Minutes - Council Work Session - 05/19/1998

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and should the budget need to be expanded, it too will require various notifications and a public hearing. He recommended that the TIF plan be amended to clarify the maximum bonded indebtedness section of the plan and accurately specify the amount, if any, of pooled increment from the District. City staff should contact legal counsel to assist in this endeavor. Mr. Winkelhake went on to TIF District No. 5 (Wood Ponds) which was approved in April, 1990, as an "economic development" TIF District. The district may remain in existence through the year 1999, at which time it must be decertified. The district currently contains 278 parcels of property, virtually all of which are residential properties. Because establishment occurred after May 1, 1988, the district has a frozen total tax rate of 92.944%. The projected cash flow schedule for the district and the projected annual tax increment is approximately $348,000 in 1998, and $330,000 in 1999. There are no other projected revenues from the district other than tax increment, and expenditures from the district consist of one remaining payment in 1998, on the 1993B Tax Increment Revenue Note. This district also appears to be financially healthy, and the cumulative fund balance is projected to reach approximately $728,000 by the end of the district in 1999. This balance must be used to pay for TIF eligible costs or be remitted back to the County for redistribution. If increment is to be used to pay for additional expenditures either within or outside of the district, an amendment to the TIF plan budget will be necessary prior to decertification of the district. The actual expenditure of funds may, however, occur after district termination. As with all districts, should the budget need to be expanded, a TIF plan amendment will need to be approved which requires various notifications and a public hearing. Discussion ensued relating to the laws for TIF spending. Mr. Winkelhake explained that the laws in 1990 were a bit more liberal but by 1992, the law changed to where you had to "pinpoint" what the money could be spent on. With #5 it appears there is only one payment left on a 1993 note. He suggested making an amendment to the plan by the end of 1999, so the money can be spent. This can be done after decertification if the budget had been previously amended. TIF District No. 6 is the Anoka Electric Cooperative Projects, approved in September 1996, as an "economic development" TIF district. The district may remain in existence through the middle of 2006, at which time it must be decertified. The district currently contains 15 parcels of property, all of which are commercial/industrial or tax exempt properties. Because establishment occurred after May 1, 1988, the district has a frozen total tax rate of 116.580%. The projected cash flow schedule for the district and projected annual tax increment is approximately $143,000. Other revenues from the district include projected tax increment and/or deficiency payments from several new developments -- Vision Ease and Sharp -- which will begin paying taxes in the next several years. Current obligations of the district consist of several revenue notes and pay- as-you-go agreements with local developers/owners. Annual projected surplus from the district should vary from approximately $143,000 to $227,000 over the life of the district. Thero are currently no identified expenditures from the district during the last half year of Council Work Session/May 19, 1998 Page $ of 10