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City Council Minutes 2000 08-30-00 (special cc) THE UNITED CITY OF YORKVILLE CITY COUNCIL & INDUSTRIAL PARK PROPERTY/BUSINESS OWNERS MEETING MINUTES ATTENDEES Mayor Art Prochaska Alderman Richard Sticka Alderman Tom Sowinski Alderman Mike Anderson Alderman Larry Kot Alderwoman Rose Spears Alderwoman Valerie Burd Treasurer Bob Allen City Administrator, Jim Nanninga City Engineer, Joe Wywrot Mayor Prochaska opened the meeting stating that the City is proposing to finish the streets that remain un-paved. This has been an issue over the years and the City had tried to do an SSA which didn't work. With the new Census being taken the City's Motor Fuel Tax will increase significantly as it is based on population. Our estimated growth adds approximately 1500 additional residents which results in $40,000 to $45,000. additional in MFT funds received. Mayor Prochaska proposes to do a Revenue Bond to complete all streets in the Industrial Park guaranteed by MFT funds. This amount could vary since we won't know the exact amount of the costs of the work to be done. This will include drainage. Since streets all over town need work, once the census is complete and our population is reflected at over 5000, we will be eligible for grant money. This will be applied for and will be targeted first to fixing Game Farm Road, etc. Additionally, the Mayor has explored the possibility of doing a T.I.F. (Tax Increment Financing) for the Industrial Park to use any additional tax gain in Equalized Assessed Value. The tax dollars from growth of the Industrial Park would be small, but our goal is new businesses on the now vacant land, and all those tax dollars would go toward paying this loan off. The worst case scenario would be that there would be no growth and the City wouldn't have any additional tax revenue. 1 Scott Haws asked if there wasn't special tax dollars the City received due to the Industrial Park. Mayor Prochaska stated that the City collects no "special" tax dollars, that MFT funds are based on population and not gasoline tax which is what most people think. Over the past 7 years the MFT funds to the City has averaged about $50,000 and it all went toward Street Improvements. In recent years the City has used additional money from the General Fund for street work plus the MFT funds which are now approximately $120,000. Rich Lucas stated for the record that he is there on behalf of a group of business owners in the Industrial Park as well as himself. Mr. Lucas asked about the creek area. City Engineer, Joe Wywrot stated that the list of items that will be improved only itemizes large items, but smaller items that need to be corrected are covered under contingency at the bottom of the list. Mayor Prochaska introduced Don Falls stating the City will work with Mr. Falls to organize this TIF. Mr. Falls is here from DCCA (Illinois Department of Commerce and Community Affairs) and he will tell you a little more about how this will work. Mr. Falls explained that a TIF area is designed for re-vitalization of an area in decline, and is to encourage development. He explained that with a 5% tax increase you won't get much, so to make a TIF work you need to substantially increase the value of the property. To do this you must better the businesses appearance. Then any additional tax dollars generated by the increase in taxes due to the increase in value goes to the TIF district. The County Assessor will do the accounting and they will advise. The TIF money uses has to be identified at the beginning as Infrastructure, Water, Sewer, Roads, City Utilities or Environmental. This is a program designed to provide a financing tool for a government entity. Treasurer Allen asked if this will qualify for a TIF. Mr. Falls stated that yes it will, since the Industrial Park is 20 to 30 years old, without a TIF it could decline and fall into a stated of disrepair. 2 Alderman Anderson asked if the City can look at areas and say weather or not it will qualify. Mr. Falls stated yes, but with government it will be subject to someone's interpretation. The City will create a Review Board for determination. A joint Review Board will report to the City Council. Alderman Anderson asked about representation from the business and property owners in the Industrial Park. Mr. Falls advised them to tell the City Council what their feelings and ideas are. Mr. Haws asked if this comes from federal funds. Mr. Falls stated no, it comes from local tax dollars, there are no stated or federal funds involved. Property is improved and then it's value increases. The stated is there to help because the rules have been taken advantage of in the past. Mr. Haws stated that the property owners in the Industrial Park have no representation and no vote there. Mr. Medford stated the property is being kept in good condition, it is the roads that are bad. Mayor Prochaska stated that property values in the Industrial Park have dropped. Mr. Haws stated that if the property is the Industrial Park is being sold for less than the appraised value we are in trouble. Mayor Prochaska stated that the City will guarantee the loan, but are looking for funding avenues. Mr. Falls stated that values will be placed, and then any increase from that amount will go to the TIF. Mr. Haws reconfirmed stating that if a property is assessed at $1000. and then the assessment goes up to $1500., that increase goes to 100% to the TIF? 3 Mr. Falls stated yes, that is correct. MFT is a good revenue. If the roads continue to deteriorate and the City of Yorkville doesn't come in and do something, the whole are goes down. The potential for decline is there, and if addressed now the potential goes away. Alderman Anderson stated this includes any and all additions? Mr. Falls stated if you add on, the City of Yorkville gets the property tax. The City will probably put requirements on this, that if the roads are paid off then the TIF would be dissolved. Mayor Prochaska stated the area of use will be identified up front and it can only go to the identified area. Once the loan is paid off for the items the TIF was created for, the TIF is eliminated. Mr. Lucas asked what the probability is of a TIF being accepted. Mayor Prochaska stated the City is looking for more information. There are concerns, that is why all the taxing bodies have been invited here tonight. The upgrade will help everyone. This was so we could meet and identify the needs of the area. Mr. Falls stated that if you have ever attended a TIF meeting before, you know someone will be negative on this. Mr. Ralph Pfister, YBSD asked if all taxing bodies have to agree. Mr. Falls stated that the majority have to agree. If property owners don't like it they cannot do anything to stop it since it doesn't increase their taxes, and doesn't affect them or their property. It was asked that once this is approved by the Board then the City Council would approve? Mr. Falls stated yes, with a few extra steps, but that is the basics. Mayor Prochaska stated that the City doesn't assess the valuation, this is done by Kendall County. 4 It was asked what the time restraint is on this. Mayor Prochaska stated he would like to see this put together for next year. This is just the first step. Alderman Sowinski stated that it is advantageous to have vacant land included for development to support the TIF. Mr. Falls stated that it was provided you can expand the infrastructure to support additions and improvements. Alderman Sowinski stated he would like to see this paid off in 5 years, not 23 years. Mayor Prochaska stated that with a large project it could take 23 years. The City will take a loan based on MFT revenue and then we will decide how long we need to pay it off. Mr. Falls stated that 23 years is the maximum number of years for the TIF. There are many kinds of bonds you can take out to cover the loan. The City of Yorkville will create a TIF district to repay the loan. Mayor Prochaska stated that we are looking at other large projects that need to be done, and this will not tie up City revenue that is needed for projects like the water treatment for radium and other needed projects. A TIF allows us to pay off the loan another way. Alderman Anderson stated that this could be the answer for some businesses who may be needing to expand or add-on have questions about the option to move instead. Mayor Prochaska stated that even if they do have to sell due to not having enough room where they are to expand, it would be nice if they are able to sell their property at a profit. Mayor Prochaska asked for TIF questions. 5 Ralph Pfister asked if School Districts like TIFs. Mr. Falls stated that no, generally speaking they don't. Some TIFs have brought added students into the schools, but sometimes they can see that it is for the good of the community. Alderman Anderson stated that the School District may not like TIFs, but they have to look at improvements due to financial conditions. Mr. Tovian, representing School District #115 stated that he couldn't speak for the board, but in this case, it is business and hopefully the businesses will go up in value. Alderman Anderson stated that these businesses deserve paved roads to their businesses too, they have paid school taxes for kids...kids that aren't even their kids. Mr. Kaufmann stated that getting this financed is important, he has paid taxes here for 17 years. The road conditions are almost negligent. Mayor Prochaska stated he understood, and as an Alderman 5 years ago he had tried to get this done, but it didn't pass. Mr. Haws stated that the businesses in the Industrial Park have budgets too,just like the schools. Mayor Prochaska stated that he cannot answer for why things were done the way they were done in the past. There have been different priorities at different times. This is an old town and as we see the growth, we are trying to put the added money back into the City. This is for the businesses because they are our tax base, and we want that tax base to increase. We are again trying something to make it better. Mayor Prochaska stated that costs keep going up, and for instance, 5 years ago when we looked at doing this street work it included streetlights, now the same cost will only cover streets. The TIF will be identified and the money will go only where we have committed it to. 6 Mr. Lucas pointed out that there has been a water flow had been a concern for some buildings, and there have been a few problems with this in the past. Mayor Prochaska stated that some work has been done, and MFT funds may not be allowable for that use, but the City will review this issue. Mayor Prochaska asked the Aldermen if they was anything additional. With no comments the meeting was adjourned. Minutes by Sandy Marker 7 UNITED CITY OF YORKVILLE GUEST SIGN IN SHEET YORKVILLE INDUSTRIAL PARK MEETING STREET AND T.I.F. WEDNESDAY, AUGUST 30, 2000 NAME (PLEASE PRINT!) REPRESENTING PHONE c� rV �►�� 1 � ��-�--2ot 8ev�/t 553- �3g2 JF- AeAly�g S% rv�..A5 119 C, yo? v, a c cv. co i/ 6�g ..-n e f C HA n Ir�S 0 t= 1yn&ed Yg,4iwo)P7� 1209 J"/v- > 7 S-r