Minutes - Council Work Session - 03/23/1998

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Mayor Gamec asked if we can transfer money from one district to another or transfer some TIF monies into the General Fund. Mr. Winkelhake stated that it has to be in: a TIF account. The money can be spent on only certain eligible accounts. Councilmember Haas Steffen inquired What happens if you cannot decide where to spend the TIF money. Mr. Winkelhake stated that the TIF money sits in a pot and all that money gets sent back to the County and the County would redistribute it. However, that doesn't happen very often. He reviewed the TIF Districts. #1: River's Bend T1F District was created in 1985. It has a fund balance, as of February 1, 1998, of about one million two. Senior Accountant Lund explained what "fund balance" is and that this is the balance you have to work with. Mr. Winkelhake continued that TIF District #1 has a projected increment of $600,000 to $640,000 annually. The expenses were four bond issues - 1985, 1989, 1993 and 1996. Two of those will be retired shortly. The City shoul6have a surplus, annually, of $250,000 to $300,000 for several years - on top of the million two. This District goes out to the year 2010. When all bonds are retired, the increments could double. Once you get beyond six years or so, projections are best left simple. With regard to spending the TIF monies, the restrictions are as follows: 1) The money has to be spent within the development area; or 2) The budget passed has been amended several times (how TIF was going to be spent). When you have spent the budget - you cannot spend more until you amend the budget. Mr. Winkelhake informed the Council that they have the maximum flexibility with this district. The legislation labels these kinds of districts as "cash cows". Councilmember Beahen had to leave the meeting (6:10 p.m.). Mr. Winkelhake stated that if the City has not expanded the budget - it should be done sooner than later. Councilmember Zimmerman inquired if the City could spend money from District #5 for improvements on T.H. #47. Mr. Winkelhake noted that District #5 was approved in April 1990, which may have been an attempt to establish it right before 1990. It is, therefore, available for pooling. He continued with TIF District #2 - Gateway, established in 1986. The most activity as far as development agreements has been commercial/industrial development. As it stands, the fund balance is in the hole about $61,000. This District is generating about $400,000 annually in increment. There is a 1995 bond issue outstanding and a number of pay as you go agreements. This District should "pop" out of the hole this year and be positive $40,000 to $50,000 by the end of 1998. A number of new developments come up for that district. There would be about $150,000 to $200,000 excess in this District beginning in about 1999. It should be healthy as well. This District goes City Council Work Session/March 23, 1998 Page 2 of 8