Reserve Fund Policy for the Marketplace TIF

A Special Allocation Fund Reserve Policy for the City of Grain Valley’s Marketplace TIF

City of Grain Valley Board of Aldermen Special Meeting - July 31, 2012

A policy that addresses the City’s approach to risk management as it relates to the Marketplace TIF financial bonds

°  TIF- Tax Increment Financing

A way of financing a development project by setting up a special taxing district for planning and developing the project.

The district may function as an independent authority or as a public/private venture.  In the latter case, the district may be governed by a city governing board sitting as the district board.

This special taxing district is useful to developers because it spreads the costs of development for a repayment period of 15 to 20 years.  When [and if] the property generates an increase in property taxes, the property owners [the property owners in the district] are assessed payments from this incremental increase to pay off the revenue bonds that the district sold.

[In the City of Grain Valley, the authority for this district is the Grain Valley Industrial Development Authority, MO.]

Securing financing involves bank fees, services of bond counsels, underwriters, rating agencies, insurers, and other specialists.
Establishing special districts requires a considerable amount of time and talent.

- from Real Estate Development: Principles and Process. Urban Land Institute. 2007. "The Roles of the Public Sector" - Chapter 13. pp. 318-19.

Issuance of bonds was approved by the Board of Aldermen on May 21, 2012. *

Compensation for all the above professionals immediately flows out of Grain Valley from the city's taxpayers since these professionals rarely live in Grain Valley itself.

The city itself takes the full risk whether or not the development will ever generate property tax increases to pay off the bonds and interest, not to mention to recoup the up-front fees which it paid to the professionals.

This redevelopment project is located at the northeast corner of Buckner-Tarsney Rd. (Main St.) and I-70.

*  Neighborhood Improvement District Limited General Obligation Temporary Notes - NID Notes

City annexes Barton property

City of Grain Valley Board of Aldermen Meeting – July 23, 2012

• Neighbor Rosalind Schlomann takes a conciliatory attitude if only one house is built on the Barton's 12 acre property.
• Some citizens feel that City Administrator Alexa Barton is in breach of her contract by living in Blue Springs instead of Grain Valley.
• Chuck Johnston:  "Aldermen have not disclosed the city's cost for annexing the Barton property."
• "How does the city benefit from the Barton annexation?" he asks.
• "What promise exists that both now and in the feature only one house will be built on the Barton property?"
• Dennis Romines asks, "What guaranty there is on the part of the Bartons to only put up one house and, for the future, that there will only be one house on the twelve acres that the Bartons have petitioned to annex?"
• Annexation ordinance is adopted by a vote of 5 to 1.
• Alderman Yolanda West votes against the annexation.
• "Only one fact about the annexation has been presented," she says.
• The one fact, according to West, is the legal description of the twelve-acre property.
• "How costly is the city's liability for this annexation?  $10,000?  $100,000?"
• She wants a due diligence report, an accounting of the expenses by the city, and a demonstration of how this annexation benefits the city.
• Alderman Scott Shafer comments:  "Has anyone asked City Administer Alexa Barton why she is living in Blue Springs?"
• Can Alderman Shafer answer this question?  Would he?  So far, not publicly.
• City Attorney Jim Cook reads a legal letter of opposition into the minutes of this meeting.
• City Administrator Barton didn't not want this letter read – "It's a personal issue," she claims.

°  Coming – Listen to my report - 11 minutes