Norman city council's vote to end tax increment moved, two public hearings proceed

The City of Norman uses the land use plan for 2025 for the University North Park Tax Increment Finance District project area. (Provided)

The anticipated Norman City Council vote to end one of the city's Tax Increment Finance districts has been moved to Nov. 5.

Residents will have two chances to hear about the project and voice concerns prior to the vote.

State law was modified a couple of years ago and now requires notice of a hearing be published online as well at least 14 days before the first hearing. Kathryn Walker, interim city attorney, said the city met the physical publication deadline, but missed the online one and had to move the vote and hearings in order to comply.

The first public hearing was slated Oct. 8 and has been rescheduled for Oct. 22. The following hearing will be held Nov. 5 before the council’s same-day vote on the proposed amendments to the project plan for the University North Park TIF District and a master agreement to end the TIF.

During the first meeting residents will receive information on the UNP TIF negotiations and agreements through presentations from Walker who will answer questions. The second public hearing will focus primarily on public comment.

The council expected the TIF to end on June 30. The fiscal 2020 budget that started July 1 was created under the pretense that it would end, but after months of negotiations between the city and developers, the council finalized its project plan amendments near the end of August.

The statutory TIF Review Committee recommended the project plan amendments on Aug. 28, but the Planning Commission voted against recommending the amendments because it wanted more review time.

The council unanimously passed the UNP TIF project plan amendments upon first reading on the consent docket Tuesday.

Back in March there was threat of litigation from developers when the city considered ending the TIF without negotiations. After discussing project plan possibilities, the developers, city staff and council created the amendments that would end the UNP TIF.

Nearly $30 million has been spent so far on the $54.7 million original UNP TIF plan, according to a presentation made at the Sept. 19 Planning Commission meeting. That means about $24.8 million of the original plan has not be funded. The proposed changes to the various projects lower that cost to almost $17 million.

The amendments will end the apportionment from city coffers to the UNP TIF fund, and the $17 million that is spread throughout the remaining projects will ensure they are completed.

The council wants to end the increment because of general fund shortfalls that could be evened out by sending sales tax revenues to the general fund that are now going to the TIF. According to the 2006 ordinance, 60 percent of sales taxes collected by the businesses in the UNP area go to the TIF fund.

The TIF is also funded by property taxes, which will continue after the sales tax apportionments end.

Anthony Francisco, city finance director, said every month that the TIF continues it costs the general fund about $300,000. He said the project plan amendments meet the expectations from a budgetary standpoint, and it’s vital to get them completed soon.

Sales taxes have already been apportioned to the TIF fund from the general fund for July, August, September and October. Walker said if the council approves the project plan on Nov. 5 all of the apportionments after June 30 for sales tax will go back to the city’s general and capital funds.

“In my opinion, time is money and from the budgetary standpoint, regardless of what the deal is, the deal needs to get done,” Francisco said.

The project plan amendments include traffic and roadway improvements for areas like Rock Creek Overpass and Tecumseh Road and Flood Avenue, the recreation facility, Legacy Park, the lifestyle center, economic development, initial project activity costs and miscellaneous costs.

For public infrastructure, the amendments propose planned traffic and roadway improvements, which would cost a little more than $5 million. There is about $3 million remaining from the original allocation for economic development, and city officials know they must find a new revenue source.

The cultural facility is now called the recreation facility under these amendments, and the exact location of the University Town Center tract is still to be determined. This facility has a proposed allocation of about $5 million.

Legacy Park still has about $2 million remaining from the original allocation, and the amendments propose a lower allocation of $250,000.

The public hearings are giving Kate Bierman, Ward 1 council member, the opportunity to get some additional feedback from the public, and she said she’s looking forward to that. There has been a lot of chatter online about the negotiations and agreement, but there weren’t many dedicated public meetings to be able to talk about this more comprehensively.

“This whole UNP process to unwind the TIF has been really onerous and really complicated,” Bierman said. “At the same time I want to be sure that we are getting the right agreement for the city and for the general public, and I don’t necessarily know that the proposed settlement gets us there.”

Just because the council has a proposed agreement out there doesn’t mean that it’s the only agreement that council should consider when it has these public hearings, Bierman said.

Bill Scanlon, Ward 6 council member, said he is leaning in the direction of supporting this solution for the UNP TIF, but can’t commit to a vote because he wants to take this month to review the plan and weigh his decision. The public hearings are a positive step, he said, because exposing information to as many people as possible and getting their feedback is important.

Scanlon wants to assure his constituents he'll be listening to their concerns.

Alex Scott, Ward 8 council member, said she’s prepared to end the TIF, and so her vote will reflect that Nov. 5. She requested documents from Walker Thursday on the new and old project plans, and she said she will sift through those over the next month to make sure the city is in a good spot before the vote.

Joe Carter, Ward 2 council member, sought a council seat a couple of years ago on the notion of ending the UNP TIF, and his vote will reflect that. He said he also looks forward to hearing resident input.

“I’m very supportive of the compromise that we reached with the developers and to end the TIF, balance the budget and resolve the location of two Norman Forward projects,” Carter said, referring to Legacy Park and the recreation facility. “I feel like this has been a wound on this community for the last 13 years, and it’s time for it to end, and it’s time for this community to move on.”

Also in support of ending the UNP TIF is Alison Petrone, Ward 3 council member, who said the city isn’t required to give an enormous windfall to the developers in the process.

“I haven’t seen any case law to legitimize the lawsuit through it, and it’s my responsibility to protect taxpayer funds,” Petrone said. “The money in the UNP TIF account belongs to the people, those are taxpayer dollars so it’s important that those funds go to the betterment of our community.”

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