As the TIF World Turns

Transcription

1 Iowa League of Cities 2012 Annual Conference & Exhibit As the TIF World Turns Handouts and presentations are available online at Mark Cory and Patricia Martin, Ahlers & Cooney

2 CAVEAT This Guide is intended for general informational purposes only. Answers to legal questions about Iowa urban renewal law can vary greatly depending upon the specific facts in a given situation. Please consult your attorney. 2

3 2012 UR Amendments Urban Renewal Report Must be completed for each UR Plan and Area in effect during the most recently ended fiscal year Affirmative vote of Council/Board Submit electronically by December 1 following the fiscal year 3

4 Urban Renewal Report Very detailed 21 paragraphs of information, including: Area designation; submission of all ordinances and amendments to UR Plan; maps List of all UR Projects in process and completed List of all expenditures from special fund and the relating UR Project (not required for 12/1/12 report) Amount of property taxes rebated and list of those properties Assessed value of UR Areas, portion of assessed value used to calculate incremental taxes, and portion released to other taxing entities Start organizing and drafting EARLY! 4

5 Consequence for Reporting Non- Compliance Urban Renewal Report & Annual Financial Report Due by December 1 following end of fiscal year Prior to publication and adoption of budget for fiscal year after December deadline Otherwise: Department of Management will not certify city or county s taxes back to county auditor Does not apply to reports due Dec. 1,

6 Amendments to Urban Renewal Plans Urban Renewal Project must be included in the plan or an amendment to plan Public improvements Development Agreements Conveyance or Acquisition of Property Blight Remediation LMI Match Planning, engineering fees, attorneys fees and costs No Planning & Zoning review for amendments (just for new plans) 6

7 Think About TIF Authorization a Little Differently Tie these 3 things together: 1. Authority for the UR Project in the Plan (description and dollar amount). 2. Resolution by Council/Board approving the expenditure as an UR Project, authorizing payment, and directing it be included in December 1 certification to county. 3. December 1 certification to the county auditor of the expense. 7

8 When to Amend? As needed; and/or Annually 8

9 ASAP (new plan only) COUNCIL/BOARD Resolution to set hearing and consulatation Refer to P&Z (only new plans, not required for amendments) Receive reports on consultation Receive report from P&Z (only new plans, not required for amendments) CLERK/ AUDITOR OR DESIGNATED STAFF Obtain written permission of all Ag owners and city/county joint agreement (if applicable). Draft UR Plan is approved by Staff and Counsel Send copy of plan, resolution, notices of consultation and public hearing to affected taxing entities. Designated Representative Holds Consultation Written response to consultation parties Report to Council/Board Hold Hearing Pass Ordinance Publish Ordinance Record Plan File copy of TIF ordinance with county auditor AFFECTED TAXING ENTITIES Written comments about plan. P&Z (only required for new plans, not required for amendments) Receipt by P&Z (new plan only) NOTMORE THAN 30 DAYS P&Z report to council/board (new plan only) 9

10 Relocation of Business Limited Cannot use TIF Reimbursement for Urban Renewal Projects that include the relocation of a business from county or contiguous county 2 exceptions Written agreement between the two municipalities Finding that relocation is in the public interest (out of state move) Relocation, closure or substantial reduction of existing operations And start up of substantially the same operation in the same county or a contiguous county Does not limit expansion as long as no closure or substantial reduction of existing operation 10

11 TIF Audit and Certificate of Compliance Each city or county audit includes examination of TIF compliance under section City/County must annually certify compliance. State Auditor will provide information and rules on this certification 11

12 Changes to TIF Certification TIF Certification must also include Interest negotiated Amounts which qualify for payment from TIF in the next fiscal year and any subsequent fiscal year 12

13 Using TIF for Public Buildings If proposed Urban Renewal Plan or amendment includes use of TIF for a public building: Analysis of alternative development options and funding must be included in information with consultation notice Show such alternatives are less feasible than using TIF for the project Also include with annual Urban Renewal Report Police Station Fire Station Administration Building Swimming Pool Hospital Library Recreational Building City Hall Other public building exempt from taxation 13

14 No Redetermination of Area Type Urban Renewal Areas can no longer be redetermined once they are designated. i.e. Cannot amend a pure economic development plan to include a blight area. 14

15 Instructional Support Program Levy (ISPL) Must be needed to pay principal and interest of TIF debt If TIF debt was incurred: On or before April 24, 2012 Beginning fiscal year Must notify county by July 1 of each fiscal year to receive ISPL revenues (suggest notifying school too) After April 24, 2012 Not eligible to receive ISPL revenues [unless school district passes resolution allowing use] Process is virtually identical to PPEL notification process 15

16 Community Colleges No longer defined as an affected taxing entity. Not required to receive notice of public hearing or consultation. Not required to agree to extension of housing agreement for cities under 15,

17 Surplus Balance in Inactive Funds If the necessity for the TIF special fund no ceases to exist and a balance remains: Balance cannot be transferred to another fund Balance must be paid into the funds for the respective taxing districts 17

18 Use of Interest Earned on TIF Interest earned on amounts in special fund must be deposited into the special fund Net proceeds from sale of assets purchased using TIF money shall be deposited in special fund. No transfers are allowed from the special fund except for payment of loans, advances, etc. that qualify for payment from the special fund. 18

19 POINT --COUNTERPOINT IF YOU HAVE AN AREA THAT IS DESIGNATED AS ECONOMIC DEVELOPMENT, CAN YOU ADD AN AMENDMENT AREA DESIGNATED AS BLIGHT? 19

20 POINT --COUNTERPOINT CAN YOU EXECUTE A TIF REBATE DEVELOPMENT AGREEMENT WITH A DEVELOPER WHO BUILDS AN OFFICE BUILDING FOR A TENANT WHO IS RELOCATING FROM AN ADJACENT COUNTY?

21 POINT -- COUNTERPOINT IT IS HARD TO JUSTIFY USING TIF ON A PUBLIC BUILDING 21

22 POINT --COUNTERPOINT DO YOU HAVE TO AMEND THE PLAN FOR EACH DEVELOPMENT AGREEMENT, I.E. ABC COMPANY, EFG LIMITED PARTNERSHIP, XYZ, LLC?

23 POINT --COUNTERPOINT DO YOU HAVE TO INCLUDE INFORMATION ON THE UR REPORT FOR AREAS THAT DID NOT SPEND TIF DOLLARS ON AN URBAN RENEWAL PROJECT DURING THE FISCAL YEAR THAT IS THE SUBJECT OF YOUR REPORT? 23

24 POINT --COUNTERPOINT What was the legislature s estimated cost for the 399 Local governments with active TIFs to comply with the UR Report requirement?

25 Answer!!! 399 Local Governments with active TIF s 12 Hours of administrative staff time devoted X 40 Dollars per hour value of staff time $192,000 Estimated statewide expense (Source: HF2460 Fiscal Note)

26 QUESTIONS? Contact Information: R. Mark Cory (515) Patricia J. Martin (515) Ahlers & Cooney, P.C. 26