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To our Redevelopment Agency board meeting. 00:00:00
It's February 26, 2025 and the time is 603. 00:00:03
I'm going to start by offering an invocation and then we'll stand for the Pledge of Allegiance. 00:00:08
Kind Heavenly Father, we're so grateful for this time to gather together as a community, and we pray that Thy Spirit will be with 00:00:13
us and that we will. 00:00:17
People to be thoughtful and. 00:00:20
Make decisions that are good for today and build for generations to come. We love these and say this name of Jesus Christ Amen. 00:00:23
All rise. 00:00:27
I pledge allegiance to the flag of the United States of America. 00:00:33
To the Republic for which it stands. 00:00:38
My nation under God. 00:00:41
Indivisible with liberty and justice for all. 00:00:43
All right, we're going to start with a few presentations. Josh is going to give us an RDA update. 00:00:52
And let's see. 00:00:59
We'll go from there. 00:01:02
Great. Thank you, Mayor. 00:01:04
We're really, I should say chair as you sit in the. 00:01:06
Board of the RDA. 00:01:09
I'm going to share my screen here. 00:01:11
So in your packet there's a memo. 00:01:13
I just have two informational items. I'm going to try to do a few of these types of informational updates from time to time as we. 00:01:16
Sort of gather data and can kind of update you on. 00:01:23
Activities in the Geneva urban renewal area project area. 00:01:27
Including sort of financial outlooks? 00:01:32
And that sort of thing. So the first set of data I want to share. 00:01:36
Is related to. 00:01:41
The total. 00:01:44
Yeah, so. 00:01:48
This item is related to. 00:01:49
The total. 00:01:51
Value in the project area from the original. 00:01:53
Adopted proposed budget for the RDA versus kind of where we're at currently based on. 00:01:57
Recent data and forecast data. 00:02:03
So just just kind of a refresher. 00:02:06
When the. 00:02:09
Geneva Urban Renewal. 00:02:11
Project Area Plan was adopted in 2011. 00:02:13
One of the components of that plan was a proposed budget. 00:02:17
And in the proposed budget, there were. 00:02:22
Estimates of what? The value of the land. 00:02:25
And the improvements on that land, the development within the project area would be overtime. 00:02:29
Of course, the RDA receives revenue in the form of tax increment financing from. 00:02:36
Those parcels. 00:02:41
That have been triggered. 00:02:43
Within various phases of the project area. 00:02:45
And so if you look at. 00:02:48
That original? 00:02:51
Budget and the original projections and estimates. 00:02:53
That is the red line. 00:02:57
So this is the total. 00:03:00
Land value and value of the improvements. The total taxable. 00:03:02
Assessed taxable value within the project area. 00:03:07
Overtime. Over the life. 00:03:10
Of the project area. 00:03:13
The green line is the base value. 00:03:14
So just as another refresher. 00:03:18
The base value for the project area was set in 2006. 00:03:20
And. 00:03:24
What the base? Why? The reason the base value is important is because that's the value of the land as it was assessed prior. 00:03:26
To the. 00:03:33
Beginning of the project area. The adoption of the project area plan. 00:03:34
And the eventual triggering of various phases of parcels in that area. 00:03:38
To collect tax increment financing revenue. Increment revenue. 00:03:44
While the base area is important because. 00:03:48
The base value All tax revenues from the base value of the land, 100% of those tax. 00:03:51
Revenues go to all of the taxing entities that are impacted. 00:03:58
The city, the county, the water district, the school district, et cetera. 00:04:02
So what happens overtime is that land as it's remediated, prepared for development? 00:04:06
And ultimately developed. 00:04:11
And structures are built on it, both commercial and residential. 00:04:12
The assessed taxable value of that land goes up overtime. 00:04:15
And uh. 00:04:19
The original estimates for. 00:04:20
Tax increment financing revenue to the RDA. 00:04:23
Were based on this original plan, if you will, so that red line is the original estimate. 00:04:26
Of what they thought in the future. 00:04:32
The increased value of the development would be overtime. 00:04:34
And so you can see how. 00:04:39
The idea of tax increment financing is that. 00:04:41
You invest in the development of the area. 00:04:44
And the value goes up, which means the total tax value of that land is far greater than if the land was left vacant and 00:04:48
unremediated as a former industrial brown site. 00:04:54
So. 00:05:00
Using the most recent 2024. 00:05:01
UMM assessed value from the county of all of the parcels that are within the project area. 00:05:05
And then forecasting our trend of. 00:05:12
Economic growth and growth in the value of land overtime. 00:05:16
We have an updated current forecast. 00:05:21
Which you can see it's kind of a. 00:05:24
More of a straight line because it's just based on some some assumptions. For example. 00:05:26
Nationally. 00:05:31
The rule of thumb on the increased value of real estate overtime is 4%. 00:05:33
If you actually look at the average. 00:05:39
In our region, in Utah County, in nearby communities. 00:05:42
We've actually been outpacing 4%, so 4%. 00:05:47
Which is the assumption in this model is. 00:05:50
Fairly conservative. 00:05:53
For what's actually been happening. 00:05:55
When you look at the. 00:05:57
To date, development within the project area, it's about half residential, half commercial. 00:05:59
We've taken that into account as we've. 00:06:04
Built this model. 00:06:06
So I just wanted to show you this. 00:06:08
Set of data. There's a lot of data points here, but I think it's helpful to look at it visually. 00:06:10
In a chart like this, this is LinkedIn the packet. 00:06:15
This online live chart so you can go back and look at the data and kind of interact with it. 00:06:19
I just wanted to pause there and see if there's any questions about. 00:06:25
This particular. 00:06:28
Piece of data in this update. 00:06:29
Any questions from the board? 00:06:33
Just a clarification or a clarifying question? 00:06:35
In this chart, is it safe to assume that 2024 and previous are actuals and everything? 00:06:40
2025 and newer, is the projection correct? Yeah, great question and that's kind of why you see a lot of. 00:06:46
Sort of organic if you will, movement in the data points up until 2024 and then from 2024 more of a straight line just prediction. 00:06:54
More of a trend line, if you will. 00:07:03
So yeah, that's a great clarification. 00:07:05
These blue figures here are all actual values overtime. 00:07:08
The dips here that you see in 2023 have a lot to do with the centrally assessed. 00:07:13
Values of the equipment that's installed at the power plant. 00:07:19
Those are assessed as real estate values, but they're actually assessed by the state. That's why they're called centrally 00:07:23
assessed. And as you recall, Rocky Mountain Power Pacific Corp. 00:07:28
They appealed their valuation of their equipment. 00:07:33
And uh. 00:07:38
They won a settlement which was a reduction in the assessed value of that. 00:07:40
Of that property. So that's why you see a dip here in valuation. 00:07:44
And you also saw. 00:07:48
A correlating dip in the actual revenue to the RDA as a result. 00:07:49
Great question. And where did you say you can find this? Is it on the? 00:07:59
The city website, yes, well, eventually we're going to get this posted on the city website, but right now this particular online 00:08:03
chart, it's it's publicly available and it's LinkedIn the memo. 00:08:09
That's part of the tonight's agenda packet for the RDA meeting. So in that memo. 00:08:14
There's a hyperlink to each of the charts that I'll share so that you can also access them online. 00:08:20
Any other questions about this particular? 00:08:30
Item. 00:08:32
OK. I'll move to the next item in the memo. 00:08:34
Now this item is about. 00:08:37
What is called the mitigation payment to the Alpine School District. 00:08:39
So. 00:08:44
When the project area was set, one of the concepts was that. 00:08:45
If residential development. 00:08:50
Outpaced commercial development. 00:08:53
And if there was a high amount of residential development, that was? 00:08:55
Occurring prior. 00:08:59
To the development of commercial. 00:09:01
Properties. 00:09:03
The concern was that because residential properties have a tax exemption. 00:09:04
Their assessed value Whether taxable value is lower. 00:09:10
It could create a situation where the school district is serving the. 00:09:13
The students that might come from the various households that move into the community, into the residential areas. 00:09:18
And because of that residential exemption on residential property. 00:09:23
This residential development, if it outpaced commercial development, would create a scenario where. 00:09:27
The school district was serving a lot of students but not receiving a whole lot of revenue as a result. 00:09:32
And so one of the agreements that the RDA made as the process of adopting the plan and setting the original. 00:09:38
Proposed Budget. 00:09:44
Was they agreed to a mitigation payment? 00:09:46
And the mitigation payment was to be calculated. 00:09:49
Based on a what they call in the documents a shortfall. 00:09:52
And the shortfall was defined as. 00:09:56
The what they call the expenses of the school district, which was set. 00:09:59
At an amount of. 00:10:04
Of 700 and. 00:10:06
$39.80 or something like that per. 00:10:08
Household unit or per. 00:10:11
You know, housing unit. 00:10:14
And by the way, just as a precursor. 00:10:16
This does not. 00:10:20
Include. 00:10:21
Or have anything to do with the base value, so just again as a refresher. 00:10:23
The base value of the LAN set in 2006. 00:10:28
The Alpine School District and all the other taxing entities continue to receive 100% of the tax revenues. 00:10:31
From the base value of $120 million for the whole project area. So the the idea was that if the land was just left vacant and not 00:10:38
developed, this base value of $120 million. 00:10:45
Whoever owned that land, private developers, etc. Would still have to pay. 00:10:51
Taxes and 100% of those taxes. 00:10:55
That of that base value would go to all the taxing entities, school district included. 00:10:58
Well, on top of that, tax revenue. 00:11:03
The idea was that well. 00:11:06
The growth in the value of the. 00:11:08
Taxable land. 00:11:11
In the project area. 00:11:13
Umm, the increment, which is the tax increment financing, that's the revenue that is diverted in a sense to the RDA for the, for 00:11:14
the. 00:11:18
You know, for the financing of redevelopment. 00:11:23
75% of that incremental additional. 00:11:26
Taxable value and taxable and tax revenue. 00:11:30
75% of it would go to the RDA. 00:11:33
And only 25% of that incremental tax revenue would go to the various taxing entities the school district included. 00:11:36
So. 00:11:43
They came up with this mitigation formula where they said OK. 00:11:44
Well, if we look. 00:11:47
At this ASD Alpine School District expense amount of the $739.80. 00:11:49
Per housing unit. 00:11:57
As our kind of baseline expense on top of what we're receiving on that base revenue. 00:11:59
If we look at that expense. 00:12:03
And the difference between that expense? 00:12:05
And the incremental revenue? 00:12:08
To the. 00:12:11
To the school district that they're 25% share if you will. 00:12:13
If the difference between those two things was high. 00:12:18
The the school district might be incurring this shortfall, and so the mitigation payment was 40% of that shortfall. 00:12:21
And So what this chart shows is. 00:12:29
Overtime. 00:12:32
That what that shortfall would be calculated as based on. 00:12:33
Housing units. 00:12:39
That are developed and given certificate of occupancy. 00:12:40
Along with the amount of revenue that the school district receives as their. 00:12:45
25% share of the increment. 00:12:49
Plus the 100% they receive. 00:12:52
Once phases have expired or prior to phases being triggered. 00:12:55
OK, so. 00:12:59
The red line is what that. 00:13:00
Assumption of revenues would be to the school district. 00:13:03
Both actuals to date with projections for the future. 00:13:07
And then the green line is what that expense amount would be? 00:13:11
So the mitigation payment would be equal to 40%. 00:13:15
Of the total gap. 00:13:20
When you look at it over the life of the project area. 00:13:22
So you look at it from the beginning to the end of the project area. 00:13:26
You look at the total. 00:13:31
Revenues that would pass through to the school district. 00:13:33
Plus this expense calculation. 00:13:35
And 40% of the gap. 00:13:38
Would be the mitigation payment. 00:13:40
So when they originally adopted the plan and adopted the budget, there was discussion among the taxing entity committee. 00:13:42
About whether or not the mitigation payment was necessary. 00:13:49
Some thought based on their own forecasting. 00:13:53
That the mitigation payment was unnecessary because it wouldn't materialize that there was a shortfall. 00:13:56
But they went ahead and included the mitigation payment as a sort of insurance policy, if you will. 00:14:02
Just in case. 00:14:08
And so can can we, can we put names of like who put that shortfall in? 00:14:09
I've been reviewing the minutes and it's not clear. 00:14:15
A person that put it in it was part of the original plan. 00:14:19
And so the mitigation payment was part. But why didn't it come in until now though? Or until just a few years ago? 00:14:23
No, it's in the original plan. 00:14:31
So the original plan adopted in 2011 had an addendum, which included a bunch of information that are, oh, it's in an addendum then 00:14:33
OK. 00:14:37
Yeah. So it's not, it's a good point. I was going to say it's not in the original and I saw the addendum. 00:14:41
And it's wise. I mean, we're very lucky that that was put in. 00:14:46
Yeah, it's a good point. So the original plan doesn't talk about the mitigation payment, but. 00:14:50
Again, the plan is really confined to more the vision and the plan for the area and the development. 00:14:55
The mitigation payment portion comes in in the form of the budget. 00:15:01
So the budget that was adopted along with the plan includes a note. 00:15:05
And the note in the budget spells out the mitigation payment and then if you look at. 00:15:09
The meeting of the Taxing Entity Committee in 2011. 00:15:13
There was some discussion about that budget and about the calculation of that mitigation payment. 00:15:16
And that's where you see some discussion about. 00:15:21
What will the mitigation payment? 00:15:24
Be necessary or not? Well, it really depends on the performance and the value, right? 00:15:26
Can I make a comment? 00:15:31
I think it's really important that people understand what this means, because if the RDA did not. 00:15:33
Produce. 00:15:40
This is like a insurance policy. 00:15:41
To ensure that Alpine School District would have sufficient funds. 00:15:44
To pay because. 00:15:49
They are saying we're not going to get. 00:15:50
We're going to give up our money for our schools. 00:15:53
But in case the RDA is not functioning to that level. 00:15:56
We're going to have a mitigation thing to say. 00:15:59
We're still going to get paid and we're not going to give it. 00:16:02
And I think that's really important because there's five entities within the RDA. 00:16:06
The only person that has a mitigation payment. 00:16:10
Is the school district. 00:16:13
The city doesn't. 00:16:15
And so as the RDA hasn't functioned. 00:16:16
To the levels of what it was the. 00:16:19
It's kind of like the five of us were going down the road and they said. 00:16:22
We're concerned that this might not function. 00:16:25
And one of the five put that in to say, if it doesn't, we still want to make sure that there's a base minimum. 00:16:29
Because Vineyard doesn't have. 00:16:35
A mitigation in there. 00:16:37
When it has underperformed. 00:16:39
There is no mitigation to separate. 00:16:41
So for the past couple years, our city has said. 00:16:45
In order to overcome that shortfall, we don't have a mitigation. 00:16:48
The only results we have is to increase other sales tax or property taxes. 00:16:52
And I did know this mitigation payment was and I think it's wise to be honest with you. 00:16:58
We would be screwed. Our school districts and our students would be. 00:17:02
Because we all hoped that the RDA would. 00:17:07
Produce more of a business revenue. 00:17:10
Than what it has, but I'm I'm glad that that was foresaw. 00:17:13
My only thing is is. 00:17:18
Who in Vineyard was there and we why we didn't put something in there to safeguard us when it started to fail or the other 00:17:20
entities? 00:17:24
Wife the other four of the five. Is there any proof that the other. 00:17:29
For why they didn't, why they were the only ones that were able to carve out and the other four weren't. 00:17:32
It really seems that the discussion of the taxing entity committee was about the the concept that the school district would would 00:17:38
have to serve students that would come from the vineyard area and so as household units started to. 00:17:45
Develop and families moved in, they would still have to serve students and if there was this shortfall in revenue. 00:17:52
That would create a pinch for the school district. I don't know that that specific conversation about sort of the level of service 00:17:59
was discussed by other members of the taxing entity committee. To your point about representatives from the city, the county, the 00:18:04
water district. 00:18:08
ETC. 00:18:13
And one of my issues is that the documentation of the exact person. 00:18:15
From venue, who is representing Vineyard in that taxing entity committee and who was representing the school district is really 00:18:20
quite. 00:18:23
Vague. It's just like, hey, we have the document, but it's like. 00:18:26
Who who actually did that? And then the other thing is, is. 00:18:30
I mean, these are forecasts. So these are all really good people, but we all. 00:18:36
Back in the day it was hoped that businesses would would be front loaded. 00:18:40
And not so many houses, right? 00:18:44
And so. 00:18:47
We're actually grateful that the mitigation was school district because with more houses comes more schools. 00:18:48
And because it was population that came so much more heavily than businesses. 00:18:54
We're grateful that our that our schools are protected. 00:19:00
However, it puts us in a. 00:19:03
A bind as a city where we're. 00:19:05
You know, hoping. 00:19:08
For businesses, it kind of hurts us more. 00:19:09
So and to date, kind of based on what I was discussing with the last chart to date, the development in the project area has been 00:19:13
5050 in terms of acreage, commercial and residential. And so the concern was that it might be even more unbalanced. 00:19:19
In the favor of residential which? 00:19:26
Largely didn't materialize, which is why there's not been. 00:19:28
A necessity to make a mitigation payment, and likely won't be. 00:19:32
Because the red line is the ASD revenues and the green lines the expenses. The reason the expenses decline overtime. 00:19:36
Is because some of the phases in the project area will expire. 00:19:43
And then the school district and other taxing entities will receive 100% of the tax revenues for those. 00:19:49
For those parcels. 00:19:55
And so if you look at the the burden, if you will, on the school district. 00:19:57
Of current. 00:20:01
Housing units. 00:20:03
That are producing. 00:20:04
Increment. Umm. 00:20:06
RDA revenue. 00:20:07
Those will decline when those phases expire and when those phases expire. 00:20:09
The revenue to the school district. 00:20:14
Balloons and so that was kind of the hope is that that that's the model of tax increment financing so. 00:20:16
And that the reason you see this gap kind of in the mid middle years is? 00:20:22
Is because that's when. 00:20:25
The large chunk of most of the parcels in the phases are all being triggered for increment revenue. 00:20:27
But then as they expire, then those housing units are no longer. 00:20:35
In a shortfall. 00:20:38
Sort of scenario for the school district. 00:20:40
So let me make sure I got this right. So the. 00:20:44
The technicality of that money is, is that it? 00:20:47
It is still paid for by. 00:20:50
The property owner. 00:20:53
Yes, that money goes to the Tax Commission. 00:20:55
The Tax Commission then rebates that back to us. 00:20:58
And we look at that and go because of the shortfall. 00:21:02
This mitigation applies and so instead of giving that to the. 00:21:05
RDA It then cuts a check to Alpine School District to cover the cost of the students right. It would be an obligation of the RDA 00:21:08
to make a payment to the school district if and when the shortfall applies. Applies right and. 00:21:15
When did it start to apply? 00:21:23
The first year it hasn't. It hasn't yet. 00:21:26
We're here in 2024, right here. 00:21:28
There was this crossover for a time that has largely to do with that centrally assessed value. 00:21:32
But there was a surplus given to the school district prior to this time. 00:21:37
And so when that surplus? 00:21:42
Is exceeded by future revenues. 00:21:44
Then we'll have an obligation to potentially make a 40% payment. 00:21:47
But you have to look at it. 00:21:51
Over the lifetime of the. 00:21:53
Of the existence of those tax increment financing horizons. 00:21:56
And when you forecast it right now, there's unlikely to be a mitigation payment. There is. 00:22:00
There's unlikely to be one. There won't be. There likely will not be a mitigation payment until 2035. Well, forever, because. 00:22:05
This is the surplus here that the school district receives. 00:22:13
Exceeds the shortfall here. 00:22:17
And the mitigation payment is 40% of the shortfall. 00:22:20
So you would take this green area. 00:22:25
And multiply that by 40%. 00:22:28
And then weigh it against the surplus areas. 00:22:31
In the red Oh, they get to take positives from previous years. 00:22:34
That's tough. Yeah. It's over the whole, the way it's outlined is it's over the whole lifetime of the project area. 00:22:39
So we're going to be in the we're going to be in the negative, but because they were positive in. 00:22:46
Oh, 10 to 20. 00:22:51
20 something 3. 00:22:53
They're going to bank off of that. 00:22:55
And what is our school districts do during that time? They just go, hey, you. 00:22:58
You're out of luck. 00:23:03
Right, Yep, that's the way it's outlined is it's it's you know, over the lifetime of the project area does our school districts 00:23:05
and split like they. 00:23:10
Because that's one of the things that they've been. 00:23:14
On the calls for me is. 00:23:16
How little revenue is coming from? 00:23:18
Vineyard for the split. 00:23:20
On the school district side, so. 00:23:24
That gap, they're looking at it going well, you already got previously paid at a higher clip. 00:23:25
And so therefore. 00:23:31
Here to 2035. 00:23:32
They're gonna be. 00:23:35
They're not shortened because they were paid previously, but. 00:23:38
No revenues are coming in. 00:23:42
On the financial side? 00:23:44
Right. 00:23:46
They're still getting revenue. 00:23:48
Right, right. But just the the ASD expense of what it actually cost? 00:23:50
So can they? Would they then? 00:23:55
Because they've got to make their budget so. 00:23:58
Do they have the power to then up our tax their tax rate? 00:24:00
To the whole. 00:24:05
The new Timpanogos district to. 00:24:07
Because they've got to be able to make up that shortfall of the cost per student, right? 00:24:10
Well, I mean, it depends. What we don't really actually know is how many students are they serving per household in Vineyard? 00:24:14
There's a lot of younger families that are moving in that that don't yet have school age children. 00:24:22
So I mean, these were all just estimates, you know that. 00:24:27
Were baked into a payment amount. 00:24:32
But you know how much they actually. 00:24:34
Require. 00:24:36
Spend on this area. Those are sort of data points the school district would be maintaining. 00:24:37
But of course, there's the windfall, if you will, that comes later. 00:24:43
I'd like to see. 00:24:49
And I know we don't have the. 00:24:51
Organizational structure yet to. 00:24:53
To see this, but as soon as we have any information about how any of this translates to the new school district. 00:24:55
It would be. 00:25:01
Really informative to the community for us to actually see that analysis. 00:25:03
And the other. 00:25:07
Question I had. I guess that was a comment, not a question. 00:25:09
But the question I have. 00:25:12
Is I understand that it's cumulative. 00:25:14
But when we're seeing that large gap between, you know, starting in, you know, 2026 ish and going through. 00:25:19
2035. 00:25:26
Umm, I. 00:25:29
I'm struggling to understand how that can be balanced by future projections. 00:25:31
Even if it's cumulative. 00:25:36
Because at the point in time when that happens, that shortfall. 00:25:38
Is a. 00:25:42
True shortfall, even if it gets made-up in the future. 00:25:43
Well, keep in mind that the shortfall. 00:25:47
Is not. 00:25:50
An actual thing. It's a concept. 00:25:51
It's a concept that drives the agreement that forms the basis of the mitigation payment. 00:25:53
Know what they actually spend? 00:26:00
But a couple of other things to keep in mind about the projected revenues. 00:26:03
You can see how these lines are kind of straight, whereas these lines prior to 2024. 00:26:08
Are more organic. 00:26:12
Again, that's because these. 00:26:14
Conservative projections, One of the things that. 00:26:16
That is actually happening with values and one of the reasons that. 00:26:19
Values in the project area have actually gone up faster than originally predicted. 00:26:23
Is because of the addition of business personal property. 00:26:28
As well as commercial property. 00:26:32
If you think about the horizon, the future horizon of the things that are most likely to be developed in the near future. 00:26:34
There's a lot of commercial properties about to be developed. 00:26:40
And so it is quite possible. 00:26:43
Projected gap. 00:26:46
Would shrink even from this projection I'm showing right now. 00:26:47
And that would. 00:26:51
Two major reasons. 00:26:53
One being. 00:26:55
Business personal property that is taxed as. 00:26:56
Commercial entities come online even as home based and other small businesses come online. 00:26:59
They have to pay business personal property tax. A lot of these estimates are just based on real estate values. 00:27:04
And business personal property is part of property taxes that also go to all the taxing entities, school district included. 00:27:09
And then the other component of this is commercial property. 00:27:16
Which is taxed at 100% rather than the residential exemption of 60%. 00:27:19
So, umm. 00:27:24
Umm, so those two factors might actually shrink this projected gap. 00:27:25
But because those are. 00:27:30
Hard to predict, they're not baked into our model here. 00:27:31
My concern and I actually saw these numbers from the folks that came to me about the mitigation was. 00:27:39
That it's. 00:27:48
It's easy to hide this shortfall when we're talking about 16 to 18 cities in Alpine School District because it's a massive thing 00:27:52
in vineyards, rather small. 00:27:56
With now us going to a small school district with four cities. 00:28:01
It magnifies that budget short. 00:28:05
Gap fall of the RDA and it and it amplifies like why isn't Vineyard? 00:28:08
You know, paying their share of. 00:28:13
Of the student cost right and. 00:28:16
You know, and I know you can say, hey, we got paid higher in 2010, but now it's not coming in. 00:28:18
And. 00:28:23
The documents that I saw. 00:28:24
It's Rob Smith and. 00:28:26
And those there was like this argument of like just. 00:28:29
Just get it done. 00:28:33
And it'll, it'll come. 00:28:35
And like. 00:28:38
I don't know, it just it didn't. 00:28:39
And so it's like instead of focusing on the negativity, it's like, well, what, what? What do we now? And my other argument is 00:28:42
like. 00:28:46
Umm, I think it would have been, I think that person from the school district to say, hey, let's have mitigation. 00:28:53
Plan. 00:28:59
The city should have had a mitigation plan if it didn't succeed. 00:29:00
To that level, just because it's an insurance policy, it's like if the RDA isn't. 00:29:03
Successful that money still is coming in and the. 00:29:07
Citizens would. 00:29:11
And it would motivate the developer dramatically. And that's actually the motivation that I'm looking for of like. 00:29:12
Great. We're giving you this money in 2011 and now in 2025, fourteen years later, it's like. 00:29:19
It didn't happen. 00:29:25
And Alpine School District. 00:29:27
Thank heavens has that mitigation policy, but we don't. 00:29:29
And so we are in. 00:29:32
And and so it's like. 00:29:34
Can we? 00:29:36
Legally put in a mitigation plan. 00:29:37
For us to protect our taxpayers and our base like the school district did, if one of four of them did it, why? 00:29:40
Why can't we? And I see that as motivation to. 00:29:46
You better start selling your property. 00:29:49
You know, quickly or. 00:29:51
Because why wouldn't that be motivating that to them? One thing to think about is that. 00:29:54
The RDA is accelerating. 00:29:58
The development of the city's infrastructure, that would be a city financial obligation anyway. And so the city in many ways is is 00:30:00
winning. 00:30:05
Because the city is able to use this tax increment financing revenue. 00:30:10
To actually build streets and roads. 00:30:14
Sidewalks and public infrastructure that the city would have to pay for anyway and so. 00:30:16
But what did he actually get? A huge windfall in the form of upfront. 00:30:22
Financing and development of infrastructure. 00:30:26
Well, I get that, but when you say the city. 00:30:28
Most developers pay for their infrastructure, not the city. We they just put that as part of an impact fee. 00:30:31
I mean, cities can finance to some, right? But. 00:30:38
But we would be smart enough to say you're paying for your roads, not, not us. I mean, right now our RDA money is paying for their 00:30:41
infrastructure. And I think that's the other thing that's a little bit different with us, it's like. 00:30:46
We need Utah City and others developers to pay for their own infrastructure, not our. 00:30:52
Not our tax base. We wouldn't even have the ability to build out. 00:30:57
Because we would not have the homes or the businesses here without the. 00:31:01
Remediation, right, but the impact fees would pay for? 00:31:06
The impact fees of what? To the developer? What developer? 00:31:10
The current developer. Just like any other developer, there's needed remediation for any development. 00:31:13
There would be no development. 00:31:20
OK. Yeah, keep going. 00:31:24
Well, just to refer back to, you know, in terms of what the model was, so the original model. 00:31:27
Was with the conservative estimates that there would be a total mitigation payment over the life of the RDF 12.2 million. 00:31:32
Based on current forecasts, there's zero mitigation payments, so in a lot of ways the school district has performed better to the 00:31:39
tune of over $12 million. 00:31:44
By not having the gap, and that's kind of what this chart shows is where. 00:31:49
This gap between the red line and the blue line. 00:31:53
Is the original estimate versus where we're on track actually. 00:31:55
Because there's been a lot faster and higher growth in value. 00:31:59
The school district has received more revenue than they were. 00:32:04
Expecting from the original estimate. 00:32:08
Which is why there hasn't been a mitigation payment. 00:32:10
That was originally estimated to be upwards of 12.2 million, so. 00:32:12
Even though there is this gap in the chart. 00:32:17
This gap originally would have been much larger. 00:32:19
All right. Any further questions? 00:32:29
Do you have more slides? Nope, that's it. So. 00:32:35
Both of these charts are linked and pasted in your memo. They're available online and we'll continue to update this data as we get 00:32:37
more data each year. 00:32:41
And as we sort of update our forecasting models? 00:32:46
But I thought these two slides would be helpful based on a lot of previous discussions. 00:32:50
Excellent. Thank you for sharing. 00:32:54
All right, can I get a motion to approve the consent items? 00:32:56
Or discussion. 00:33:00
Yeah. 00:33:03
I move to approve and adopt the consent items as presented. Thank you. We have a 1st vice. Sarah, can I get a second? 00:33:09
Second. Second by Brett, all in favor. 00:33:16
Awesome. At this time we have to go into a closed session. We will be back for our business item right after. 00:33:19
Were you wanting to make the motion? No, I wanted to make a comment. I. 00:33:26
I feel the need to ask Jamie if there's any way that we can disclose the topic of the closed session. 00:33:30
Or at least some of it. 00:33:37
Outside, because I feel citizens have a right to know at least some of it. Does all of it have to be there? 00:33:39
The board can't. 00:33:44
Take any action in closed session. So the purpose of the closed session would be to update you all. 00:33:46
And then after the update when you take action we can. 00:33:51
Do a presentation and a summary for the public before the Council takes its but for. 00:33:55
What you're saying, Yes, when you go into emotion you always state what the purpose is for. 00:34:00
In this case, it's item a strategy sessions to discuss pending a reasonably imminent litigation. 00:34:06
And when you make the motion, whoever that is, you will state that as our purpose. 00:34:13
Right. I'm not saying the reason, I'm just saying that I really believe. 00:34:17
A great percentage of this should be debated or talked about prior to the closed session. 00:34:22
Maybe not the dollar amounts or different sums, but like. 00:34:28
The overall idea or concept? 00:34:32
Of the citizens and the third party of the right to know. 00:34:35
Is that available? Isn't that what the discussion when we come back is about? 00:34:38
Correct. 00:34:43
So we'll, we'll have the discussion. 00:34:44
Privately. 00:34:47
And then we'll. 00:34:49
We'll be able to. 00:34:51
Discuss openly. 00:34:52
Yeah, yeah. 00:34:53
OK, can I get a motion? 00:34:55
Can I? I might. 00:34:57
I might clarify the reason why. 00:34:59
For Councilmember Holdaway, because I think it's important. 00:35:01
Anytime you're confronting litigation, you have to be careful about. 00:35:04
What the city as an entity or representatives of the city say about a matter. 00:35:08
Because what you say could be used as evidence in a court proceeding against you. 00:35:13
And so the reason for the closed session discussion is that you can. 00:35:18
Receive openly legal advice on a matter and you can discuss the matter. 00:35:22
Within that closed session without fear of your discussion. 00:35:27
Being used against you in a court and so that's why we do the closed session conversation, talk about the contours of the matter. 00:35:31
You can't approve a settlement agreement or. 00:35:38
Any kind of action in a closed session, so we would come back after depending on. 00:35:41
How the discussion goes and if the Council. 00:35:46
Wants to pursue settlement on the matter. 00:35:50
Then we can present the details to the public at that time. 00:35:52
You'll remember. 00:35:56
Was probably 6 to 12 months ago we had a matter with Comcast. 00:35:59
That we settled and this is the same format that we. 00:36:04
Yeah, I just I. 00:36:07
I just know being in this position, I feel that. 00:36:11
The citizens right to know on the topic prior but so we'll go into a closed session. 00:36:16
Talk about it and then we can come out and debate it before we vote on the merits of the settlement. 00:36:21
Correct. So you would come into open session and then if if the board. 00:36:29
Of the RDA decides to move forward with the settlement agreement and that agreement will be presented. 00:36:33
I can provide a summary of what the agreement provides for and a summary of the dispute. 00:36:38
And then at that point in time you can. 00:36:43
Vote and discuss. 00:36:46
As part of that voting process. 00:36:48
Whether to support? 00:36:51
Settlement or not in open meeting? 00:36:52
But I. 00:36:55
I don't want to. 00:36:56
Make a promise that maybe wouldn't occur if in the closed session, the council decides not to move forward with settlement. 00:36:58
Then we would be left in a situation where the city would face litigation and I would not recommend. 00:37:05
An open discussion of the topic. 00:37:11
In that way. 00:37:13
We have to protect the city against. 00:37:14
Its enemies in the litigation matter. 00:37:18
Yeah, I I definitely agree with not opening us up to litigation. I'm just wondering like how the citizens would be able to opine 00:37:20
during or like have a. 00:37:25
Question and answer period. 00:37:30
Of the problem because I know. 00:37:32
Just how much this effects? 00:37:33
A certain group that I'm like. 00:37:37
I would want to know prior the issue and petition my elected officials is all and I'm like so I don't know how to do that. I think 00:37:40
it's been made clear that anything that the council would move on or make a decision on. 00:37:47
Would go before the public. 00:37:54
And so if there was a need to have further discussion or action items, the public would have that same engagement that we do with 00:37:55
any items we move forward on. 00:38:00
With that being said, it looks like those are the parameters that we work inside of, so we need to go into a closed session. 00:38:07
Can I get a motion? 00:38:13
Yes. 00:38:18
OK, can I get a motion from someone? 00:38:21
I moved to go into a closed session immediately in the. 00:38:27
Conference room. 00:38:30
For a strategy session to discuss pending or reasonably imminent litigation. 00:38:32
All right, we have a first by Sarah. Can I get a second? 00:38:37
Second all in favor, aye. 00:38:40
Oh, roll call, Jake. 00:38:42
No. 00:38:44
Aye, aye, Sarah. 00:38:46
All right, we will be back. 00:38:49
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To our Redevelopment Agency board meeting. 00:00:00
It's February 26, 2025 and the time is 603. 00:00:03
I'm going to start by offering an invocation and then we'll stand for the Pledge of Allegiance. 00:00:08
Kind Heavenly Father, we're so grateful for this time to gather together as a community, and we pray that Thy Spirit will be with 00:00:13
us and that we will. 00:00:17
People to be thoughtful and. 00:00:20
Make decisions that are good for today and build for generations to come. We love these and say this name of Jesus Christ Amen. 00:00:23
All rise. 00:00:27
I pledge allegiance to the flag of the United States of America. 00:00:33
To the Republic for which it stands. 00:00:38
My nation under God. 00:00:41
Indivisible with liberty and justice for all. 00:00:43
All right, we're going to start with a few presentations. Josh is going to give us an RDA update. 00:00:52
And let's see. 00:00:59
We'll go from there. 00:01:02
Great. Thank you, Mayor. 00:01:04
We're really, I should say chair as you sit in the. 00:01:06
Board of the RDA. 00:01:09
I'm going to share my screen here. 00:01:11
So in your packet there's a memo. 00:01:13
I just have two informational items. I'm going to try to do a few of these types of informational updates from time to time as we. 00:01:16
Sort of gather data and can kind of update you on. 00:01:23
Activities in the Geneva urban renewal area project area. 00:01:27
Including sort of financial outlooks? 00:01:32
And that sort of thing. So the first set of data I want to share. 00:01:36
Is related to. 00:01:41
The total. 00:01:44
Yeah, so. 00:01:48
This item is related to. 00:01:49
The total. 00:01:51
Value in the project area from the original. 00:01:53
Adopted proposed budget for the RDA versus kind of where we're at currently based on. 00:01:57
Recent data and forecast data. 00:02:03
So just just kind of a refresher. 00:02:06
When the. 00:02:09
Geneva Urban Renewal. 00:02:11
Project Area Plan was adopted in 2011. 00:02:13
One of the components of that plan was a proposed budget. 00:02:17
And in the proposed budget, there were. 00:02:22
Estimates of what? The value of the land. 00:02:25
And the improvements on that land, the development within the project area would be overtime. 00:02:29
Of course, the RDA receives revenue in the form of tax increment financing from. 00:02:36
Those parcels. 00:02:41
That have been triggered. 00:02:43
Within various phases of the project area. 00:02:45
And so if you look at. 00:02:48
That original? 00:02:51
Budget and the original projections and estimates. 00:02:53
That is the red line. 00:02:57
So this is the total. 00:03:00
Land value and value of the improvements. The total taxable. 00:03:02
Assessed taxable value within the project area. 00:03:07
Overtime. Over the life. 00:03:10
Of the project area. 00:03:13
The green line is the base value. 00:03:14
So just as another refresher. 00:03:18
The base value for the project area was set in 2006. 00:03:20
And. 00:03:24
What the base? Why? The reason the base value is important is because that's the value of the land as it was assessed prior. 00:03:26
To the. 00:03:33
Beginning of the project area. The adoption of the project area plan. 00:03:34
And the eventual triggering of various phases of parcels in that area. 00:03:38
To collect tax increment financing revenue. Increment revenue. 00:03:44
While the base area is important because. 00:03:48
The base value All tax revenues from the base value of the land, 100% of those tax. 00:03:51
Revenues go to all of the taxing entities that are impacted. 00:03:58
The city, the county, the water district, the school district, et cetera. 00:04:02
So what happens overtime is that land as it's remediated, prepared for development? 00:04:06
And ultimately developed. 00:04:11
And structures are built on it, both commercial and residential. 00:04:12
The assessed taxable value of that land goes up overtime. 00:04:15
And uh. 00:04:19
The original estimates for. 00:04:20
Tax increment financing revenue to the RDA. 00:04:23
Were based on this original plan, if you will, so that red line is the original estimate. 00:04:26
Of what they thought in the future. 00:04:32
The increased value of the development would be overtime. 00:04:34
And so you can see how. 00:04:39
The idea of tax increment financing is that. 00:04:41
You invest in the development of the area. 00:04:44
And the value goes up, which means the total tax value of that land is far greater than if the land was left vacant and 00:04:48
unremediated as a former industrial brown site. 00:04:54
So. 00:05:00
Using the most recent 2024. 00:05:01
UMM assessed value from the county of all of the parcels that are within the project area. 00:05:05
And then forecasting our trend of. 00:05:12
Economic growth and growth in the value of land overtime. 00:05:16
We have an updated current forecast. 00:05:21
Which you can see it's kind of a. 00:05:24
More of a straight line because it's just based on some some assumptions. For example. 00:05:26
Nationally. 00:05:31
The rule of thumb on the increased value of real estate overtime is 4%. 00:05:33
If you actually look at the average. 00:05:39
In our region, in Utah County, in nearby communities. 00:05:42
We've actually been outpacing 4%, so 4%. 00:05:47
Which is the assumption in this model is. 00:05:50
Fairly conservative. 00:05:53
For what's actually been happening. 00:05:55
When you look at the. 00:05:57
To date, development within the project area, it's about half residential, half commercial. 00:05:59
We've taken that into account as we've. 00:06:04
Built this model. 00:06:06
So I just wanted to show you this. 00:06:08
Set of data. There's a lot of data points here, but I think it's helpful to look at it visually. 00:06:10
In a chart like this, this is LinkedIn the packet. 00:06:15
This online live chart so you can go back and look at the data and kind of interact with it. 00:06:19
I just wanted to pause there and see if there's any questions about. 00:06:25
This particular. 00:06:28
Piece of data in this update. 00:06:29
Any questions from the board? 00:06:33
Just a clarification or a clarifying question? 00:06:35
In this chart, is it safe to assume that 2024 and previous are actuals and everything? 00:06:40
2025 and newer, is the projection correct? Yeah, great question and that's kind of why you see a lot of. 00:06:46
Sort of organic if you will, movement in the data points up until 2024 and then from 2024 more of a straight line just prediction. 00:06:54
More of a trend line, if you will. 00:07:03
So yeah, that's a great clarification. 00:07:05
These blue figures here are all actual values overtime. 00:07:08
The dips here that you see in 2023 have a lot to do with the centrally assessed. 00:07:13
Values of the equipment that's installed at the power plant. 00:07:19
Those are assessed as real estate values, but they're actually assessed by the state. That's why they're called centrally 00:07:23
assessed. And as you recall, Rocky Mountain Power Pacific Corp. 00:07:28
They appealed their valuation of their equipment. 00:07:33
And uh. 00:07:38
They won a settlement which was a reduction in the assessed value of that. 00:07:40
Of that property. So that's why you see a dip here in valuation. 00:07:44
And you also saw. 00:07:48
A correlating dip in the actual revenue to the RDA as a result. 00:07:49
Great question. And where did you say you can find this? Is it on the? 00:07:59
The city website, yes, well, eventually we're going to get this posted on the city website, but right now this particular online 00:08:03
chart, it's it's publicly available and it's LinkedIn the memo. 00:08:09
That's part of the tonight's agenda packet for the RDA meeting. So in that memo. 00:08:14
There's a hyperlink to each of the charts that I'll share so that you can also access them online. 00:08:20
Any other questions about this particular? 00:08:30
Item. 00:08:32
OK. I'll move to the next item in the memo. 00:08:34
Now this item is about. 00:08:37
What is called the mitigation payment to the Alpine School District. 00:08:39
So. 00:08:44
When the project area was set, one of the concepts was that. 00:08:45
If residential development. 00:08:50
Outpaced commercial development. 00:08:53
And if there was a high amount of residential development, that was? 00:08:55
Occurring prior. 00:08:59
To the development of commercial. 00:09:01
Properties. 00:09:03
The concern was that because residential properties have a tax exemption. 00:09:04
Their assessed value Whether taxable value is lower. 00:09:10
It could create a situation where the school district is serving the. 00:09:13
The students that might come from the various households that move into the community, into the residential areas. 00:09:18
And because of that residential exemption on residential property. 00:09:23
This residential development, if it outpaced commercial development, would create a scenario where. 00:09:27
The school district was serving a lot of students but not receiving a whole lot of revenue as a result. 00:09:32
And so one of the agreements that the RDA made as the process of adopting the plan and setting the original. 00:09:38
Proposed Budget. 00:09:44
Was they agreed to a mitigation payment? 00:09:46
And the mitigation payment was to be calculated. 00:09:49
Based on a what they call in the documents a shortfall. 00:09:52
And the shortfall was defined as. 00:09:56
The what they call the expenses of the school district, which was set. 00:09:59
At an amount of. 00:10:04
Of 700 and. 00:10:06
$39.80 or something like that per. 00:10:08
Household unit or per. 00:10:11
You know, housing unit. 00:10:14
And by the way, just as a precursor. 00:10:16
This does not. 00:10:20
Include. 00:10:21
Or have anything to do with the base value, so just again as a refresher. 00:10:23
The base value of the LAN set in 2006. 00:10:28
The Alpine School District and all the other taxing entities continue to receive 100% of the tax revenues. 00:10:31
From the base value of $120 million for the whole project area. So the the idea was that if the land was just left vacant and not 00:10:38
developed, this base value of $120 million. 00:10:45
Whoever owned that land, private developers, etc. Would still have to pay. 00:10:51
Taxes and 100% of those taxes. 00:10:55
That of that base value would go to all the taxing entities, school district included. 00:10:58
Well, on top of that, tax revenue. 00:11:03
The idea was that well. 00:11:06
The growth in the value of the. 00:11:08
Taxable land. 00:11:11
In the project area. 00:11:13
Umm, the increment, which is the tax increment financing, that's the revenue that is diverted in a sense to the RDA for the, for 00:11:14
the. 00:11:18
You know, for the financing of redevelopment. 00:11:23
75% of that incremental additional. 00:11:26
Taxable value and taxable and tax revenue. 00:11:30
75% of it would go to the RDA. 00:11:33
And only 25% of that incremental tax revenue would go to the various taxing entities the school district included. 00:11:36
So. 00:11:43
They came up with this mitigation formula where they said OK. 00:11:44
Well, if we look. 00:11:47
At this ASD Alpine School District expense amount of the $739.80. 00:11:49
Per housing unit. 00:11:57
As our kind of baseline expense on top of what we're receiving on that base revenue. 00:11:59
If we look at that expense. 00:12:03
And the difference between that expense? 00:12:05
And the incremental revenue? 00:12:08
To the. 00:12:11
To the school district that they're 25% share if you will. 00:12:13
If the difference between those two things was high. 00:12:18
The the school district might be incurring this shortfall, and so the mitigation payment was 40% of that shortfall. 00:12:21
And So what this chart shows is. 00:12:29
Overtime. 00:12:32
That what that shortfall would be calculated as based on. 00:12:33
Housing units. 00:12:39
That are developed and given certificate of occupancy. 00:12:40
Along with the amount of revenue that the school district receives as their. 00:12:45
25% share of the increment. 00:12:49
Plus the 100% they receive. 00:12:52
Once phases have expired or prior to phases being triggered. 00:12:55
OK, so. 00:12:59
The red line is what that. 00:13:00
Assumption of revenues would be to the school district. 00:13:03
Both actuals to date with projections for the future. 00:13:07
And then the green line is what that expense amount would be? 00:13:11
So the mitigation payment would be equal to 40%. 00:13:15
Of the total gap. 00:13:20
When you look at it over the life of the project area. 00:13:22
So you look at it from the beginning to the end of the project area. 00:13:26
You look at the total. 00:13:31
Revenues that would pass through to the school district. 00:13:33
Plus this expense calculation. 00:13:35
And 40% of the gap. 00:13:38
Would be the mitigation payment. 00:13:40
So when they originally adopted the plan and adopted the budget, there was discussion among the taxing entity committee. 00:13:42
About whether or not the mitigation payment was necessary. 00:13:49
Some thought based on their own forecasting. 00:13:53
That the mitigation payment was unnecessary because it wouldn't materialize that there was a shortfall. 00:13:56
But they went ahead and included the mitigation payment as a sort of insurance policy, if you will. 00:14:02
Just in case. 00:14:08
And so can can we, can we put names of like who put that shortfall in? 00:14:09
I've been reviewing the minutes and it's not clear. 00:14:15
A person that put it in it was part of the original plan. 00:14:19
And so the mitigation payment was part. But why didn't it come in until now though? Or until just a few years ago? 00:14:23
No, it's in the original plan. 00:14:31
So the original plan adopted in 2011 had an addendum, which included a bunch of information that are, oh, it's in an addendum then 00:14:33
OK. 00:14:37
Yeah. So it's not, it's a good point. I was going to say it's not in the original and I saw the addendum. 00:14:41
And it's wise. I mean, we're very lucky that that was put in. 00:14:46
Yeah, it's a good point. So the original plan doesn't talk about the mitigation payment, but. 00:14:50
Again, the plan is really confined to more the vision and the plan for the area and the development. 00:14:55
The mitigation payment portion comes in in the form of the budget. 00:15:01
So the budget that was adopted along with the plan includes a note. 00:15:05
And the note in the budget spells out the mitigation payment and then if you look at. 00:15:09
The meeting of the Taxing Entity Committee in 2011. 00:15:13
There was some discussion about that budget and about the calculation of that mitigation payment. 00:15:16
And that's where you see some discussion about. 00:15:21
What will the mitigation payment? 00:15:24
Be necessary or not? Well, it really depends on the performance and the value, right? 00:15:26
Can I make a comment? 00:15:31
I think it's really important that people understand what this means, because if the RDA did not. 00:15:33
Produce. 00:15:40
This is like a insurance policy. 00:15:41
To ensure that Alpine School District would have sufficient funds. 00:15:44
To pay because. 00:15:49
They are saying we're not going to get. 00:15:50
We're going to give up our money for our schools. 00:15:53
But in case the RDA is not functioning to that level. 00:15:56
We're going to have a mitigation thing to say. 00:15:59
We're still going to get paid and we're not going to give it. 00:16:02
And I think that's really important because there's five entities within the RDA. 00:16:06
The only person that has a mitigation payment. 00:16:10
Is the school district. 00:16:13
The city doesn't. 00:16:15
And so as the RDA hasn't functioned. 00:16:16
To the levels of what it was the. 00:16:19
It's kind of like the five of us were going down the road and they said. 00:16:22
We're concerned that this might not function. 00:16:25
And one of the five put that in to say, if it doesn't, we still want to make sure that there's a base minimum. 00:16:29
Because Vineyard doesn't have. 00:16:35
A mitigation in there. 00:16:37
When it has underperformed. 00:16:39
There is no mitigation to separate. 00:16:41
So for the past couple years, our city has said. 00:16:45
In order to overcome that shortfall, we don't have a mitigation. 00:16:48
The only results we have is to increase other sales tax or property taxes. 00:16:52
And I did know this mitigation payment was and I think it's wise to be honest with you. 00:16:58
We would be screwed. Our school districts and our students would be. 00:17:02
Because we all hoped that the RDA would. 00:17:07
Produce more of a business revenue. 00:17:10
Than what it has, but I'm I'm glad that that was foresaw. 00:17:13
My only thing is is. 00:17:18
Who in Vineyard was there and we why we didn't put something in there to safeguard us when it started to fail or the other 00:17:20
entities? 00:17:24
Wife the other four of the five. Is there any proof that the other. 00:17:29
For why they didn't, why they were the only ones that were able to carve out and the other four weren't. 00:17:32
It really seems that the discussion of the taxing entity committee was about the the concept that the school district would would 00:17:38
have to serve students that would come from the vineyard area and so as household units started to. 00:17:45
Develop and families moved in, they would still have to serve students and if there was this shortfall in revenue. 00:17:52
That would create a pinch for the school district. I don't know that that specific conversation about sort of the level of service 00:17:59
was discussed by other members of the taxing entity committee. To your point about representatives from the city, the county, the 00:18:04
water district. 00:18:08
ETC. 00:18:13
And one of my issues is that the documentation of the exact person. 00:18:15
From venue, who is representing Vineyard in that taxing entity committee and who was representing the school district is really 00:18:20
quite. 00:18:23
Vague. It's just like, hey, we have the document, but it's like. 00:18:26
Who who actually did that? And then the other thing is, is. 00:18:30
I mean, these are forecasts. So these are all really good people, but we all. 00:18:36
Back in the day it was hoped that businesses would would be front loaded. 00:18:40
And not so many houses, right? 00:18:44
And so. 00:18:47
We're actually grateful that the mitigation was school district because with more houses comes more schools. 00:18:48
And because it was population that came so much more heavily than businesses. 00:18:54
We're grateful that our that our schools are protected. 00:19:00
However, it puts us in a. 00:19:03
A bind as a city where we're. 00:19:05
You know, hoping. 00:19:08
For businesses, it kind of hurts us more. 00:19:09
So and to date, kind of based on what I was discussing with the last chart to date, the development in the project area has been 00:19:13
5050 in terms of acreage, commercial and residential. And so the concern was that it might be even more unbalanced. 00:19:19
In the favor of residential which? 00:19:26
Largely didn't materialize, which is why there's not been. 00:19:28
A necessity to make a mitigation payment, and likely won't be. 00:19:32
Because the red line is the ASD revenues and the green lines the expenses. The reason the expenses decline overtime. 00:19:36
Is because some of the phases in the project area will expire. 00:19:43
And then the school district and other taxing entities will receive 100% of the tax revenues for those. 00:19:49
For those parcels. 00:19:55
And so if you look at the the burden, if you will, on the school district. 00:19:57
Of current. 00:20:01
Housing units. 00:20:03
That are producing. 00:20:04
Increment. Umm. 00:20:06
RDA revenue. 00:20:07
Those will decline when those phases expire and when those phases expire. 00:20:09
The revenue to the school district. 00:20:14
Balloons and so that was kind of the hope is that that that's the model of tax increment financing so. 00:20:16
And that the reason you see this gap kind of in the mid middle years is? 00:20:22
Is because that's when. 00:20:25
The large chunk of most of the parcels in the phases are all being triggered for increment revenue. 00:20:27
But then as they expire, then those housing units are no longer. 00:20:35
In a shortfall. 00:20:38
Sort of scenario for the school district. 00:20:40
So let me make sure I got this right. So the. 00:20:44
The technicality of that money is, is that it? 00:20:47
It is still paid for by. 00:20:50
The property owner. 00:20:53
Yes, that money goes to the Tax Commission. 00:20:55
The Tax Commission then rebates that back to us. 00:20:58
And we look at that and go because of the shortfall. 00:21:02
This mitigation applies and so instead of giving that to the. 00:21:05
RDA It then cuts a check to Alpine School District to cover the cost of the students right. It would be an obligation of the RDA 00:21:08
to make a payment to the school district if and when the shortfall applies. Applies right and. 00:21:15
When did it start to apply? 00:21:23
The first year it hasn't. It hasn't yet. 00:21:26
We're here in 2024, right here. 00:21:28
There was this crossover for a time that has largely to do with that centrally assessed value. 00:21:32
But there was a surplus given to the school district prior to this time. 00:21:37
And so when that surplus? 00:21:42
Is exceeded by future revenues. 00:21:44
Then we'll have an obligation to potentially make a 40% payment. 00:21:47
But you have to look at it. 00:21:51
Over the lifetime of the. 00:21:53
Of the existence of those tax increment financing horizons. 00:21:56
And when you forecast it right now, there's unlikely to be a mitigation payment. There is. 00:22:00
There's unlikely to be one. There won't be. There likely will not be a mitigation payment until 2035. Well, forever, because. 00:22:05
This is the surplus here that the school district receives. 00:22:13
Exceeds the shortfall here. 00:22:17
And the mitigation payment is 40% of the shortfall. 00:22:20
So you would take this green area. 00:22:25
And multiply that by 40%. 00:22:28
And then weigh it against the surplus areas. 00:22:31
In the red Oh, they get to take positives from previous years. 00:22:34
That's tough. Yeah. It's over the whole, the way it's outlined is it's over the whole lifetime of the project area. 00:22:39
So we're going to be in the we're going to be in the negative, but because they were positive in. 00:22:46
Oh, 10 to 20. 00:22:51
20 something 3. 00:22:53
They're going to bank off of that. 00:22:55
And what is our school districts do during that time? They just go, hey, you. 00:22:58
You're out of luck. 00:23:03
Right, Yep, that's the way it's outlined is it's it's you know, over the lifetime of the project area does our school districts 00:23:05
and split like they. 00:23:10
Because that's one of the things that they've been. 00:23:14
On the calls for me is. 00:23:16
How little revenue is coming from? 00:23:18
Vineyard for the split. 00:23:20
On the school district side, so. 00:23:24
That gap, they're looking at it going well, you already got previously paid at a higher clip. 00:23:25
And so therefore. 00:23:31
Here to 2035. 00:23:32
They're gonna be. 00:23:35
They're not shortened because they were paid previously, but. 00:23:38
No revenues are coming in. 00:23:42
On the financial side? 00:23:44
Right. 00:23:46
They're still getting revenue. 00:23:48
Right, right. But just the the ASD expense of what it actually cost? 00:23:50
So can they? Would they then? 00:23:55
Because they've got to make their budget so. 00:23:58
Do they have the power to then up our tax their tax rate? 00:24:00
To the whole. 00:24:05
The new Timpanogos district to. 00:24:07
Because they've got to be able to make up that shortfall of the cost per student, right? 00:24:10
Well, I mean, it depends. What we don't really actually know is how many students are they serving per household in Vineyard? 00:24:14
There's a lot of younger families that are moving in that that don't yet have school age children. 00:24:22
So I mean, these were all just estimates, you know that. 00:24:27
Were baked into a payment amount. 00:24:32
But you know how much they actually. 00:24:34
Require. 00:24:36
Spend on this area. Those are sort of data points the school district would be maintaining. 00:24:37
But of course, there's the windfall, if you will, that comes later. 00:24:43
I'd like to see. 00:24:49
And I know we don't have the. 00:24:51
Organizational structure yet to. 00:24:53
To see this, but as soon as we have any information about how any of this translates to the new school district. 00:24:55
It would be. 00:25:01
Really informative to the community for us to actually see that analysis. 00:25:03
And the other. 00:25:07
Question I had. I guess that was a comment, not a question. 00:25:09
But the question I have. 00:25:12
Is I understand that it's cumulative. 00:25:14
But when we're seeing that large gap between, you know, starting in, you know, 2026 ish and going through. 00:25:19
2035. 00:25:26
Umm, I. 00:25:29
I'm struggling to understand how that can be balanced by future projections. 00:25:31
Even if it's cumulative. 00:25:36
Because at the point in time when that happens, that shortfall. 00:25:38
Is a. 00:25:42
True shortfall, even if it gets made-up in the future. 00:25:43
Well, keep in mind that the shortfall. 00:25:47
Is not. 00:25:50
An actual thing. It's a concept. 00:25:51
It's a concept that drives the agreement that forms the basis of the mitigation payment. 00:25:53
Know what they actually spend? 00:26:00
But a couple of other things to keep in mind about the projected revenues. 00:26:03
You can see how these lines are kind of straight, whereas these lines prior to 2024. 00:26:08
Are more organic. 00:26:12
Again, that's because these. 00:26:14
Conservative projections, One of the things that. 00:26:16
That is actually happening with values and one of the reasons that. 00:26:19
Values in the project area have actually gone up faster than originally predicted. 00:26:23
Is because of the addition of business personal property. 00:26:28
As well as commercial property. 00:26:32
If you think about the horizon, the future horizon of the things that are most likely to be developed in the near future. 00:26:34
There's a lot of commercial properties about to be developed. 00:26:40
And so it is quite possible. 00:26:43
Projected gap. 00:26:46
Would shrink even from this projection I'm showing right now. 00:26:47
And that would. 00:26:51
Two major reasons. 00:26:53
One being. 00:26:55
Business personal property that is taxed as. 00:26:56
Commercial entities come online even as home based and other small businesses come online. 00:26:59
They have to pay business personal property tax. A lot of these estimates are just based on real estate values. 00:27:04
And business personal property is part of property taxes that also go to all the taxing entities, school district included. 00:27:09
And then the other component of this is commercial property. 00:27:16
Which is taxed at 100% rather than the residential exemption of 60%. 00:27:19
So, umm. 00:27:24
Umm, so those two factors might actually shrink this projected gap. 00:27:25
But because those are. 00:27:30
Hard to predict, they're not baked into our model here. 00:27:31
My concern and I actually saw these numbers from the folks that came to me about the mitigation was. 00:27:39
That it's. 00:27:48
It's easy to hide this shortfall when we're talking about 16 to 18 cities in Alpine School District because it's a massive thing 00:27:52
in vineyards, rather small. 00:27:56
With now us going to a small school district with four cities. 00:28:01
It magnifies that budget short. 00:28:05
Gap fall of the RDA and it and it amplifies like why isn't Vineyard? 00:28:08
You know, paying their share of. 00:28:13
Of the student cost right and. 00:28:16
You know, and I know you can say, hey, we got paid higher in 2010, but now it's not coming in. 00:28:18
And. 00:28:23
The documents that I saw. 00:28:24
It's Rob Smith and. 00:28:26
And those there was like this argument of like just. 00:28:29
Just get it done. 00:28:33
And it'll, it'll come. 00:28:35
And like. 00:28:38
I don't know, it just it didn't. 00:28:39
And so it's like instead of focusing on the negativity, it's like, well, what, what? What do we now? And my other argument is 00:28:42
like. 00:28:46
Umm, I think it would have been, I think that person from the school district to say, hey, let's have mitigation. 00:28:53
Plan. 00:28:59
The city should have had a mitigation plan if it didn't succeed. 00:29:00
To that level, just because it's an insurance policy, it's like if the RDA isn't. 00:29:03
Successful that money still is coming in and the. 00:29:07
Citizens would. 00:29:11
And it would motivate the developer dramatically. And that's actually the motivation that I'm looking for of like. 00:29:12
Great. We're giving you this money in 2011 and now in 2025, fourteen years later, it's like. 00:29:19
It didn't happen. 00:29:25
And Alpine School District. 00:29:27
Thank heavens has that mitigation policy, but we don't. 00:29:29
And so we are in. 00:29:32
And and so it's like. 00:29:34
Can we? 00:29:36
Legally put in a mitigation plan. 00:29:37
For us to protect our taxpayers and our base like the school district did, if one of four of them did it, why? 00:29:40
Why can't we? And I see that as motivation to. 00:29:46
You better start selling your property. 00:29:49
You know, quickly or. 00:29:51
Because why wouldn't that be motivating that to them? One thing to think about is that. 00:29:54
The RDA is accelerating. 00:29:58
The development of the city's infrastructure, that would be a city financial obligation anyway. And so the city in many ways is is 00:30:00
winning. 00:30:05
Because the city is able to use this tax increment financing revenue. 00:30:10
To actually build streets and roads. 00:30:14
Sidewalks and public infrastructure that the city would have to pay for anyway and so. 00:30:16
But what did he actually get? A huge windfall in the form of upfront. 00:30:22
Financing and development of infrastructure. 00:30:26
Well, I get that, but when you say the city. 00:30:28
Most developers pay for their infrastructure, not the city. We they just put that as part of an impact fee. 00:30:31
I mean, cities can finance to some, right? But. 00:30:38
But we would be smart enough to say you're paying for your roads, not, not us. I mean, right now our RDA money is paying for their 00:30:41
infrastructure. And I think that's the other thing that's a little bit different with us, it's like. 00:30:46
We need Utah City and others developers to pay for their own infrastructure, not our. 00:30:52
Not our tax base. We wouldn't even have the ability to build out. 00:30:57
Because we would not have the homes or the businesses here without the. 00:31:01
Remediation, right, but the impact fees would pay for? 00:31:06
The impact fees of what? To the developer? What developer? 00:31:10
The current developer. Just like any other developer, there's needed remediation for any development. 00:31:13
There would be no development. 00:31:20
OK. Yeah, keep going. 00:31:24
Well, just to refer back to, you know, in terms of what the model was, so the original model. 00:31:27
Was with the conservative estimates that there would be a total mitigation payment over the life of the RDF 12.2 million. 00:31:32
Based on current forecasts, there's zero mitigation payments, so in a lot of ways the school district has performed better to the 00:31:39
tune of over $12 million. 00:31:44
By not having the gap, and that's kind of what this chart shows is where. 00:31:49
This gap between the red line and the blue line. 00:31:53
Is the original estimate versus where we're on track actually. 00:31:55
Because there's been a lot faster and higher growth in value. 00:31:59
The school district has received more revenue than they were. 00:32:04
Expecting from the original estimate. 00:32:08
Which is why there hasn't been a mitigation payment. 00:32:10
That was originally estimated to be upwards of 12.2 million, so. 00:32:12
Even though there is this gap in the chart. 00:32:17
This gap originally would have been much larger. 00:32:19
All right. Any further questions? 00:32:29
Do you have more slides? Nope, that's it. So. 00:32:35
Both of these charts are linked and pasted in your memo. They're available online and we'll continue to update this data as we get 00:32:37
more data each year. 00:32:41
And as we sort of update our forecasting models? 00:32:46
But I thought these two slides would be helpful based on a lot of previous discussions. 00:32:50
Excellent. Thank you for sharing. 00:32:54
All right, can I get a motion to approve the consent items? 00:32:56
Or discussion. 00:33:00
Yeah. 00:33:03
I move to approve and adopt the consent items as presented. Thank you. We have a 1st vice. Sarah, can I get a second? 00:33:09
Second. Second by Brett, all in favor. 00:33:16
Awesome. At this time we have to go into a closed session. We will be back for our business item right after. 00:33:19
Were you wanting to make the motion? No, I wanted to make a comment. I. 00:33:26
I feel the need to ask Jamie if there's any way that we can disclose the topic of the closed session. 00:33:30
Or at least some of it. 00:33:37
Outside, because I feel citizens have a right to know at least some of it. Does all of it have to be there? 00:33:39
The board can't. 00:33:44
Take any action in closed session. So the purpose of the closed session would be to update you all. 00:33:46
And then after the update when you take action we can. 00:33:51
Do a presentation and a summary for the public before the Council takes its but for. 00:33:55
What you're saying, Yes, when you go into emotion you always state what the purpose is for. 00:34:00
In this case, it's item a strategy sessions to discuss pending a reasonably imminent litigation. 00:34:06
And when you make the motion, whoever that is, you will state that as our purpose. 00:34:13
Right. I'm not saying the reason, I'm just saying that I really believe. 00:34:17
A great percentage of this should be debated or talked about prior to the closed session. 00:34:22
Maybe not the dollar amounts or different sums, but like. 00:34:28
The overall idea or concept? 00:34:32
Of the citizens and the third party of the right to know. 00:34:35
Is that available? Isn't that what the discussion when we come back is about? 00:34:38
Correct. 00:34:43
So we'll, we'll have the discussion. 00:34:44
Privately. 00:34:47
And then we'll. 00:34:49
We'll be able to. 00:34:51
Discuss openly. 00:34:52
Yeah, yeah. 00:34:53
OK, can I get a motion? 00:34:55
Can I? I might. 00:34:57
I might clarify the reason why. 00:34:59
For Councilmember Holdaway, because I think it's important. 00:35:01
Anytime you're confronting litigation, you have to be careful about. 00:35:04
What the city as an entity or representatives of the city say about a matter. 00:35:08
Because what you say could be used as evidence in a court proceeding against you. 00:35:13
And so the reason for the closed session discussion is that you can. 00:35:18
Receive openly legal advice on a matter and you can discuss the matter. 00:35:22
Within that closed session without fear of your discussion. 00:35:27
Being used against you in a court and so that's why we do the closed session conversation, talk about the contours of the matter. 00:35:31
You can't approve a settlement agreement or. 00:35:38
Any kind of action in a closed session, so we would come back after depending on. 00:35:41
How the discussion goes and if the Council. 00:35:46
Wants to pursue settlement on the matter. 00:35:50
Then we can present the details to the public at that time. 00:35:52
You'll remember. 00:35:56
Was probably 6 to 12 months ago we had a matter with Comcast. 00:35:59
That we settled and this is the same format that we. 00:36:04
Yeah, I just I. 00:36:07
I just know being in this position, I feel that. 00:36:11
The citizens right to know on the topic prior but so we'll go into a closed session. 00:36:16
Talk about it and then we can come out and debate it before we vote on the merits of the settlement. 00:36:21
Correct. So you would come into open session and then if if the board. 00:36:29
Of the RDA decides to move forward with the settlement agreement and that agreement will be presented. 00:36:33
I can provide a summary of what the agreement provides for and a summary of the dispute. 00:36:38
And then at that point in time you can. 00:36:43
Vote and discuss. 00:36:46
As part of that voting process. 00:36:48
Whether to support? 00:36:51
Settlement or not in open meeting? 00:36:52
But I. 00:36:55
I don't want to. 00:36:56
Make a promise that maybe wouldn't occur if in the closed session, the council decides not to move forward with settlement. 00:36:58
Then we would be left in a situation where the city would face litigation and I would not recommend. 00:37:05
An open discussion of the topic. 00:37:11
In that way. 00:37:13
We have to protect the city against. 00:37:14
Its enemies in the litigation matter. 00:37:18
Yeah, I I definitely agree with not opening us up to litigation. I'm just wondering like how the citizens would be able to opine 00:37:20
during or like have a. 00:37:25
Question and answer period. 00:37:30
Of the problem because I know. 00:37:32
Just how much this effects? 00:37:33
A certain group that I'm like. 00:37:37
I would want to know prior the issue and petition my elected officials is all and I'm like so I don't know how to do that. I think 00:37:40
it's been made clear that anything that the council would move on or make a decision on. 00:37:47
Would go before the public. 00:37:54
And so if there was a need to have further discussion or action items, the public would have that same engagement that we do with 00:37:55
any items we move forward on. 00:38:00
With that being said, it looks like those are the parameters that we work inside of, so we need to go into a closed session. 00:38:07
Can I get a motion? 00:38:13
Yes. 00:38:18
OK, can I get a motion from someone? 00:38:21
I moved to go into a closed session immediately in the. 00:38:27
Conference room. 00:38:30
For a strategy session to discuss pending or reasonably imminent litigation. 00:38:32
All right, we have a first by Sarah. Can I get a second? 00:38:37
Second all in favor, aye. 00:38:40
Oh, roll call, Jake. 00:38:42
No. 00:38:44
Aye, aye, Sarah. 00:38:46
All right, we will be back. 00:38:49
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