Agenda - Council - 05/27/1986 - Laserfiche WebLink

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regarding extension of utilities to the industrial area but because of a couple of events, has not co. plated that task. The subject of stor~ sewer districts consumed a lot of time and expect that would hold true at Council's April 22 meeting also. Staff rill reco~nend that Council conduct the April 2~ hearing and to continue the hearing to April Nr. Hartley stated that it has come to his attention that it vas not necessarily approved or agreed to that tax increment revenues would be used to provide deferrment o[ special assessments for municipal utilities. ED¢ and Staff need to address the following issues: 1) Use of tax increment revenues; 2) Hov big of a project do we do; 3) Do we or do we not want to use tax increment /inancing. As of today, we have until September 1, 1986 in which to sell tax exempt bonds; the future of that type of financing is undefined. Refer to page 4 for further action. Discussion Regarding Commission Position On Proposed Establish- ment 0f Storm Sewer Improvement Tax Districts (South Central and West Drainage Districts: Commissioner Ippel inquired as to the status of establishing storm sewer taxing districts. Hr. Hartley stated that storm sewer taxing districts is on the Council agenda for Aprll 221 expect Council to take some kind of action and that could be no action. Commissioner Fults stated that the commerclal/industrial property owners he has talked to prefer tsxing districts rather than ad valorem to pay for storm sever improvements. Hr. Raatikka noted that the taxing district method, just as the ad valorem, is based on assessed valuation. Hr. Rartley stated that the fiuanciu§ options are ad valorem, storm sewer districts and special assessments. Storm sewers can be financed with tax increment, but on a city wide basis it is not practical. The reason is because one of the key principles of tax increment is property valuation growth and that is not necessarily the case on a city wide basis. Storm sewers may not increase property value enough to create sufficient increment to pay for the storm sewers. In the last legislative session, a law was adopted that says cities can levy a tax, and even save money up, to pay for infrastructure. That law did not give cities borrowing authority beyond what they already have. Saving up that much money takes years and borrowing requires a referendum of the entire community. If this option is not used, that leaves taxing districts and special assessments. With taxing districts, it is more common for benefits to be spread over a larger area of property. With special assessments, it is a more narrowly defined area of benefit. It is possible special assessments could be levied to all that larger area based on acreage, but the owners of larger parcels in the area would probably appeal the assessment. State constitution and laws led the courts to interpret that this word we use called 'benefit' is well defined. Courts know exactly what it is-and they defined it in this way. Property is benefitted by any improvements in the same proportion April 22, 1986 Page 2 of 5