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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 11/20/2001 - ITEMS RELATING TO THE 2002 DOWNTOWN DEVELOPMENT AU AGENDA ITEM SUMMARY ITEM NUMBER: 40A-B DATE: November 20, 2001 FORT COLLINS CITY COUNCIL FROM John F. Fischbach/ Alan Krcmarik SUBJECT: Items Relating to the 2002 Downtown Development Authority Budget. RECOMMENDATION: Staff recommends adoption of the Ordinances on Second Reading. EXECUTIVE SUMMARY: A. Second Reading of Ordinance No. 195, 2001, Appropriating Operating Funds and Approving the Budget of the Downtown Development Authority for the :Fiscal Year Beginning January 1, 2002, and Fixing the Mill Levy for the Downtown Development lip Authority for 2002. The Downtown Development Authority (the "DDA") adopted the proposed DDA budget for 2002, totaling $416,740, and determined the mill levy necessary to provide for payment of all properly authorized expenditures incurred by the District, at its regular meeting of November 1, 2001. Council unanimously adopted Ordinance No. 195, 2001, on First Reading on November 6, 2001. B. Second Reading of Ordinance No. 196, 2001, Appropriating Revenue in the Downtown Development Authority Debt Service Fund for Payment of Debt Service for the Year 2002. This Ordinance, which was unanimously adopted on First Reading on November 6, 2001, appropriates funds for 2002 from the tax increment received by the City for the DDA for debt service payments. AGENDA ITEM SUMMARY ITEM NUMBER: 36 A-B FORT COLLINS CITY COUNCIL DATE: November 6, 2001STAFF- Joan F. Fischbach/ Alan Kremarik SUBJECT: Items Relating to the 2002 Downtown Development Authority Budget. RECOMMENDATION: Staff recommends adoption of the Ordinances on First Reading:' The DowntownUevelopment Authority Board of Directors recommends adoption of Ordinance l o ° 95, 2001 on First Reading, and recommended adoption of a debt service budget for 2002"thatM--has n modified by staff as described in Ordinance No. 196, 2001. j� FINANCIAL IMPACT: "} ^ Ordinance No. 195, 2001 sets the Downtown Development Authority annual mill levy at 4.05 mills and appropriates $416,740 in the operating fimcl..for 2902. The mill levy is projected to generate $237,120. The mill levy has been at this`tev�e 1991. Ordinance No. 196, 2001 appropriates the tax increment revenue, or debt service ,W*be paid in 2002. The debt includes DDA revenue bonds, DDA su tnafe Tev'4ebw bonds, the DDA share of the lease purchase certificates of participation.`Cr the Civic Center ,Parking Structure, 'and monies for projects supported by the Tax Increment Revenues from the expansion of the DDA boundaries. The total tax increment revenue for 2002 is projected to be $1,991,772. The 2002 appropriation in the Downtown Development Authority Debt Service Fund is $1,739,456. EXECUTIVE SUMMARY: A. First Reading of Ordinance ;No. 195, 2001, Appropriating Operating Funds and Approving the Budget of the Downtown Development Authority for the Fiscal Year Beginning January 1, 2002, and Fixing the Mill Levy for the Downtown Development Authority for 2002. The Downtown Development Authority (the "DDA") adopted the proposed DDA budget for 2002 totaling $416,740, and determined the mill levy necessary to provide for payment of all properly authorized expenditures incurred by the District, at its regular meeting of November 1, 2001. B. First Reading of Ordinance No. 196, 2001, Appropriating Revenue in the Downtown Development Authority Debt Service Fund for Payment of Debt Service for the Year 2002. This Ordinance appropriates funds for 2002 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 1992 DDA Refunding Revenue Bonds in the amount of$1,321,938, the DDA share of the Parking Structure lease payment of$282,406, the amount of$35,112 for the DATE: November 6, 2001 2 ITEM. NUMBER: 36 A-B annual interest payment on the subordinate revenue bonds issued in 2000, and $100,000 for various projects identified by the DDA board from tax increment revenues from expanding the DDA boundaries to include the Mulberry/Lemay Crossing Property. BACKGROUND: Through action of the Council and the qualified electors, the City of Fort Collins created the Authority in 1981. According to the state statute, the purpose of the is to plan and implement improvements within the boundaries of the Authority. The DDDD blished a Plan of Development that specified the types of projects that it would under. 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 ref ending 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 occurred in 2001. s , .,.. In April of 2001, the City issued $3,640,000rof Downtown" Development Authority Tax Increment Revenue and Refunding Bonds. hilkcordance with the applicable state law,only the City may issue long-term debt on behalf of the-Authority. AThe bond ordinances pledge tax increment revenues of the DDA to debt retirement and'establish the debt service payments. The Charter requires that Council appropriate all funds thit.pass through City accounts. The tax increment from the DDA to be appro'natedby the City Mows directly into the debt service account. In 2002, the debt service on the` 6611t- onds is $1,321,938. In addition to the debt service on the 2001 boads,?the DDA has entered into agreements or passed resolutions that use additional amounts of tax increment:' According to an agreement with the City of Fort Collins and Larimer County, the DDA is to pay a share of the annual lease payment on the Civic Center Parking Structure. In 2002, the DDA share of the payment is$282,406. In 2000, the DDA also issued subordinate revenue bonds to participate in the financing of other improvements within the Authority's boundaries. This bond issued has an interest rate that readjusts with the prime rate of the 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$35,112. In 20011 tt e DDA refunded its 1992 Bonds to create debt service savings. The interest rate decrease 6S%-to 3.5%. In 2001, the refunding reduced the DDA debt service �t payments by $214,000 �3'lie savings accumulate in the debt service fund and the City and DDA may use them for other projects. The DDA also anticipates that it will participate in additional improvements in the DDA area in 2002. The debt service appropriation Ordinance appropriates $100.000 for expenditure on three projects. The $100,000 will be used as follows: $35,000 for the Mulbeny/Lemay intersection, $15,000 for the Poudre River Design Payments, and $50,000 for the Downtown Strategic Plan. DATE: Noycmber 6 2001 3 ITEM. NUMBIER: 36 A-B In addition to the projects financed using the tax increment from the Authority, the DDA has the ability to impose a mill levy for the administration, operation, and maintenance of the entity. The mill levy for 2002 is 4.05 mills. The mill levy has been constant at this level since 1991. According to preliminary information from the County Assessor, this mill levy should generate $237,120 of revenue in 2002. The total operating budget for the DDA is $416,740. Staff has attached the corresponding resolutions adopted by the DDA Board of Directors. i"'` M do Y F YY AS. r r e � s