Item Coversheet

7.A.


Shakopee City Council
March 1, 2022

FROM:Nate Reinhardt, Finance Director
TO:Mayor and Council Members
Subject:
Tax increment spending plan
Policy/Action Requested:
Adopt Resolution R2022-005 approving a spending plan for certain tax increment financing districts located in the City of Shakopee.
Recommendation:
Approval
Discussion:

The State Legislature amended the TIF law in 2021 to provide flexibility to cities to utilize unobligated TIF balances in existing districts in order to promote construction and job creation in their communities.  The law allows cities to provide assistance for private development that creates or retains jobs, without counting against the pooling limitations of the districts.

 

If the spending plan is approved the City/EDA has until December 31, 2022 to transfer the funds to another designated City/EDA fund and the dollars must be spent by December 31, 2025.

 

In order to preserve the ability to use this tool, the City and EDA are required to develop a spending plan that identifies the TIF districts that will fund defined projects, hold a public hearing, adopt the plan and submit it to the State Auditor

Budget Impact:
If the spending plan is approved, the City/EDA does not commit assistance to a development project, but rather reserves the right to do so in the future.  Staff estimates the current available unobligated increment is approximately $500,000.  Preference for financing assistance will be for private development that provides for high wage job creation or development of housing, including but not limited to, market rate and affordable multi-family, town homes and single-family units.
ATTACHMENTS:
Description
R2022-005 Tax Increment Spending Plan
Tax Increment Spending Plan
OSA Statement of Position (2021 TIF Law)
TIF Spending Plan (Presentation)