It was a brief discussion, happening at the same time as the Council “briefing” on TIF, but interesting in that they seem to think that they would benefit greatly from the TIF district closing by getting taxes on an additional $120M in property value.x
Maya Cole announces the topic and turns it over to Lucy Mathiak.
Lucy Mathiak says that she wanted to give them a heads up, she has sent them information about opinions and analysis that has been done. She says thus far there have been several issues that have come up that they have no role in like the environmental or landmarks issue, at some point the city may approve the Edgewater plan and the TIF financing proposals and if and when that happens the city will come back to the board with the proposed TIF structure and they will be asked to vote on it, they will get a packet with the maps and descriptions in it. She wanted the item on the agenda for two reasons, first she will be speaking to the item as an individual, not as a school board representative but expressing some of the concerns that she has and what it means for their budget, it could help them a lot to close out the TIF. And she would hope they would close it and not extend its life. She would advise people to follow it, lots of information on line on city website, can’t speak to where the city will go with it, there are a lot of things that are problematical that have nothing to do with us, but the finance packet does.
Arlene Silveira thanks Mathiak for sending them information, she wants to make sure the Board doesn’t have something they should do tonight.
Mathiak says that there is nothing they can do because they wouldn’t know what they are doing. She says that she wanted people to know she was speaking and she will be saying what she has said at other places and at other times. But that she recognizes that she does that as an individual, not representing the board because they have not had that discussion or consensus, their discussion will have to wait til the city makes its decisions.
Beth Moss says she is wary of TIF given what happened to them two years ago. What is the amount for University Square, how much money would they receive.
Erik Kass says that the University Square TIF will close three years from now, it won’t be closing tomorrow, the Edgewater would extend that three years from now. [This differs from what Dean Brasser told the Council at their briefing, he said it could close in 2011, I believe the difference is that they know they have projects that they want to do in the next three years and would have kept it open, but also spend more money, money that is not going to be available to help pay back the Edgewater TIF, which means Brassers projections of it closing in 2019 need to be extended for another three years to 2022. At least I think that is what it means, its so hard to tell with all the smoke and mirrors.] He says the last projection was that there would be $1.3 to $1.7M in residual income, that would be split up according to the previous years tax levy. The school board is the biggest portion of it between the city, county and MATC, and they would expect to get 50 – 55% of it, but there is a secondary issue where the base is locked in at $80 or $70M, and it has increased to $200M in growth, that growth is great because once they get it back, that will allow the tax base to grow so no only will they get the money back, but the tax rate will decrease and impact on taxpayers will decrease, their revenue and property taxes are dictated by a state formula and the levy and the tax rate will go down.
Mathiak says it a slightly different way. Right now the properties are held at about $80M in value, the true value is over $200M, when that closes they get the value of the property taxes at the full $200M. So that is the issue for them, it is a substantial amount of property tax coming in.
Moss asks what happens to the state aid with that influx. Is it going to be the same scenario.
Kass says the was the aid formula treats that is like a tax revenue and we would be penalized, but there is no way of knowing where we will be in that formula. Under the levy it will have a positive effect, our property value not growing right now also has a positive effect, there are so many moving pieces that we would have to run some projections on what getting a half a million dollars will mean, it won’t be as bad as last time because they got over $6M in one year. Which was larger than they ever received which was why the loss was so drastic, but he doesn’t see it being that drastic this time.
Mathiak says that there is some dispute about when the TIF is ready to be closed out, the remaining piece that is out there has the word Edgewater on it so she thinks some of the money is going to plan for the Edgewater.
Kass says it could be, he is not sure.
Mathiak says that basically whatever happens, we are paying either through budget cuts or through what we are asking taxpayers to do, because of this project.
Kass says it is also a true statement that the Edgewater on its own would not be able to sustain itself, it would not be able to close within the 26 years. That is why they need to partner it with the University Square.
Mathiak says the second piece of that is that instead of paying for schools, the revenues that would be coming from that would be going to the Edgewater, so pick your poison, but I’d rather get some of that money into the school budgets.
With that, they have no more discussion and adjourn.
