HomeMy WebLinkAbout6/23/2016 DMCC Joint Meeting and Work Session - DMC Finance Overview1.What are the public funding streams?
2.When do the public funds
become available?
3.How can we leverage public funds
for maximum public value?
1.DMC Plan Scope Review
2.State’s Commitment is an Investment
3.Understanding Sources
4.Estimated Private Investment Pipeline
5.State General Aid Illustration
6.Availability of Public Funds
7.Public Investment Detail
8.City of Rochester Review
9.Considerations
10.Understating Cash Flow and Bonding Issues
11.Key Takeaways
•Findings that meet the requirements and legislative intent of
the DMC Act
•A framework to guide the policies and procedures for the
DMC
•Establishment of the Development District Boundaries
•A tool to support the Economic Development efforts of the
DMC
•A workplan to guide the ongoing efforts of the DMC and EDA
•Evaluation criteria for DMC Investment
•An outline of the planned public infrastructure and
transportation programs for the DMC that will trigger a
conceptual planning and engineering report for the DMC
District
•A definitive block-by-block Master Plan or
Land Use Plan for Rochester
•A commitment for capital investment for
any specific project(s)
•An appropriation of any funds by the City
of Rochester
•An obligation to enact any specific tax by
the City of Rochester
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’
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Sources not directly controlled by
Board(s)/Council: $6.0B+
1.Mayo Clinic: $3.0B+
2.Other Private Investment: $2.0B+
3.Other Public (Fed/MNDOT Grant Dollars): TBD
4.Other Private (donations/sponsorships): TBD
Sources available for DMC Investments:
1.DMC Public Sources: $585.0M
*Orange slice represents
total estimated Admin
Budget for 20 year
initiative
DMC Investment (millions)
Public
Investment
Private
Investment
Federal
MNDOT
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
0 $585
$5,000
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$5,000
$585
Total public sources: $585.0M
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State Transit Aid, $69.6
County Transit Aid, $46.4
City of Rochester Aid, $128.0
State General Aid, $327.0
State Tax Exemption, $14.0
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Total public sources: $585.0M
1.City of Rochester Aid: $128.0M
1.Funded via city 0.25% sales tax, estimated at $5.6M annually.
2.Tax Increment Financing (TIF) projects may count towards this total.
1.The two above sources are projected to cover the $128.0M
commitment.
2.State General Aid $327.0M
1.These funds are available after $200.0M of Private Investment at a
rate of 2.75% for every dollar over the $200.0M threshold. These
funds are advanced annually.
2.These funds are also subject to a local match, at a rate of 1:2.55 of
Rochester Aid to State General Aid.
3.County Transit Aid $46.4M (40% of $116M of Transit funds)
1.Funded via a portion of the county’s 0.25% sales tax.
2.The County’s contribution is estimated at $3.0M annually.
4.State Transit Aid: $69.6M (60% of $116M of Transit funds)
1.These funds are available after $200.0M of Private Investment at a
rate of 60% of 0.75% for every dollar over the $200.0M threshold.
These funds are advanced annually.
5.Sales Tax Exemption: $14.0M
1.Projection of exemption over 20 years.
1.Materials, supplies, equipment in construction of publicly owned
buildings & infrastructure are exempt.
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$585M Breakout:
State Transit Aid,
$69.6
County Transit
Aid, $46.4
City of Rochester
Aid, $128.0
State General
Aid, $327.0
State Tax Exemption,
$14.0
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Phase One Projection
Private Investment Project Name Public Assistance Est. Project Cost in
Calendar Year
July 2013 –Dec 2015 Various Various $152.4M
2016 Projection:
501 Building City TIF $25.0M
Stencil Apartments City TIF $10.0M
Lofts at Mayo Park City TIF $7.5M
1st Ave Flats City TIF / Housing Tax Credits $5.0M
Conley Maass City TIF / Historical Credits $3.0M
BroadWay @ Center DMC TIF $20.0M
Associated Bank None $5.0M
Mayo Projects None $75.0M
Total 2016:$150.5M
2017 High Level Projection Various TBD $150.0M
2018 High Level Projection Various TBD $150.0M
2019 High Level Projection Various TBD $150.0M
Total Phase One Projection $752.9M
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$10.3 $64.8
$152.4
$302.9
$452.9
$602.9
$752.9
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
2013 2014 2015 2016 2017 2018 2019
Private Investment Projection with resulting
State General Aid (Millions)
2017 SGA 2018 SGA 2019 SGA Private Investment
$2.8M $7.0M $11.1M
SGA = State General Aid
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State General Aid Projection:
Phase One (2015-2019)
Total: $20.9M
$7.0M$2.8M $11.1M
Phase 1
(2015-2019)
Phase 2
(2020-2024)
Phase 3
(2025-2029)Phase 4
(2030-2034)
Projected Private Investment = $5.0B
Projected Public Funding = $585M
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$752.9M
$59.5M
$1,800M
$180M
$2,000M
$200M
$1,455M
$145.5M
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State Transit Aid,
$5.7M
County Transit
Aid, $10.5M
City of
Rochester,
$22.4M
Committed
Uses,
$43.6M
State General Aid,
$20.9M Available,
$15.9M
Phase 1 -$59.5M
Committed vs Available
Sources*
Phase 1 -$59.5M
(2015 –2019)
Sources*
* Cash Basis. PAYGO TIF can increase funds available.
$14.0
$121.6
$17.0
$4.1 $12.6
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
DMCC Operating
Budget & Plan
('13-'16)
City DMC Project
Costs ('15'-'16)
DMC TIF
Committed ('16)
Est. DMC Admin
Costs ('17-
'19)
Total City
Investments
through 2019
State GSIA
Equivalent *
$47.7
1.Phase I Revenue: 0.25% Sales Tax, estimated at $5.6M a year from 2016 –2019
2.Zero State General Aid received through 2016.
3.City has fronted investments in advance of City DMC Sales Tax Revenue in amount of
$15.8M. This advance will need to be repaid (possibly via Bonding).
4.City of Rochester’s $128.0M commitment does not include any potential bond interest payments.
5.$47.7M projection does not include 2017-2019 capital costs yet to be determined.
Phase One Review (2015-2019)
*While the City’s projected investment of $47.7M in phase I
unlocks $121.6M of State General Aid,the projected Private
Investment unlocks $25.6M of State General Aid.This shows that
the City is out in front of the state.
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Estimated City Project Cost Detail:
1.Transit Studies & Program Management: $825,000
2.Chateau Theatre: $5,500,000
3.Parking Ramps (B&C): $10,700,000
Total: $17,025,000
Estimated DMC TIF Funding:
1.Broadway @ Center: $3,735,000
2.3rd Street Design Project: $365,000
Total: $4,100,000
$750M
Private
Investment
Phase 1
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Time/
Availability
of Funds
Priority
Sub-districts
Priority
Project Types
1.Overall City revenue available for the DMC
2.Annual Revenues to provide bonding match for $455.0M GSIA
3.Alternatives to provide more bonding capacity
4.Transit Project Funding –State and County Match total $116M
5.City up-front funding of $15.8M needs to be repaid
6.Credit for City Tax Increment used for DMC projects
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1.Overall City revenues available for the DMC.
0.25% sales tax $5.6M/yr. with est. growth increasing to $8.0M/yr. by 2035 = $136.0M
$1.0M/yr. in tax abatement from 2020 to 2035 = $15.0M ( City staff proposed)
TIF/Parking and CIP funds as solely determined by the Mayor and Council.
2.Annual Revenues To Provide Bonding Match for $455.0M GSIA:
Legislation requires the City to issue all the bonds.
Current available annual revenues = $1.4M/yr. with State Match = $50.0M in bonds (2035)
Additional revenues proposed –Abatement 2020 $1 M/yr. with State Match + est. sales tax growth $0.5 M = $47 M in bonds (2035).
3.Alternatives to provide more bonding capacity:
Some reduction in the DMC annual operating budget.
Additional Revenues –for 2020-2035 allocate $1.0 M in abatement funds (City staff recommends)
Additional Revenues -impose one or more of remaining DMC taxing alternatives in addition to 0.25% DMC sales tax (City staff does not recommend).
Alternatives in DMC Legislation (lodging tax, food and beverage tax, admissions tax)
4.Transit Project funding -State and County match totals $116 M. Transit costs may exceed this.
1.County annual pledge of $3 M/yr. needed starting in 2017 for transit costs/bonding.
2.County funding will be in advance of State Transit funding (similar to the City $)
3.Additional funding from GSIA funding may be needed for transit improvements.
4.Some bonding capacity may need to be reserved for transit solutions.
5.City up-front funding of $15.8 M needs to be repaid within 3 to 5 years.
6.Credit for City tax increment used for DMC projects
Legislation provides opportunity for City local contribution credit for TIF/CIP contributions made for DMC.
TIF credit has only applied to the Broadway at Center Project thus far, was requested for the Brutger project, and will be requested by the City for the Bloom project.
For many other smaller TIF projects the City has undertaken the projects as City TIF projects only that do not receive credit towards the required local contribution, preserving a
higher cash contribution from the 0.25% sales tax.
TIF for a few larger projects increase the City match available in Phase II and III when higher State Matching funds are needed.
City TIF or DMC TIF funding allows projects to proceed without reducing city cash contribution or requiring DMC sales tax bonding.
The DMC legislation TIF provisions do provide an opportunity for financial assistance to allow more projects, such as those on bare land, to proceed.
•DMC leadership needs to continue to be prudent with the allocation of the
public funds
•We have confidence in the initiative, evidenced by the high levels of private
investment to date and in the pipeline
•We are fortunate to have the city and county in a position that they can lead
the public investment to date
•Private investment leads to Public investment
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EDA Staff
EDA
Board
City Staff
DMCC
Board
City
Council
Olmsted
County
•Private non-profit corporation formed by Mayo Clinic
•Assists DMCC in DMC implementation
•Works with City staff on all projects in the DMC Boundary
•Leadership role for Discovery Square
•Co-Leadership role on Heart of the City
•Co-leadership role on Chateau Theater
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•Approval of the DMC Development Plan, after action by the
City Council
•Public non-profit corporation, appointed by the Governor of
MN, Olmsted County, Rochester City Council, and Mayo Clinic
•Approval of projects, annual budget and 5 year CIP, prior to
action by the City
•Provides public oversight and expertise to shape strategy
•Retains services of DMC EDA to assist with DMC
implementation
•Retains services of the City for financial and administrative
support
•Retains firm for legal and administrative services
•Approval of the DMC Development Plan, after submittal by DMCC
•Approval of projects, annual budget and 5 year CIP, after action by
the DMCC Board
•Provides financial and administrative support to the
DMCC
•Assists the DMCC with DMC implementation
•Constructs public infrastructure projects for DMCC
•Agreement with MN DEED for receipt and management of State
funds
•Agreement with Olmsted County for receipt of County Transit
funding
•Assists with DMC implementation and construction
•Works with DMC EDA staff on all projects in the DMC Boundary
•Leadership role in Transit/Transportation planning and construction
•Co-Leadership role on Heart of the City
•Co-leadership role on Chateau Theater
•Planning Staff works with City staff on all
aspects of transit and project planning
•Engineering staff works on
Transit/Transportation work
group
•Member of DMCC Board
•Provides transit matching funds to city
•Membership on Transit/Transportation
work group
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