Agenda - Charter Commission - 11/21/2017

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Ms. Kvilvang stated that when debt is issued there is a call date set for the time at which you can attempt to refinance the bonds or pay in full. She noted that for a bond of ten to 15 years, the call date would typically be set for seven to eight years for the issuance of the debt. She noted that Ramsey has taken advantage of this multiple times, refinancing the debt following the call date to obtain a lower interest rate. She provided an overview of tax increment financing (TIF) and the type of items that can be funded through that development tool. She noted that cities do not need the approval of the School District or the County to establish a TIF district. She provided information on the length of time that a TIF district can be open, noting that certain conditions must be met in order to qualify for longer terms. She explained that TIF is often used to spur development or redevelopment which in turn benefits the local economy in that municipality. Commissioner Bendtsen asked the type of tests that are applied to determine if the purpose of a TIF is valid for that type of district. Ms. Kvilvang explained that there are specific criteria that must be met in order to qualify for the different types of TIF and reviewed some examples for the different types of TIF districts. She stated that Ramsey has four TIF districts and believed that the City has been studious in its use of TIF districts. She explained how a city reviews a request for TIF funds. She noted that under the Data Practices Act, once a development agreement is approved, it becomes a public document. Commissioner Bendtsen asked where the idea of a proposal for TIF funds is presented or brought forward. Ms. Kvilvang stated that typically a request is brought forward from a developer who would then work with city staff to determine if their project would qualify under the city's policy and if so, the developer could then submit to bring the request forward to a public hearing. Commissioner S. Anderson stated that there are people that do not like TIF and asked for input as from their point of view. Ms. Kvilvang stated that the common argument is from those who are not seeing the benefit from the development for a delayed period. She stated that argument comes back to the fact that you would not have that extra tax increment but for that development. She explained that this is a short-term development for a long-term gain which benefits the residents and businesses in that area when the TIF district comes offline. Chairperson Field thanked Ms. Kvilvang on behalf of the Commission for her thorough presentation to the Commission. Commissioner S. Anderson stated that this presentation seemed to represent the positive comments regarding TIF but not the negative perspective, noting that there is an opinion of that nature out there. Ms. Kvilvang replied that during public hearings most of the negative comments are regarding the fact that they will not receive the additional tax increment from the improvement or Charter Commission/ October 19, 2016 Page 3 of 5