HomeMy WebLinkAbout5J - Waterfront Passage Business Office Park
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t;O~ 16200 Eagle Creek Avenue S.E.
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~ CITY COUNCIL AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DECEMBER 18, 2006
5J
Ralph Teschner, Finance Director
CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING PAYMENT OF
EXCESS TAX INCREMENT FOR WATERFRONT PASSAGE BUSINESS
OFFICE PARK TO SCOTT COUNTY
DISCUSSION:
Introduction
The purpose of this agenda item is to consider the re-payment of excess tax
increment that was generated from the tax increment districts associated with
Waterfront Business Office Park back to Scott County as required by state
statute.
Historv
When Waterfront Business Office Park was established in 1993 the City
issued general obligation bonds and advanced an inter-fund loan from the
Utility and Trunk Reserve Funds in the amounts of $142,000 and $214,000
respectively, for the utility improvements in the business park. Seven tax
increment districts (TIF 2-1, 2-2, 2-3, 2-5, 2-6, 2-7 and 2-8) were subsequently
created in the City's first effort at promoting economic development in the
community. The tax increment was pledged for debt payment for these bonds.
All of these tax increment districts have been de-certified and are no longer
contributing tax increment.
The final bond payment was made December 1, 2006 and the loan re-
payments were made via a journal voucher transfer on December 4, 2006 as
approved by Resolution 05-138 which authorized the transactions to occur
after the last bond issue payment and included 13 years of interest at 6%.
Current Circumstances
State statutes require that tax increment may only be used for the expressed
purposes as originally pledged. Once all obligations have been satisfied any
excess tax increment must be paid back to the county. These seven tax
districts have generated an excess of $362,575.76 in tax increment. The
reason is simply that in the City's original pro-forma we assumed it would take
10 years for build-out of the 32 business park acres. Instead we completed
development within a six year time period which resulted in an accelerated flow
of tax increment. Land sale proceeds and assessment income allowed for the
inter-fund loan to be repaid.
FINANCIAL
IMPACT:
An accounting ledger summary is illustrated in the table below:
, TIF Revenue (since district inception)
Less total bond payments
Less annual administration
$1,405,832.25
<$1,013,256.49>
<$30.000.00>
$362,575.76
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245
The good news is that:
1. The project was a success adding 22 net acres of commercial/industrial
development to Prior Lake.
2. All city administrative expenses and utility infrastructure costs were
paid by the TIF districts.
3. The business office park now generates property tax revenue for all
taxing authorities (school, county, city).
4. Prior Lake will get approximately one-third of these dollars returned to
us in our January property tax settlement because according to law the
County, School District and City share in the distribution of any excess
tax increment on a tax rate pro-rata basis. This payment amount is
included in the "List of Invoices To Be Paid" for your approval as part of
the Consent Agenda.
RECOMMENDED
MOTION:
A motion as part of the Consent Agenda to approve A Resolution Authorizing
Payment of Excess Tax Increment For Waterfront Passage Business Office
Park to Scott County.
ReViitJ'
Frank Bo
16200 Eagle Creek Avenue S,E.
Prior Lake, MN 55372-1714
RESOLUTION 06-xx
RESOLUTION UTHORIZING PAYMENT OF EXCESS TAX INCREMENT
FOR WATERFRONT PASSAGE BUSINESS OFFICE PARK TO SCOTT COUNTY
MOTION BY: SECOND BY:
WHEREAS, All tax increment districts (TIF 2-1, 2-2, 2-3, 2-5, 2-6, 2-7 and 2-8) that were
established in the Waterfront Passage Business Office Park have been de-
certified; and
WHEREAS, Tax increment legislation requires excess tax increment be remitted to the
county auditor for re-distribution to all eligible taxing jurisdictions within Scott
County; and
WHEREAS, The bonds for Waterfront Passage Business Office Park have been paid in
full; and
WHEREAS, Initial loans from the water/sewer utility fund and trunk reserve fund have
been re-paid (JV#06-261); and
WHEREAS, Annual administration charges of $500.00 per district have been reimbursed
in the total amount of $30,000 (JV #06-271); and
WHEREAS, Total net TIF revenue of $1,405,832.25 has been accounted for and
transferred to the Debt Service Fund; and
WHEREAS, Total bond payments of $1,013,256.49 have been expended.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE that:
1. The recitals set forth above are incorporated herein.
2. That the City Council hereby approves payment in the amount of $362,575.76 from the
Debt Service Fund (Account #534-47000-630) to Scott County.
Passed and adopted this 18th day of December, 2006.
YES
NO
Haugen
Dornbush
Erickson
LeMair
Millar
Haugen
Dornbush
Erickson
LeMair
Millar
{Seal}
City Manager
City of Prior Lake
www.cityofpriorlake.com
H:\TIF\2006 Excess TIF Resolution,doc
Phone 952.447.4230 / Fax 952.447.4245