Agenda - 10-07-2014 - 6a - Laserfiche WebLink

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 5 taxes. He said in order to make this financing more solid, they are requesting that Orange County give back some of the incremental taxes. He said the County would pay no more than half of the increment and no more than half of the debt service ($800,000 /year which would be $400,000 /year for the cost to Orange County). Ken Pennoyer said the town has passed the first hurdle of approving the zoning, and this will help begin the actual development project. He said the town is looking to put together the debt funding package and the repayment plan, to include both the Town and the County pledging those tax increments. He said the Town is taking the risk of a shortfall in the tax increments should the projects be delayed or the tax increments not come in on the predicted timeframe. He said the Town will pay for the debt service through its debt management fund. Chair Jacobs said based on this model the Town is not asking Orange County to lay out any funding up front, and the County would only be responsible for a portion of moneys that would potentially be generated. Ken Pennoyer said the maximum would be 50 percent of any additional incremental tax revenue that comes in. He said a current baseline would be set, and anything after the re- zoning would constitute an increment for the purposes of calculating the tax increment. Michael Talbert said he has discussed this with Roger Stancil. He said the County does have a re- evaluation in 2017 but that would have no impact. He asked for information about the type of document that would need to be approved, and how this would impact the County. Bob Jessup said the County may only have a resolution of intent to consider this appropriation of incremental taxes annually; the nature of the obligation would not change if there was an actual paper contract. He said the commitment would be expressed as a renewing annual commitment that would occur during the budget season. He said it is very easy to describe the nature of the commitment. He said the other benefit with the County's participation, is that it may allow the overall financing term to be squeezed down a bit. Michael Talbert asked for a breakdown of the anticipated bond schedule and whether this would count against the County's debt limit or credit rating. Bob Jessup said this would not count as outstanding County debt; but there would be some sort of note disclosure of the commitment, and the parties would all know. Chair Jacobs noted that this project has been approved by the town and at this point the County is being asked for support of the proposal through a partnership. He said before this reaches a decision point, it would be brought before the public. He said there may be differences of opinion regarding the merits of how this was re- zoned, but that is not the issue before the Board. Chair Jacobs said the town wants the County to be on board as quickly as possible, but they also need to be comfortable before moving forward on this as a decision item. He would like to make sure there is time for due consideration. Commissioner Rich asked about the type of financing, which has been called tax increment financing and project development financing. Ken Pennoyer said this is referred to as synthetic tax increment financing; the development financing refers to financing done through state statutory tax increment financing. He said this is a different model that is based on an installment financing that is secured by an asset. He said this is being combined with the financing for the newly renovated Town Hall, which will act as collateral for the asset. He said the synthetic tax increment financing is preferred over the state statutory because it uses a standard method, which looks more solid because it is backed by an asset. Commissioner Rich said the way the tax base is being projected is based on how the Town sees the project growing, and then the Town Hall is being used as a backup asset. She asked if this is correct.