Agenda - Council - 06/23/1998 - Laserfiche WebLink

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I I I i I ! I I i I I I I I '1 I I I I FINANCE OPTIONS The City of Ramsey has several possibilities for funding the acquisition and/or development of the Waste Management site and/or the 149-acre site located west of the Anoka Electric Cooperative Energy Park. One or more of the options shown could effectively fund the desired land purchases. The financing options are categorized as payment up front and installment/no-payment options depending upon when the City is required to submit the total purchase price. Each of these different methods of financing is summarized briefly below. Payment Up-Front Options: 1. Excess Tax Increment Financing Funds. This is a highly feasible option in which the City would place the desired properties within the Tax Increment Development District. The City would be able to use excess tax increment revenue generated from its tax increment financing districts. This procedure is generally referred to as pooling. 2. Tax Increment Bonds. In this option, the City's Tax Increment Development District would require a formal amendment to encompass the two desired properties within its boundaries. After the required budget amendment, the City would be allowed to sell bonds to the general public. Tax increment bonds require that at least 20% of the interest and principal payments be reimbursed with revenue generated from new developments created within the expanded TIF area. 3. Internal Borrowing. Many of the City's funds allow for the opportunity of internal fund transfers, or borrowing between funds. Upon examination of City fund balances, the City shows a strong, positive balance in most funds. A transfer between funds would result in the borrowing fund paying a stated interest rate to the loaning fund, in addition to repaying the loan. Installment/No Payment Options: 1. Contract for Deed/Option. This option allows the City the opportunity to pay for the acquisition of the property for a period of time. A contract is entered into between the seller and the City stating terms of payment and when title will exchange hands. 2. Joint Venture. The City, Anoka Electric Cooperative, or possibly the property sellers, would form a team in tl~e acquisition of the properties. The City's partner, would finance the transactions and dccd the properties to the City. Both partners benefit, as the City, or agent, obtains the desired properties, and the joint venture partner avoids paying property taxes. -5-