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Home My WebLink About4.b. Discussion of Carlson Tractor Site Redevelopment Plan CITY OF ROSEMOUNT EXECIITIVE SIIbmIARY FOR ACTION PORT AUTHORITY MEETING DATE: NOVEMBER 1, 1994 AGENDA ITEM: DISCUSSION OF CARLSON TRACTOR AGII�TDA SECTION: SITE REDEVELOPMENT PLAN OLD BUSINESS PREPARED BY: JOHN MILLER, AGENDA NO. ECONOMIC DEVELOPMENT COORDINATOR 4. B. ATTACHM'ENTS: NONE APPROVED BY: Mr. David Drown from Springsted Inc. will be at the board' s November 1 meeting. He wants to discuss financial considerations of the Carlson Tractor site redevelopment plan with the members. These include the efforts on Fiscal Disparities Act distributions and local government aid. Mr. Drown will provide the members with projections at the November 1 meeting and lead an exercise that will allow for the resolution of several fiscal policy questions. RECObmiENDED ACTION: Discussion item only. PORT AUTHORITY ACTION: Ta�c Increment Financing Summa Re ort Gity of Rosemount, Minnesota Proposed Tax Increment Financing District- Carison Project Scenario D2 - Phases J, It and III (17 Years of TI, FID From Outside 71F DisVict) Type of Tax lncrement Financing District Redevebpment Ma�cimum Duration af TIF District 25 years from ist increment Certfication Date of TIF District 01/01/95 Decertification Date of TiF District 12/Ot/2013 (17 Years of incremer� Maximum Duration of TiF District 0�/01l�21 1995It 996 1996/1997 1997/1998 1998/7 999 Total Estimated Market Value $521 500 $2,094,2U0 $2,594,200 $4,�44,200 Future P.V. Ma�cimum Loan Amount @ 9.00°,6 $1,185,000 Value @ 5.0096 Maximum Bond Issue @ 0.000%(NIG) NA Adm./Pooling(10.00%} 326,533 193,960 Loss of LGA/HACA ($384.303) ($182�623 Net Proceeds NA Capitalized interest NA Gross Surpius (Shortage) ($57,770) $11,337 Underwriters Discount NA City Taxes From Project 0 0 Administration NA ' Net surpius (snortage) (s�,no) ��,�� Annuaj Annuai Admin. Annua! Gity Taxes Projected Perrod Gross Tax Retainage Net Ta�c Bond ' Cumulative From Loss of Ending increment 10.00°k Increment Payments Balance Project LGA/HACA (1) (2) (g (4) (5) (6) (� . ($) �2/d1/� 0 0 0 NA NA 0 0 02(01/97 0 0 0 NA NA 0 0 02/01/98 90,913 9,Q91 81,822 NA NA 0 0 02/p1/99 119,817 �.11,982 107,835 NA NA 0 0 02/01/2000 203,637 20,364 183,273 NA NA 0 0 02/d1/2001 203,637 20,364 183,273 NA NA 0 0 02/fl1/2002 203,637 20,364 183,273 NA NA 0 0 02/01/2003 203,637 20,364 183,273 NA NA 0 4,223 02/01/2004 203,637 20,364 183,273 NA NA 0 8,446 02/01/2005 203,637 �20,364 183,273 NA NA 0 12,669 02/01/2Q06 203,637 20,364 183,273 NA NA -0 16,892 02/O1J2007 203,637 20,364 183,273 NA NA 0 21,116 02/Oi/2008 203,637 20,364 183,273 NA NA 0 25,339 02/01/2009 203,637 20,364 183,273 NA NA 4 29,562 02/01/20f0 203,637 � 20,364 183,273 NA NA 0 33,785 02/01/2011 203,637 0,364 183,273 NA NA 0 38,008 02/01/2012 203,637 ,364 183,273 NA NA 0 42,231 02/01/2Q13 203,637 ( 20;364 183,273 NA NA -0 46,454 02/01/2014 203,637 1 20,364 183,273 NA NA 0' 50,67T 02/0112015 0 0 0 NA NA Q 54�901 �2/01/2016 0 0 0 NA NA 0 Q 02/01/2Q17 0 't 0 D NA NA 0 � 02/0112018 0 0 0 NA NA 0 -0 $3r265,285 $3 6,533 $2,938,752 NA $0 $384�303 '`�, Prepared by: Springsted Incorporated (31-Ocf=�'�4 j�__�. � , �. , , . W:\WORK�REPORTSWIN\ROSEMOU6.TIF � � ��► . • � City of Rosemount, Minnesota Tax Inc�ement Financing Plan for Tax increment Financing (Redevelo�ment) District No. (Carlson Project) Dated: November 1, 1994 �r � . TABLE OF CONTENTS Section Paae(s1 ADefinitions ............................................................................................. 1 B Statement of Need and Public Purpose ................................................. 1 C Statement of Authorization .................................................................... 1 D Statement of Objectives ........................................:............................... 1 E Designation of Tax Increment Financing District as a Redevelopment District ................................................................... 1-2 F Duratian of the TIF District .................................................................... 3 G Property to be Included in the TIF District ............................................. 3 H Property to be Acquired in the TIF District.............................................. 3 I Specific Development Expected to Occur Within the TIF District ........... 3 J Findings and Need for Tax Increment Financing ................................... 4 K Estimated Public Costs ......................................................................... 4-5 L Estimated Amount of Bonded Indebtedness ......................................... 5 M Estimated Sources of Revenue ............................................................. 5 N Original Net Tax Capacity ..................................................................... 5 O Original Tax Capacity Rate ................................................................... 6 P Projected Retained Gaptured Net Tax Capacity and6 Projected Tax Increment ................................................................. 6 Q Use of Tax Increment............................................................................. 7 R Excess Tax Increment.............•.............................................................. 7-8 STax Increment Pooling .......................................................................... 8 T Limitatian on Administrative Expenses .................................................. 8-9 U Limitation on Property Not Subject to Improvements ............................. 9 V Estimated Impact on Other Taxing Jurisdictions ................................... 9 W Loca{ Government Aid Penalry .............................................................. 9 X Prior Planned Improvements ................................................................. 9 Y Development Agreements ..................................................................... 10 Z Assessment Agreements ...................................................................... 10 AA Modifications of the Tax Increment Financing Plan ............................... 10 AB Administration of the Tax Increment Financing Plan ............................. 10-11 AC Financial Reporting and Disclosure Requirements ................................ 11-13 Map of the Tax Increment Financing District.......................................................... EXHfBIT I Projected Tax Increment Report............................................................................ EXHIBIT II Projected Loss of LGA/HACA Report .................................................................... EXHIBIT III Estimated Impact on Other Taxing Jurisdictions Report ........................................ EXHIBIT IV .� ,� : City of Rosemount, Minnesota ; Section A Definitions The terms defined in this section have the meanings given herein, unless the context in which they are used indicates a different meaning: "Authoritv" means the Port Authority in and for the City of Rosemount, Minnesota. "Citv„ means the City of Rosemount, Minnesota; also referred to as a "Munici a� litv". "C�.y Council" means the City Council of the City; also referred to as the "Goveminq Bodv". " � " means Dakota County, Minnesota. "Develoqment District" means Municipal Development District No. in the City, which is described in the corresponding Development Program. " evelo�ment Program" means the Development P�ogram for the Deveiopment District "Project Area" means the geographic area of the Development District. "School District" means Independent School District No. 196, Minnesota. " " means the State of Minnesota. "TIF Act„ means Minnesota Statutes, Sections 469.174 through 469.179, both inclusive. "TIF DistricY' means Tax Increment Financing (Redevelopment) District No. "TIF Plan" means the tax increment financing plan for the TIF District (this document). Section B Statement of Need and Public Purpose See Section of the Development Program for the Development District Section C Statement of Autharization See Section of the Development Program for the Develapment District. Section D Statement of Objectives See Section of the Development Program for the Development District. ��Section E Designation of Tax Increment Financing District as a Redeve{opment District Redevelopment districts are a type of tax increment financing district in which one o# the following conditions exists and is reasonably distributed throughout the district: (1) parcels comprising at least 70% of the area of the district are occupied by buildings, streets, utilities, or other improvements, and more than 50% of the buildings (not inctuding outbuildings) are structural{y substandard requiring substantial renovation or G'� SPRINGSTED Page 1 ' i . � ' City of Rosemount, Minnesota � ciearance. A parcel is deemed "occupied" if at least 15% of the area of the parcel contains some type of improvement; or (2) the property consists of vacant, unused, underused, inappropriately used, or infrequently used railyards, rail storage facilities, or excessive or vacated railroad right- of-ways. For districts consisting of two more noncontiguous areas, each area must individuaAy qualify under the provisions listed above, as well as the entire area must afso qualify as a whole. The TIF District qualifies as a redevelopment district in that it meets all of the criteria listed in (1) above. The supporting facts and documentation for this determination will be retained for the life of the TIF District and are available to the public upon �equest. "Structurally substandard" is defined as buildings containing defects or deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection (including egress), layout and condition of interior partitions, or similar factors. A building is not structurally substandard if it is in compliance with the building code applicable to a new building, or could be modified to satisfy the existing code at a cost of less than 15% of the cost of constructing a new structure of the same size and type. The City may find that a building is structurally substandard without an interior inspection or an independent expert appraisal, if there exists "reasonably available evidence" to support this conclusion. Such evidence may include size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar information. A parcel is deemed to be occupied by a structurally substandard building if the following conditions are meet: (1) the parcel was occupied by a substandard building within a three-year period prior to the parcels inclusion in the district; and . (2) if the substandard building was demolished or removed within the three year period, . such demolition or removal was performed or financed by the Authority, or was performed by a developer under a development agreement with the Authority. In addition, the Authority must have found by resolution before such demolition or removal occurred that the building was structurally substandard and that the Authority intended to include the parcel in the TIF District. In the case of (2) above, the County Auditor shall certify the Original Net Tax Capacity of the parcel to be the greater of (a) the current tax capacity of the parcel, or (b) a computed tax capacity of the parcel using the estimated market value of the parcel for the year in which the demolition or removal occurred, and the appropriate classification rate(s} for the current year. At least 90 percent of the tax increment derived from the TIF District must be used to finance the cost of correcting conditions that allow designation as a redevelopment district. These costs include acquiring properties containing structurally substandard buildings or improvements, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition of structures, clearing of land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the Authority may be included in the qualifying costs. F1 SPRINGSTED Page 2 - � � ' City of Rosemount, Minnesota Section F Duration of the TIF District Redevelopment districts may remain in existence 25 years from the date of receipt of the first tax increment. This term shall be reduced to 20 years if the Authority elects to delay receipt of the first tax increment until a minimum market value for the TIF District is reached or exceeded, or four years have elapsed from the date of certification, whichever is earlier. Modifications of this plan (see Section AA) shall not extend these limitations. The Authority does not elect to delay receipt of the first tax increment, and anticipates that the TIF District will remain in existence the maximum duration allowed by law (anticipated to be July 2021). All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. In addition, no tax increments shal! be paid to the Authority from the TIF District after three years from the date of certificatian unless within that time period: (1) bonds have been issued in aid of the Project Area (except revenue bonds issued pursuant to M.S. Sections 469.152 to 469.165); (2) the Autt�ority has acquired property within the TIF District; or (3) the Authority has constructed public improvements within the TIF District. Section G Property to be Inciuded in the TIF District The TIF District is a two parcel area focated within the Development District. A map showing the location of the TIF District is shown in Exhibit 1. The boundaries and area encompassed by the TIF District are described below: Parcel ID Number Legal Descri tp ion 34-71 1 50-021-04 [To Be Addedj 34-71150-032-04 [To Be Added] The area encompassed by the TIF District shall also include all street, alley and railroad right- of-way and utility or drainage easements located upon or adjacent to the property described above. Section H Property to be Acquired in the TtF District The Autharity may aequire and sell any or all of the property lacated within the TIF District; however, the Authority does not anticipate at this time acquiring any property located within the TIF District. �Section I Specific Development Expected to Occur Within the TIF District At the present time, proposed development in the TIF District includes construction of a 46-unit hote! and associated restaurant in 1995 (Phase I), construction of a fast faot restaurant in 1996 (Phase II) and construction of an automotive/service center and daycare facility in 1997 (Phase fll). It is anticipated that existing structures in the T1F District will be demolished in 1995 or 1996. At the time this document was prepared there were no signed constnaction contracts with regards to the proposed development. G� SPRINGSTED Page 3 � � � City of Rosemount, Minnesota Section J Findings and Need for Tax increment Financing In establishing the TIF District, the City makes the following findings: (1) The TIF District qualifies as a redevelopment district; See Section E of this document for the reasons and facts suppo�ting this finding. � (2) The proposed development, in the opinion of the City, wou(d not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and therefore the use of tax increment financing is deemed necessary; The reasons and facts supporting this finding are that the developer has represented to the Authority that it would not undertake the proposed development without the assistance of tax increment financing. Private investment will not finance these development activities because of prohibitive costs. It is necessary to finance these development activities through the use of tax increment financing so that other development by private enterprise will occur within the Develapment District. (3) The TIF Plan conforms to the general plan for development or redevelopment of the City as a whole; and The reasons and facts supporting this finding are that tne TIF District is properly zoned and the TIF Plan will generally compliment and serve to implement policies adapted in the City's comprehensive plan. (4) The TIF Plan will afford maxirnum opportunity, consistent with the sound needs of the City as a whole, for the deve{opment of the Project Area by private enterprise. ' The reasons and facts suppo�ting this finding are that the develapment activities are neeessary so that develapment and redevelopment by private enterprise can occur within the Development District. � Sectian K Estimated Public Costs The estimated public costs of the proposed development in the TIF District are listed below. Such costs are eligibls for reimbursement from tax increments of the TIF District. Land Acquisition /Writedown $ 650,000 On-Site Street Utilities 210,000 Soil Contamination 150,000 Building Demolition 125,000 Site Grading 50,000 Relocation Costs 250.000 Subtotal $1,435,000 Capitalized Interest 300,000 Administration 190.Q00 Total Public Costs $1.925,000 F1 SPRINGSTED Page 4 � ' City of Rosemount, Minnesota The Authority reserves the right to adjust the amount of any of the items listed above or to incorporate additional eligib(e items, so long as the total estimated public cost is not increased. Section L Estimated Amount of Bonded Endebtedness The Authority anticipates providing financial assistance to the proposed development through the use of a pay-as-you-go technique. As tax increments are collected from the TIF District in future years, a portion of these taxes will be distributed to the developer as reimbursement for eligible public costs incurred (see Section K). Reimbursement may include accrued interest calcuiated at a rate not to exceed 9.50%. In no event will the total reimbursements exceed the tota! estimated public costs plus accrued interest. The Authority reserves the right to finance any or all eligible public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation debt, or any other financing mechanism authorized by law. General obfigation tax increment bonds issued to finance the estimated public costs of the TIF District shall not exceed $1,925,000. Section M Estimated Sources of Revenue Estimated public costs of the TIF District (see Section K) wil{ be financed through the collection of tax increments from the TIF District. The Authority reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section N Original Net Tax Capacity The County Auditor shall certify the Original Net Tax Capacity of the TIF District, which will be the total net tax capacity af all property in the TIF District as certified by the State Commissianer of Revenue. For districts certified befinreen January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31, inclusive, this value is based on the current assessment year. The Estimated Market Value of all praperty within the TIF District as of January 2, 1994, for taxes payable in 1995, is $619,100. Upon establishment of the TIF Distri�t, and subsequent rec(assification of property, it is estimated that the Original Net Tax Capacity of the TIF District will be approximately $26,879. Each year the County Auditor shall certify the amount that the Original Net Tax Capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; (2) reductions or enfargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements; or (4) changes in classification rates. F1 SPRINGSTED Page 5 , ,� '• City of Rosemount, Mi�nesota Section O Original Tax Capacity Rate The County Auditor shall also certify the Original Tax Capacity Rate of the TIF District. This rate shall be the sum of all local tax rates that apply to prope�ty in the TIF District. This rate shall be for the same taxes payable year as the 4riginal Net Tax Capacity. In future years, the amount of tax increment generated by the TIF District will be calculated using the lessor of (a) the sum of the current local tax rates at that time or (b) the Original Tax Capacity Rate of the TIF District. At the time this document was prepared, the sum of all local tax rates that apply to property in the TIF District, for taxes levied in 1994 and payable in 1995, was not yet avaiiable. When this totat becomes available, the County Auditor shall certify this amaunt as the Original Tax Capacity Rate of the TIF District. For purposes of estimating the tax increment generated by the TIF District, the sum of the local tax rates for taxes levied in 1993 and payable in 1994, is 125.668% as shown below. 1993/1994 Taxing Jurisdiction Local Tax Rate City of Rosemount 32.297% Dakota County 27.474% Independent School District#196 60.933% Other 4. 4% Total 125.668% Section P Projected Retained Captured Net Tax Capacity and Rrajected Tax tncrement Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the Original Net Tax Capacity, the difference shall be known as the Captured Net Tax Capacity of the TIF District. For communities affected by the fiscal disparity provisions of Minnesota Statutes, Chapter 473F, the Original Net Tax Capacity of the TIF District shall be determined before the application of fiscal disparity. In subsequent years, the current net tax capacity shall either (a) be determined before the application of fiscaf disparity or (b) exclude the product of any fiscal disparity increase in the TIF District (since the Original Net Tax Capacity was certified) times the appropriate fiscal dispa�ity ratio. The method the Authority elects shall remain the same for the life of the TIF District, except that a single change may be made at any time from method (a) to method (b) above. The Authority elects option (a) in the determination of the current net tax capacity of the TIF District. The County Auditor shall certify to the Authority the amount of Captured Net Tax Capacity each year. The Authority may choose to retain any or all of this amount. It is the Authority's intention to retain 100% of the Captured Net Tax Capacity of the TIF District. Such amount shall be known as the Retained Captured Net Tax Capacity of the TIF District. The projected tax increment generated over the life of the TIF District is shown in Exhibit II. G� SPRINGSTED Page 6 � � City of Rosemount, Minnesota Section Q Use of Tax Increment The Authority has determined that it wili use 100% of the tax increments generated by the TIF District for any of the foliowing purposes: (1) Pay for the estimated public costs of the TIF District (see Section K) and County administrative costs associated with the TIF District (see Section �; (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a resenre securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road casts as may be required by the County Board under M.S. Section 469.175, Subdivision 1a; or (5) retum excess tax increments to the County Auditor for redistribution to the City, County and School District in proportion to their local tax capacity rates. Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless both county boards involved waive this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used ta finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of govemment or the State or federal government. This prohibition does not apply to the construction or renovation of a parking structure, a common area used as a public park, or a facility used for social, recreational, or canference purposes and not primarily for conducting the business of the community. If there exists any type of agreement or arrangement providing for the cieveloper, or other beneficiary of assistance, to �epay all or a portion of the assistance that was paid or financed with tax inc�ements, such payments shal( be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sales of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connectians, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section R Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan, the Authority shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereon; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or F1 SPRINGSTED Page 7 . � ' City of Rosemount, Minnesota (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District in proportion to their local tax capacity rates. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such reciistribution. Section S Tax Increment Pooling In general, at least 75% of the tax increments from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No more than 25% of the tax increments may be spent on costs outside of the TIF District, but within the boundaries of the Project Area. All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if, within five years after certification, such amounts were used to: (1) make payments to a third party for activities performed within the TIF District; (2) make payments or reimbursements under binding contracts to a third party for activities performed within the TIF District; or (3) pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year period or a reasonable temporary period or are deposited in a reasanably required reserve or replacement fund. Beginning with the sixth year following certification of the TIF District, at least 75% of the tax increments must be used to pay outst'anding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractuai obligations, the TfF District must be decertified. The Authority does not anticipate that tax increments will be spent outside of the TIF District (except for allowable administrative expenses); however, the Authority does reserve the right to allow for tax increment pooling from the TIF District in the future. Section T Limitation on Administrative Expenses Administrative expenses are defined as a11 costs of the Authority other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the proposed development within the TIF . District; (3) relocation benefits paid to, or services provided for, persons or businesses located within the TIF District; or (4) amounts used to pay interest on, fund a reserve for, or sell at a discount, tax increment bonds. Administrative expenses include amounts paid for services provided by bond counsel, fiscal . consultants, planning or economic development consultants, and actual costs incurred by the F1 SPRtNGSTED Page 8 � ` City of Rosemount, Minnesota County in administering the TIF District. Tax increments may be used to pay administrative expenses of the TIF District up to the lessor of (a) 10% of the total estimated public costs authorized by the TIF Plan or (b) 10% of the total tax increment expenditures of the project. Section U Limitation on Property Not Subject to Improvements If after four years from certification of the TIF District no demolition, rehabilitation, renovation, o� qualified improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the Original Net Tax Capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the Original Net Tax Capacity of the TIF District. Section V Estimated Impact on Other Taxing Jurisdictions Exhibit IV shows the estimated impact on other taxing jurisdictions if the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to the other jurisdictions. The Authority believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred witnout the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will accur when the TIF District is decertified and the development therein becomes part of the general tax base. Section W Loca{ Government Aid Penalty Tax increment financing districts estab(ished or expanded after April 30, 1990 may cause a reduction in the local government aid (LGA/HACA) received by the City from the State. Such reduction is an offset to the decrease in state aid the School District would otherwise receive, due to the manner in which the Retained Captured Net Tax Capacity of the TIF District is treated in the school aids formula. Exhibit III shows the projected {oss of LGA/HACA payments to the City, beginning no sooner than the year after the first tax increment is received. Section X Prior Planned Improvements The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the Original Net Tax Capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. GJ SPRINGSTED Page 9 � ' City of Rosemount, Minnesota Section Y Development Agreements If more than 25°� of the acreage of a project (which contains a redevelopment district) is to be acquired by the Authority with proceeds from tax increment bonds then, prior to such acquisition, the Authority must enter into an agreement for the development of the property. Such agreement must provide recourse for the Authority should the development not be completed. The Authority anticipates entering into an agreement for development. Section Z Assessment Agreements The Authority may, upon entering into a development agreement, also enter into an assessment agreement with the developer, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. � The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value cantained in the assessment agreement appears to be a reasonable estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of �he County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and Schoof District. The Authority anticipates entering into an assessment agreement. Section AA Modifications af the Tax Increment Financing Plan Any reduction or en{argement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the Capfured Net Tax Capacity to be retained by the Authority; increase in the total estimated public costs; or designation of additional property to be acquired by the Authority shall be approved only after satisfying a!I the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1} the only modification is elimination of parcels from the Project Area or the TIF District; and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TfF District's Original Net Tax Capacity, or the Authority agrees that the TIF District's Original Net Tax Capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority must notify the County Auditar of any modification that reduces or enlarges the geographic area of the Project Area or the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. Section AB Administration of the Tax tncrement Financing Plan Upon adoption of the TIF Pfan, the Authority shal� submit a copy of such plan to the Minnesota Department of Revenue. The Authority shall also request that the County Auditor certify the F1 SPRINGSTED Page 10 � � City of Rosemount, Minnesota Original Net Tax Capacity and Net Tax Capacity Rate of the TIF District. To assist the County Auditor in this process, the Authority shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The Authority shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TIF District, and shall� request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax increment in any year represents the total property taxes generated by the Retained Captured Net Tax Capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan, the following actions should occur on an annual basis: (1) prior to July 1, the Authority shall notify the County Assessor of any new devefopment that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, on or before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the Original Net Tax Capacity of the T{F District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax-exempt to taxable shall be added to the Original Net Tax Capacity of the TIF District. The reverse shall a(so apply; (b) the Original Net Tax Capacity may be modified by any approved en{argement or reduction of the TIF District; (c) if the TIF District is classified as an economic development district, then the Original Net Tax Capacity shall be increased by the amount of the annual adjustment factor; and (d) if laws governing the classification of real property cause changes to the percentage of Estimated Market Value to be applied for property tax purposes, then the resulting increase or decrease in net tax capacity shall be applied proportionately to the Original PVet Tax Capacity and the Retained Captured Net Tax Capacity of the TIF District. The County Auditor shall notify the Authority of all changes made to the Original Net Tax Capacity of the TIF District. Section AC Financial Reparting and Disclosure Requirements The Commissioner of Revenue shall enforce the provisions of the TIF Act; however, the responsibility for financiaf and compliance auditing of the Authority's use of tax increment financing lies with the State Auditor. The Authority must submit to the State Auditor, on or F1 SPRINGSTED Page 11 � � City of Rosemounf, Minnesota before July 1, an annual financial report for the TIF District. The report must also be provided to the City Council, School District Board and the County Board. This report shall: (1) provide full disclosure of the sources and uses of public funds in the TIF District; (2) permit compa�ison and reconciliation of the accounts and financial reports; (3) permit auditing of the funds expended on behalf of the Tlf District; and (4) be consistent with generally accepted accounting principles. In addition, the report shall contain the following information: (1) the Original Net Tax Capacity of the TIF District; (2) the Captured Net Tax Capacity of the TIF District, including the amount of any Captured Net Tax Capacity shared with other taxing jurisdictions; (3) the outstanding principal amount of bonds issued or other loans incurred to finance public costs in the TIF District; (4) for the repo�ting period and for the duration of the TIF District, the amount budgeted under the TIF Plan, and the actua! amount expended for, at least, the following categories: (a) acquisition of land and buildings through condemnation or purchase; (b) site improvements or preparation costs; (c) installation of public utilities or other public improvements; and (d) administrative costs, including the al{ocated cost of the Authority. - (5) for properties sold to developers, the total cost of the property to the Authority and the price paid by the developer; and (6) the amount of tax-exempt obligations, other than those reported under clause (3), that were issued on behalf of private parties for facilities located within the TfF District. The City must also annually report to the State Commissioner of Revenue, by March 1 of each year, the following: (1) forthe entire City: (a) the total principal amount of nondefeased tax increment bonds outstanding at the end of the previous calendar year; and (b) the total amount of principal and interest payments that are due for the current ca{endar year on tax increment bonds. (2) far each tax increment financing district in the City: (a) the type of district; GJ SPRINGSTED Page 12 ' ' City of Rosemount, Minnesota (b) the date the TIF District is required to be decertified; (c) the Captured Net Tax Capacity of the TIF District, by property ciass, for taxes payable in the current calendar year; (d) the tax increment revenues for taxes payable in the current calendar year; (e) whether the TIF Plan permits tax increment revenues to be expended for activities located outside of the TIF District, and (fl any additional information that the Commissioner of Revenue may require. GJ SPRINGSTED Page 13 - � EXHIBIT I Tax Increment Financing District No. (?) (Redevelopment) r -- - - N c.s.a.N. �ro. 42 �� N N 88�'S'S�'S7�E 1 wrw� :...;!ap,�, N� �, -�� lV� �"-�. - _ a0 o�p'' O_ . t.....:� . f , � O1°' ;'� d^ Parcei E ,� ca � v � _-.. j , .. zaa.�o . . � �,r 2 .. �. . _ .. - C � ' � ' / Q �:� �. � _ " / .. �j ,� �a � —Parcals � � / $ , �_r' � 1 .,., . a , o, `. � °-1 ; � O N i . . � C " � J � - • • • ; 1 • � t ' . `� . � . I ` r �� v .` . ♦ N . • � ' � �'i / � ; •o�•'� t �/ � � � �� ed�� • �� \7 _ • "^1 . =Porcel—�`C� - - . �..�h�� / /i � P'rojected Loss of LGA/HACA Report � . , City of Rosemount, Minnesota Tax Increment Financing (Redevelopment) District No. (?) . Carlson Project (Phases 1, II and III) Retained Times: Qualifying Divided by: Adjusted Times: Annual Captured Captured I.S.D. Captured I.S.D. Projected Period Net Tax Phase—In Net Tax Sales Net Tax Equalized Loss of Ending Capacity Percent Capacity Ratio Capacity Tax Rate LGA/HACA �1) �2) (3) �4) �5) �6) (�) (8) 12/31/95 0 0.00% 0 94.20% 0 39.28% 0 12/:�1/96 0 0.00% 0 94.20% 0 39.28% 0 12/31/97 72,344 0.00°/a 0 94.20% 0 39.28% 0 12/31/98 95,344 0.00% 0 94.20% 0 39.28% 0 12/31/99 162,044 0.00% 0 94.20% 0 39.28% 0 12/31/2000 162,044 0.00% 0 94.20% 0 39.28% 0 12/31/2001 162,044 625% 10,128 94.20% 10,752 39.28% 0 12/31J2002 162,044 12.50% 20,256 94.20% 21,503 39.28% 4,223 12/31/2003 162,044 18.75% 30,383 94.20% 32,254 39.28% 8,446 12/31/2004 162,044 25.00% 40,511 94.20% 43,005 39.28% 12,669 12/31/2005 162,044 31.25% 50,639 94.20% 53,757 39.28% 16,892 12/31/2006 162,044 37.50% 60,767 94.20% 64,508 39.28% 21,116 12/31/2007 162,044 43.75% 70,894 94.20% 75,259 39.28% 25,339 12/31/2008 162,044 50.00% 81,022 94.20% 86,011 39.28% 29,562 12/31/2009 162,044 56.25% 91,150 94.20% 96,762 39.28% 33,785 12/31/2010 162,044 62.50% 101,278 94.20% 107,514 39.28% 38,008 12J31/2011 162,044 68.75% 111,405 94.20% 118,264 39.28% 42,231 12/31/2012 162,044 75.00% 121,533 94.20% 129,016 39.28% 46,454 12/31/2013 162,044 81.25% 131�661 94.20% 139,768 39.28% 50,677 12/31/2014 0 87.50% 0 94.20% 0 39.28% 54,901 12/31/2015 0 93.75% 0 94.20% 0 39.28% • 0 X 12/31/2016 0 100.00% 0 94.20% 0 39.28% 0 = � 12/31/2017 0 100.00% 0 94.20% 0 39.28% 0 � $384,303 � Prepared by: Springsted Incorporated (01—Nov-94) __ - ----- -------------------- { Projected Tax lncrement Report � . . City of Rosemount, Minnesota Tax Increment Financing (Redevelopment) District No: (?) Carlson Project (Phases I, 11 and III) Less: Less: Retained Times: Less: Annual Total Original Fiscal Captured Tax Annual Adm./Pooling Annual Period Net Tax Net Tax Disparities @ Net Tax Capacity G�oss Tax Retainage Net Tax Ending Capacity Capacity 0.0000% Capacity Rate Increment 10.00% Increment (�) (2) (3) (4) (5) (6) (�) (8) (9) 12/31/95 22,389 22,389 0 0 125.668% 0 0 0 12/31/96 22,389 22,389 0 0 125.668% 0 0 0 12/31/97 94,733 22,389 0 72,344 125.668% 90,913 9,091 81,822 12/31/9$ 117,733 22,389 0 95,344 125.668% 119,817 11,982 107,835 12/31/99 1$4,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2000 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 � 12/31/2001 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2002 184,433 22,389 0 162,044 125.66$% 203,637 20,364 183,273 12/31/2003 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2004 184,433 22,389 0 162,044 125.668% 203,637 20,364 � 183,273 12/31/2005 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2006 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2007 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2008 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2009 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2010 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2011 184,433 22,3$9 0 162,044 125.668% 203,637 20,364 183,273 12/31/2012 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2013 184,433 22,389 0 162,044 125.668% 203,637 20,364 183,273 12/31/2014 184,433 184,433 0 � 125.668% 0 0 0 12/31/2015 184,433 184,433 0 0 125.668% 0 0 0 m 12/31/2016 184,433 184,433 0 0 125.668% 0 0 0 �C 12/31/2017 184,433 184,433 0 0 125.668% 0 0 0 = - - - -- ----- W $3,265,285 $326,533 $2,938,752 � Prepared by: Springsted Incorporated (01-Nov-94) ' , ( Estimated Impact on Other Taxing Jurisdictions Report —� � City of Rosemount, Minnesota Tax Increment Financing (Redevelopment) District No. X—X Carison Project (Phases I, II and 111) Without TIF District With TIF District Projected Hypothetical 1993/94 1993/94 Retained New Hypothetical Hypothetical Tax Generated Local 1993/94 Local Captured Local Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capacity (1) Tax Rate Capacity (1) Capacity Capacity Tax Rate Tax Rate N.T.C. CRyofRosemount 7,281,254 32.297% 7,281,254 162,044 7,443,298 31.594°� 0.703% 51,196 Dakota County 197,911,016 27.474% 197,911,016 162,044 198,073,060 27.452% 0.022% 44,484 ISD #196 68,891,791 60.933% 68,891,791 162,044 69,053,835 60.790% 0.143% 98,507 Other(2) ——— 4.964% ——— 162,044 ——— 4.964% ——— -—— Totals 125.668% 124.799% 0.869� Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above,the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case,the total local tax rate would decrease by 0.869% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impad on taxes levied or local tax rates. m X _ � (1) Taxable net tax capacity equals net tax capacity less captured TIF,fiscal disparity contribution and powerline values. � (2) The impact on these taxing jurisdictions is negligibte since they represent only 3.95% of the tota)tax rate. C Prepared by: Sringsted Incorporated (01—Nov-94 )