Idaho Falls Redevelopment Agency

IDAHO FALLS REDEVELOPMENT AGENC Y P.O. BOX 50220 IDAHO FALLS, ID 83405 July 11, 2024 Regular Meeting Minutes Council Chambers Call to Order: Lee Radford called the meeting to order at 12:00. Members Present: Lee Radford, Chris Pelkola Lee, Jon Walker, Brent Thompson, Lisa Burtenshaw. Members Absent: Terri Gazdik, Chris Harvey. Also Present: Wade Sanner, Brian Stevens, Meghan Conrad, Esq. (via Teams), Cassie Auten, and interested citizens. 1. Modification to Agenda. None. 2. Approval of Minutes June 20, 2024. Walker moved to accept the Minutes for June 20, 2024, Radford seconded the motion, and the motion passed unanimously. 3. Approval of Expenditures and Finance Report. Lee Radford presented the Finance Report dated July 11, 2024. In the River Commons Area: $75.00 to Rebecca Thompson for transcription of Minutes; $130.00 to Brad Cramer for work on River Commons Close Out Analysis; $3,090.00 to Elam and Burke for legal services; $1,540.00 to City of Idaho Falls for administrative services. In Eagle Ridge Area: $1,775.00 to Elam and Burke for legal services; $200.00 to City of Idaho Falls for administrative services. In Jackson Hole Junction: $200.00 to the City of Idaho Falls for administrative services. Thompson moved to approve the Finance Report dated July 11, 2024, Walker seconded the motion and the motion passed unanimously. 4. Review of the Draft FY 2025 Budget. Cassie Auten presented the FY 2025 Budget. Auten noted that one of the major changes to this budget year, excluding amounts, is that Snake River West, Willow Creek, and Yellowstone Squar have been added to the budget with hopes that they will be added this year as districts. Auten went through revenues vs. expenditures. Auten stated that in reference to property taxes they have projected amounts by giving a 3% increase based on what they thought last year’s budget would be, excluding Pancheri East of $50,000, and that one is now starting to get on its feet, and they have started to receive payments from the County in that District. Pancheri East was estimated at $50,000. The other 3 (River Commons, Eagle Ridge, and Jackson Hole) have been estimated with 3% increase. The interest income increase is 1.5% based on available cash balance that they perceive they will have. The other income line has $45,000 for the five districts and that is income that should be received from developers for future projects. Auten explained that the way they currently do that is with an inner district loan. All revenues and expenditures come into River commons until the Districts become official then they do a journal entry and true it up with a bank account. The available cash balance is money left in the bank after OPA payments and expenditures and taking into account the property taxes received from the County. Radford clarified that the revenue projections don’t look at new buildings, just simply adds 3%. It could be higher if things were built. Auten agreed and stated that property taxes are hard to project. Hagedorn will explain further how property taxes work for the Redevelopment Agency. In order to budget they take 3-5% and increase the budget by that amount. Radford stated that this will be published this month for the public and a public hearing on August 15, 2024. Auten stated that there is an increase in expenditures, including professional services, City administration and audit fees. They have increased those items based on where they were at on their budget and projected where they’d be at the end of fiscal year and took into account any other increase in fees and items that should be included. There is an increase compared to last year’s budget. City administration includes the time that City workers are working on IFRA and takes into account streaming of meetings, office space, and other supplies that City staff uses for IFRA, (i.e. paper, copies, etc.). Auten stated that the audit fees are a percentage of revenue earned based on property taxes and that is how they allocate where audit fees should be paid and from which account. That has been a topic in the past as far as how to pay for the audit fees and where it should come out. In the past they have pulled from River Commons as it has the higher earning district. This year they took a percentage based on property taxes and allocated the audit fees that way. Insurance was not expected to increase, so they kept that number the same, and office and dues expense the same, and OPA payments were calculated by property tax amounts and percentages of what is stated in each of the OPA agreements, and got the number based on the agreements and what they felt they would receive in property taxes. The remaining item of capital projects is the amount budgeted for the board’s discretion on capital projects this upcoming year. Burtenshaw asked what OPA meant – Owner Participation Agreement. Thompson likes the new allocations. Thompson asked if the County had comments regarding the timing of tax revenues on Anderson Bush. Auten stated that those are hard to tell and where do they stand on Anderson Bush and Stanley Boge and when payments will come in. Thompson asked if they are planning to wait for 100% completion. Hagedorn stated that they have to wait for CO. Sanner stated he does not have a timeline for completion. Radford agreed it is a conservative assumption that they will not see property taxes from Anderson Bush in 2024-2025. Radford asked if the Board feels good publishing the FY 2025 Budget. Chris Pelkola Lee moved to tentatively approve the draft FY 2025 budget, schedule the hearing for August 15, 2024, and publish the notice of Public Hearing in the Post Register in advance of the public hearing date. Walker Seconded the motion. The motion passed unanimously. 5. Discussion of Property Taxes with Mark Hagedorn. Hagedorn will explain how property taxes are calculated for Urban Renewal District. Hagedorn stated that on a local government entity that issues property taxes, they submit a form called L2 to the County stating in whole dollars what they want to be levied. They don’t give a levy rate, and they don’t assess the tax, they just give a dollar amount that they need based on the State rules for property taxes. The County takes that amount and calculates the assessed value and comes up with a levy rate that they charge to the property owners. Redevelopment agencies is different as they do not levy. The Redevelopment Agency gets the incremental value that has been segregated and they apply all the levy rates to that property and that is what the entity gets. To predict revenues is tricky as they do not set a fixed dollar amount. They are dependent on the levy rates of all the taxing districts. Hagedorn stated that they do a 3% increase because they do not know what each taxing district will do. When property is permitted and built, it does not get added to the roles until the future year. Hagedorn explained that in order to put a property on the levy books, they need a CO and then the assessor’s office puts that property on the next years books. Once it gets to the new construction value, then it is published and the next tax cycle (ex. Construction completed in 2023 should be on 2024 tax cycle for Tax year 2025). FY year go from September – October. There is a huge lag from when property returns taxing dollars. Radford stated that property tax is calendar year January – December. They send out notices in May for what the assessed property values are, and that gets finalized in June and the numbers then become the numbers taxed for that calendar year, and the 1st payment is due December 1, and the second payment is due June. Hagedorn stated that there is up to 18 months lag before the taxes are assessed on a property. Radford agreed and stated that if the property is done by December 1, you will not see revenue until December of next year. Hagedorn stated that it is reasonable to see a building up, and not see taxes being collected for some time. Burtenshaw stated that the assumption is one year of taxes after the District closes. Radford stated that it works out in the end, and you get money for a couple of years after the District closes. Hagedorn explained in cut off years, you have a year when you get the first cut off, and then there is point in time when you have to refund the money back to the County. Radford stated that there is a lot of uncertainty as the other side of the fraction isn’t decided until after the tax year. Radford stated that the levy rates are going down because of the increase in property values. The commercial properties aren’t going up the same way that residence is. Walker stated that Ag is going up, residential is going down. Commercial rates are going up based on their valuations. With the level of income, revenue and taxation stays the same, where it is coming from residential was carrying a bigger burden then it should have and this year you are seeing balance shifting. Hagedorn stated that you have a pie, and if the valuation doesn’t go up equally across all three categories there is a tax shift, so if residential is decreasing the property tax is shifted, and this year the category is AG and commercial (Ag took 15% more than commercial.) Hagedorn stated that residential does site visits and commercial has different metrics, including property value, asset value, income, etc. Hagedorn stated that Walmart was all property value and they changed it based on income, so it decreased their property tax contribution. Radford stated that the bottom line is there is a lag (several years) to the point where they can make OPA Payments. Walker asked if there is an accounting for a portion of stuff that turns out to be residential and the loss that occurs or lack of tax revenue that occurs due to homeowner’s exemptions. Radford explained that homeowner’s exemptions still look at what the base was, and the increase over the base, the increase may be diminished by the homeowner’s exemption but is still compared to the base. Conrad stated that she would confirm with the tax commission, but she thinks the exemption comes out of increment portion. Radford stated that it is a dollars in the door tax analysis, and it has to be new dollars in, not hypothetical dollars. Conrad agreed it is based on taxes received. Thompson asked if the base stays the same throughout the district. Hagedorn agreed that the base is set at the time the district is created, and any value above that goes to the district. How it applies after the district is created and a homeowner’s exemption is requested would be interesting to know. If they levy a certain amount they might get less as the exemption or judgment comes after the fact. Radford stated that on the budget they have, after making all OPA payments in River Commons, they do have an available cash balance of $1.9 million and that district will end in 2028(ish). Radford stated that there will be a process with the extra funds available, and they need to look if there are other things that will improve that area, that they should use the additional funds for, or return to taxing entities. Cramer is talking with Ball Ventures to find out information and numbers so they can present what might be used toward the end of the District. Burtenshaw stated that there are TAP Grants and other grants that can be used for trails, and it is not any too soon to start thinking about those, as they are programed in 2-year increments. Those could work to be cooperative with the IFRA Funds. Radford stated that they want to hear from the developer first as they know what might be useful in the area. 6. RAI and Legislative Update. Conrad indicated that there is nothing new to report. Next Regular Meeting: August 15, 2024 – Burtenshaw will be out of town. Sanner indicated that Yellowstone Square Plan, Willow Creek Eligibility Study, and DEFCO wants to come and talk. Thompson moved to adjourn the meeting, Walker seconded the motion passed unanimously. Radford adjourned the meeting at 12:45 p.m. Respectfully Submitted: Beckie Thompson