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03-27-17 Council Minutes
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03-27-17 Council Minutes
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City Council - City Clerk
City Council - Document Type
Council Mtg Minutes
City Counci - Date
3/27/2017
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REGULAR MEETING <br />MARCH 27, 201 <br />met entirely by user fees paid by the water customer. In this phasing concept, in that period <br />where the rates are lower, the City is injecting non -water revenues to eliminate that gap. <br />Councilmember Davis asked, Which is the TIF part we're looking at? <br />Mr. Julien responded, Correct. <br />Councilmember Davis asked, If the TIF is eliminated, then if we go back to the original plan the <br />TIF was in, we would have some issues regarding them being able to justify what we could do at <br />that time? <br />Mr. Julien responded, Yes. Without having that substitute revenue coming in from the TIF, the <br />rates would have to be that full amount that would be in place for the second phase. <br />Councilmember Karen White asked Mr. Horvath to share with the public the suggestions sent <br />from the Council to the Administration regarding capital improvement needs. She also asked him <br />to share the details of the decision that was made regarding the two (2) TIF districts that will be <br />supporting the rate increase. Councilmember White stated, This is the first time that we have <br />utilized TIF as a means of supporting this particular initiative. <br />Mr. Horvath responded, There is a difference between communities that are governed by the <br />IURC and those that aren't, because if you are not governed by the IURC, it's all local control. It <br />makes it a lot easier to have phased -in rates. Mr. Horvath explained that in such a situation, the <br />City does not have to go to the IURC to prove each year that it needs another rate increase. He <br />continued, stating that using TIF for infrastructure is appropriate, in this case, as it allows the <br />City to meet a short-term gap. He stated, In particular, we see that the best use for TIF is when <br />you're using it to build infrastructure to support economic development needs in the City, <br />especially when you get new development opportunities. We don't want it to take the place of <br />creating sustainable rates for enterprise funds that should, on their own, be based on a cost - <br />service basis. That is what we theoretically try to do as best as we can. Mr. Horvath moved on to <br />the subject of how the TIF decision was made, stating, When the Council asked us to use TIF, <br />we decided to use that for the gap —the phase -in. First thing we did was to go back to the map <br />and looked at where these needs were and how they fit into TIF areas. I was trying to make sure <br />that these were right in or immediately adjacent to the TIF area. The TIF areas don't cover the <br />whole City they cover a portion of our City —so you're still going to have needs outside of <br />that. Ten percent (10 %) of customers are outside of the City. They would be benefiting from TIF <br />dollars that they would not be paying into, as well as anyone else who is not in those TIF <br />districts. That is not an issue, but it is a consideration. You're essentially subsidizing the County <br />residents' rates by using City TIF dollars, if you use TIF as a funding source. <br />Councilmember Tim Scott stated that he was generally in agreement with Councilmember Davis <br />but asked if spreading the payments out too thin would mean that each year would bring in too <br />little revenue to meet critical needs. <br />Mr. Horvath responded that the City would not get ahead, and that it would take a number of <br />years before it could address any critical needs if per -year revenue is too low. <br />Councilmember Davis followed up, stating, But the issue that we have is that your desire is to <br />not use TIF as a subsidy. Councilmember Davis stated that relying on the TIF now means that, <br />when it is no longer being used in the future, rate - payers would have to potentially deal with <br />another rate increase to make up for the absence of TIF. <br />Mr. Horvath responded, Maybe I should have said that it would be a short-term rate subsidy, but <br />I don't think it's appropriate to be a long -term rate subsidy. Short-term means we do things to <br />meet needs. Having said that, nowhere have we ever said, "We're never going to use TIF again <br />for water." Let's be clear about that. All we're doing right now is showing the plan for these <br />critical capital needs, and we allocated a certain amount to rates and a certain amount to TIF, and <br />we built a plan that would be a funded plan where the sources of needs would not jump. He <br />stated that if the City approved of a new development for which it must pay $1,000,000 in <br />running water, "we can make those decisions in the future to use TIF dollars for water." He <br />stated that the plan was a result of trying to compromise with the needs of some of the <br />Councilmembers who wanted to see TIF dollars used along with a phased -in rate. <br />14 <br />
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