to <br />local governments in this and other States, which local government can use <br />to encourage development. In this State there are three kinds of Tax Increment <br />Financing: 1) Redevelopment 2) Housing 3) Economic. The purpose of <br />Tax Increment Financing is to give the community the opportunity to encourage <br />redevelopment or new growth and use proceeds for public improvements and <br />improvements more specifically related to the development itself. Industrial <br />Revenue Bonds is another financing tool that is available w~ich more directly <br />assists a private corporation. There is a limit, you~e~ll more than /~"~ <br />$10,000,000 for any one project except for public facilities. Mr. Burggraaff <br />stated that he raised the question of whether we want this charter to subject <br />TIF and IRB to referendum because cities without commercial and industrial <br />tax base have higher residential taxes. <br /> <br />Mr. Schnelle provided copies of tax comparison of residential versus commercial <br />from 1981 - 1983. (See Attachment I). <br /> <br />Discussion turned to Chapter 8 of the charter. <br /> <br />Mr. Burggraaff recommended a very simple chapter 8; that the City can do <br />whatever is consistent with State law. Just looking at it, it gets back again <br />to the question of how much a charter should encumber the decision making <br />body of the city. As he reads Chapter 8, in many instances you can have a <br />referendum on whether to initiate a public improvment project. There is in <br />one situation an instance whereby receipt of a petition will stop a project. <br />Whenever a city sells general obligation bonds you have to retain a bond <br />council who writes an opinion of that bond based on all provisions in your <br />charter. The bond council is writing an opinion for the benefit of the <br />purchaser. <br /> <br />CC/November 10, 1983 <br /> Page 8 of 11 <br /> <br /> <br />