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development will occur, but along with that there should be an assessment agreement between the city, developer and county assessor. In that assessment agreement the developer promises to pay the taxes and not contest the county assessed value of the property. This is a very important agreement to have, particularly in residential developments. A city may also choose to give up that degree of security and allow the bonds to be sold at a tax exempt rate. Tax increment financing is best used as a device for the city to force itself, developers and owners of adjacent parcels to look at the long term land use of parcels. The benefit creating a tax increment district larger than the immediate need is that it forces the city, developer and owners of adjacent parcels to look at the long term land use of parcels. The disadvantage to creating a district larger than the immediate need is that unless the city sells bonds for improvements .within 3 years of creation of the district, the district dissolves and, on a parcel by parcel basis, something must happen on the property within 4 years of creation of the district (even a street in front of the property would quality) or the property will be deleted and not readmitted until something does happen. Statute says that the improvement has to be one by the developer but streets do qualify as an improvement; sewer and water does not qualify but the public portion of tax increment can be used for sewer and water. Mr. Hartley stated that to this date, the city has not paid attention to how much money is left over after a project is done; the city has only looked to make sure the revenue will be ther to pay the debt. This policy proposes that the city will only participate up to a limit of 70% of the increment proposed to be generated; the remainder of that increment will be reserved for purely public purposes. The ratio for participating in rural area projects is small in order to encourage development of all types to be more in the urban area with utilities. The policy will also prevent situations of leapfrog development. Mr. Hartley inquired if Council agrees with this proposed policy. Councilmember DeLuca noted that in the past, Council committed to encouraging development in areas having municipal sewer and water service. Refer to page 6 for further action. CITIZEN INPUT Carl Anderson - 6331 153rd Lane N.W. - Stated that his neighbor has a black bear that is supervised but not always leashed; he and his neighbors are concerned and are there ordinances addressing a situation like this. Council agreed to place the issue raised by Mr. Anderson on the agenda. APPROVAL OF AGENDA Councilmember Cox noted that Mr. Raudio will not be present until later in the evening and requests that Cases 3 and 4 be tabled until he arrives. Motion by Councilmember Pearson and seconded by Councilmember Sorteberg to approve the agenda with the following adjustments: City Council/August 11, 1987 Page 4 of 17