Periodic Financial Reviews

Periodically we look at the long term debt of the city and see if there are opportunities to make a change that benefits the finances of the city. Recently that effort was done concerning a couple of issues. The first involved the Tax Increment District 1. This district was established about 24 years ago with intended development to occur along the frontage road, most of which occurred in the area of Sherburne Avenue and Highway 10. There was also development that occurred along Bank Street as part of the original district. Tax Increment takes the value before development and freezes it at that rate and when development occurs a new value is determined. The property owner pays taxes just like any other property but the “increment” between the before and after value creates a tax that is collected separately and used for economic development purposes.

As development occurred the city collected increment to offset costs associated with public improvements. The area of benefit expanded in 1994 to include a larger improvement district and as debt was incurred the proceeds of this district were pledged to debt service for the 1996A Tax Increment Bonds.

As time progressed and revenues were collected the city recognized that these bonds could be called as adequate revenues were available to pay off the debt. As there were sufficient revenues to address the debt the need to continue the Tax Increment District was unnecessary. Dealing with that the city decertified the Tax Increment District which places the property within that district out side of a tax increment district becoming part of the entire tax base of the city.

With the early payment of the bonds the city was able to reduce the required levy to met bond requirements recognizing an impact of approximately $35,000 per year. The city also saves in interest expense over the remaining life of the original issue for the bonds that will be paid off. These bonds also had assessment income pledged to debt service so with the bond paid, that revenue comes to the general fund until the assessments are paid in full.

Managing debt service involves more than making payments and keeping the books. The benefits of periodic reviews of debt service seem to be apparent with this example. The tax payers of the City of Becker become the winners when these actions are taken.

Advisory Committees

The City of Becker has a few advisory committees that are served by residents of the community. These include the Planning Commission, Economic Development Authority and the Park and Recreation Committee. Each year terms expire for incumbent members which allows for others to participate in serving their community in an advisory role. These position are voluntary however a per diem is paid.

For 2008 the city has 2 seats on the Planning Commission that will expire and one seat on the Economic Development Authority that expires. If anyone is interested in applying for these positions please request an application. You must be a resident of the city to apply. We have posted a form on the web site at www.ci.becker.mn.us or a copy can be mailed out or emailed as you prefer. The number at city hall is 763-261-4302. Requesting a copy by email please use nfiereck@ci.becker.mn.us.

Hockey Arena

Hockey Arena

The Becker Big Lake Ice Association has been diligently working on a plan to provide an ice arena for use by Becker and Big Lake participants. This organization has worked hard to address ice time needed to practice and play. They recently have submitted a working plan to provide for an arena in Big Lake on property they acquired in the Big Lake Marketplace.

Their plan provided for a joint powers board to be established among those entities that would participate in the funding of the facility. Having the facility on property owned by the association not only would diminish some of the costs associated with construction it would allow the Association to use that as collateral in seeking a loan to finance a portion of the facility. The association also intended on providing additional funding for construction costs. They had asked the cities of Big Lake and Becker for assistance with the remaining costs of construction. They had also wanted to seek participation from the associated townships as well.

In allocating costs the Ice Association devised a formula using 4 factors. These factors were (1) population and number of skaters (2) budget (3) users and (4) responsibility. These factors were used in conjunction with each other to determine an appropriate share of costs, and benefits, of an ice arena.

The city council held workshops to discuss and address questions concerning the proposed facility. As part of the follow up, alternate locations were also discussed and the impacts of cost shifts as a result were also reviewed. The council was impressed with the Ice Association’s level of organization and will to fulfill the association’s dream of an ice arena. There was a good deal of honest hard work accomplished to find a proposal that was fair for those parties involved.

The council discussed the matter at its November 6^th meeting and felt the City of Becker was not willing nor in a position to participate at this time. They cited location and cost per participant as issues. They also felt our present tax base situation did not lend itself to financing. They did feel this to be a good project but difficult to participate in.