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Item 5BCity of Southlake, Texas MEMORANDUM TO: Billy Campbell, City Manager FROM: Sharen Elam, Director of Finance Ext. 1713 SUBJECT: Approve an amendment to TIF Participation Agreement with Tarrant County Action Requested: Approval of attached amendment to Tarrant County's TIF participation Agreement ( "the Agreement "). Background Information: The original participation agreement in 1998 stated that Tarrant County would contribute the annual Tax Increment produced from property located in the reinvestment zone, up to a maximum cumulative deposit of $4,664,000 to the Tax Increment Fund ( "TIF "). The agreement also provided for the County to have an interest of 20% usage and title ownership of the planned Town Hall government building. This amendment will increase their usage and title ownership of Town Hall to 25% with a total maximum cumulative deposit of $6,864,000. Tarrant County Commissioners are scheduled to vote on this amendment at their August 26 meeting. Financial Considerations: Increase in TIF cumulative revenue of $2,200,000. Citizen Input/ Board Review: None required Legal Review: The city attorney prepared this amendment. Alternatives: Modification of amendment or disapproval. Supporting Documents: Amended Participation Agreement Staff Recommendation: Approval of the attached amended participation agreement Billy Campbell, City Manager March 23, 2011 AMENDMENT NUMBER ONE TO AGREEMENT BETWEEN TARRANT COUNTY, TEXAS AND THE CITY OF SOUTHLAKE TO PARTICIPATE IN THE TAX INCREMENT REINVESTMENT ZONE NUMBER ONE, CITY OF SOUTHLAKE, TEXAS WHEREAS, on the 16th day of January, 1998, the County of Tarrant (hereinafter called "Taxing Unit" and the City of Southlake (hereinafter called "City ") entered into an Agreement to Participate in the Tax Increment Reinvestment Zone Number One, City of Southlake, Texas ( "the Agreement "); and WHEREAS, the Agreement currently provides that County will contribute the annual Tax Increment to the Tax Increment Fund and that the County shall have an interest of 20 percent usage and title ownership of the planned Town Hall government building; and WHEREAS, the County of Tarrant and the City of Southlake have agreed that the Taxing Unit shall increase its contribution of tax increment in exchange for the increase of the County's interest in the Town Hall government building and the real property upon which the building sits to 25 percent; NOW, THEREFORE, County and Taxing Unit, in consideration of the terms, conditions and covenants contained herein, hereby agree as follows: That Sections II and III of the Agreement are hereby amended to read as follows: II. AGREEMENT TO DEPOSIT TAX INCREMENT Pursuant to a Resolution, duly adopted by its governing body, a copy of which is attached hereto as Exhibit B, Taxing Unit shall deposit into the Tax Increment Fund one hundred percent (100 %) of its annual tax increment from the TIF district until such time as a cumulative total of $6,864,000 has been deposited to the TIF fund by Taxing Unit, or until such time the debt issued to finance the initial $28,500,000 of project costs, as set forth in the Project Plan, has been paid, whichever occurs first. After such time, Taxing Unit's obligation to participate in the TIF funding shall cease. III. LIMITATIONS ON TAX INCREMENT DEPOSITS A. Deposit Limitation The combined total amount of Tax Increment deposited into the Tax Increment Fund by Tarrant County shall not exceed $6,864,000. These totals, when combined, represent approximately 25% of the projected principal and interest costs to finance the initial $28,500,000 of public infrastructure projects as set forth in the Project 7/ 10/ 2003W: \Southlake\Agreements\Amendment No. 1 to TIF Page 2 Plan and Financing Plan, a copy of which is attached hereto as Exhibit C and Exhibit D, respectively. Billy Campbell, City Manager March 23, 2011 In accordance with Section 311.013 of the Act, the TIF Taxing Units shall not be required to pay tax increment into the tax increment fund of the Reinvestment Zone after three (3) years from the date the Reinvestment Zone has been created unless: 1. bonds have been issued for the Reinvestment Zone under Section311.015 of the Act to finance the Project. 2. the City has acquired property in the Reinvestment Zone pursuant to the project plan; or 3. construction of Phase 1 of the Project pursuant to the Project Plan has begun in the Reinvestment Zone. B. Project Cost Limitation. The "project costs" (as defined in Section 311.002 of the Act) that may be paid through Tax Increment deposits made by Taxing Unit directly and /or financed through the issuance of bonds or other obligations of the City secured by Tax Increment deposits is $28,500,000, as set forth in the Project Plan and Financing Plan. C. Use of Funds. All amounts paid into the Tax Increment Fund by Taxing Unit shall be used to pay direct project costs and /or the principal of and interest on bonds or other obligations, secured in whole or in part by Tax Increment deposits, issued to finance said project costs under the Act, as set forth in the TIF Project Plan; however, in no event shall any of the amounts paid into the tax increment fund by Taxing Unit be used to pay any overhead, administrative or management costs of the TIF District. D. Co- Ownership of Town Hall Government Building. Participation in funding of the TIF District as set forth herein entitles Taxing Unit to a 25% usage and title ownership of the planned Town Hall government building. The Taxing Unit and the City have agreed that the City shall convey the interest by special warranty deed, and that the parties share, on a pro rata basis, in the cost of an owner's title policy as expressed by the ownership interest of each. The specific details as to usage, and operation of the Town Hall government building shall be set forth in an Interlocal Agreement separate from this document. In all other respects, the terms and conditions of the Agreement shall remain the same. Billy Campbell, City Manager March 23, 2011 EXECUTED this the day of by and through its City Manager, and this the _ Taxing Unit, signing by and through the County CITY OF SOUTHLAKE City Manager APPROVED AS TO FORM: City Attorney ATTEST: City Secretary 2003, by the City, signing day of , 2003 by the Judge. TARRANT COUNTY County Judge Assistant District Attorney County Clerk