TOWN OF SOUTH WINDSOR
SPECIAL WORK SESSION MINUTES
TOWN COUNCIL MONDAY, July 20, 2009
COUNCIL CHAMBERS TIME: 5:30 P.M.
1. Call Meeting to Order
Mayor Prague called the meeting to order at 5:45 p.m.
2. Roll Call
Members Present: Mayor Cary Prague
Deputy Mayor Gary Bazzano
Councillor Edward Havens
Councillor Kathryn Hale
Councillor Kevin McCann
Councillor Paul Oates (arrived at 6:05 p.m.)
Councillor John Pelkey (arrived at 6:50 p.m.)
Councillor Keith Yagaloff (arrived at 6:55 p.m.)
Members Absent: Councillor Lisa Maneeley
3. Public Participation
None
4. Communications
None
5. Town Manager’s Report
None
6. Items for Discussion
Mr. Dan Marsh from the National Development Council came before the Town Council to present a slide presentation regarding Tax Increment Financing. He explained that Tax Increment Financing (TIF) is a mechanism whereby the future tax collections generated by real estate improvements are captured to pay the present cost of providing infrastructure in support of private development. TIF Bonds are not a general obligation of the municipality, but are repaid from generally applicable taxes, usually real estate taxes assessed by a governmental entity.
Attorney Dave Panico came forward and explained to the Council the different projects that have used TIF.
Work Session – Town Council
July 20, 2009
Page 2
ITEM
6. B. Tax Increment Financing (continued)
Mr. Galligan stated that the Assessor will determine what the value of these buildings are and the taxes will be generated by that determination.
Answering questions, Mr. Marsh explained that Tax Increment Financing could be available for the construction of buildings depending on the tax analysis involved, and it also depends on how the deal is structured.
Answering further questions from the Town Council members, Attorney Dave Panico explained that if the actual revenues are not sufficient to repay the bonds, the bond holders would be obligated, but if there is a shortfall when taxes are paid there will be a reserve fund of probably a full year of debt service sitting in a fund that will be partially drawn on to cover that shortfall. The bond holders would be notified by the developer if this were to happen.
Mr. Marsh added that there will be big banks coming in to provide the financing to put up the actual buildings. The banks know that the real estate taxes get paid before they do and so the bank is going to want the taxes to be current because chances are they will have a lot more money in the project then the Town will.
At 7:00 p.m., Mayor Prague called the Work Session to order, and then recessed the Work Session in order to finish the Special Work Session.
Attorney Panico explained that there is no limitation on the cost of issuance that can be paid with the proceeds of these bonds. If the Town wishes, certain items can be included in the bond proceeds.
Mr. Craig Stevenson informed the Town Council that there are institutional investors who are aware of this project and are waiting for the Town in order to discuss the finished product.
Attorney Panico stated that it is fairly typical for the governmental improvement money to go in first to be used for roads and infrastructure in order to make the site accessible for construction, but it is important to make sure that the developer has a commitment letter from a bank to ensure money is secured to complete the project.
Mr. Marsh explained that after the developer has a complete set of plans, the plans will be reviewed to make sure that the uses are appropriate, and follow State Statute as well as for Federal tax exemption purposes.
Mr. Stevenson informed the Council that in this quarter the developer will be spending two million dollars on this project prior to site plan approval.
Work Session – Town Council
July 20, 2009
Page 3
ITEM
7. Executive Session
None
8. Adjournment
At 7:18 p.m. Deputy Mayor Bazzano made a motion to adjourn the Work Session. Councillor McCann seconded the motion; and it was approved, unanimously.
Respectfully submitted,
Deborah W. Reid
Clerk of the Council
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