Follow Up on TIF Issue Related to Gardens of Dubuque ProjectCity of Dubuque
City Council Meeting
Consent Items # 06.
Copyrighted
January 3, 2024
ITEM TITLE: Follow Up on TI F Issue Related to Gardens of Dubuque Project
SUMMARY: City Manager recommending City Council approval to allocate
$34,595.38 from the City's Fiscal Year 2023 General Fund savings to
cover the Gardens of Dubuque Project TI F payments for November
2023 and May 2024.
SUGGESTED Suggested Disposition: Receive and File; Approve
DISPOSITION:
ATTACHMENTS:
Description
MVM Memo
Staff Memo
Type
City Manager Memo
Staff Memo
THE C
DUj!BQTE
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Follow Up on TIF Issue Related to Gardens of Dubuque Project
DATE: December 22, 2023
Dubuque
WAWca 914
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2007-2012.2013
2017*2019
Economic Development Director Jill Connors is recommending City Council approval to
allocate $34,595.38 from the City's Fiscal Year 2023 General Fund savings to cover the
Gardens of Dubuque Project TIF payments for November 2023 and May 2024. Moving
forward, approximately $34,655 per year will need to be allocated for the same purpose
at a net annual cost to the city of $22,805.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mic ael C. Van Milligen
MCVM:sv
Attachment
cc: Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Jill Connors, Economic Development Director
Jennifer Larson, Chief Financial Officer
Dubuque
THE CITY OF
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DUB E
2007-2012.2013
Masterpiece on the Mississippi 2017*2019
TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
Economic Development
Department
1300 Main Street
Dubuque, Iowa 52001-4763
Office (563) 589-4393
TTY (563) 690-6678
http://www.cityofdubuque.org
SUBJECT: Follow Up on TIF Issue Related to Gardens of Dubuque Project
DATE: December 14, 2023
INTRODUCTION
This memorandum provides information regarding a communication gap from Economic
Development to the Finance and Budget Department and requests the allocation of
$34,595.38 from the City's Fiscal Year 2023 General Fund savings to cover November
2023 and May 2024 TIF payments to the Gardens of Dubuque project. It also provides
an explanation of general funds needed annually until June 1, 2037.
BACKGROUND
On September 28, 2020, the City entered into a Development Agreement with Gardens
of Dubuque for the creation of 50 apartments at 1895 Radford Road. The Development
Agreement provides for 15 years of 100% of allowable increment TIF payments beginning
November 1, 2023. The project was included in the Radford Road Urban Renewal District
in order to generate the funds needed to make these TIF payments.
In order to certify debt with the County in an urban renewal district (which allows the City
to collect increment to fund TIF payments), Finance/Budget staff require documentation
from the Economic Development Department providing the details of the Development
Agreements which require TIF payments to developers. Unfortunately, our office did not
provide this full information to Finance/Budget staff in a timely manner. This has delayed
debt certification in this urban renewal area in order to fully fund TIF payments the City
has committed to the developer.
As the City is obligated to make a TIF payment both for November 2023 and in May 2024,
I had requested in an earlier memo an allocation of $34,595.38 from the City's Fiscal Year
2023 General Fund savings to cover the TIF payments for November 2023 and May 2024.
Jenny Larson has certified the Radford Road Urban Renewal District to the County as of
November 30, 2023, which means there will be funding available beginning with the
November 2024 payment and future payments, albeit with a gap in funding.
DISCUSSION
I had initially thought a one-time allocation of $34,595.38 was a temporary stop gap, as
the property is now certified with the County. However, upon review with CFO Jenny
Larson, Senior Counsel Barry Lindahl, and City Assessor Troy Patzner, an approximately
$34,655 annual gap will continue for the duration of the 15 year agreement.
If the debt on the property had been certified with the County before December 1, 2022
(as should have been done), the base value of the property would have been set at
$199,500 (assessed value as of January 1, 2021). All City -directed tax increment above
that amount would have been available for disbursement in TIF rebates to the developer.
Because it was not certified with the County until December 1, 2023, only the increment
above the value as of January 1, 2022 is available. The difference between the available
increment and the increment obligated to the Developer is $34,595.38 during the current
fiscal year. And an approximately $34,655 annual shortfall will continue through the term
of the agreement (June 1, 2037). This project is located in a stand-alone TIF district,
which means there are no funds available from other projects in the district to subsidize
this shortfall.
$22,805 of the annual $34,655 shortfall will need to be covered by the general fund, as
the City's tax levy covers $11,850 of that amount. What this means is that while the
payment to the developer will be $519,825 over 15 years, the actual cost to the City is
$342,075.
RECOMMENDATION/ ACTION STEP
I respectfully request a $34,595.38 allocation from the City's Fiscal Year 2023 General
Fund savings to cover the TIF payments for November 2023 and May 2024. Moving
forward, approximately $34,655 per year will need to be allocated for the same purpose.
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