After months of negotiations, the Norman City Council finalized its project plan amendments, which will effectively end the apportionment for the University North Park finance district.
The 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.
The council is trying to end the UNP Tax Increment Finance District and will vote Oct. 22 on the amendments and a master agreement that amends all of the previous agreements, as well as some potential clean-up items. The council wants to end the UNP TIF 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.
By 2006 ordinance, 60% of sales tax collected by the businesses in UNP go to the TIF fund.
The fiscal 2020 budget, which started July 1, was created under the pretense that the UNP TIF would end around June 30, 2019.
Anthony Francisco, city finance director, said every month the UNP TIF continues it costs the general fund about $300,000.
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 lower that cost to almost $17 million.
The project plan amendments meet the expectations from a budgetary standpoint, Francisco said, and it’s vital to get them done quickly.
“We have already apportioned sales taxes to the TIF fund for July and August, and we budgeted for that money to be recorded to the general fund,” Francisco said. “We are about to make an apportionment for September as well.”
At the time the council and city went into negotiations together with developers in April, they thought talks would be complete by the end of June. If the council doesn’t end the UNP TIF Oct. 22, Francisco said, it will make it that much more difficult to meet the revenue budget for the whole fiscal year. Every month of delay exasperates the problem, he said.
“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. “From a budgetary standpoint that’s it, the bottom line is the bottom line.”
The Statutory TIF Review Committee recommended the UNP TIF amendments on Aug. 28. The Planning Commission, however, voted against the recommendation with a two to five vote during a special meeting on Sept. 12. The council takes these recommendations into consideration before the vote, but ultimately the decision is up to the council.
The commission did not recommend the plan because it wanted more time to review the amendments.
Before voting, Commissioner Dave Boeck said this resolution recommendation is above and beyond what the commission is capable of doing.
“We have heard it millions of times from esteemed attorneys, that all we are is a recommendation body, we are not an ordinance body and the city council’s position and role is to approve plans and budgets, we just approve whether whatever is being done fits into the long range master plan the 2025 plans,” Boeck said during Sept. 12 commission meeting. “So, I don’t feel comfortable voting on whether the plan works or not, because that’s not our role.”
The council asked city staff to explore ways to address the UNP TIF in November so that more money could go into the general fund to address some of the city’s budget shortfalls. Staff came back with several options, but the council and city staff ended up discussing options with developers to end the TIF effective June 30.
Since that date has passed the general fund continues to monthly apportion $300,000 to the UNP TIF.
“The bottomline immediately is we have budgeted based on the TIF ending, based on that assumption,” Walker said during the Planning Commission meeting. “So, in Finance Committee today they were talking about what we do if this doesn’t happen this year, and we have to find the answer to that $3.8 million question of what do we do if we don’t get 100% of the revenues.”
An increasing shorting in the general fund is what what really started this process to end the TIF early, Walker said.
There will be two public hearings — Oct. 8 and a date yet to be announced — before the vote. Walker said the hearings give the public time to express their views and a chance to acquire additional information on the UNP TIF negotiations and agreements.
Both Walker and Francisco said there have been several misconceptions out amongst the public through the whole process of attempting to end the UNP TIF. Both through word of mouth and on social media they have seen several inaccuracies surrounding the UNP TIF and the negotiations.
Walker said one misconception is the council is giving $17 million to developers.
“That’s not true,” Walker said, “The vast majority of the UNP TIF funds collected through June 30, 2019 will be spent on public infrastructure or public improvements, including desperately needed traffic improvements on Robinson on the west side of I-35, Tecumseh and Flood, Tecumseh and 24th, those are really big improvements that we need, not just because of the development in UNP, but just best of the way Norman is developing overall.”
Francisco said he doesn’t define the council’s action as giving $17 million to developers either.
“Remember the $17 million is not just for incentives,” Francisco said. “Most of it is for traffic improvements. A lot of it is for economic development incentives and a chunk of it would be for the recreational facility, which is the redefined cultural center.”
It is also incorrect to refer to the University North Park as the TIF, Walker said. The University North Park is a development and the TIF is a financing tool, which the city uses several of, he said.
The TIF is not a special tax, Francisco said, because the businesses in UNP are collecting sales tax like any other business in Norman. Businesses send the tax receipts to the Tax Commission and the commission funnels the city’s portion through.
“Then the city apportions it to various funds,” Francisco said. “So, that’s the only thing that will change, the taxes that have been collected in UNP will not change.”