Like the Blog Says, "Moving FORWARD"

I got a phone call this afternoon while I was in my department staff meeting. It was Mitchell Schmidt, a reporter from The Gazette. I've known Mitchell since he was a student reporter at the DI. I was surprised, however, when he said he was calling to ask for my reaction to a last-minute slate of candidates that included one incumbent, one challenger, three write in council seekers and a write in for mayor.

You can read the full article here:

Candidates emerge to challenge University Heights council

I will reiterate that I want this town to move forward. No one is more cognizant of how divisive One University Place has been to our town. I continue to try to heal those wounds, and look toward better times for everyone.

However, running a last minute campaign in hopes that the electorate will skip a non controversial election, and allow a small number of residents to slip into office is not the way for our city to get back together. And for announced candidates to throw in with this tactic is extremely frustrating.

I've been going door to door for 6 weeks. I was out again tonight, and will be tomorrow too, right up to Election Day. I continue to be humbled by the response I receive and am heartened by your faith in these efforts. Thank you. 

And I challenge everyone, continue to be the town that participates, by once again turning out a majority of the electorate in a year when a hotly contested Iowa City race may not break 10%

This race could be tight and your vote will certainly make a difference.

So in case we haven't hit you with it often enough, Here are some early voting times and places:

University of Iowa Hospitals and Clinics, Fountain Lobby                              
200 Hawkins Dr.                                                                                   
Thursday, October 29 and Friday, October 30, 10 a.m. to 4 p.m.

Iowa City Public Library

123 S. Linn St. I.C.

Thursday, October 29, 10 a.m. to 6 p.m. 

Friday, October 30, 10 a.m. to 4 p.m.

Sunday, November 1, 12 p.m. to 5 p.m.

And on Election Day November 3

St. Andrew's Church. 7 AM to 8 PM.

Parking is still available behind the church.

 

-Mike

TIF Talk

City council will continue discussing Tax Increment Financing (TIF) at a work session on Tuesday April 28th. We held an informational session on TIF last month. Here is a link to the official minutes of the meeting as posted at the City of University Heights website:

http://university-heights.org/council/15/minutes/150323minutes.pdf

I recommend reading these. I also took notes at the meeting, here is what I recorded:

1. Explain difference doing TIF funding as opposed to doing a municipal bond to provide funding for a development.

Difference between fronting cash or a TIF rebate arrangement. When city has to front, they have to borrow, and puts city’s credit at risk. TIF rebate requires developer to front cash, and then offers future economic benefits, keeps risk on private side. Iowa law allows cities to define “necessary.” That includes infrastructure low-moderate housing.

2. What are the different types of TIF funding- Bond, tax rebate, tax abatement, et.al

Basic tenet: tool to repay obligations to a city or county of urban renewal projects. Has to have a public obligation. 1. Traditional banking (borrowing or a bond) general obligation can be paid by debt obligation levy. 2. Internal borrowing must have your own funds. 3. Negotiated TIF contracts or rebate agreements. 4. Statutory obligation for low income if you TIF market rate projects. One more tool “tax abatement” not a TIF. Keeps new valuations from going on the property tax roll.

3. What is a TIF district and who decides the location of the TIF district?

Location is defined by City Council and BOS have authority to establish urban renewal areas. TIF district is designated by ordinance.

4. Our town has a bonding capacity of about $5.3 million. How is our bonding capacity affected by the different types of TIF funding or a municipal bond?

Law sets debt limit. Interest is not legal debt. Utility borrowing, special assessments not considered debt. GO and TIF are debt. Annual Appropriations make it such that city’s payment liabilities are dependent on city council decisions and action. You can put specific concrete benchmarks to incentivize developers.

5. If TIF funding or a municipal bond is chosen as a gap funding mechanism, who determines how the repayment is used and where it goes. E.g. Johnson County, School District, University Heights.

All decisions are made by city council. Can’t control whether or not revenue comes in and the pace. Minimum assessment agreement establishes a floor of valuation with assessor. Makes TIF revenue stream more predictable.

6. How is University Heights' bonding capacity affected as new buildings are added to the tax rolls and a portion of the TIF or bond is repaid?

As buildings are added debt limits goes up 5% of assessed valuation of new construction. Have to wait for assessment to catch up. 18 month lag. Bond rating of city won’t be an issue.

7. Are there any employment requirements for any TIF funding or bonding?

Required? No but cities could say that if jobs are created in commercial projects the TIF could be higher. 

8. What are the circumstances in which TIF could go totally wrong and result in "bankrupting the city" that we hear from some individuals?

TIF negotiated contract shouldn’t ever hurt a city, since it isn’t the public credit put at risk. However fronting cash is risky but with debt limits and savvy lenders it shouldn’t be an issue either.

9. When does Affordable Housing come into effect for TIF projects?

Lower and moderate income set aside if used for public infrastructure related to new market rate housing then must have additional funding for low/moderate income. Amount is county specific due to rates. In negotiated contract that developer gets percentage after LMI (low moderate income) is first required. TIF for commercial does not require set aside.

What triggers that obligation (TIF used in residential project or for residential purposes, I believe);

How much funding is involved (how is the obligation computed); and

How is the obligation paid – over time, as TIF is rebated, etc.

Questions from audience

When should city not use TIF?

Each community has to make that decision about what is appropriate use and when.

Any implications for public space not subject to taxation?

2012 leg says analysis has to be done to find feasibility. Keeps discretion at local level.

In determining increment on tax exempt property how is increment measured?

County assessor starts from zero when counting in similar projects but must involve assessor to know for sure.

Coralville’s Bond Rating drops 6 levels in 2 years What about U-H? What about local banks not wanting to loan to us?  

Doesn’t work for a rating agency and has a hard time considering how we might need a bond rating agency. Are you making a good policy decision and a good fiscal decision?  Banks generally will enter with municipalities. 

20 year TIF collection limit under current law. For market rate housing TIF limit is 11 years.