[00:00:01]
30.WE WILL GET STARTED A LITTLE EARLY TODAY BECAUSE
[1. Discussion and action on the Final Project and Finance Plan for the Tax Increment Reinvestment Zone No. 2]
WE HAVE A TAX INCREMENT REINVESTMENT ZONE.UH, AND WE ARE GONNA GO AHEAD AND CALL THAT MEETING TO ORDER.
UH, WE HAVE A REGULAR, WE HAVE DO HAVE A QUORUM REGULAR AGENDA.
ITEM NUMBER ONE, DISCUSSION ACTION ON THE FINAL PROJECT AND FINANCE PLAN FOR THE TAX INCREMENT REINVESTMENT ZONE NUMBER TWO.
WHO WANTS TO LEAD THIS ONE? UH, I'M GOING PUNCH WITH
GOOD EVENING, MAYOR AND COUNCIL.
I'M ANDREA BARNES WITH P THREE WORKS.
P THREE WORKS WAS HIRED BY THE CITY TO ADMINISTER THE, UM, PUBLIC IMPROVEMENT DISTRICT, AS WELL AS ASSIST WITH THE PREPARATION, UM, AND ADMINISTRATION OF THE TURS, WHICH IS A TAX INCREMENT REINVESTMENT ZONE.
BOTH ARE APPLICABLE TO THE RIVERWOOD RANCH DEVELOPMENT.
UM, THE ZONE WAS CREATED ON JULY 14TH, 2020, AND IT CONSISTS OF 78.1 ACRES.
AND IT IS, UM, THE BOUNDARIES OF THE TURS AND THE PI DO MATCH EXACT.
UM, THE, THE PURPOSE OF THE TURS WAS TO HELP FUND THE PUBLIC IMPROVEMENTS ASSOCIATED WITH THE DEVELOPMENT.
UM, AND THE WAY THAT THEY ARE, UM, HANDLING THE REIMBURSEMENT FOR THE PUBLIC IMPROVEMENTS IS BY A BUYDOWN OF THE PI ASSESSMENT.
SO IT, IT REDUCES THE PIT ASSESSMENT THAT THE HOMEOWNERS WITHIN THE TURS BOUNDARY AND THE PI BOUNDARIES END UP PAYING.
UM, AND, AND SO THAT WAS THE PRIMARY PURPOSE FOR IT.
WHEN THE PI WAS CREATED, IT WAS PLANNED TO CONSIST OF 318 SINGLE FAMILY HOMES.
AND THE, THE TS ACTUALLY APPLIES TO 205 OF THOSE 318 HOMES.
'CAUSE THAT'S PHASE ONE, UM, OF THE DEVELOPMENT.
IF WE MOVE FORWARD WITH OTHER PHASES, THEN WE WOULD DO WHAT WE CALL AN AMENDED AND RESTATED, UM, TAX INCREMENT REINVESTMENT ZONE PROJECT AND FINANCE PLAN.
AND THEN WE WOULD ADD THOSE ADDITIONAL HOMES, UM, IN THE PLAN.
UM, WE ALSO, UM, HAVE NOTED IN THE FINANCE PLAN THAT IT IS ANTICIPATED THAT THE TURS WILL GENERATE $10.5 MILLION AND NEW TOTAL PROPERTY TAX REVENUE FOR THE CITY OF WHICH YOU WOULD RETAIN 7.6 MILLION.
SO, UM, THE CITY WOULD RETAIN THE BULK OF THE REVENUES THAT ARE GENERATED OUT OF THE PROPERTY, UM, ADDED AS A RESULT OF THIS TAX INCREMENT REINVESTMENT ZONE.
THE BASE VALUE WHEN THET WAS CREATED, UM, WAS $125,440.
SO YOU CAN SEE, UM, HOW MUCH OF A FINANCIAL BENEFIT CREATING THE TURS WILL PROVIDE FOR THE CITY.
UM, TAX YEAR 2022, THAT VALUE HAD GROWN TO 7,000,417.
SO IT'S ALREADY DOING AS WAS ANTICIPATED, AND ON TRACK.
THE ZONE IS SET TO EXPIRE IN 2051, SO IT'S A 30 YEAR TERM, UM, ON THE TURS.
AND THE CITY IS CONTRIBUTING 27% OF THE VALUES RECEIVED OF THE PROPERTY TAXES RECEIVED ON THE INCREMENT WITHIN THAT ZONE TOWARDS THAT BUYDOWN OF THAT PIT ASSESSMENT.
SO THOSE MONIES, UM, BY STATUTE MUST BE PUT IN A SEPARATE FUND, AND WE REFER TO THAT AS THE RIVERWOOD RANCH TURS NUMBER TWO, UM, TAX INCREMENT REINVESTMENT ZONE FUND.
AND SO THOSE MONIES ARE CARVED OUT AND SET ASIDE WITHIN THE FINANCE DEPARTMENT, AND THEN THEY ARE USED TO PAY FOR THE BUYDOWN OF THAT PIT ASSESSMENT EACH YEAR.
UM, AND I'LL BE HAPPY TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE.
THE PROJECT AND FINANCE PLAN DOES COMPLY WITH ALL OF THE STATUTES AND THE PROPERTY TAX CODE CHAPTER THREE 11.
UM, THERE IS A LONG LIST OF ITEMS THAT ARE REQUIRED TO BE INCLUDED IN SUCH A FINANCE PLAN, AND I'M HAPPY TO GO OVER IN DETAIL ANY OF THOSE SECTIONS THAT YOU WOULD LIKE TO REVIEW.
BUT I WANTED TO LEAVE AMPLE TIME FOR YOU TO BE ABLE TO ASK ANY QUESTIONS THAT YOU MIGHT HAVE.
ANYBODY ON THE BOARD HAVE A QUESTION? SO WHAT I, WHAT I, WHAT STRUCK ME WAS THAT YOU CITY ARE GETTING APPROXIMATELY 75% OF THE TAX.
AND THEN ONCE THE 30 YEAR PERIOD IS UP, IT WOULD GET A HUNDRED PERCENT.
THE QUESTION I HAVE IS REALLY RELATING TO, AND IT'S NOT SO MUCH LOCALLY,
[00:05:01]
BUT AS WE SEE CHANGES IN THE STATE LEGISLATURE AND SOME CHANGES IN LAWS AND TAX RATES AND WHAT CAN HAPPEN, HOW DOES THIS AFFECT THAT? SO IF WE'RE FORCED TO WHATEVER, TAKE OUR VALUATIONS DOWN OR THEY CAP US, DID THESE PROJECTIONS STILL HOLD OUT THE SAME WAY THE INCREMENT IS CALCULATED, UM, EACH YEAR? SO THAT'S, THAT'S REALLY A DIFFICULT QUESTION TO ANSWER, NOT KNOWING WHAT THE LEGISLATURE MAY OR MAY NOT DO.UM, AND SO IT WOULD BE BASED ON THOSE CAPTURED APPRAISED VALUES.
SO IF THE LEGISLATURE WERE TO SAY YOU COULD NO LONGER, UM, YOU KNOW, GO ABOVE A CERTAIN PERCENTAGE EACH YEAR, INCREASE IN THOSE APPRAISED VALUES, WHAT IF THEY CUT 'EM? WHAT IF THEY CUT OUR VALUATIONS OR OUR, OUR TAX RATE, LET'S JUST SAY THEY SAY YOU CAN, YOU CITIES CAN NO LONGER HAVE MORE THAN 30 CENTS ON THE DOLLAR.
I'M JUST THROWING OUT IDEAS THAT SUDDENLY WERE LIKE, NOT EVEN THOUGHT ABOUT BEFORE, BUT NOW MIGHT BE IN THE REALM OF POSSIBLE.
UM, I'M JUST TRYING TO UNDERSTAND HOW THAT AFFECTS THIS.
SO THE WAY WE CALCULATE THAT INCREMENT IS WE TAKE THE ADDED NEW VALUE TO REACH WHAT THE INCREMENT IS.
SO WE TAKE THE, ADD A NEW VALUE LESS THE BASE VALUE.
AND THEN WE USE THAT AMOUNT, AND THAT IS MULTIPLIED BY YOUR CURRENT TAX RATE.
SO IF THE STATE LEGISLATURE WERE TO ADJUST THAT TAX RATE DOWN CONSIDERABLY AS YOU'RE SUGGESTING COULD HAPPEN, AND, AND YOU'RE PROBABLY CORRECT, UM, THEN THAT AMOUNT THAT WOULD, THAT WOULD BE SUBJECT TO GOING INTO THE TURS FUND WOULD REDUCE NATURALLY.
SO BECAUSE WE TAKE IT BASED ON THE CURRENT, THE CITY'S CURRENT TAX RATE FOR THAT YEAR.
SO IF THERE WAS A LOSS, THERE WOULD BE A LOSS ON BOTH SIDES.
IT WOULDN'T BE JUST US ABSORBING ALL THE COST AND REVENUE GOING OVER ACROSS, IF FOR WHATEVER REASON IT WENT DOWN.
I JUST WANNA MAKE SURE THAT LIKE, UH, COUNCIL MEMBER BOOTH SAID IT'S A 75 25, ROUGHLY 27 23 7.
AND I'M JUST, I'M KIND OF QUESTIONING IF, IF THAT'S ACTUALLY GONNA HOLD TRUE, UM, WITH PROPERTY TAX RATE, UH, FREEZES AND ALL THESE OTHER IDEAS BEING FLOATED.
UM, SO THIS FEASIBILITY STUDY IS A PROJECTION CORRECT FOR THE CITY TO GO BY.
IT'S SOMETHING, SOMETHING TO USE.
YOU ALSO DO GET, WHEN THEY'RE CALCULATING YOUR TAX RATE EACH YEAR, UM, YOU KNOW, YOU GET THE THREE DIFFERENT ONES, THE NO NEW REVENUE TAX RATE AND ALL, ALL THE, THE NEW ONES THAT WERE CREATED A FEW, UH, LEGISLATIVE SESSIONS AGO.
BUT YOU DO ACTUALLY GET CREDIT DURING THAT CALCULATION FOR THE MONIES THAT YOU CONTRIBUTE TO THE TS UM, INCREMENT FUND.
SO I'M SURE THAT IF SOME OF THOSE VARIABLES THAT YOU'RE REFERRING TO CHANGE THOSE CALCULATIONS WILL ALSO CHANGE AND HAVE MORE OF, I GUESS WHAT YOU COULD SAY A POSITIVE IMPACT ON WHAT YOU'RE ABLE TO ADOPT AS YOUR NO NEW REVENUE TAX RATE.
BUT IT'S REALLY SPECULATION ON ANYBODY'S PART IN REGARDS TO WHAT THE LEGISLATURE MAY OR MAY NOT DO.
UM, BUT EACH YEAR AS PART OF THE SERVICE AND ASSESSMENT PLAN UPDATE, THAT'S ON THE AGENDA FOR THE CITY COUNCIL ACTION LATER TONIGHT.
THOSE, UM, THE, THE IMPACT OF THE TURS IS RECALCULATED EVERY YEAR.
AND THEY ARE BASED ON, UM, THE PROPERTY TAXES THAT ARE ACTUALLY PAID BY EACH PROPERTY OWNER WITHIN THAT ZONE.
AND, AND SO THE TWO PLANS KIND OF WORKED TOGETHER.
UM, AND SO THERE WERE MAXIMUM TURS CREDIT AMOUNTS SET IN THAT SERVICE AND ASSESSMENT PLAN THAT WAS APPROVED IN 2021.
SO THOSE HOMEOWNERS ARE GUARANTEED NEVER TO RECEIVE MORE THAN THAT ANNUAL MAXIMUM TURS CREDIT AMOUNT.
SO IF WHAT YOU'RE SUGGESTING IS THE LEGISLATURE ADJUST OR, OR CREATE SOME LIMITATIONS FOR YOU AS A CITY ON, UM, HOW HIGH YOU CAN GO WITH THE APPRAISED VALUES, THEN OF COURSE IF THOSE COME DOWN, THEN SO IS THE AMOUNT THAT THE CITY CONTRIBUTES INTO THAT TS FUND.
AND SO THOSE HOMEOWNERS WOULD THEN RECEIVE A REDUCED CREDIT AMOUNT SO THEY CAN RECEIVE LESS THAN THE MAXIMUM SET IN 2021, BUT THEY CAN'T RECEIVE ABOVE THAT AMOUNT.
DOES THAT, DOES THAT HELP? IT'S REALLY COMPLICATED.
IT IS
I GET TO DO ALL THOSE CALCULATIONS AND SOMETIMES I HAVE TO REALLY, YOU KNOW, TAKE A LONG HARD LOOK AT IT AND MAKE SURE, UM, BECAUSE IT CAN BECOME VERY COMPLICATED WHEN YOU, WHEN YOU'RE MAKING THOSE CALCULATIONS AND, AND YOU'RE RIGHT, SIR.
THAT'S THE REASON WHY YOU HIRE A CONSULTING FIRM TO DO THAT.
THE OTHER THING WAS THE PROJECT COSTS YES.
[00:10:01]
THE NON-PROJECT COSTS ARE, ARE OUTSIDE THE SCOPE OF THIS.SO THE PROJECT COST IS THE PUBLIC INFRASTRUCTURE THAT THE DEVELOPER PUT IN, SUCH AS YOUR DRAINAGE, YOUR STREETS, WATER, SEWER INFRASTRUCTURE, UM, AND THEN THE NON-PROJECT COSTS ARE THE ACTUAL HOMES.
SO THE, THE DEVELOPER CAN'T SEEK ANY REIMBURSEMENT ON THOSE PRI MORE PRIVATE COST.
UM, AND SO WE CLASSIFY THOSE AS NON-PROJECT COST.
UM, ARE ALL THESE COSTS ALREADY INCURRED YES.
FOR THIS PARTICULAR PHASE? SO LIKE I WAS MENTIONING EARLIER, AS THEY ADVANCE WITH THE OTHER, UM, PLATTS AND DEVELOPMENT MM-HMM.
SO, SO YES, THIS IS ALL COST THAT HAS BEEN INCURRED AT THIS POINT.
SO THIS IS PHASE ONE AND PHASE TWO ONLY.
IT'S, OR WHAT WE CALL IMPROVEMENT AREA NUMBER ONE.
AND THAT'S ALL BEEN AUDITED AND EVERYONE AGREES WITH THOSE NUMBERS THAT THOSE ARE, THOSE WERE SPENT.
THAT THAT'S REALLY MORE A QUESTION FOR FINANCE DEPARTMENT BECAUSE YOUR, UM, INDEPENDENT AUDITOR DOES AUDIT, UM, THE WORK OF P THREE AS WELL AS, YOU KNOW, THE, THE CALCULATIONS RELATED TO THE TURS AND EVERYTHING AS PART OF YOUR ANNUAL AUDIT.
UM, AND THAT ALSO IS COST THAT, THAT GETS CHARGED TO THE PID AND ORTS AS PART OF YOUR ADMINISTRATIVE COSTS THAT YOU SEE IN THOSE TWO PLANS.
UM, AND SO I WOULD, I WOULD SAY THAT MOST LIKELY YES, BECAUSE I KNOW WE'VE BEEN CONTACTED BY THE AUDITORS THAT, THAT YES, YOU SHOULD HAVE RECEIVED AN AUDIT REPORT SOMETIME IN THE SPRING AND THEY TS NUMBER TWO.
WAS IT THAT THEY PUT IT AS PART OF THE, THE CITY'S AUDIT? IT SHOULD BE LISTED, UM, IN THE AUDIT.
BECAUSE I WAS WONDERING ABOUT THE CONTINGENCY OF 360,000 AND THEN THE ADMINISTRATIVE COST OF 4 0 5.
I WAS JUST WANTING TO KNOW WHAT WERE THE LARGE ITEMS THAT MADE UP THAT.
THOSE ARE JUST SIMPLY, UM, PROJECTIONS.
AND ON THE ADMINISTRATIVE SIDE, WHAT WE DO IS WE START OUT WITH $10,000 IN THAT FIRST YEAR MM-HMM.
SO IT'S JUST A PRODUCT PROJECTION, BUT WE ACTUALLY BASE THE TS CREDIT CALCULATION OFF OF THE ACTUAL ADMINISTRATIVE COST OF THE CITY.
SO WE JUST USE THAT BECAUSE WE'RE REQUIRED TO PROVIDE YOU WITH A FEASIBILITY STUDY AND YOU HAVE TO START SOMEWHERE.
AND THAT'S PRETTY MUCH THE STANDARD THAT MOST CITIES USE.
THEY START WITH THAT 10,000 A YEAR.
SO I GUESS IT'S UP TO THE COMMISSION.
WHAT, WHAT ACTION WOULD YOU LIKE TO TAKE TABLE LOUD? I ACTUALLY HAVE A QUESTION FOR LEGAL, UH, MS. JUDITH, UH, IS THERE ANYTHING THAT WE, THAT WAS APPROVED BY PRIOR COUNSEL OR COUNSELS PRIOR TO THIS YEAR THAT UM, SAY THAT THIS IS A MOVING FORWARD ADMINISTRATIVELY? OR IS THIS SOMETHING THAT WE HAVE TO, THAT HAS NOT BEEN FORMALLY APPROVED, UH, THROUGH THE COUNCIL AND THROUGH THIS BOARD? SO YOU UNDERSTAND WHAT I'M SAYING? UH, I THINK I DO UNDERSTAND WHAT YOU'RE SAYING.
SO THERE WASN'T PRELIMINARY PLAN THAT WAS SET FORTH IN UM, 20 20 20 20 20, BUT THAT WAS JUST PRELIMINARY PLAN.
THIS IS THE FINAL AND WE HAVE TO, THE BOARD HAS TO, UH, APPROVE THIS IN ORDER FOR US TO GO AHEAD WITH THE S ON.
THIS IS THE FIRST FINAL CLIENT.
AND NO CITY COUNCILMAN HAS NOT, THERE HAS NOT BEEN ANY ACTION ON THE FINAL P BETWEEN THAT.
UH, AND THERE'S NOTHING IN ANY OF THE AGREEMENTS WITH THE, THE DEVELOPER THAT SAYS THAT COUNCIL WOULD AGREE TO A TERMS DOWN THE ROAD.
SO WE DON'T HAVE ANYTHING IN WRITTEN IN A CONTRACT OR ANY OF OUR AGREEMENTS.
WHAT WAS THIS SPA AGREEMENT? ANY OF THOSE THAT SAYS A CHARGE WILL BE CREATED OR DOES IT SAY SHALL BE CREATED? UH, SO IN THE REIMBURSEMENT AGREEMENT, IT STATES THAT THE, UH, THE PUBLIC IMPROVEMENT DISTRICT AND THE NUMBER TWO AND 27% PAYMENT TO THE DEVELOPER OF WHATEVER.
SO THAT IS ALL SET OUT IN THE, UH, FACILITIES AND REIMBURSEMENT AGREEMENT THAT WAS EXECUTED BACK IN 2020 JULY, 2020.
'CAUSE I SENT THAT TO JUDITH THIS MORNING AT PROBABLY 10 O'CLOCK THIS MORNING.
IT'S KIND OF HARD TO RECALL YOU EXACTLY.
[00:15:03]
DID THE STATIC ALL OF A SUDDEN START? 'CAUSE I SHOWED UPBUT NOW THAT THOSE CREDITS APPLY, WE HAVE TO DO BOTH.
AND SO YOU'LL SEE BOTH EVERY YEAR.
LET ME ASK THIS QUESTION, UM, BEFORE WE TAKE ACTION.
THE, YOU KNOW, I, I GO BACK TO THE, THE ACTUAL CALL HERE AND I KNOW IT'S AUDITED, BUT SHOULDN'T THE TSS BOARD GET TO SEE AND THE PROOF OF THAT BEFORE WE GO AND VOTE ON SOMETHING? I MEAN, THAT SEEMS KIND OF, OH, IT'S IN THE AUDIT AND WE SAW THAT MONTHS AGO, BUT NOT HAVING IT, IT'S NO TRUST BUT VERIFY.
AND I DON'T HAVE ANY ACTUAL PROOF THAT THOSE ARE THE ACTUAL COSTS.
UM, DO YOU HAVE ANYTHING WITH YOU, PHIL? I CAN, I'VE GOT IT ON THE EMAIL.
I MEAN, I'M NOT SAYING YOU HAVE TO YEAH.
RIGHT NOW, BUT I'D LIKE TO SEE IT JUST TO MAKE SURE.
UM, AND I WOULD ASK THAT ANY ACTION TAKEN BY THE TURS BOARD TONIGHT IS SUBJECT TO THE, THE ACTUAL, THE ACTUAL COST BEING DOUBLE CHECKED OR VALIDATED.
BECAUSE I MEAN, ADDRESS YOU MICHAEL, BUT I ALSO WANNA MAKE SURE THAT WE'RE, WE'RE CHECKING THAT.
BECAUSE I KNOW AUDITORS TOO, SOMETIMES THEY DON'T CHECK EVERYTHING.
WELL, MR. MAYOR, I'LL MAKE A MOTION THAT WE APPROVE THE FINAL PROJECT OF FINANCING PLAN FOR THE TAX INCREMENT REINVESTMENT ZONE NUMBER TWO.
I HAVE A MOTION BY COMMISSIONER PEREZ, A SECOND BY COMMISSIONER BOOTH.
ANY FURTHER DISCUSSION? CALL FOR THE VOTE.
ALL THOSE IN FAVOR SIGNIFY BY SAYING AYE.
SO WE'LL MOVE TO ADJOURNMENT AT 5 48.