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HomeMy WebLinkAboutMinutes - Finance Committee - 04/21/2008 -r Seest,Heather Jim Manire of James discussing what the City of Fort Collins ~FInance Administration 215 N Mason Street P0 Box 580 Fort Collins,CO 80522 970.221.6788 970.221 6782-fax (cgov corn Council Finance Committee Minutes 04/21/08 10:30 12:00 Council Members:Doug Hutchinson,Ben Manvel,Kelly Ohlson City Staff:Darin Atteberry,Jeremy Reese,Mike Freeman,Chuck Shepherd,Kraig Ecton,John Voss Guests:John Knezovich,Marcus McAskin of Grimshaw a Harring, Capital Advisors Approval of the minutes from the March 1 7th Meeting. Ben moved to accept the minutes and Kelly seconded the motion.The motion carried unanimously. Metro District Discussion Kelly said that the City Council should spend about a half an hour pros and cons would be,what do other communities do,etc. Mike Freeman gave 4 key points regarding staff recommendations on Metro Districts: •The City should limit usage of Metro District to primarily Significant Infrastructure Requirements on Commercial Developments •Enhancements to requirements could also be funded by Metro District •Cap the mill levy the Metro District can assess to 40 mills •Set a time limit on the overall life of the Metro District to 40 years Ben asked about the suggestion to put a cap on the Mill Levy.He said it appears that if the project failed and the levy doesn’t continue the taxpayers might end up paying. Darin said that in such circumstances,the City is under no legal obligation to come in and cover bond payments for Metro Districts.Jim Manire said that the Districts would be issuing bonds that whose revenue streams are limited to what the District generates (property taxes,fees,etc.).The purchaser of the bond accepts that risk. Ben asked why a metro district would be needed if there is only a single developer. Jim Manire said it would result in higher returns for the developer as they could lower where renewal is a way of life 0 0 the cost of the infrastructure through tax exempt financing and payment over time via property taxes. Doug asked how the Metro District implementation would benefit the City?Jim Manire said that it gives the City the ability to choose preferable development (i.e.ones that align with City goals and objectives).As service plans are brought forward and with the direction of City policy,the City could influence “where”and “how”these districts are used. Darin also asked Jim what any potential downside for the City would be.Jim said that for commercial Metro Districts,there isn’t really a down side.It’s not that much of a departure from normal business practices.Jim said one possible detractor would be that if a lot of projects start to occur at once,there is a risk of overdeveloping.Jim also said that residential metro districts are different.If the property turns over several times,the reason for the tax difference may be lost or forgotten--the owner may not understand why their property tax is higher than their neighbor. Staff recommendation of a cap for the mill Levy is 40 mils and Kelly asked how staff chose that figure.Mike said the idea is generally not to do anything larger than the largest taxing entity does (which is PSD in this case).It’s also lower than the average that developers would see in the market. Next steps will be to draft a specific Policy and bring to a Council Work Session,and then present the policy for formal adoption at the Council Meeting on July 1st. Sales Tax Forecast Jeremy reviewed the sales tax revenues from 2007 and the first quarter of 2008. Doug asked if we still have consultants helping with forecast modeling and Jeremy said City staff is mainly responsible for it now.The City staff does a forecast every quarter. Darin asked how much Wal Mart has contributed to the General Merchandise category of sales tax collection being down -8.9%.He asked if the overall number would be positive if not for Wal Mart.Jeremy and Chuck said it would not.It’s primarily due to the fact that we had a month where all general merchandise was down,not just Wal Mart. Other Business In preparation for the GERP topic on next month’s agenda,Kelly would like a summary of what occurred last time this information was presented,what was council direction at that time,etc. John Knezovich said he thinks future revenue collections will go up in future years and that current sales tax numbers are ‘grossly understated’.Kelly Ohlson responded that the Council would rather remain conservative in their estimate. Meeting was adjourned at 12:05 p.m.