DEPARTMENT: Planning and Community Development
DEPARTMENT HEAD: Bridgett White, Director
COUNCIL DISTRICTS IMPACTED: 3
SUBJECT:
Public Hearing and Consideration of an Ordinance Authorizing an Annual Increase in Administrative Fee for Mission Drive-In Tax Increment Reinvestment Zone (TIRZ) #32.
SUMMARY:
City Council is being asked to consider an Ordinance authorizing an increase in the annual administrative fee for the Mission Drive-In TIRZ. The current administrative fee for the TIRZ is $50,000.00. The proposed increase in the annual administrative fee is $75,000.00 beginning January 2017, and $120,000.00 beginning January 2018, until the expiration of the TIRZ term.
BACKGROUND INFORMATION:
The City’s TIF Unit is tasked with the management of the City’s TIF Program, including all City-initiated and Petition-initiated TIRZs.
City Council through Ordinance No. 2008-12-11-1174, designated the Mission Drive-In TIRZ, a City-initiated TIRZ, to assist in the revitalization and reinvestment initiatives necessary to achieve the goals of City programs and City-adopted plans, by using a comprehensive reinvestment plan to coordinate development initiatives and standards that encourage long-term, high quality investment.
On May 14, 2015, City Council approved Ordinance No. 2015-05-14-0419, amending the 2008 Tax Increment Financing Program Policy, which included adjustments to the administrative fees collected by the City for all newly created TIRZs and allowed for the renegotiation of TIRZs administrative fees for existing TIRZs.
The current annual administrative fee is $50,000.00. On December 15, 2016, the TIRZ Board of Directors passed Resolution T32 2016-12-15-01R, approving the increase in annual administrative fee to $75,000.00 beginning January 2017, and $120,000.00 beginning January 2018, until the expiration of the TIRZ term
ISSUE:
Recent City policy mandated that the City’s TIF Unit be funded solely through TIRZ revenue, as a special revenue funded program. Currently, the annual administrative fee for the Mission Drive-In TIRZ is $50,000.00. This Ordinance authorizes an increase in the administrative fee to $75,000.00 beginning January 2017, and $120,000.00 beginning January 2018, until the expiration of the TIRZ term. The revised fee off-sets the costs associated with the administration of the TIRZ program throughout the life of the TIRZ.
Chapter 311 of the Property Tax Code authorizes imputed administrative costs as an allowable project cost incurred by the City.
ALTERNATIVES:
City Council could decide not to authorize the proposed administrative fee increase. If so, this action would reduce the amount of funding available to the TIF Unit to cover the administrative costs associated managing and operating the Mission Drive-In TIRZ.
FISCAL IMPACT:
This Ordinance authorizes an administrative fee increase for the Mission Drive-In TIRZ to $75,000.00 beginning January 2017, and $120,000.00 beginning January 2018, until the expiration of the TIRZ term. The revenues from this fee will be deposited in the Tax Increment Financing Administrative Fund. There is no impact on the City’s General Fund.
Furthermore, the amendments to the TIRZ Finance Plan shall reflect these increases.
RECOMMENDATION:
Staff recommends approval of an Ordinance authorizing an increase in administrative fee for Mission Drive-In TIRZ to $75,000.00 beginning January 2017, and $120,000.00 beginning January 2018, until the expiration of the TIRZ term.