2003 CAFR - Laserfiche WebLink

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The City has two development districts that were created in accordance with Minnesota Statutes 469 and 472. Within these districts are eight tax increment financing districts, five of which are for redevelopment, two for economic development, and one for housing development. These tax increment financing districts capture increments from residential and commercial development that occur within the districts. As of December 31, 2003, the City had $10,235,000 of Tax Increment Financing Bonds outstanding, which have been issued for the purpose of constructing public improvements and assisting developers with site improvements within the tax increment project areas. Although the City pledges its full faith and taxing power for these bonds, it is anticipated that all bonds will be paid solely from annual increment. The City also has several private development agreements in effect which basically dedicate future tax increments to be received from certain properties, in specific years, to reimburse developers for special trunk assessments. The agreements utilize tax increment financing revenue notes which include principal and interest due to the developers. Payments on these notes are only due if sufficient tax increments are generated by these properties. The notes are cancelled at the end of the agreement term, whether or not they have been repaid. Any additional tax increments received in years following the term are retained by the City. The outstanding principal balance on these notes at December 31, 2003 was $355,169. This amount is not included in long -term debt due to the nature of payment of the notes and the unsurety of collection of tax increments. GENERAL FUND The General Fund is the general operating fund of the City and is used to account for all financial resources except those required to be accounted for in another fund. The fund balance in the General Fund is used to provide working capital for the General Fund until property tax and state aid settlements, which are received periodically throughout the year, are collected. The City has established a fund balance policy which designates a portion of the General Fund's unreserved fund balance for working capital equal to 50% of the next year's expenditures budget not financed by other sources such as transfers. This policy also reserves fund balance for prepaid items at year end, and designates an amount equal to compensated absences included in general long -term debt. The remaining unreserved - undesignated fund balance is then set equal to 10% of the next year's expenditures budget, with certain adjustments, with any excess or deficiency being transferred to or from the Equipment Revolving Fund (10 %), Public Facilities Construction Fund (40 %), and the Public Improvement Revolving Fund (50 %). Total fund balance for the General Fund consists of the following: Fund Balance TAX INCREMENT DISTRICTS FINANCIAL SECTION Reserved for prepaid items Unreserved Designated for compensated absences Designated for budget carryover Designated for working capital Undesignated Total fund balance xi 2003 $ 70,231 351,416 93,000 2,954,072 604,862 2002 $ 56,313 307,748 590,199 2,684,130 548,089 $ 4,073,581 $ 4,186,479