TREMONTON CITY CORPORATION
REDEVELOPMENT AGENCY
MAY 1, 2018

Board Members Present:
Roger Fridal, Chairman
Diana Doutre, Board Member
Lyle Holmgren, Board Member
Jeff Reese, Board Member
Bret Rohde, Board Member
Lyle Vance, Board Member
Shawn Warnke, Executive Director
Linsey Nessen, Executive Secretary

Chairman Fridal called the Tremonton Redevelopment Agency Meeting to order at 8:09 p.m. The meeting was held in the City Council Meeting Room at 102 South Tremont Street, Tremonton, Utah. Those in attendance were Chairman Fridal, Board Members Doutre, Holmgren, Reese, Rohde, and Vance, Executive Director Warnke, and Executive Secretary Nessen. Also in attendance was Public Works Director Paul Fulgham.

1. Approval of agenda:

Motion by Board Member Reese to approve the May 1, 2018 agenda. Motion seconded by Board Member Doutre. Vote: Board Member Doutre – aye, Board Member Holmgren – aye, Board Member Reese – aye, Board Member Rohde – aye, Board Member Vance – aye. Motion approved.

2. Approval of minutes – June 20, 2017

Motion by Board Member Vance to approve the minutes of June 20, 2017. Motion seconded by Board Member Reese. Vote: Board Member Doutre – aye, Board Member Holmgren – aye, Board Member Reese – aye, Board Member Rohde – aye, Board Member Vance – aye. Motion approved.

3. Public Hearing:

a. To consider adopting the proposed Tentative Budget entitled “The Redevelopment Agency of Tremonton City Annual Implementation Budget 2018- 2019 for RDA District #2 Fund – Downtown and Tremonton West Liberty Foods EDA 172” commencing July 1, 2018 and ending June 30, 2019.

There were no public in attendance. Chairman Fridal opened and closed the Public Hearing at 8:10 p.m.

4. New Business:

 

a. Discussion and consideration of adopting Resolution No. RDA No. 18-01 adopting the proposed Tentative Budget entitled “The Redevelopment Agency of Tremonton City Annual Implementation Budget 2018- 2019 for RDA District #2 Fund – Downtown and Tremonton West Liberty Foods EDA 172” for the fiscal year commencing July 1, 2018 and ending June 30, 2019

Executive Director Warnke said we have touched upon this in other meetings and there is nothing more to add.

Motion by Board Member Reese to adopt the resolution. Motion seconded by Board Member Rohde. Roll Call Vote: Board Member Doutre – aye, Board Member Holmgren – aye, Board Member Reese – aye, Board Member Rohde – aye, Board Member Vance – aye. Motion approved.

b. 2017 Tax Increment Reports for the following project areas:

1) West Liberty Foods EDA
2) Tremont Center Community Development Project Area

Executive Director Warnke said this year with West Liberty Foods we received $1.3 million. We take 20% of that, which equals $270,000 and is earmarked for affordable housing projects through the life of the project. We are at the end of the life of this project area and $2.6 million will be invested and set aside for housing. BRAG holds $500,000 and we have the rest, but have spent some along the way. Board Member Rohde asked if we have some projects earmarked for that. Executive Director Warnke said yes, in the budget we appropriated some funds so we could participate if an opportunity arose. We have also looked at purchasing some property for affordable housing on 6th South. That has been programmed into the budget, but we do not necessarily have an ongoing program. We have leveraged our funds with the County’s RDA funds and grant funds so we have been able to do a lot of renovations for single-family homes. We also have the support of an administrating agency, Neighborhood Non-Profit out of Logan. They have done a great job for us, along with other entities in the County. We have the ability to do more and have about $1 million in that fund right now.

Chairman Fridal asked how much tax increment West Liberty pays a year. Executive Director Warnke said there are two entities that are getting taxed. The total amount that the RDA receives from West Liberty Foods and Millard Refrigeration is $1.3 million, but we pay a percentage back to them. The County also takes a percentage for their collecting and assessing. That is not the total amount they paid, just the total amount of the RDA. Chairman Fridal clarified they are not getting the money refunded to them anymore. Executive Director Warnke said not anymore, but they were for the past 10 years. Board Member Reese clarified this is the end of both West Liberty Food and Millard Refrigeration EDAs, which it is. Executive Director Warnke referred the Board to the PT700 reports showing a breakdown of property taxes and flow explaining what the entities collect. We will get $270,000 in the General Fund, which will be ongoing. That is $100 million in new taxable value. It is comprised of about $50 million in person property and $50 million in real property. The certified tax rate delivers the same amount of revenue that the City received last year, plus new growth. However, there was a change in State Law that will not count as new growth in the certified tax calculation, unless personal property is part of an RDA project area. We are fortunate enough to have that $50 million of taxable value for personal property included as new growth.

Executive Director Warnke said 20% of the $270,000 was retained by the RDA, with Millard receiving $97,000 (a 9% claim) of that $1.3 million, while the remaining amount went to West Liberty Foods. Executive Director Warnke has reached out to both companies to get a dissolution agreement and has heard back from West Liberty Foods at this time.

c. 2017 Tax Agency Reports for the following project areas:

1) West Liberty Foods EDA
2) Tremont Center Community Development Project Area

Executive Director Warnke said the life of the Tremont Center project area is 15 years or until we hit $4.3 million, whichever occurs first. In the first year, we received $31,000, which was reimbursed to the developer. This year the taxable value delivered was $91,000. That total may have included partial construction so there might be some increased value in this property tax year, which are assessed, as they exist as of January 1 of the tax year. Developer Micah Capener is working on doing some additional development, which is what we need to increase taxable value and deliver a quicker amount of tax increment to the RDA in order to take care of the obligations we have. In time this will lead to improvements and further investments downtown. Board Member Rohde clarified that the first $2.2 million goes to the Tremont Center and then after that we start realizing that on Main Street. Executive Director Warnke said yes, there are primary improvements ($2.3 million) and there are secondary improvements, which the developer could also get reimbursed for if he does those. He is capped at $2.3 million or actual expenses and then we start sharing 50/50 or it could be 100% if he does not do any secondary improvements, which are listed and categorized.

The Board then discussed the agency reports. Executive Director Warnke said each project area has a budget and they forecast the taxable revenue they foresee, along with how quickly it will come in. Right now we are pretty good, but there needs to be a big jump in the next fiscal year. We are lower than what we estimated and we will not hit that since he is not developing that much between now and then. Executive Director Warnke also showed the tax rates for the different entities. The School District is realizing the lion’s sharing. We thought the County’s certified tax rate might be more, but we are at .002 and they are .0019. We also adopted resolutions that will allow the City to make financial contributions to the RDA, which are not necessarily loans. However, there is the hope that there will be tax increment so we could be reimbursed. He gave the example of the 480 West intersection. The City is already doing projects in advance of receiving tax increment with the hopes of reimbursement through tax increment. The PT700 report shows the breakdown of each tax entity and what they are projected to receive this year for taxable value, which is essentially a $100 million investment.

Board Member Vance asked if we purchased those two four-plex lots at 6th South for $80,000 or if that is still up in the air. There is a right-of-way for the Canal Company on the west side of the canal for clean up. Board Member Vance asked if our walking trail could be on that right-of-way. Executive Director Warnke said yes. The Canal Company utilizes that right-of-way, but they do not own it. Board Member Vance asked if our trail would be able to handle the Canal Company’s equipment going on it. On 6th South there will be the canal and walking trail so whoever has these lots cannot put anything on the canal’s right of way. Director Fulgham said they cannot build a building, but they could put a fence or some other surface improvement. Board Member Vance asked if we could save some money by coming across the road. Director Fulgham said there is an issue of safety with the railroad tracks. The railroad has already allowed a sidewalk to go across there and they do control how you cross their tracks. Board Member Vance said if we do the walking trail we need to figure out how to do it as economical as we can. We could save that $80,000 and spend it somewhere else. That is wasted money and asked if we can work it so we are on the canal’s right-of-way so we are coming down through there and across our own street. Director Fulgham said the canal has a right-of-way, but they do not own the property—they cannot allow us to put our trail on someone else’s property. We could if we could buy the right-of-way.

Board Member Vance said we would only be able to fit one four-plex on that property because there is not enough room for two. Executive Director Warnke said it was platted as a four-plex lot and the home plans that are there are four-plexes on the same size of lot. That is a gray area because we do have to consider applying the new standards and we will need to talk to City Attorney Ericson. It is tight—we would have to go up and stack them because we cannot go out. Board Member Vance said he wanted to talk to the canal and railroad companies because it would cost the City nothing to come around on the south side of the canal. We could clean up those weeds and make Tremonton prettier if they would allow us to come across the railroad. Executive Director Warnke showed where the existing right-of-way ends and where Michael Rasmussen’s property begins. If we can get from here to here you are right and this is something we need to explore. We still need to go through his property. We could sell it to someone else to be developed and take the right-of-way, but there is a sewer line there too. Board Member Vance said if we buy those at $40,000 a piece and take off our right-of-way then try to sell it, we are only going to get one lot out of it so we just lost $40,000 to buy a little strip of land for a walkway.

Board Member Reese brought up the Holmgren East Trail and asked if we are looping it around. Executive Director Warnke said it is a mile loop, which is what we obtained the grant to do. Board Member Reese clarified so right now we are done. Executive Director Warnke said that would complete what we had. The only other options would be a north and south linear. Board Member Reese said there is a lot of heartburn over this trail. We need more discussions before we put any more money into it. Executive Director Warnke said that is a Council decision and suggested some trail cameras to see how it is being utilized. This other one is a different trail because it is an alternate transportation corridor and has transportation value. It is not just a recreational trail. Active transportation is anything other than a vehicle. This provides a corridor to move people. The real value is having people walk or ride bikes to schools, parks or downtown. Board Member Reese said the Council is getting to the point where we feel like we have spent enough money on trails. Board Member Vance said we need to start being careful. Right now it is accessible and I see why you are going for it, but there needs to be a way to negotiate around that to get what we need and not spend that kind of money. Executive Director Warnke said we are using housing funds, but I do agree that we need to be careful. Frankly, I think we have done a great job. We have leveraged City funds with grants and had a lot of contributions from the community. We are still working with Rupp’s to have them finish that trail. Board Member Reese said we need to educate the public on what funds have been available to us. Executive Director Warnke said he has that information and would send it to the Council. This is a plan that reaches back to the 1980s. If we get these remaining parcels we will have a complete two-mile corridor through the center of town. The only one we have to improve right away is one of the parcels we got with Rocky Mountain Power as an easement. I suggest we do that so we protect our interest and right to have that easement. We can stop there to regroup and figure out if there is another way or wait for the future. As the community starts to grow, having this corridor is going to become more and more appreciated.

Board Member Rohde said he is all for a healthy community and providing a means for people to get out and exercise, but we do not know what the pulse is on this from the City. Executive Director Warnke said in the economic development plan we did a survey and trails was a part of it. I will see if I can find that information. Board Member Vance said he has talked to a lot people who are opposed. Board Member Rohde said they would also have to worry about safety and policing this corridor. There is potential for crime to happen and we have to keep an eye on the trail. Executive Director Warnke said these corridors are multipurpose. Whether we put a trail on it or not, we still need to acquire a good section of them for the storm drain. Board Member Vance said that type of information would be helpful when talking to citizens. If we had a map showing them where we are putting a drain and that it also works out for a walking trail it would help us explain things rather than them thinking we are just spending a lot of money. Executive Director Warnke said that will drive the timing because we will not add a trail before the storm drain. Executive Director Warnke said he will put together some talking points.

Executive Director Warnke said he is working on getting the purchase agreement with Mr. Rasmussen on this property using the housing funds, unless the Board does not want him to. Chairman Fridal said we have enough heartburn that we need to discuss it more before we offer Mr. Rasmussen any money. We need to hold off and talk about it again in the future unless he comes up with a good deal. Executive Director Warnke said it is a Council decision, but had some thoughts. We would have two-miles with two more properties and we are not even using General Fund money, we are using RDA funds for the purpose they are used for, which is affordable housing. Right now, that money is sitting in the bank. We can purchase it, invest in it and have the access. Now is the wrong time to stop. If this property goes, then we lose a lot of value. We purchased them with multi-uses in mind. We are using housing funds to acquire property that will have a multiple use. On this other one we can wait. It might go up and be harder to negotiate, but that is undevelopable.

Board Member Vance said so the idea of going around the south end of the canal is not going to be addressed. Executive Director Warnke said we should look at it. That is a great idea. UDOT, who partners on railroad safety, will push us to where there is already a crossing because they do not want multiple crossings. However, we will reach out because I would like to work around that too. In my mind, it is a better scenario because it is separated from other traffic, which makes this more of a transportation corridor. The Board asked if anyone besides Board Member Vance would have an issue moving forward. Board Member Doutre said she has a problem with it too because there is not going to be anything left to put the four-plex on. Board Member Reese said everything Board Member Vance said is right, but the problem we have now is that we have got ourselves down to the end. Board Member Doutre asked what we are going to do with the rest of that lot because there is not room. Executive Director Warnke said the purpose of the money is to develop affordable housing so we can either develop affordable housing or allow someone else to do that. We would sort of control how it is developed. There are lots of ways we can accomplish both purposes to have a trail and affordable housing. The money is either going to sit in the bank or sit in the value of the land. It makes sense to acquire the property now while there is a chance. This corridor was accomplished through the annexation process. They dedicated the land to us and we are reimbursing them with impact fees, which is a dedicated restricted use of those funds to acquire the property. It was a good, economical move. There has not been a lot of money out of pocket in that sense. The developer is getting paid back by the development he is creating. This would be the last connection of a developable property. If Mr. Rasmussen sells it or applies for a building permit, then we would have to figure out a different way if there is a desire to have it and utilize it for multiple purposes.

Board Member Rohde said we have already spent the money and have acquired land so we need to finish it. Board Member Holmgren said that is how he feels—we need to finish out the project. The Board continued to talk about sizing of the lot and what would be required for the right-of-way. Executive Director Warnke said we could grant it to a non-profit, because all the RDA cares about is affordable housing, and they could develop a stacked unit on that. We do not need to be the ones to do it. We could also resell. The purpose of the funds is to subsidize and make it more affordable. We are not stripping out the development potential because it is already encumbered with the access we talked about and the sewer line. Board Member Vance asked how much it would cost to obtain the piece we need to cross. Executive Director Warnke said he was told $30,000. Mr. Rasmussen purchased it for $23,000 eight years ago and wants a return on his investment. Board Member Vance said if we can come behind that canal and the railroad, let us spend the money on those two lots and get the thing done without spending more money on the east side to come through it. Executive Director Warnke agreed that would be a more ideal functionality if he is willing to sell, but it is at a high price. We can wait because that is not going anywhere—it is not developable. It may change hands, but we can leave that for a future day. Chairman Fridal asked if we want to move forward on those lots. Board Member Rohde said we are obligated at this point. The Board gave Executive Director Warnke direction to finish out the agreement and present them with the information. Executive Director Warnke said after this acquisition there is not a real pressing need for more trails. I try to provide opportunities for the Council, but I am not driving it. If you do not want projects we can stop. I do not want you feeling pained to be in a position you do not want to be in.

d. Discussion of the possibilities of creating a new Community Development Project Area on Main Street from approximately 300 East to SR 13

Board Member Vance said let us do it and asked if we are going to be able to fix the Crossroads if we do. Executive Director Warnke said there are lots of ways we can spend the money, assuming the taxing entities would consent to it. There could be a lot of support. The Board asked if they would be able to tear the old building down and clean up the area. Executive Director Warnke said there is no responsible party according to the Attorney General’s Office on that property. He talked about environment contaminants and underground storage tanks, which the State is doing testing on. The Department of Water Quality is working on the above ground tanks. The State should get the results back in six weeks and have $30,000 to do remediation. They were told the City has an interest in seeing the property redeveloped and potentially creating a project area to address this issue.

Executive Director Warnke said we could also discuss using some of those tax dollars to help fund the park, but was not sure how well that would be received. We are also doing some entryway improvements. I have talked to County Commissioner Jeff Scott and school district employee Rod Cook. Both were supportive on the surface to have a conversation. The next thing the RDA needs to do is adopt a resolution to create a study area. Then we need to get numbers together and engage Zion’s Bank Public Finance, who we have used in the past. They would come up with numbers so we could talk to the taxing entities and make our case for why we need to create a project area and ask for their support. The School District has the majority of the control and are kind of a wild card. Mr. Cook did not know what the reaction with the new superintendent would be. There is a great case to be made especially with some environmental issues that exist on the property. Chairman Fridal asked if there is any reason we should not pursue this. The Board agreed it would be a great thing to pursue.

Executive Director Warnke said we have looked at ways to fund this park because our plans show the need for a regional park at that location, as well as a regional facility storm drain. Impact fees from parks and storm drain are certainly in play. The idea is that the developer would make the improvements now and the City would reimburse him over time. We could also look into using tax increment. The School District might be hesitant to participate on that portion of the project, but it could be more City or County participation. That is an allowed use and makes the park and storm drain more feasible. Executive Director Warnke asked if the Board is okay with exploring tax increment for funding of the park and seeing how far we can get with other taxing entities. Mayor Fridal said we have to. Board member Vance said let us look into it.

5. Adjournment

Motion by Board Member Rohde to adjourn the meeting. Motion seconded by Board Member Vance. Vote: Board Member Doutre – aye, Board Member Holmgren – aye, Board Member Reese – aye, Board Member Rohde – aye, Board Member Vance – aye. Motion approved.

The meeting adjourned at 9:08 p.m.

The undersigned duly acting and appointed Executive Secretary for Tremonton City Corporation Redevelopment Agency hereby certifies that the foregoing is a true and correct copy of the minutes for the RDA Meeting held on the above referenced date. Minutes were prepared by Jessica Tanner.

Dated this 5th day of June, 2018.

____________________________
Linsey Nessen, Executive Secretary