03/10/2008 Meeting Minutes - Laserfiche WebLink

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Special Council Meeting 3-10-08 Page 11 could have gotten $50,000:00 an acre, you would have been lucky. Those are real dollars. We are not looking at liquidating but the debt service for it is predominantly through the taxes. Mr. Marquardt asked about liquidating if we had to from a risk standpoint. Mayor Rinker stated that he does not know if he can answer his question about risk that we would have no risk. We have always understood that we were tying a lot of these investments in the fact that we were looking at a certain revenue stream by Progressive. Most of the infrastructure that we paid for we have done not through income tax but through property taxes. That is where the underlying value in all of these comes. A lot of what we are paying for is based upon the land value. If the land value goes flat, there is not a lot we can do. But in terms of the TIF dollars, that is based upon the enhanced value of the property with the physical improvements that were placed on it. That is not the jobs, that is the physical plant. If Progressive leaves and we are left with a ghost town, yes that is going to have a huge impact. There is no question. But a lot of what we are getting is coming through the tax duplicates. We have created a pretty rich tax base based upon these strategies. What we are trying to do is recognize that Progressive is now not making the money hand over fist that it was. It is still generating substantial revenues relative to just about anyone else around. We are trying to trim back. This budget reflects. an effort to parallel a pretty significant reduction. We are trying to anticipate where the end of the year will go. At the end of the day, the final decision for Council is less this budget than it is on whether or not we go ahead with the police station. Council President Buckholtz stated that we are running at a relatively high amount of debt. We are balancing with the amount of land that we are holding and the quality and value of the land. Mr. Brett said he would not say that. He would say relative to the assets. If someone comes up and says they have a$100,000.00 mortgage, they have not told him a thing. But if they live in a$50,000.00 house and have a$100,000.00 mortgage, they have problems. If they live in a million dollar mansion and have a$100,000.00 mortgage, that is nothing. That is why we present the assets in conjunction with the debt that is associated with it. Council President Buckholtz asked where we are in that scenario. Mr. Brett said with the $18 million in debt, we have approximately $20 million. Mr. Marquardt asked if you could sell it if you had to. Mr. Brett said that many of the least liquid projects that we have undertaken, we are not done with debt. This building would not have been hard to sell. The church could have sold it to Walgreen's for 50% more than what we paid for it. We chose not to. This building is paid for. There is a host of things. The least liquid things that we have, a lot of them are already paid for. Mr. Marquardt said if you had to cover that debt, could we do that. Mr. Brett said if the risk came to a curve, last on the list would be debt. It would be more the general operating activities in this community that would be targeted. Most of the debt is backed up by the value of properties or for revenue streams that are tied to the property. We are not allowed to go above 10-1/2% of the assessed valuation and most of the valuations are not even on the duplicate because we can't do stuff that is TIF'd or community reinvestment. In concerns of