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City of Ramsey <br />October 12, 2010 <br />Page 12 <br />Proposed Budgets <br />As we have indicated in the previously, when establishing a TI F District the City must choose whether to elect for the <br />fiscal disparities contribution generated from new commercial - industrial property be made from within the district <br />(Option B) or from properties outside the district (Option A). Option B typically results in reduced tax increment <br />revenues captured, but reduces impact to other taxpayers. Option A will maximize revenue collections within the <br />district, but may have an impact on properties outside of the district. <br />The fiscal disparities election will impact the amount of estimated available total tax increment revenues, and will <br />control the amount of budgeted expenditures. The draft TIF Plan has been prepared with the assumption of the City <br />choosing Option A (fiscal disparities contribution made from properties outside the district) and includes the <br />estimated maximum amount of revenues generated for the full term of the District. The purpose is to maximize the <br />tax increment revenues of the district. As the TIF district grows, if it is determined the impact of this election is too <br />great; the City could modify the Plan and elect to have the contribution be made from commercial - industrial <br />properties within the District. <br />It is important to note that both budget scenarios are based on anticipated but unknown future development <br />assumptions. It is likely the HRA and City will need to administratively amend the budget, and or formally modify. <br />Under current TIF Statute the City will have the authority to adjust the specific line -item amounts of the TIF Plan <br />budgets without requiring a public hearing, provided the total revenues and expenses have not increased. As a <br />result, it is important to estimate tax increment revenues and expenditures for the TIF Plan budget in a realistic <br />manner that provides the HRA and City with maximum flexibility. Any increase in tax increment revenues and or total <br />project costs will require a formal budget modification. Adjusting the individual project costs without increasing the <br />total expenditure amount will not require a formal budget modification. <br />Without Fiscal Disparities (included in draft TIF Plan) <br />Estimated Expenses <br />TIF Budget <br />TIF Budget <br />Tax Increment revenue <br />( Option A <br />(Option B <br />Land /Building acquisition, Special Assessments, Public <br />0 <br />0 <br />Utilities, Site Improvements /Preparation Costs, Northstar <br />0 <br />0 <br />Transit Station and related infrastructure, and other <br />$61,825,343 <br />$40,082,416 <br />Eligible Improvements <br />0 <br />0 <br />"Project costs based on Present Value of TIF assuming an <br />0 <br />0 <br />interest rate of 6% <br />$185,708,929 <br />$119,223,964 <br />Bond /Note Interest Payments <br />105,312,690 <br />67,219,151 <br />Administrative expenses <br />18,570,896 <br />11,922,397 <br />Other Expenditures <br />Capitalized Interest payments <br />Total <br />$185,708,929 <br />$119,223,964 <br />Estimated Revenues <br />Tax Increment revenue <br />$185,708,929 <br />$119,223,964 <br />Interest on invested funds <br />0 <br />0 <br />Bond proceeds <br />0 <br />0 <br />Loan proceeds <br />0 <br />0 <br />Grants <br />0 <br />0 <br />Other <br />0 <br />0 <br />Total <br />$185,708,929 <br />$119,223,964 <br />