Joe Fisher, Community Reporter

The Wayzata City Council has been debating the use of approximately $9 million of tax increment financing funds (TIF) from District 6 in workshops over the last month.

The debate is whether it is appropriate — and in the interest of residents — to use upwards of $4 or 5 million in TIF funding for the Panoway Boardwalk and public docks. An additional $4 million is estimated for out of district Capital Improvement Projects.

During a workshop on Sept. 7, councilor Alex Plechash said he is conflicted over the best course of action. “It’s a philosophical question. If it’s true the Panoway was to be privately funded or at least funded from sources not from the city — if we truly said that it didn’t come from the city money — TIF is city money; at least a portion of it is,” he said. “That’s the philosophical part. The other view is, if we don’t have legitimate places to spend the money and we end up losing it and getting back a small portion, we just let it go.”

What Plechash referred to is if the district funds are not put to use over the next 18 months, it would go back to the county to be redistributed back to taxing entities. This means the city would in essence lose about 80-percent of the fund if it isn’t applied to capital improvement projects.

Legislation passed during the 2021 session clarified the Panoway Project is considered part of Wayzata’s TIF district, which means TIF money can be spent on projects within the scope of Panoway.

Following Plechash’s thought, City Manager Jeff Dahl noted the vision for the Panoway Plechash referred to, represented the ideas of past council members and former Mayor Ken Wilcox.

“Times and traditions have changed in the community. We’ve had a number of Planning Commissions and set a new vision,” he said. “That’s what you guys are elected to implement.”

Councilor Cathy Iverson said her hesitation with applying TIF funds to the boardwalk and docks comes from concern over how maintenance will be funded. She said the Wayzata Conservancy was tasked with fundraising and coordinating funds for the Panoway, but she questions whether it has shown the capability to fund its share.

“I get concerned we’re going to build this and somebody is going to have to pay for the maintenance,” Iverson said during the Sept. 21 workshop. “We’re going to build it and it’s going to be the taxpayers responsibility to pay for it. I’m not comfortable with that.”

Iverson also questioned if all possible uses of the TIF dollars had been explored. Dahl said staff hasn’t been able to find suitable uses which would likely start in the next 18 months.

Dahl noted staff is continuously exploring ways to create a more diverse revenue stream to limit the burden on taxpayers.

“We’re looking at options exploring sales tax, franchise fee; this is part of our strategic plan initiative,” he said. “It can help us ultimately fund other things to reduce the levy and potentially have more funds available to offset maintenance costs if the conservancy can’t pay for it.”

The Sept. 21 workshop ended with Dahl stating staff would draft a resolution to consider TIF projects including the boardwalk and public docks.