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TAX INCREMENT INTER-FUND LOANS <br /> By: Diana Lund, Finance Officer <br /> <br />Background: <br /> <br />As part of the 2002 tax bill, effective August 1, 2001, all cities will need to follow certain <br />guidelines pertaining to inter-fund loans on tax increment projects. For example, if the <br />City pays for the cost of a project with its funds-on-hand to be reimbursed at a later date <br />by tax increment, the City needs to pass a resolution with the amount it plans to loan to <br />the project before the money is transferred, advanced, or spent. <br /> <br />In the past, the City's resolutions have stated the total cost of the project and its funding <br />source as tax increment. The State is mandating that if Cities pay for any projects with <br />funds on hand that it can loan to a project with the expectation to be reimbursed with tax <br />increment dollars, it needs to report this specifically in the resolution. <br /> <br />For any projects that were completed prior to July 31, 2001, Cities are allowed to pass a <br />resolution to bring them into compliance with this new law. The resolution will be used <br />to document all costs that the City has "loaned" to TIF projects during the years, and <br />reimbursed itself at a later date with tax increment dollars. <br /> <br />Committee Action: <br /> <br />Motion to recommend City Council adopt Resolution #01-07-XXX approving inter-fund <br />loans on various projects throughout the City with the sole intention of being reimbursed <br />with Tax Increment. <br /> <br />Reviewed by: <br /> <br />Finance Officer <br />City Administrator <br /> <br />FC: 07-24-01 <br /> <br /> <br />