7. Resolution 5508 - URA Recommendation for West Side TIF DistributionT
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Fok Bus iNss. POR LIFE, i E� .
MEMORANDUM
TOO Mayor Tammi Fisher
And Kalispell City Council
FROM: Jane Howington, City Manager
Wade Elder, Revolving Loan Fund Manager
City of Kalispell
Urban Renewal Agency
241 1st Avenue East
Kalispell, MT 59941
Phone: 44fi.758.7738
Fax: 445.758.7758
SUBJECT: TeleTech Service, Inc. Request for West Side TIF Distribution.
MEETING DATE: July 5, 2011 - Regular Council Meeting.
BACKGROUND: The West Side TIF was established on 03/ 17/97 through the passage of
Resolution 4309 and Ordinance 1259. It established the base year for calculating the tax
increment as 01 /01 /97. The TIF is set to sunset on 03/ 17/ 12. The amount of funds in the West
Side TIF account as of 06/29/11 was $2,235,257.24 and the projected ending balance (06/30/12)
in the proposed FY 2012 is $2,553,754. The projected revenues from the proposed FY 2012
budget are $409,168.
The City of Kalispell received a request from TeleTech Services, Inc, requesting $43,964.00.
Funds are being requested for running a redundant fiber optic line from TeleTech's location at
Gateway West Mall, 1203 Highway 2 West, Kalispell. Please see the Memorandum for the June
229 2011 URA Committee meeting for details.
The LIRA Committee met on June 221 2011 to consider this request. At the meeting we heard
from Tory Graham indicating the reasons for requesting the funds and Teresa Holman from
CenturyLink indicating the importance of TeleTech as a major employer of the area and the
importance of this redundant line as required by TeleTech's client. The URA Committee
discussed the following points:
1.) The request of $43,964.00 should not include the $2,000 for inside plant costs and should
only be 50% of the $41,964 Outside Plant Costs as 50% of the costs are outside the TIF
District.
2.) Installing this redundant line is a great opportunity for other companies to have access to
it.
3.) TeleTech is a company with a lot of cash on hand and does not need TIF Funds.
4.) This project does not involve TeleTech creating any new jobs.
5.) Discussion regarding TeleTech being a major employer and retaining jobs.
6.) The prior South Kalispell TIF request approval for Avail-TVN in November, 2011 to run
a fiber line under Highway 93 should be taken into consideration as it was a similar
request which was funded by TIF dollars.
A motion was presented by a LIRA Committee member to reject the request but died for lack of a
second.
A motion was presented to recommend City Council approve the request from. rT'eleTech
Services, Inc. from the West Side TIF District in the amount of $20,982.00 for installing a
redundant fiber line from TeieTech to Lone Pine. This motion passed with a 3 / I vote.
RECOMMENDATION: A motion for approving a $20,982.00 distribution front. the Nest
Side TIF District to fund a redundant fiber line for TeieTech would be in order.
FISCAL IMPACTS: A. reduction of the Nest Side TIF District fund of $20,982.00.
ALTERNATIVES: The City Council can reject the request and the applicant can fund
the redundant line themselves.
Respectfully submitted,
", IZA,
Wade Elder, Revolving Loan Fund Manager
Vne' Howington, City Manager
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A. RESOLUTION TO AUTHORIZE A CASH DISTRIBUTION FROM THE WEST SIDE TAX
INCREMENT FINANCING DISTRICT FOR THE PURPOSES OF PARTIALLY FUNDING
THE PROJECT THAT PROVIDES THE PUBLIC INFRASTRUCTURE OF REDUNDANT
FIBER OPTIC LINE TO THE GATEWAY WEST FACILITY.
WHEREAS, on the 171h day of March, 1.997 the City of Kalispell established the west Side Tax
Increment Financing (TIF) District with Ordinance No. 1259 and Resolution No. 4309
pursuant to the authority granted the City under MCA Title 7, Chapter 1.5, Part 42; and
WHEREAS, the city received a request from TeleTech Services, Inc., the city's tenant in the Gateway
West facility, for a distribution from the west Side TIF account in the sure. of $43,964.00
for the purpose of providing the public infrastructure of a redundant fiber optic line to
service the city owned property, as required for the tenant's business; and
WHEREAS, pursuant to the terms of MCA Title 7, Chapter 1.5, Part 42 the city has properly approved
an urban renewal plan for the west Side TIF District to which this project conforms and
is consistent with the goal of meeting the sound needs of the city as a whole and for the
rehabilitation or redevelopment of the west Side District; and
WHEREAS, , the Urban Renewal Agency met on June 22, 2011. and fully considered the request of
TeleTech Services, Inc. and determined to recommend to the City Council that it partially
approve the distribution request by making a total distribution of $20,982.00 for the
purpose of partnering with TeleTech Services, Inc. to install the redundant fiber optic line
to service the city owned property and to make it available to other businesses in the
vicinity; and
WHEREAS, the balance of the west Side TIF fund on June 29, 2011 is $2,235,257.27 from which
there are sufficient unencumbered funds to make a distribution of $20,982.00 for the
purposes of partially funding the project of installing redundant fiber optic line to the city
owned property at the Gateway west facility.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL
AS FOLLOWS:
SECTION I. The City Manager is authorized to instruct the Finance Director to remit the sum
of $20,982.00 for the purposes of paying for a portion of the costs of installing a
redundant fiber optic line to the city owned property at the Gateway west
facility.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR. OF THE
CITY OF IA.LIS PLLL, THIS 5 TH DAY OF JULY, 2011.
Tammi Fisher
Mayor
ATTEST:
Theresa white
City Clerk
A RESOLUTION CLARIFYING THE GUIDELINES OF THE CITY OF KALISPELL
REGARDING THE UTILIZATION OF TAX INCREMENT FINANCING WITHIN TA.
INCREMENT DISTRICTS THAT HAVE PUBLIC IMPROVEMENTS FINANCED THROUGH
SPECIAL IMPROVEMENT DISTRICT DEBT.
WHEREAS, the City of Kalispell has established a number of tax increment districts pursuant to its
authority and the terms of state law; and
WHEREAS, the City of Kalispell has also established, pursuant to its authority and the terms of state
law, a number of special improvement districts for the purpose of funding certain public
improvements; and
WHEREAS, a special improvement district on which public improvements were constructed and
financed trough city debt, secured by and assessed to the properties directly benefitted
by such public improvements may also be within a tax increment district; and
WHEREAS, the existing tax increment distribution guidelines established by the Council at Resolution
No. 4609 and Resolution No. 5262 specifically enumerate the statutorily permissible uses
of tax increment that includes the use of such funds for public improvements and
establishes the eligibility of businesses that locate or expand within the city that are of a
manufacturing, technological, office, professional or technical service nature to receive
increment benefits in an industrial or technology tax increment district; and
WHEREAS, the Kalispell City Council hereby finds that in instances in which the City establishes a
special improvement district and issues bonds for public improvements and also
establishes a tax increment district over the same area, it is appropriate that tax increment
benefits be considered for otherwise eligible businesses electing to locate and make
private investment within the districts for the purposes of paying the special improvement
district assessments of that. district.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL, OF THE CITY OF KALISPELL
AS FOLLOWS:
SECTION I. That the tax increment distribution guidelines for the City of Kalispell shall
include the allowable use of tax increment to be the payment of special
improvement district assessments on property owned within such special
improvement district and within such tax increment district for the benefit of a
property owner of an eligible business electing to locate and make private
investment within the districts.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE
CITY OF KALISPELL, THIS 7TH DAY OF FEBRUARY, 2011.
ATTEST:
ry
Theresa White
City Clem
Tammi Fisher
Mayor
City of Kalispell
Urban Renewal Agency
201 I st A -venue East
Kallapell, MT 59901
Phone: 406.758.7738
Fax:
MEMORANDUM
To: Urban Renewal Agency
FROM* 'wade Elder, Revolving loan Fund Manager
SUBJECT: TeleTech bequest for West Side TIC` Funds.
MEETING DATE: June 22, 2011. Urban Renewal Agency Meeting.
BACKGROUND: The west Side TIF was established on 03/17/97 through the passage
of Resolution 4309 and Ordinance 1259. It established the base year for calculating the
tax increment: as o 1 /01 /97. The TIF is set to sunset on 03/17f 12. The amount of funds in
the West Side TIF account as of 06/16/1 I was $2, l 10,278.41 and the projected ending.
balance (06/30/12) M* the proposed FY 201.2 is $2,553,754. The projected, revenues from
the proposed FY 2012 budget are $409,1 68.
This request is in the amount of $43,964.00. Funds are being requested for running a
redundant fiber optic line from. TeleTech's location at Gateway 'west Mall, 1203
Highway 2 west, Kalispell connecting to an existing line at Lone Pine (a neap is available
to review). The work is to be done by CenturyLink.
TeleTech is a major employer of our area employing over 800 employees. They operate
out of the building that was bought by the City of Kalispell and Flathead County
Economic Development Authority (FCEDA) and was funded in part by the West Side
TIF. They operate in a facility under a lease with the City & FCEDA that gives them
incentives for jobs created and retained.. They have one customer and this major customer
requires there be a redundant fiber line for them. to operate under should there be a break
in the primary line. When the project was originally put in place the primary and
redundant line both ran down Meridian Road, however when. Meridian Road was redone
there was only one Iine rem* stalled. wring an audit it was identified as an. exception that
there was not a redundant line to the TeleTech facility and they are now addressing it.
The total bid from Centur Link is in the amount of $78,579.00. This is broke down as
fo l lows -,
$41,964.00 Outside Plant Costs
$ 2,000.00 Inside Plant Costs
$34,615.00 Redundant fiber optic Terminal Systems & Rectifiers within the
building
$78>579-00 TOTAL.,
In addition to this $78,579 CenturyLink is estimating TeleTech will have to pay for
running the fiber line under the Stillwater River at a cost of about $30,000F Since this is
outside of the TfF District this is not an item to be considered.
GirtLink and Tee eTech,hav'e worked on this line for some tim-e and they have
indicated this is the most costffective placement of the line given the conditions of the
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contract with their client, the connections with other existing -lines, land and obstacles etc.
I have asked CenturyLink to ident l fy how much of the project .a .t fi n the "Outside
Plwit Costs" category is within the TIF distn'et as some oft goes outside of the TIF
district into Lone Pine. They have indicated that 50% of these costs are related to costs
within the TIF district. It is not _50% of the distance but because of higher costs of going
under sidewalks etc. with -in the TIF district the dollar amount is 50%.
I have asked CenturyLink if there are any other businesses that could use this redundant
line in the area and they have indicated that National Mood has in the past indicated an
interest but due to the od cn*sis throughout the country they do not want to consider
this for at least 3 months ftom now.
The Urban Renewal Agency (URA) met on June 8th to discuss this request from
TeleTech from the City of Kalispell"s West Side Tax Increment Financing (TIF) District
with. no act -ion. taken, As requested by the URA Committee I have invited CenturyLink to
the meeting to help answer any questions that might come up,
Providing this redundant line to the area would provide for other major companies in the
area that are in need of this additional fine in the event of their primary line being cut.
RECOMMENDATION: A. motion to recommend. to the City Coupcil. fundIng be
approved in the amount of $20,982,00 ($41.964.00 X 50%) from. the West Side Tax.
Increment Financing District from the request of TeleTech. to run a redundant fiber optic
line ftom Teich to Lone Pine would be in order,
Ow
FISCAL IMPACTS. If approved by the URA. and the City Council a reduction
of the West Side TIF District fund in the aniount indicated by the ap 0
proving bodies.
ALTERNATIVES', As identified in the UR A has trl:ed to consider other
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funding sources from CenturyLink but this funding. source isnot available. The other
source is the applicant paying for the cost entirely.
Respectfully submitted,
Wade Elder, Revolving Loan Fund Manager
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