CC Minutes 06/26/2006 - Laserfiche WebLink

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City Commission Meeting June 26, 2006 Page 6 . In 2004, for some unknown and unauthorized reason, the Seminole County Tax Assessor increased the tax increment base amount from $8 1,977 ,660 to $9 I ,624,920. This in essence altered the amount contributed (under the 95% formula) to the trust Fund. It is our understanding that this increase in the base occurred as to parcels annexed into the City were folded in the CRA district. However well intended the increased base may have been, Chapter 163.361 (4) specifically describes the process by which a tax increment area can be expanded. To do so, the same process, including the "Finding Necessity" documentation and public hearing process for plan amendment must be followed. This was not done, so there should not have been any increment attributable to these annexed parcels and obviously, the 1996 base year could not be changed. Should these two parcels be subsequently included in the CRA tax increment area, a separate base year for these two parcels will be established and future increment will be calculated off of that new base. The original base is inviolate and cannot be changed. The land acquisition and subsequent forgiveness of the loan between the City and the CRA in 2004 as a result of the CRA donating land to the City may be justifiable. From a review fo the records back to 2004, it appears that the City Commission forgave the entire debt owed by the CRA without qualification, although the City Commission may not have had all the financial information regarding the implications fo the forgiveness at the time. In any event, the most appropriate time to make the determination whether to credit the City for the loan forgiveness would be when the property is sold. If it sells for less that the amount of the debt, rather than relying on a current appraisal of the property, then the credit could be determined at that time. For purposes of this analysis, we have not included a credit for the debt forgiveness. With regard to expenses, Florida Statutes 163.387(6)(a-h) describes the types of expenses for which the City can be reimbursed by the CRA. These expenses include, but are not limited to, administrative overhead, professional services related to planning, engineering, design, surveys, financial analysis, acquisition of property, clearance and site preparation, repayment of principal and interest on any indebtedness, development of affordable housing and community policing innovations. The reimbursements would be eligible back to costs incurred in assisting the CRA since 1995. The estimated amount of eligible reimbursable costs to the City from the CRA Trust Fund is $258,626. . The estimated total funding requirements for the CRA since 1995 are $1,063,890 for the City and $1,027,092 for the County. In reviewing the Finance Department figures, it appears that the City underfunded the CRA Trust Fund in thetotal amount of$552, 1 0 I. This revised figure is calculated using the 95% formula since tax increment has been collected starting in 1996. Similarly, the County's share of tax increment contribution to the Trust Fund has been underfunded by a total of $23,995. These calculations are based on contributions since 1998. Another issue to be addressed relates to the interest accrued for any outstanding payments. The legislation stipulates I % per month penalty for all outstanding payments. Though the City has provided figures on this penalty, we feel this must be recalculated based on the removal of the credit for the debt forgive ness to determine the actual financial obligations to adhere to Chapter 1 63.387(2)(b) Florida Statutes. It appears that both the City and the County would be required to