Wyoming plan to buy vacant bank building still a sore spot
Residents of Wyoming continue to speak their minds over the proposed city purchase of the vacant RiverBank building.
During open forum at the Tuesday, July 17 Wyoming City Council meeting, discussion of the purchase continued to figure prominently.
City Attorney Mark Vierling reported that the language of the reverse referendum petition is legal. There are enough signatures to place the question on the November ballot.
City staff is now verifying that signatures are those of registered city voters, City Administrator Craig Mattson said. More than 600 signatures were collected on petitions, far exceeding the number required to force the ballot question.
In his report, Vierling noted that Federal Deposit Insurance Corporation, the building owner, has received a second offer. Andrew Odney, of Colliers International, confirmed a second offer to FDIC for the building, but would reveal no details.
It is known that FDIC wants to expedite the sale; however, factors such as financing and timing may affect any deal.
Ken Anderson asked about the council’s plan if the building is sold to another buyer.
Jerry Owens commented that population estimates have come as a result of the comprehensive plan developed by land planners on the eve of the township/city merger.
City resident Dan Babbitt said growth projections should be re-checked. Fred Weck, building official, said four or five permits for new homes have been issued this year.
During the most recent open forum the theme was opposition to any increase in taxes. The petition for the reverse referendum is tied to this.
There has been cross-over discussion tied to requests for street improvements. Engineer Mark Erichson explained that the pavement management plan and list of street conditions has been developed and is updated annually the past four years.
A similar discussion occurred at the Truth in Taxation hearing last December. Street work now is primarily maintenance. Street repair is limited by lack of funds.
As part of the formation of the 2012 budget, the council proposed a Street Replacement Fund general tax levy in the amount of $500,000.
At the time Mattson said the fund would demonstrate to lenders that there was a funding source to pay loans, otherwise no one would buy bonds.
Mayor Eric Peterson explained that levying over time would be a more economical way to improve the streets. Property taxes would be deductible and there would be no individual hits for street assessments, which are not deductible.
Residents who attended the December meeting were opposed. The council cut that portion of the 2012 levy and postponed the street replacement plan.
There have also been questions about how the city is spending the money it does have and suggestions of misuse.
During the 2011 audit discussion on July 3, Mattson pointed out there had been no referendum on the TIF 3-1 project. The money pit for the city appears to be the Viking Commons commercial development.
Neil Gatzow, a former mayor, was angry when he heard about Mattson’s July 3 comments regarding how TIF 3-1 was created. Mattson had said residents have been paying for a public project. Gatzow responded that the sitting council had unanimously agreed on the terms of the project and funding.
Viking Commons was created in 1999 as part of a combined street and infrastructure improvement involving federal, state, county and city money. For its part of the project the city sold $860,000 in non-taxable bonds (5.46 percent interest), and $755,000 in taxable bonds (7.78 percent interest).
Tax-exempt bonds were sold for the public improvements. Taxable bonds were sold to purchase property on both sides of Viking Blvd. which was later sold to the developer.
During planning for the TIF district, Ehlers and Associates projected a $155,000 levy to meet bond payments for the 15-year term. The 2011 audit shows that during the first four years of the repayment the total actually levied was $197,000, enough to cover payments for the taxable bonds (1999C).
During the years 2003-2006, nothing was levied for bond payments. The fund was in deficit, so likely the money was paid with city reserves, Mattson said.
Since 2006-2007 the levy has been accelerated to make up for the difference in what was needed. In the 12 years of repayment, the city has levied $874,066, transferred $254,284 from the closed TIF 1 and TIF 3-2 accounts, and moved $448,084 from the general fund.
Increased taxes have been generated in the TIF, but not what was expected. Tax increment reflects the increase in taxes collected as a result of increased value of the property. The city’s part of these increased taxes has been applied to bond payments.
In 2010, the TIF taxes collected in the district totaled $38,385 on property valued at $2,532,500. The developer’s agreement splits this increase between the city and developer in the following way.
For 2010, the city received taxes of $19,704, minimum value on $1.3 million valuation. Between $1.3 million and $1.6 million property valuation, 60 percent went to the city, ($2,728), and 40 percent to the developer ($1,819). The split for the excess value over $1.6 million was 20 percent for the city ($2,827) and 80 percent to the developer ($11,307).
In 2010, the net tax split of TIF 3-1 generated $25,259 to the city and $13,126 to the developer. Similar splits occurred in previous years.
With the city accelerating payments, by 2015 the TIF 3-1 will be paid off.
The city also expects that Polaris, a JOBZ state program, will begin paying full taxes in 2014, or some $250,000 a year, according to Mattson. The property taxes will be shared by the city, school district and Chisago County.
He said Polaris is planning expansion which will more than double its space and add to the tax base.
Xccent is expected to begin paying full taxes about the same time. The plant’s tax payments will generate $100,000 annually to local governmental units.