HomeMy WebLinkAbout03.14.90 Special Council Minutes
MINUTES
COUNCIL MEETING
SPECIAL
MARCH 14, 1990
1. Mayor Kuchera called the meeting to order at 7:00 P.M.
Members Present: Kuchera, Mayer, McKnight, Sprute, Galler.
Members Absent: None.
Also Present: Administrator Thompson, HRA Director Henricks.
2. The purpose of the meeting was to conduct a public hearing to consider amending
the Farmington Redevelopment Plan. The Council also indicated it would discuss a
safety nuisance at the Co-op fertilizer plant.
3. Mayor Kuchera opened a public hearing at 7:00 P.M. to consider amending the
Farmington Redevelopment Plan. Administrator Thompson gave a brief overview of the
amendments, noting that the major change would be expanding the project area and ex-
tending the life of the district. HRA Executive Director Henricks presented a map
of the proposed boundary changes. Mr. Henricks stated the project area was necessary
for:
a.
b.
soils correction,
removal of substandard structures,
non-productive railroad property, and
high ground water.
c.
d.
Mr. Henricks noted the present district would expire on April 1, 2001 unless there
was outstanding debt. The amendment would allow the City to sell bonds to install
improvements in the proposed industrial park which would be repaid after 1997.
Mr. Henricks noted that the original district would not be modified, only the project
area. The following testimony was heard.
Steve Finden:
Gerald Henricks:
Steve Finden:
Gerald Henricks:
Pat Akin:
Gerald Henricks:
Larry Thompson:
Gerald Henricks:
Dale Franke:
Gerald Henricks:
Dale Franke:
Gerald Henricks:
Pat Akin:
Can you use the revenue from the existing district for the
industrial park right now?
Not without the amendment.
What generates the revenues?
Past projects where the bonds have been or will be repaid.
Do all properties in the original 8 block area generate revenues?
If their value has increased since 1975.
Original base value is still split by the City, County and School
District.
Any school referendum revenues go to the School District.
Will taxes from the new project area contribute to industrial park
improvements?
No, not unless a new district is established, which can only be for
10 years.
Will new projects be incremented~
Not automatically. A new district has to be established.
When does it go back on the tax rolls?
Gerald Henricks: After 10 years, but only the old district will produce increments
at this time, which will be in existence as long as debt remains
which has been issued before April 1, 1990.
Pat Akin: Will any new debt be retired after 2001?
Gerald Henricks: The only debt will be the $950,000 for industrial park
infrastructure.
Warren Sifferath: Assuming Duo Plastics value goes up 15%, will that increase
go to the TIF District?
Gerald Henricks:
No. It goes to the City, County and School District.
Warren Sifferath: Why amend the plan?
Gerald Henricks: So the increments from the original district can pay for
improvements in the industrial park.
Pat Akin: You can only expand the district with the amendment to the
original Redevelopment Plan?
Gerald Henricks: We can increment any parcel without amending the plan.
Dale Franke: Are you having trouble spending the revenues in the district now?
Gerald Henricks: No. We intend to proceed with improvements in the original
district. We'll use the revenues to repay the debt on the
industrial park after the original district is scheduled to expire.
Steve Finden: Are there bonds outstanding now?
Gerald Henricks: Yes, but they will mature by 1995.
Steve Finden: Could improvements be made in the industrial park without
financing from the original 8 block area?
Gerald Henricks: Yes, but it would take special assessments or general taxes.
Mayor Kuchera:
Adm. Thompson:
Why can't projects be financed like FEI?
FEI was done through a lot split with no public improvements.
The Planning Commission will not allow developments like that
anymore.
Tom Hemish: The plan is to produce more revenues?
Gerald Henricks: No, just to extend the existing revenues.
Warren Sifferath: Wouldn't it be easier just to create a new district?
Gerald Henricks: No. A Redevelopment Plan amendment and TIF plan amendment
follow the same basic process.
Steve Finden: How does the County and School District feel about the Plan?
Adm. Thompson: The County is generally opposed to the use of TIF except for
redevelopment projects. The School has not responded.
Pat Akin: The original plan was to eliminate slums and blight in the
original 8 block area. Why are you spending money outside
of the area when you haven't completed the 8 block area?
Gerald Henricks: The Industrial Park Bonds won't be repaid until 1997. We will
still use the original TIF revenues in the 8 block area until
then.
Pat Akin: It still is like robbing Peter to pay Paul. Instead of the
revenues going back to the taxing districts in 2001, they will
have to wait until 2009. The original plan was to end the district in 1995.
Council Minutes - 3/14/90 - Page 3
Mike Grossman: There are a lot of misconceptions about the amendment. The
City can create a TIF District anywhere without amending the
plan. A change in the plan doesn't change the way the taxes are paid. That only
occurs when a district is created. The City is not pooling the funds either. That
only occurs when one district is used to fund another district.
Adm. Thompson: A lot of things have changed since 1974 when the original district
was created. Changes in Federal and State Law have made the
TIF the only viable City development tool.
Mike Grossman: The proposal is to use future revenues to stimulate growth.
You can't separate economic development from downtown rehabilitation.
Pat Akin:
When you use funds to stimulate growth, you don't realize revenues
immediately. You have to provide a cushion.
That has been accounted for.
Mike Grossman:
Warren Sifferath: I'm concerned about these districts going on forever. Some
time they have to end.
Adm. Thompson:
The original Duo Plastics TIF has expired and is now paying
$20,000 in tax revenues. Without TIF it would still be a
cornfield.
Dale Franke: Does the original district and new project cash flow?
Gerald Henricks: Yes.
Dale Franke: If it produces cash flow and new jobs are created, then why are
we arguing about this? Farmington needs jobs.
Gerald Henricks: It not only means jobs, but the elimination of contaminated soils,
slums and blight.
Warren Sifferath: We create jobs and then people move into the City. Where is the
tax base to support the new schools?
Adm. Thompson: If we don't provide TIF with a chance of capturing taxes in the
future, factories will be built in Lakeville with no chance of
ever capturing the taxes, and people will still move to Farmington.
Harvey Snyder: We need to compete with other cities. Without an industrial
park, Farmington cannot compete. This would be a very positive
step.
Steve Finden:
I understand Pat Akin's and Warren Sifferath's concerns, but
right now I want to expand my business, and I have no place to
Farmington. My only option right now is to move outside of the City. Right
are probably 20 years behind other cities.
go in
now we
Warren Sifferath: TIF is good if the districts end at some time.
Adm. Thompson: New districts have to end after 8 "increments" or 10 years.
Mayor Kuchera: We were fortunate to get Duo Plastics and FEI, but without an
industrial park I don't think we stand much of a chance to attract
new businesses.
Gordon Wichterman: I would like to locate my business here. I met with the
Castle Rock Town Board last night because there is no site in
Farmington.
Pat Akin:
My position is that the HRA should concentrate on the 8 block
area and their track record hasn't been too good lately.
Council Minutes - 3/14/90 - Page 4
Gerald Henricks:
Pat Akin:
Dale Franke:
will stick money
Pat Akin:
Adm. Thompson:
Pat Akin:
tax base, how are
to get too high.
Adm. Thompson:
Pat Akin:
Adm. Thompson:
Pat Akin:
Mike Grossman:
Adm. Thompson:
Pat Akin:
Harvey Snyder:
Jeff Thelen:
Adm. Thompson:
Pat Akin:
Adm. Thompson:
Pat Akin:
Adm. Thompson:
Pat Akin:
Development and redevelopment take time.
The Council should insist the HRA do more in the 8 block
area.
You can't dp anything without a developer. If the correct
economic opportunity doesn't present itself, no developer
into a project. The City doesn't want projects that will fail.
How much of the City is tax exempt?
40 to 50 percent.
Since 1974 we've built a new high school and elementary school,
with a referendum passed for a middle school. Without more
we going to afford these costs? Our per capita debt is going
The system is not perfect, but without using financial tools
allowed by the State, the City can't compete for new industry.
Wil fiscal disparities still be paid.
Either the projects or the City will contribute to fiscal
disparities.
Why not capture the fiscal disparities?
The law does not allow it.
An important point to note is that once the financial obligation
of a district is met, it automatically expires.
Again, I think you should focus your attention on the 8 block
area.
The intent is not to increase taxes, but to use existing revenues
as a tool to stimulate growth.
If 100% of the existing increments went back to taxes, what
would the impact be?
Approximately a $40 to $45 decrease on a $65,000 home.
Is the City planning to sell bonds?
Yes, on Monday.
The City's timing leaves a lot to be desired.
It was either that or not be able to use the tool. The City
Council didn't write the laws or set the expiration date.
Again, concentrate on the original plan.
MOTION by Sprute, second by Mayer to close the hearing. APIF, MOTION CARRIED.
4. Councilmember Sprute stated that the City has to improve its tax base and this
was the best way to accomplish that goal. Councilmember Mayer stated that, while
the HRA would pursue the industrial park, as a member of the HRA he would continue
to concentrate on the downtown area. Councilmember McKnight stated the amendment
would give businesses a chance to locate in Farmington. Councilmember Galler
concurred, stating that industry was important. Mayor Kuchera stated that the
establishment of an industrial park was his primary goal as Mayor and in order
to get something, the City may have to give up some things. MOTION by Mayer,
Council Minutes - 3/14/90 - Page 5
second by McKnight to adopt RESOLUTION NO. R14-90 approving the revised Redevelopment
Plan. (Administrator Thompson read the resolution.) APIF, MOTION CARRIED.
5. Councilmember Sprute noted that he had observed several safety violations and
nuisances at the vacated Co-op fertilizer and grain bins north of Elm Street.
Councilmember Sprute added that he was concerned for the safety of kids who played
in the area. It was the consensus that staff order the abatement of the nuisances
and report back at the next meeting.
6. MOTION by Galler, second by Sprute to adjourn at 9:15 P.M. APIF, MOTION CARRIED.
Respectfully submitted,
;/777-r--
Larry Thompson
City Administrator
Approved