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HomeMy WebLinkAboutTIF Minutes 4-17 Downtown Tax Increment Finance Board Meeting Minutes April 18, 2017 Attending: Bob Hietala, Vonda Laird, Cory Lawrence, Bobby Bear, Bill Stoddart, Jeff Krauss, Chris Naumann Absent: None Public Comments: None Minutes ACTION: Vonda Laird moved to approve the March minutes as presented. Cory Lawrence seconded the motion. All voted in favor. Financial Report The April finance report included year-to-date income as unchanged from March. Expenses over the following month included: the fourth and final Partnership management fee of $26,250; Streetscape engineering and design work for $3,300; Fiber infrastructure $1390; $2905 for UDC Update consulting and Soroptomist landscape work; $4975 for the final structural report on the cable anchor repairs. The board had no other questions regarding the finance report. Executive Director’s Report Technical Assistance Program Update—CHANGES Three grants have been awarded thus far for FY2017—shown at the bottom of the chart. The chart also lists uncompleted grants that were awarded in FY2016. Keep in mind that the committed grant amounts are only tentative since the actual reimbursement amount will be determined as a one to one match upon completion of the grant work. As a reminder, the Planning grants have a $7500 cap and the Façade grants are capped at $3000. Date Project Name Project Address Applicant Professional Type Value 8/21/2015 712 East Main 712-716 East Main BCHO Architects BCHO Architects Plan/Façade 10,500$ 12/28/2015 Rialto 10 West Main BARC Thinktank Planning 7,500$ 12/30/2015 Big Sky Western Bank 106 East Main Big Sky Western Sanderson Stewart Façade 3,000$ Total 21,000$ Date Project Name Project Address Applicant Professional Type Value 10/31/2016 Owenhouse 2nd Floor 26 East Main Larry Bowman Yellowstone Arch Planning 7,500$ 10/31/2016 Owenhouse 2nd Floor 26 East Main Larry Bowman Yellowstone Arch Façade 3,000$ 3/30/2017 23 East Main 23 East Main Mark Kehke Intrinsik Planning 7,500$ Technical Assistance Program FY2016 Report Technical Assistance Program FY2017 Report Mobile Vending Ordinance Update Upon second reading and final adoption, the City Commission added a provision allowing non- food mobile vending to occur from 2:00pm until 9:00pm adjacent to Soroptomist Park. TIF Legislative Audit Update The final TIF bill (HB 573) was tabled in Senate Taxation last week. HJ18, the Interim TIF study bill, is scheduled for 3rd reading in the House today and then will move on to the Senate. The URD and TIF practioners are planning to convene quarterly during the interim to track the implementation of the study bill and participate when and where allowed. Earlier in the month, I completed a 50+ question online survey as part of the audit process. On Wednesday April 12, 2017, I participated in a 3-hour in person interview with the auditor. This was all in addition to a previous multi-hour interview conducted this winter. The auditor requested: 5 years of financials; current copy of the urban renewal plan; and total expenditure summary of the district’s five largest projects. I will be compiling all of this information and submitting by the end of the month. Building Project Updates Lark Addition (corner of Grand and Main) 4 story building with 28 new Lark hotel rooms. Construction began in December 2016. 5 West Building (northwest corner of Mendenhall and Tracy) Construction began on October 2016. First floor businesses scheduled to open in April 2017 and the upper floors completed in June 2017. Etha Hotel (old Armory building) first phase of foundation work complete. No date for when construction will resume. Willson Residences (old East Willson School) being redeveloped into 18 residential units with underground parking. Partial completion scheduled for Summer 2016. Rialto Theater under construction to be completed by August 2017. Black & Olive Apartments application was denied by the City Commission on April 11, 2017 after concluding that only one car share space would be allowed thus leaving the project below the required number of parking spaces. “OSM” Building 5 story mixed use building proposed on southwest corner of Babcock and Wallace BG Mill Building 5 story mixed use building New Businesses Update • Union Market—39 North Rouse—old Service Electric space opening date unknown • Squire House—27 East Mendenhall—Element Hotel restaurant is under construction • Stuffed Waffles—26 West Main—(former Tonsorial Parlor) to open in April • Evergreen—16 East Main—former F-11 space • Headroom space—12 East Main—vacant but under contract • Reflections space—240 East Main—vacant • Montana Silversmiths—14 West Main—former Mountain Lodge space • Sandwich shop—411 East Main— former Rockford space • Boho Boze—129 West Main—former Jewelry Studio space • Burger Bar—127 West Main—former Bistro space Planning Updates In this section I will provide update about several ongoing City planning processes. Transportation Master Plan www.bozemantmp.com Consultants: Peccia & Associates (Helena), Alta Planning (Bozeman) Timeline: September 2015 (kickoff) through September 2016 (adoption) Update: Draft plan now available UDC Revisions http://bozeman.net/Projects/UDCCodeupdate/Home Consultants: Makers (Seattle), Leland Group (Portland), Studio Cascade (Spokane) Update: Draft to be released in May 2017 then public meetings and comment period in Summer 2017 City Vision & Strategic Plan Consultants: HDR Timeline: March 2016 (kickoff) through October 2016 Update: draft plan completed by April 1st 2017 Community Plan (City Growth Policy) Update Consultants: City release RFP for consultants January 2017 Timeline: October 2016 through late 2017 Discussion and Decision Items FY2018 Draft Budget Chris presented the draft budget for fiscal year 2018 (included below). Highlights include: incomes similar to FY17; 5% increase in Partnership Management Fee; $115,000 for Phase 3 of the fiber network installation; $250,000 for parking infrastructure improvements; $35,000 for car sharing system implementation; $100,000 for completion of streetscape design and formation of SLID. FY2017 FY2017 FY2018 Category BUDGET Year End DRAFT Income Starting Cash Balance 1,479,289$ 1,657,529 1,582,965 Income from TIF (estimated)430,000$ 430,000 430,000 COB Interlocal Share 472,500$ 472,500 500,000 Entitlement Share State of Montana 45,436$ 45,436 45,000 Interest Income (estimated)10,000$ 10,000 10,000 Other Income (Library benches)3,000$ - - Total Income 2,440,225$ 2,615,465 2,567,965 Expense Operations Management Fee and Admin.105,000$ 105,000 110,000 Total Operations 105,000$ 105,000 110,000 Infrastructure Improvements Street Furniture and Park Maintenance 7,500$ 7,500 10,000 Streetscape--new purchases 25,000$ 20,000 25,000 Streetscape Assistance Program 80,000$ - 80,000 Wayfinding Signage--fab & install 10,000$ - 10,000 Alley Improvement Incentive Program 25,000$ - 25,000 Public Parking Improvements 250,000$ 250,000 250,000 Library Pedestrian Safety Improvements 10,000$ - 10,000 Code Compliance Program 50,000$ 10,000 50,000 Fiber-Broadband Infrastructure 150,000$ 150,000 115,000 Intersection Cable Anchor Repairs 50,000$ 10,000 Car Share Implementation 25,000 Total Improvements 657,500$ 437,500 610,000 Planning Technical Assistance Grants 50,000$ 20,000 50,000 FY16 Encumbered Funds 10,000$ - FY17 Encumbered Funds 30,000 Residential Incentive Program 200,000$ - 200,000 Hotel Incentive Program 100,000$ - FY16 Encumbered Funds 100,000$ 100,000 FY17 Encumbered Funds 100,000 Downtown Improvement Plan Update 80,000$ - 80,000 DBIP Implementation Funds 20,000$ 10,000 50,000 City Wayfinding--Downtown Planning 5,000$ - 10,000 DURT Phase 1 & SLID Engineering 30,000$ 100,000 Strategic Parking Plan--Data Collection 20,000$ 20,000 Car Share and EV Master Planning 10,000 Total Planning 615,000$ 50,000 730,000 Parking Structure Garage Bond Payment 430,000$ 430,000 430,000 Garage Long-term Maintenance Fund 10,000$ 10,000 10,000 Total Parking Garage Payments 440,000$ 440,000 440,000 Explosion Impact Fee Expenses Explosion Impact Fees 100,000$ - - Total Impact Fee Expenses 100,000$ - - Total Expenses 1,917,500$ 1,032,500 1,890,000 Year End Balance 522,725$ 1,582,965 677,965 Car Share Partnership Concept Chris informed the Board that during his ‘State of the City’ address Mayor Taylor suggested the URD consider investing in a downtown car share cooperative. The concept is to collaborate with the City Parking Division to place 2 vehicles at the garage and several private developments to contract with a national provider to place 4 or 5 car share vehicles downtown. One of the requirements to launch such a service would be a certain revenue guarantee for each vehicle. Chris presented the following estimate: Revenue Guarantee (2 cars) $3000 (per month) $36,000 (annually) Estimated Use (2 cars/2 hr/day) $1020 (per month) $12,240 (annually) Revenue Match $1980 (per month) $23,760 (annually) Cory commented that MSU initiated the Car Share Request for Information and would be a good pilot. Bob noted that IF the URD agreed to include funds in the FY18 budget, we should acknowledge that revenue guarantee funds would most likely be required for several years. Bobby mentioned that one option would be to budget funds for the guarantee on one of the two vehicles in the garage thus requiring the City Parking Division to match our funds for the second vehicle. Cory asked if such an investment would align with provisions of the Montana Urban Renewal law and the Downtown Urban Renewal Plan. Chris said it could in terms of increasing the efficiency of use at the garage thus reducing demand for parking spaces. This would be based upon the national standard that each car share vehicle reduces the number of private vehicles by 20 to 30. The Bozeman UDC “credits” each car share with a reduction of 5 vehicles. TIF Legislation Update Chris handed out a document highlighting a dozen pieces of legislation that would impact Montana’s urban renewal law and the use of tax increment financing. See legislation overview below. Most of the remaing bills were tabled on account of the passage of an interim study bill to analyze URD and TEDD. Meeting was adjourned at 1:05 pm TIF BILLS – 2017 SESSION As of 4/18/17 HB 30 (Essman) – Chapter Number Assigned 4/6 This bill was also approved by RTIC (LC 414). This bill removes levies adopted after the TIF is created from the TIF calculation. The bill now has an immediate effective date. Question whether existing TIFs could add new levies to the calculation (i.e., does it just apply to TIFs created after effective date of bill). League agreed to be neutral on bill. Amended in House on floor to clarify applies to any new voted levy after bill becomes law; bill effective April 6, 2017. HB 76 (Hertz) – Chapter Number Assigned 2/17 The bill is unchanged from what was proposed by RTIC (LC 412). It adds language to existing 7-15-4291 that restricts the agreement terms for remittance of unused portions of tax increments, requiring remittance to all taxing jurisdictions included in the calculation and proportional to each jurisdiction’s share of total mills levied. Applies to remittance agreements entered into on or after February 17, 2017. HB 396 (Grubbs) – Chapter Number Assigned 4/4 Replacement bill for HB 250. MACO, MTSBA, and League drafted amendment language to HB 250 that would remove veto vote but require that city meet and confer with county and school district before creating plan with TIF, adding TIF to existing plan, or bonding. Met with Grubbs 1/30 to review proposed amendments; new bill title needed to make amendments, Rep Grubbs tabled HB250 and replace with HB 396 with the amendments previously approved by this group (notify with opportunity to meet and confer). Committee passed amendment written by League for Rep. Grubbs specifying that the consultation with county and school districts will be a public meeting with opportunity for public comment (same as SB 27 language); Committee passed second amendment applying same consultation requirements to TEDDs. Bill is effective April 4, 2017. SB 27 (Thomas). Returned from Enrolling 4/12 As amended in Senate, requires the local government’s annual financial report under 2-7-503 to include a report of the financial activities related to TIF; requires public meeting and opportunity for comment on all matters before the urban renewal agency board; requires the TIF annual report under 7-15-4237 to “describe the public purpose of expenditures of tax increment and how the expenditures meet the goals of the urban renewal plan or comprehensive development plan (TEDD). In House, Rep. Essman brought amendments to add references to 2-3- 103 (public participation law) and 2-3-203 (open meeting law) to the urban renewal board meetings and specify in the statute that a public hearing must be held to modify the urban renewal plan (now required in DOR’s ARMs). If becomes law, bill is effective October 1, 2017. HJ 18 (A Hertz). Passed House 2nd Reading 4/13. Interim study of tax increment financing. League supports. HB 134 (Essman) – Rereferred to Senate Finance and Claims 4/8 While the RTIC voted not to move forward with the proposal to remove the 95 school mills from TIF calculation, the proposed language was instead put into the School Funding Interim Commission’s draft bill revising the Quality Schools Facility Grant Program. The School Funding Interim Committee estimates this change will redirect $2-3 annually in TIF increment from the TIF districts to the schools. The bill would be effective July 1, 2017, but allows 95 mills to be used in calculation if it was pledged to pay bonds on or before August 29, 2016. UPDATE: Bill was amended in House Education to remove all reference to the 95 mills – League will monitor to ensure language does not get put back in. Probably Dead: HB 250 (Grubbs) – TABLED by House Local Government 2/2 Require county and school district approval for adoption of TIF provision. Potential amendment would be to have city approve TIF in a TEDD district? Tabled, amended and introduced as HB 396. HB 359 (Burnett) – TABLED House Taxation 2/16 This bill would limit tax increment financing revenue to the mills collected by the TIF-creating entity only, removing mills collected on behalf of a school districts, mills supporting elementary and high school district retirement obligations, public school equalization mills, university system mills, and the permissive levies in 15-10-420(9)(a). DOR will prepare fiscal note quantifying overall impact to TIF districts statewide; initial estimate will be a loss of about half of all TIF revenues; up to ¾ of revenues in individual TIF districts. HB 403 (Hertz) – TABLED House Taxation 3/20 (Revise TIF laws to require remittance if increment exceeds certain level). HB 403 would require remittance of all incremental taxable value of one or more urban renewal districts in excess of 5% of the municipality’s total taxable value, except to the extent such revenues are pledged for the payment of bonds before the effective date of the act (immediate effective date). The bill also incorporates the same language in HB 76 and if transmitted would likely get a coordination provision making HB 76 null and void. No action has been taken on the bill since the hearing – may be part of study bill subjects. Revenue bill. HB 411 (A Hertz) – TABLED House Taxation 2/16 Would prohibit TIF funds for paying for facade improvements to privately owned buildings. Bill has immediate effective date. Bill was tabled in House Taxation. HB 413 (Essman) – TABLED House Taxation 2/10 Two main provisions: (1) The bill provides for a recapture provision if building improvements are made with TIF funds. If controlling stock or other equity interest in the building is sold, leased, or transferred within 5 years of the TIF funded improvements, 100% of the funds must be paid back; 80% if within 6 years; decreasing by 20% each year thereafter. No recapture after 10 years; no recapture if ownership conveyed to a governmental entity. (2) The bill provides for a direct court review of any decision made under Title 7, Chapter 15, Parts 42 or 43 by any taxpayer or taxing jurisdiction. The bill has an immediate effective date, and applies to improvements funded on or after effective date of bill; liability provisions apply to decisions on or after the effective date of the bill. Rep. Essman has agreed to drop the issue of recapture and put the discussion of standing into the interim study bill. HB 549 (Skees) – TABLED House Business and Labor 2/24 Bill would have allowed cities with BID/TIF districts to issue ordinances to license alcohol sales. HB 573 (Cook) – TABLED Senate Taxation 4/12 This bill is essentially the language that RTIC voted not to move forward with. The bill would remove the 95 school mills from TIF calculation, but only for TIFs in urban renewal districts or TEDDs established on or after the effective date of the act (October 1, 2017). The School Funding Interim Committee estimates this change would redirect $2-3 annually in TIF increment from the TIF districts to the schools; this estimate was based on existing TIF districts that wouldn’t be affected under this bill. SB 34 (Hoven). TABLED Senate Local Government 2/13 The bill is substantively the same as what was approved by RTIC (LC 411). The bill would require a representative of a school district within the municipality and a representative who lives in the county to be appointed by the mayor to the urban renewal agency board. The mayor must appoint these two new members from a list of three people each submitted by the school board and by the county commission. Sen. Hoven agreed to amend bill to add two new representatives to the five-member board, so the board would increase to seven members. On 1/18 Sen Hoven introduced amendment, but it was voted down by 5-4. Bill as introduced voted out of committee 6-3. On 1/25 bill was rereferred on the floor back to Senate Local Govt – Sen Hoven tabled his bill.