Thursday, September 06, 2012
 
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City votes to move forward with TIF district

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[September 06, 2012]  Tuesday evening the Lincoln City Council conducted its first voting meeting for September. Normally voting sessions are on the first and third Monday of the month. This week the meeting was postponed one day due to the Labor Day holiday.

During their voting the council approved moving forward with the next step of creating a tax increment financing, or TIF, district in the downtown portion of the city.

When the vote was taken, it passed 7-1 with one abstaining. Melody Anderson was absent for the evening, Buzz Busby voted no, and Tom O'Donohue abstained from voting.

Last Tuesday during the committee of the whole meeting of the council, John Myers of Rabin & Myers in Springfield along with Lisa Kramer of Prairie Engineers presented the completed first step of forming the district: the feasibility study.

Myers said early on that much of the legwork for the study had been completed by Kramer. He said she had taken photos of every building in the proposed district area and had complied information for him that he was able to use in completing the study.

He said the city of Lincoln does qualify for a "conservation TIF district."

Myers said the city structures had to meet specific requirements to qualify for this type of TIF.

The tax assessments on the downtown building have to show a declining value over the last few years. Over 50 percent of the buildings have to be 35 years old or older, and there has to be visible deterioration of the buildings. These are only three of the dozen or so qualifying factors and the three that Myers drew most upon during his discussion.

Myers said 90 percent of the buildings in the downtown area are over 35 years old. He said that looking at tax assessment records, it was clear that building values in the downtown area were decreasing, and of some 170 buildings inside the target area, 81 percent had some defect.

On the bright side, he commented that of the buildings surveyed, very few were in a state of dilapidation.

Myers talked about how the TIF could work for the various business owners downtown as well as the city.

If a building is currently valued at $20,000 and is in need of improvements, the business owner can obtain a TIF loan to remodel or refurbish the building. Once refurbished, the building value will go up and the taxes on the property will increase. If that building were valued for property tax at $300,000 after rehab, the city could collect the tax difference between the $20,000 and the $300,000.

That money would be unrestricted cash the city could use in a variety of ways. They could use it to finance future building restorations, and they could use it to take care of some of the infrastructure needs in the downtown area or to fill the gaps in funds needed for downtown beautification and restoration.

Myers noted specifically that the money could be used to build a parking garage or lot, or it could be used to improve the city sewer system in the downtown area.

He told the council that with the feasibility study done, he and Kramer are ready to move on to the next steps of creating the TIF district.

For him to move forward, the city would need to pass an ordinance approving the study.

Then the city would need to vote to approve a letter of engagement for the rest of his services.

He shared with the council a task list containing 26 items that he and Kramer would complete in the next stage, with the goal of having all his work done by March 1, 2013.

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Some of the items discussed on the task list included establishing a joint review board for the district.

The joint review board will consist of representatives of the school district and other tax bodies and advisers. He said it would be their job to offer an opinion to the council on the merit of the district.

Another item on the list was to adopt rules for an "interested party registry." Myers said this would be the guide for giving out information to interested parties, who would otherwise not be entitled to the information.

Myers said the city would also need to develop a broad-based TIF budget, which would outline how the city will spend the money they earn.

During the discussions, Melody Anderson questioned using the money for sewer work. She said she had been of the understanding the city sewer system had to take care of itself.

Myers said the sewers in Lincoln for the most part are combined sewers. However, as a general rule, storm sewers are considered to be a part of the street department, not the sewer department.

This week when the items came to the floor, O'Donohue, who chairs the ordinance committee, first made the motion to approve the feasibility study. When it came time to vote, he abstained. As the city clerk made her way through roll call, everyone else with the exception of Busby voted in favor.

The second motion was to approve the engagement letter with Myers and Kramer. Again, O'Donohue made the motion and abstained from voting.

When the roll call made its way to Busby, he said he wanted to ask a question. He wondered if it was legal for O'Donohue to make a motion, then abstain from voting.

O'Donohue said he made the motion as the committee chair but was abstaining from the vote because he had a personal interest in the outcome. Busby said little else, but cast his vote once again as no.

Later in the evening O'Donohue shared information he had looked up as the meeting progressed, which confirmed it is legal to make a motion, then vote against or abstain if desired.

[By NILA SMITH]

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