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2011/2012 Tax Increment Finance (TIF) Annual ReportCity of Kalispell Tax Increment Financing Districts Annual Report 2011-2012 ��. IQ)] 1 Prepared by: Kalispell Urban Renewal Agency and Community and Economic Develop ment Department 1 City of Kalispell Tax Increment Finance Districts September 15, 2011 0 LOW 1. ail t. Legend Kalispell City Limits Boundary Airport TIF Westside TIF Old School Station TIF - Industrial Old School Station TIF Technology I z"T, ;< vv:IN� Introduction The intent of this report is to provide a comprehensive understanding of existing Tax Increment Financing (TIF) Districts. Knowledge of TIF projects and other actions related to TIF in addition to financial reports serve to improve TIF management and implementation on behalf of the community. This report documents Kalispell Tax Increment Financing Districts for the period September 2011 through September 2012 and to provide adequate information for review. Summary Tax Increment Financing District law is found at Title 7, Chapter 15, Parts 42 and 43, of the Montana Code Annotated. In Kalispell, applications for Tax Increment Financing are accepted through the Community and Economic Development Department, reviewed and considered by the Urban Renewal Agency and ultimately decided by City Council. $41,785,560 $ 3,676,477 $ 5,392,074 $ 1,715,597 The Montana Department of Revenue 2011 Certified Taxable Valuation Information annual report is the source of all current taxable, base taxable and incremental values utilized in this report. The Department of Revenue's information for the Kalispell City taxing jurisdiction was certified July 29, 2011. Note that certification of values is determined on a single day in the calendar year and therefore provides a "snapshot" of value. It is not uncommon for values to vary between the time of the certification and the actual collection of taxes by the Department of Revenue. During the reporting period the City of Kalispell discovered a number of properties that were not correctly tracked with the appropriate TIF district. This situation has since been rectified, but highlights the necessity of regular review. The current assessed value of property within the four TIF Districts has increased by 47% over the base assessed values at their times of creation. The City of Kalispell Tax Increment Financing Districts are overseen by a five member volunteer board, the Urban Renewal Agency (URA). Board members are appointed by City Council to serve three-year, staggered terms. Members and board terms for 2011-2012 follow: Member Marc Rold Tom Lund Suzanne Faubert Richard Kuhl* Shannon Nalty Position Chairman Vice Chairman Member Member Member Term Expires 04/30/2014 04/30/2014 04/30/2015 04/30/2012 04/30/2013 Murphy McMahon 04/30/2015 k] * Richard Kuhl's term expired on 04/30/2012. Murphy McMahon was appointed by City Council to the Urban Renewal Agency for a three year term ending 04/30/2015. The URA held seven meetings September 14, 2011 through September 30, 2012. The Urban Renewal Agency receives staff support from the City of Kalispell, Community and Economic Development Department. The Urban Renewal Agency meeting history for the period September 2011 thru September 2012 follows: Meeting Attendance Action Date 09/28/2011 Rold, Lund, Kuhl, Nalty, Faubert Recommended West Side Urban Renewal District Expansion to include Core Area and Flathead County Fairgrounds. 11/09/2011 Lund, Kuhl, Nalty, Faubert Considered proposed land swap of City parking lot north of TeleTech facility with former Gateway Cinema property located to the west. No action. 12/05/2011 Rold, Lund, Kuhl, Nalty, Faubert Recommended that City continue consideration of TeleTech-Gateway land swap project. 12/14/2011 Rold, Lund, Kuhl, Nalty, Faubert Considered new information on proposed land swap of City parking lot north of TeleTech facility with former Gateway Cinema property located to the west. No action. 12/28/2011 Rold, Lund, Kuhl, Nalty, Faubert Discussion of West Side TIF benefits and potential projects. No action. 01/18/2012 Rold, Lund, Kuhl, Nalty Discussion of West Side TIF timeline for bond financing, update on West Side projects and City growth policy update. No action. 02/01/2012 Rold, Lund, Kuhl, Nalty, Faubert Recommended two West Side TIF district projects: Colorado Street water project and Appleway/South Meridian intersection reconstruction to be bonded for 25 year term. imnolm 9 C HUSKYJ ST. ST NY IN WAft�Z—O—WAIE%ffij 5 West Side Tax Increment Financing District In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1259 on March 17, 1997, establishing the West Side Urban Renewal Tax Increment Financing District and adopting the urban renewal plan. The Ordinance also established January 1, 1997, as the base year for calculating the tax increment of the district. The enabling legislation documents the following purpose of the West Side TIF: Whereas, the Plan [West Side Urban Renewal Plan] for the project area requires, among other things: a. setting a pattern of land use incorporating sensitivity to neighboring uses; b. creating a circulation pattern that maintains a separation of incompatible uses; c. creating a street system that can accommodate increase in traffic safety; and d. provide full range of services to area. Current City Council Ward: Ward 1 $ 3,222,347 I $ 3,808,596 $ 586,249 The current assessed value of property within the West Side TIF District increased by 18% over the base assessed value established in 1997 at the time of the District's creation. In March 2012, Kalispell City Council approved a bond issuance of $500,000 to fund improvements within the District detailed below: 1. The Colorado Street Water System Improvement Project to connect/loop the dead end water mains on Colorado Street to the overall water distribution system. The project also replaced an existing inadequate 2" water main with a standard 8" water main. The improvements provided dependable fire flows, water pressure levels, and improved water quality to Colorado Street residents; and 2. The South Meridian Road Intersection Improvement Project modified the intersection of South Meridian Road and Center Street. Additionally the project modified the intersection of South Meridian Road and Appleway Drive. Engineering study of the area found that the two intersections were causing significant congestion which was mitigated by widening the roadway and the addition of a left turn lane at Center Street and Appleway Drive. Annual payments of approximately $32,000 are being made to service the debt for the period January 1, 2013, through July 1, 2018. Council action in March 2012 extended the "life" of the West Side TIF District to January 1, 2037. A- f Y�♦t., jti�.fa fi �• - f f' � ILrt, �-�.� � q `� �1�T�� LAI �r 1E- yl -- LW i i 'L � '-J ,Y �� •t , � j(- .y_ ;tLrm.y f_ �y`,1� �- 3�•' A `-�., �. r-t .,^' _ � z - .. � t�' � �. 'I III i..rc.eriC •� Y . �: � � @. 7Y '� w• : '�� � is • ►o... �.. .�.. tJ......- r;k� •fi:.a e,r �L'I_ ra•. � • r _.� v'�a~' !r � :r' ,•. +.:� iis �j i AMP _i ,�, �' ' o � i';• ••- _ �; 04 Its �}� . r .�,� I,y _'t��'L...�a. � i:•. Egli - ... ...._ y • ., f„•�'`• ,+• b� �, �•', '.1 � +�`i:- 1 Sr rY, /r t �pp dy�'t'C(r .r. `•. � � b�,..�--cr •� S Airport Tax Increment Finance District September 15, 2011 • 1-r'� iy : -•C��-fit S� ,� Legend Airport TIF - -� ��-� -'� -•�"• Kalispell City Limits Boundary en_ w > -' gg B°r 8TH ST E 1 BLUESTONE KEL ;C`eF�7 gEG PARK TEAL: DR -. J �I � J - - IY1� FT- 7 MERGANSER DR a \�� •�- Wiz.. 0 South Kalispell/Airport TIF In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1242 on July 1, 1996, establishing the City Airport/Athletic Complex Urban Renewal District and adopting the "Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis" establishing January 1, 1996, as the base year for calculating the tax increment of the district. The enabling legislation documents the following purpose of the Airport Tax Increment Finance District: Whereas, among the identified goals and objectives of the Urban Renewal Plan are: a. minimizing hazards to navigation, b. developing the airport in accordance with an airport layout plan, c. increasing development opportunities on nearby properties, d. promoting compatible land use in and around the airport, e. establishing a funding mechanism for airport properties, and f. establishing a priority schedule for plan implementation. Ordinance No. 1541 was adopted by Council on July 18, 2005, amending the City Airport/Athletic Complex Redevelopment Plan, authorizing an urban renewal project and approving revenue bonds. Current City Council Ward: Ward 4 The current assessed value of property within the South Kalispell/Airport TIF District has increased by 222% over the base assessed value established in 1996 at time of District's creation. As a result of project bonding issued in September 2005, beginning January 1, 2006, and continuing each year through July 1, 2020, $500,000 of the annual increment will be utilized to pay debt service. The South Kalispell/Airport TIF District will expire July 1, 2020. 10 Old School StationTax Increment Finance Districts September 15, 2011 11 Old School Station, Industrial In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1557 on November 21, 2005, establishing the Old School Station Industrial Tax Increment Financing District, identifying its boundaries and establishing January 1, 2005, as the base year for calculating the tax increment of the district. Current City Council Ward: Ward 4 The current assessed value of property within the Old School Station —Industrial District increased by 14,153% over the base assessed value established in 2005 at time of District's creation. This high percentage of increase in value is the result of the TIF being created while the properties were still undeveloped sites. A portion of the annual increment from this TIF is pledged for repayment of Special Improvement District bonds, as needed and as funds are available, over the life of the bond, January 1, 2007, through July 1, 2026. In fiscal year 2011-2012, $30,000 was transferred for this purpose. Due to non-payment of property taxes as assessed, there exists the potential for tax receipts to be adequate to meet SID payments. Any shortfall would need to be made from the General Fund. The Old School Station —Industrial TIF is scheduled to terminate on the fifteenth year following its creation, meaning January 1, 2020. 12 Old School Station, Technology In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1558 on November 21, 2005, establishing the Old School Station Technology Tax Increment Financing District, identifying its boundaries and establishing January 1, 2005, as the base year for calculating the tax increment of the district. Current City Council Ward: Ward 4 The current assessed value of property within the Old School Station —Technology TIF District increased by 26,608% over the base assessed value established in 2005 at the time of the District's creation. This high percentage of increase in value is the result of the TIF being created while the properties were still undeveloped sites. A portion of the annual increment from this TIF is pledged for repayment of Special Improvement District bonds, as needed and as funds are available, over the life of the bond, January 1, 2007, through July 1, 2026. In fiscal year 2011-2012, $12,900 was transferred for this purpose. Due to non-payment of property taxes as assessed, there exists the potential for tax receipts to be adequate to meet SID payments. Any shortfall would need to be made from the General Fund The Old School Station —Technology TIF is scheduled to terminate on the fifteenth year following its creation on January 1, 2020. Date Rold, Urban Renewal Agency Chairman Thompson, Comiliunity Development Manager 13 Submit Inquiries To: Katharine Thompson Community Development Manager 201 First Avenue East Kalispell, MT 59901 406n58.7713 kthompson@kalispell.com WA&OPTJ;W� rt�..