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<br /> VIII-B-2 <br /> September 12, 2006 <br /> , <br /> / TO: The Honorable Mayor and City Council <br /> FR: Jolm Grossman, BRA Director <br /> RE: Use of pre-79 tax increment for public improvements <br /> A result of Shennan's inability to close on land and start work this year, the HRA has a <br /> balance of pre-79 increment from the downtown district. The funds were to be used for <br /> a parking lot lUld the balance for infrastructure assessments along Tyler Street. <br /> The anticipated balance is expected to around $725,000. The funds are to be spent this <br /> year by a combination of paying for completed work and escrowing for contracted work. <br /> The HRA has committed to or is planning $285,000 in redevelopment and rehabilitation <br /> costs by year-end, including the Second and Third Street crossings. <br /> The HRA proposes to use the remaining balance to pay this year's public improvements <br /> on 3'd and Eddy inside the TIF district. That amount would be at least $440,000, perhaps <br /> more. This amount could be used to reduce the bonded debt and/or be used in lieu of <br /> sewer and water funds, saving the City the expense this year. <br /> The HRA asks that the City Council agree to provide the HRA a credit, in an equal <br /> C) amount, against the costs of street and utility work to be done adjacent to HRA <br /> redevelopment property in the future. An agreement would be written to document the <br /> amounts and types of costs paid for this year. <br /> The Engineer's estimate of costs to be paid by the City for Third and Eddy Street public <br /> improvement project. <br /> Street reconstruction: $346,658 City improvement bond <br /> Sewer and water reconstruction: $279,228 City's sewer and water fund <br /> Total $626,540 <br /> Staffhas discussed this with Char Stark, Tom Montgomery and tax increment consuhants <br /> to verifY that it would meet legal and accounting requirements. The consultants advise <br /> that the HRA can use the increment to pay for the City's share of public improvements in <br /> the district. lfthe Council approves ofthis concept, an agreement would be drafted for <br /> the meeting in October when the Public Works Director asks the Council to levy for the <br /> project. <br /> ACTION: Approve this use oftax increment in concept, and direct that an agreement be <br /> drafted for consideration. <br /> n <br />