2012-2013 URA Annual Report
Prepared by:
Kalispell Urban Renewal Agency and
Community and Economic
Development Department
City of Kalispell
Tax Increment Financing Districts
Annual Report
2012-2013
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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 2012 through August 2013 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.
City of Kalispell TIF Districts 2011 2012 % Change
since 2011
City Total Taxable Value $41,785,560 $40,531,328 -3%
Aggregated TIFs Base Taxable Value $3,676,477 $8,387,046 +128%
Aggregated TIFs Current Taxable Value $5,392,074 $ 9,901,804 +83%
Total Aggregated TIFs Incremental Value $1,715,597 $1,514,758 -12%
The Montana Department of Revenue 2012 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 August 2, 2012. 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.
Further, it is important to note that the West Side TIF boundary was expanded by City Council
action in December 2012 to include the Core Area. This expansion led to the recalculation of the
base taxable value: still at 1997 values when the West Side TIF was originated, but now
including a larger physical boundary area. This change taken in tandem with the significant
reduction in taxable values experienced throughout the City and mirrored in two of the TIF
Districts creates year to year calculations that can be counter-intuitive.
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 four-year, staggered terms. Members and board terms for 2012-2013:
Member Position Term Expires
Marc Rold Chairman 04/30/2014
Tom Lund Vice Chairman 04/30/2014
Suzanne Faubert* Member 04/30/2015 Pam Mower 4/30/2015
Murphy McMahon Member 04/30/2015
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Shannon Nalty** Member 04/30/2013 Dave Girardot 4/30/2017
*Suzanne Faubert moved outside Kalispell City limits in 2013 and no longer owns property in
the city limits, therefore disqualifying her to serve on the Urban Renewal Agency board. Pam
Mower was appointed by City Council to fill the remainder of the term.
**Shannon Nalty’s term expired on 04/30/2013. Dave Girardot was appointed by City Council
to the Urban Renewal Agency for a four year term ending 04/30/2017.
The URA held five regular meetings, and three work sessions September 1, 2012 through August
31, 2013. 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 2012 through August
2013 follows:
Meeting Date Attendance Action
11/14/2012 Rold, Lund, Faubert,
McMahon, Nalty
Recommended City Council not endorse the
acquisition of permanent easement for Kidsports
utilizing South Kalispell/Airport TIF District
funds.
01/16/2013 Rold, Faubert, Lund,
McMahon, Nalty, TIF
Applicant Paul Roybal
Reviewed and discussed TIF proposal from 11
Main Street/Paul Roybal. Discussion of policies
and application process for future TIF requests.
02/13/2013 Rold, Lund, Faubert, Nalty Discussion and review of draft Westside/Core
Area TIF Criteria for Review. Discussion on 11
Main Street/Paul Roybal TIF request. Schedule of
February work session to begin creation of
Westside/Core Area TIF policies and procedures.
02/27/2013
Work Session
Lund, Faubert, McMahon,
Nalty
Drafted possible funding programs for the
Westside/Core Area TIF: Shared Utility
Extension, Rehab/Code Compliance, Façade
Improvement, Historic Façade Restoration,
Technical Assistance.
03/13/2013 Lund, Faubert, McMahon,
TIF Applicant Paul Roybal
Discussion of 11 Main Street Request from Paul
Roybal. Motion made to submit a
recommendation of funding to City Council for
this project in the amount of $72,661 in grant and
loan dollars.
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03/20/2013
Work Session
Lund, Faubert, McMahon Reviewed and suggested changes to the drafted
programs and policy updates for the
Westside/Core Area TIF.
04/10/2013 Rold, Faubert, McMahon Reviewed certification of taxable valuation.
Reviewed 2011-2012 Annual TIF report.
05/08/2013
Work Session
Rold, Lund, Faubert,
McMahon
Review of draft developer’s agreement for 11
Main Street. Review of 2011-2012 Annual TIF
Report. Recommendation to submit Annual
Report to City Council. Review of Technical
Assistance Program Draft.
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West Side/Core Area 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. providing a full range of services to area.
In November 2012, City of Kalispell ordinance 1717 modified the boundaries of the Westside
TIF District to include an area referred to as the “Core Area.” The Core Area encompasses 365
acres and is focused along the major roadways of Idaho Street, Main Street, Center Street,
Meridian Street, and 5th Avenue West North.
In February 2013 Kalispell City Council Resolution 5605 adopted as an amendment to the West
Side Urban Renewal Plan, the Core Area Plan. The intent of the plan is to eliminate blight and
encourage redevelopment in the district through the use of TIF as specified by State Law.
Current City Council Ward: Ward 1
West Side TIF District 2011 2012 % Change Since 2011
West Side Base Taxable Value $3,222,347 $7,932,918 +146%
West Side Current Taxable Value $3,808,596 $8,390,756 +120%
Total West Side TIF Incremental Value $586,249 $457,838 -22%
The current assessed value of property within the West Side TIF District increased by 5% over
the base assessed value established in 1997 at the time of the District’s creation.
In April 2013 City Council approved a TIF request of up to $72,661 to assist the redevelopment
of blighted property at 11 Main Street, Kalispell, Montana. Of these funds, up to $52,290 may be
grant funds, and $20,371 may be offered as loan support pending approval by the Kalispell
Revolving Loan Fund Committee. Per the Developer’s Agreement, signed September 25, 2013,
$18,533 of these funds are to construct a fire flow line to meet the fire flow needs of this
property and neighboring properties. Remaining funds may be used to renovate the historic
façade of the building and complete interior renovations that are required to rehabilitate the
building and comply with City codes. To ensure adequate owner investment, TIF funding for
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private investment in this project does not exceed 10% of the total project cost. These funds are
reimbursable contingent upon the project being completed within one year of the executed
Developer’s Agreement (September 25, 2014.)
On April 3, 2013 the City of Kalispell signed a memorandum of understanding with Flathead
County Economic Development Authority (FCEDA) transferring ownership of the Teletech
facility within the Gateway West Mall from the City of Kalispell to FCEDA. FCEDA shall
receive the entire portion of the revenues above the Beneficial Use Tax and Personal Property
Tax amounts paid annually by the lessee until such time as a total of $300,000 has been received
for the purposes of building an adequate maintenance reserve for the property. Thereafter, and in
consideration for the City transferring its property interest, FCEDA shall remit to the City 25%
of all revenues it receives from the lessee which are above the Beneficial Use Tax and Personal
Property Tax amounts which will continue to be paid to the taxing entities.
West Side TIF Fiscal Year 2013 Revenue (7/1/12-6/30/13):
West Side TIF beginning cash July 1, 2012: $2,275,372
Tax Increment: $ 507,289
Investment Earnings: $18,160
Fiscal Year 2013 Available for Expenditures: $2,800,821
West Side TIF Fiscal Year 2013 Expenditures and Commitments:
Personal Services: ($32,352)
Contract Services: ($7,090)
Reimbursements/other: ($1,776)
Debt Service: ($32,041)
Redevelopment Activity: ($0)
Total Expenditures and Commitments: ($73,259)
Uncommitted Cash as of 6/30/2013: $2,727,562
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West Side/Core Area TIF Projects 2012-2013
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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
South Kalispell/Airport TIF District 2011 2012 % Change
Since 2011
South Kalispell/Airport Base Taxable Value $453,612 $453,612 0
South Kalispell/Airport Current Taxable Value $1,461,072 $1,386,714 -5%
Total South Kalispell/Airport TIF Incremental
Value
$1,007,460 $933,102 -7%
The current assessed value of property within the South Kalispell/Airport TIF District has
increased by 205% 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.
On December 17, 2012 City Council voted for Resolution 5602- Kidsports Permanent Easement
Purchase using funds generated by Airport/Athletic Complex TIF District. This resolution
allowed for the expenditure of $2,260,496 plus potential fees and expenses to be spent from this
TIF district.
The South Kalispell/Airport TIF District will expire July 1, 2020.
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South Kalispell/Airport TIF Fiscal Year 2013 Revenue (7/1/12-6/30/13):
South Kalispell/ Airport TIF beginning cash July 1, 2012: $1,933,710
Tax Increment: $ 667,122
Investment Earnings: $12,435
Fiscal Year 2013 Available for Expenditures: $2,613,267
South Kalispell/Airport TIF Fiscal Year 2013 Expenditures and Commitments:
Personal Services: ($9,955)
Contract Services: ($2,151)
Reimbursements/other: ($9,335)
Debt Service: ($181,000)
Redevelopment Activity: ($2,266,336)
Total Expenditures and Commitments: ($2,468,777)
Uncommitted Cash as of 6/30/2013: $144,490
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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
Old School Station—Industrial TIF District 2011 2012 % Change
Since 2011
Old School Station—Industrial Base Taxable
Value
$128 $126 0
Old School Station—Industrial Current Taxable
Value
$18,244 $19,925 +9%
Total Old School Station—Industrial TIF
Incremental Value
$18,116 $19,799 +9%
The current assessed value of property within the Old School Station—Industrial District
increased by 15,713% 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 2012-2013, $12,661 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 covered per City Council action.
For these reasons, this account is budgeted by City Council for fiscal year 2014 at a zero balance.
The Old School Station—Industrial TIF is scheduled to terminate on the fifteenth year following
its creation, meaning January 1, 2020.
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Old School Station Industrial Fiscal Year 2013 Revenue (7/1/12-6/30/13)
OSS TIF beginning cash July 1, 2012: $61
Tax Increment: $18,809
Investment Earnings: $0
Fiscal Year 2013 Available for Expenditures: $18,870
Old School Station Industrial Fiscal Year 2013 Expenditures and Commitments:
Personal Services: ($0)
Contract Services: ($0)
Reimbursements/other: ($0)
Debt Service: ($18,870)
Redevelopment Activity: ($0)
Total Expenditures and Commitments: ($18,870)
Uncommitted Cash as of 6/30/2013: $0
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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
Old School Station—Technology TIF District 2011 2012 % Change
since 2011
Old School Station—Technology Base Taxable Value $390 $390 0
Old School Station—Technology Current Taxable
Value
$104,162 $104,409 +.24%
Total Old School Station—Technology TIF
Incremental Value
$103,772 $104,019 +24
The current assessed value of property within the Old School Station—Technology TIF District
increased by 26,671% 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 2012-2013, $25,000 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 covered per City Council action.
For these reasons, City Council fiscal year 2014 budget reflects a zero balance for this account.
The Old School Station—Technology TIF is scheduled to terminate on the fifteenth year
following its creation on January 1, 2020.
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Old School Station Technology Fiscal Year 2013 Revenue (7/1/12-6/30/13)
OSS TIF beginning cash July 1, 2012: $1,120
Tax Increment: $51,323
Investment Earnings: $117
Fiscal Year 2013 Available for Expenditures: $52,560
Old School Station Technology Fiscal Year 2013 Expenditures and Commitments:
Personal Services: ($0)
Contract Services: ($0)
Reimbursements/other: ($23,068)
Debt Service: ($29,492)
Redevelopment Activity: ($0)
Total Expenditures and Commitments: ($52,560)
Uncommitted Cash as of 6/30/2013: $0
This report reviewed and approved by the Urban Renewal Agency on January 8, 2014
Date
Marc Rold, Urban Renewal Agency Chairman
Katharine Thompson, Community Development Manager
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Submit Inquiries To:
Katharine Thompson
Community Development Manager
201 First Avenue East
Kalispell, MT 59901
406/758.7713
kthompson@kalispell.com