RESOLUTION NUMBER 18-13

 

APPROVING MODIFICATION OF THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT DISTRICT NO. 14

 

WHEREAS, the City of Mountain Iron, Minnesota (the “City”) originally established Tax Increment Financing (Redevelopment) District No. 14 (the “TIF District”) and approved the Tax Increment Financing Plan (the “TIF Plan”) therefor under pursuant to Minnesota Statutes, Sections 469.124 through 469.134 and Minnesota Statutes, Sections 469.174 through 469.1799, both inclusive, as amended (collectively, the “Act”) on January 7, 2008; and

 

WHEREAS, the City wishes to modify the TIF Plan to include corrections made under Minnesota Statutes 469.177, Subdivision 13, by St. Louis County for the TIF District and to reduce the geographic area of the TIF District to reflect an agreement reached between the St. Louis County Auditor and the City of Mountain Iron; and

 

WHEREAS, the City Council has investigated the facts and has caused to be prepared a modification to the adopted TIF District and TIF Plan therein; and

 

WHEREAS, the City has performed all actions required by law to be performed prior to the modification of the TIF Plan, including, but not limited to, notification of St. Louis County and Independent School District No. 712 having taxing jurisdiction over the property included in the TIF District and the holding of a public hearing upon published and mailed notice as required by law.

 

NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF MOUNTAIN IRON, MINNESOTA:

 

1.         The modifications of the TIF District and TIF Plan as described in Attachment 1 of this resolution are hereby ratified and affirmed.

 

2.         The City Administrator is authorized and directed to transmit a certified copy of this resolution together with the modified TIF Plan to the Office of the State Auditor, the Minnesota Department of Revenue and St. Louis County.

 

DULY ADOPTED BY THE CITY COUNCIL THIS 20^TH DAY OF MAY, 2013.

 

 

 

______________________________

Mayor Gary Skalko

ATTEST:

 

 

 

____________________________________

City Administrator

ATTACHMENT 1

 

MODIFICATION NO. 1

TO AMENDED TAX INCREMENT FINANCING PLAN FOR

TAX INCREMENT DISTRICT NO. 14

WITHIN MUNCIPAL DEVELOPMENT DISTRICT NO. 1

 

Public Hearing Date:  May 20, 2013

Adoption Date:  _____________, 2013

 

I.          Introduction and Background

 

The purpose of the proposed Modification to the Tax Increment Financing Plan for Tax Increment Financing District No. 14 (“the District) is to modify the TIF Plan to include corrections made under Minnesota Statutes 469.177, Subdivision 13, by St. Louis County for the TIF District and to reduce the geographic area of the TIF District to reflect an agreement reached between the St. Louis County Auditor and the City of Mountain iron.

The sections of the Modified Plan specifically being modified (as detailed in Section II of this document) include:

• Article III. Section 3.10 Estimated Net Tax Capacity
• Article III, Section 3.13 Duration of Tax Increment Financing District No. 14
• Article III, Section 3.14 Fiscal Disparities
• Exhibit A – Description of Tax Increment Financing District No. 14
• Exhibit B – Estimated Project Costs
• Exhibit C – Impact on Other Taxing Jurisdictions
• Exhibit D – Tax Increment Details as Required by Minnesota Statutes 469.175(2)
• Exhibit E – Captured Tax Capacity and Estimated Tax Increment
• Exhibit F – Original Tax Capacity of All Parcels in the Tax Increment Financing District
• Exhibit G – Present Value Analysis as Required by Minnesota Statutes, Section 469.175(3)(2)
• Exhibit H – Estimated Semi-Annual Cash Flow

 

The City of Mountain Iron (the “City”) established Project Area No. 1 and adopted a tax increment financing plan (“TIF Plan”) for the District on February 20, 2008.  The City made the request for certification of the TIF District to the St. Louis County Auditor (the “County”) on June 19, 2008.  The TIF District certification date is September 30, 2008.  The County set the decertification of the TIF District to be December 31, 2018.

 

The County notified the City in a letter dated February 20, 2013 that a correction will be made to the District by the County pursuant to Minnesota Statute.  The County found that there were TIF payment errors involving the District. 

The County will utilize option number five (5) under Minnesota Statute 469.177, Subdivision 13, to take appropriate action so that the amount of increment compensates for the error.  The County contacted the State Auditor TIF Division and the Minnesota Department of Revenue regarding the error and was instructed that option number five was acceptable.

The County will extend the duration of the District for an additional three years.  This will be done to correct the lack of TIF Funds (payments to the City) that were generated for taxes payable in 2010, 2011, and 2012.  The new decertification date for the district is December 31, 2021; three years later than the original decertification date of December 31, 2018.

The City has determined modification to the District is necessary.  The original TIF Plan remains in full force and effect and are not modified except as described in this modification document.

 

II.        TIF Plan Modifications to TIF District No. 14

The following sections of the Original TIF Plan for TIF District No. 14, dated February 20, 2008, are modified as shown:

 

Article III. Section 3.10 Estimated Recent Net Tax Capacity.

Replaced in its entirety to read as follows:

The net tax capacity of all taxable property in Tax Increment Financing District No. 14, as most recently certified by the Commissioner of Revenue of the State at time of adoption of the Tax Increment Financing Plan, being the certification made in 2007 with respect to the net tax capacity of such property as of January 2, 2006, for taxes payable in 2007 is $0. 

In determining the original net tax capacity the net tax capacity of real property exempt from taxation at the time of the request shall be zero, except for real property which is tax exempt by reason of public ownership by the requesting authority and which has been publicly owned for less than one year prior to the date of the request for certification, in which event the net tax capacity of the property shall be the net tax capacity as most recently determined by the commissioner of revenue.  All property within the boundaries of Tax Increment Financing District No. 14 were publicly owned for more than one year prior to the date of the request for certification.

 

Article III, Section 3.13 Duration of Tax Increment Financing District No. 14:

Replaced in its entirety to read as follows:

The Tax Increment Financing Act allows “economic development districts” to remain in existence for a period of 8 years from the receipt of the first Tax Increments.  The County has informed the City in writing in a letter dated, February 20, 2013, the decertification date of Tax Increment Financing District No. 14 will be December 31, 2021.

 

Article III, Section 3.14 Fiscal Disparities:

Add New Section in its entirety to read as follows:

Fiscal disparity contributions attributable to the TIF District shall be made from property inside the boundaries of the TIF District as described in Minnesota Statutes 469.177, Subdivision 3.   Tax Increment Financing District No. 14 is an economic development district and the City does not have the authority to elect option (a) under Minnesota Statutes 469.177, Subdivision 3, to allow for fiscal disparities to be paid from property outside the boundaries of the TIF District.

 

 

 

 

Exhibit A – Description of Tax Increment Financing District No. 14:

Replaced in its entirety to read as follows:

The original TIF Plan included a single parcel, parcel number 175-0071-00880.  At time of adoption of the TIF Plan, on February 20, 2008, the parcel owner was the City of Mountain Iron.  This single parcel was subsequently subdivided into multiple parcels within the same geographic area.  The TIF Plan is amended to include a reduction in the geographic area of Tax Increment Financing District No. 14 and the parcels located in Tax Increment Financing District No. 14 are as follows:

175-0035-00020

175-0035-00030

175-0035-00040

175-0035-00050

175-0035-00060

175-0035-00070

175-0035-00080

175-0035-00090

175-0035-00170

 

 

Exhibit A (Continued):

The Map below shows the geographic boundaries of Project Area No. 1 and the modified boundaries of Tax Increment Financing District No. 14 (inclusive of the parcels listed in Exhibit A):

 

Exhibit B – Estimated Project Costs:

Replaced in its entirety to read as follows:

Mountain Iron
City of Mountain Iron
Tax Increment Financing District No. 14
Projected Use of Tax Increment
Estimated Tax Increment Revenues (from tax increment generated by the district)
Tax increment revenues distributed from the county	$846,000
Interest and investment earnings	$5,000
Sales/lease proceeds	$0
Market value homestead credit	$0
Total Estimated Tax Increment Revenues	$851,000
Estimated Project/Financing Costs (to be paid or financed with tax increment)
Project costs
Land/building acquisition	$0
Site improvements/preparation costs	$501,000
Utilities	$0
Other qualifying improvements	$0
Construction of affordable housing	$0
Small city authorized costs, if not already included above	$0
Administrative costs	$85,000
Estimated Tax Increment Project Costs	$586,000
Estimated financing costs
Interest expense	$265,000
Total Estimated Project/Financing Costs to be Paid from Tax Increment	$851,000
Estimated Financing
Total amount of bonds to be issued*	$501,000
*Estimate of Bonded Indebtedness – The City does not intend to issue Tax Increment Bonds to finance the above public costs.  Rather, the City intended to finance said costs on a pay as you go basis, including the payment of interest thereon via a Tax Increment Revenue note.  The City however, reserves the right to issue bonds to finance said public costs.

 

 

Exhibit C – Impact on Other Taxing Jurisdictions:

Replaced in its entirety to read as follows:

 

Exhibit D – Tax Increment Details as Required by Minnesota Statutes 469.175(2)

Replaced in its entirety to read as follows:

 

 

 

 

 

Exhibit E – Captured Tax Capacity and Estimated Tax Increment:

Replaced in its entirety to read as follows:

 

 

 

 

 

Exhibit F – Original Tax Capacity of All Parcels in the Tax Increment Financing District:

Deleted in its entirety.

 

Exhibit G – Present Value Analysis as Required by Minnesota Statutes, Section 469.175(3)(2):

Replaced in its entirety to read as follows:

 

 

Exhibit H – Estimated Semi-Annual Cash Flow:

            Deleted in its entirety.