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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/19/2002 - ITEMS RELATING TO THE 2003 DOWNTOWN DEVELOPMENT AU AGENDA ITEM SUMMARY ITEM NUMBER: 33 A-B DATE: November 19, 2002 FORT COLLINS CITY COUNCIL FROM: John F. Fischbach/ Alan Krcmarik SUBJECT : Items Relating to the 2003 Downtown Development Authority Budget. RECOMMENDATION: Staff recommends adoption of the Ordinances on Second Reading. EXECUTIVE SUMMARY: A. Second Reading of Ordinance No. 163, 2002, Appropriating Operating Funds and Approving the Budget of the Downtown Development Authority for the Fiscal Year Beginning January 1, 2003, and Fixing the Mill Levy for the Downtown Development Authority for 2003. The Downtown Development Authority(the"DDA")adopted the proposed DDA budget for 2003,totaling $655,794, and determined the mill levy necessary to provide for payment of all properly authorized expenditures incurred by the DDA, at its regular meeting of October 3,2002. Ordinance No. 163, 2002,f was unanimously adopted on First Reading on November 5, 2002. B. Second Reading of Ordinance No. 164, 2002, Appropriating Revenue in the Downtown Development Authority Debt Service Fund for Payment of Debt Service for the Year 2003. This Ordinance, which was unanimously adopted.on First Reading on November 5, 2002, appropriates funds for 2003 from the tax increment received by the City for the DDA for debt service payments. Debt service and annual lease payments include: the semi-annual payments of the 2001 DDA Tax Increment Revenue Refunding Bonds in the amount of$1,355,938, the DDA share of the Parking Structure lease payment of$281,987,the amount of$35,112 for the annual interest payment on the subordinate revenue bonds issued in 2000, and$156,500 for various projects identified by the DDA board from tax increment revenues from expanding the DDA boundaries to include the Mulberry/L.emay Crossing Property. AGENDA ITEM SUMMARY ITEM NUMBER: 30 A-B DATE: November 5, 2002 FORT COLLINS CITY COUNCIL John F. Fischbach/ STAFF: Alan Krcmarik SUBJECT: Items Relating to the 2003 Downtown Development Authority Budget. RECOMMENDATION: Staff recommends adoption of thCth on st ea g. he owntown Development Authority Board of Directors recommends this O i on Ft Reading, and recommends adoption of a debt service budget for 2003 n m tfi by staff described in this Ordinance. FINANCIAL IMPACT: This Ordinance sets the Downtown Development Authority annual mill levy at 5.00 mills and appropriates $655,794 in the operating fund for 2003. The mill levy is projected to generate $328,057. The mill levy is being increased from 4.05 mills to 5.0 to the' s Hance and security services needed in the downtown area. The mill y h en a s 991 through 2002. If adopted this Ordinance would appropriate thktaxs incr ent r e r de ervice to be paid in 2003. The debt includes DDA revenue bonds, Dub r ate ve a bonds, he DDA share of the lease purchase certificates of participation for the enter in cture, monies for projects supported by the Tax Increment Revenues from the expansion of the DDA boundaries. The total tax increment revenue for 2003 is projected to be$2,465,369. The 2003 appropriation in the Downtown Development Authority Debt Service Fund is $1,829,537. EXECUTIVE SUMMARY: A. First Reading of Ordina No. 200 AP at erasing Funds and Approving the Budget of theDowntow evelop ntAu the calYearBeginningJanuary1,2003, and Fixing the Mill Lev r the ntopme Authority for 2003. The Downtown Development Authority (the "DDA") adopted the proposed DDA budget for 2003, totaling $655,794, and determined the mill levy necessary to provide for payment of all properly authorized expenditures incurred by the DDA, at its regular meeting of October 3, 2002. B. First Reading of Ordinance No. 164, 2002, Appropriating Revenue in the Downtown Development Authority Debt Service Fund for Payment of Debt Service for the Year 2003. This Ordinance appropriates funds for 2003 from the tax increment received by the City for the DDA for debt service payments. Debt service and annual lease payments include: the semi-annual payments of the 2001 DDA Tax Increment Revenue Refunding Bonds in the amount of$1,355,938, the DDA share of the Parking Structure lease payment of$281,987,the amount of$35,112 for the annual interest payment on the subordinate revenue bonds issued in 2000,and$156,500 for various projects identified by the DDA board from tax increment revenues from expanding the DDA boundaries to include the Mulberry/Lemay Crossing Property. DATE: November 5, 2002 2 ITEM NUMBER: 30 A-B BACKGROUND: Through action of the Council and the qualified electors, the City of Fort Collins created the DDA in 1981. According to state statute,the purpose of the DDA is to plan and implement improvements within the boundaries of the DDA district. The DDA established a Plan of Development that specified the types of projects that it would undertake. In order to undertake the plan of improvements, the City on behalf of the DDA has issued various bond anticipation notes and revenue bonds. The first issuance of revenue bonds for the DDA occurred in 1984. Subsequently, the bonds have been refunded to effect savings and to better match the tax increment of the authority with the debt service of the bonds. The first refunding of the bonds occurred in 1992 when the City issued $11,380,000 of Downtown Development Authority Tax Increment Revenue and Refunding Bonds. The most recent refunding of the bonds occurred in 2001. In April of 2001, the City issu 3, 0 0 ]PP n v pment Authority Tax Increment Revenue and Refunding Bonds acco nce lic state law, only the City may issue long-term debt on behalf of the A. T and pled tax incrementrevenues ofthe DDA to debt retirement and establish debt tcnts. e Charter requires that Council appropriate all funds that pass through City accounts. The tax increment from the DDA to be appropriated by the City flows directly into the debt service account. In 2003, the debt service on the 2001 bonds is $1,355,938. In addition to the debt service on the 2001 bonds, the DDA has entered into agreements or passed resolutions that use additional amounts of tax increment. According to an agreement with Cit o ort lli a L e ounty, the DDA is to pay a share of the annual lease payment o e Civi ente tru e. In 2003, the DDA share of the payment is $281,987. In 2000, the DDA also issued subordinate revenue bonds to participate in the financing of other improvements within the DDA's boundaries. This bond issue has an interest rate that readjusts with the prime rate of Key Bank, the buyer of the bonds. Staff projects an interest rate on the bonds at 6.6%. This interest rate generates an annual interest payment of$35,1 12. In 2001, the DDA refunded its 1992 Bonds to create debt service savings. The interest rate decreased from about 6.5%to 3.5%. The refu redu d the A d er ' payments by$214,000 in 2001, and$5,645 in 2002. It is anticip th t re 'n wi e t service payments by$5,103 in 2003. The savings accumulate the deb ervic the ' and DDA may use them for other projects. The DDA also anticipates that it will participate in additional improvements in the DDA area in 2003. The debt service appropriation Ordinance appropriates$156,500 for expenditure on three projects. The $156,500 will be used as follows: $85,250 for the Mulberry/Lemay intersection,$15,000 for the Poudre River Design Payments, and $56,250 for the Downtown Strategic Plan. In addition to the projects financed using the tax increment from the DDA, the DDA has the ability to impose a mill levy for the administration, operation, and maintenance of the entity. The mill levy for 2003 is being increased to 5.00 mills. The mill levy had been the 4.05 level since 1991. The increase in mill levy is needed to fund the increase in maintenance and security services needed in the downtown area. According to preliminary information from the County Assessor, this mill levy should generate $328,057 of revenue in 2003. The total operating budget for the DDA is $655,794. Staff has attached the corresponding resolutions adopted by the DDA Board of Directors.