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MI~IUTES <br />City Council <br />August 5, 19II7 <br />The Auditor then reviewed Capital Asset Replacement and Acquisition <br />Budgeting. <br />Next discussed was the General Fund Reserve Balance. As part of this <br />subject, the Auditor reported that in 1986 the City did not use all <br />of its Minnesota State Aid allotment, thus the unused funds for that <br />year were lost. The State also cut cities' allotment of MSA funds <br />by 8%. The Auditor reported that for 1987 the City will draw down <br />all its MSA fundsto ensure that none are lost. <br />The Auditor pointed out the City's General Fund Balance and discussed <br />with the Council the designation of some of these funds for various <br />projects or improvements in the City such as Tax Increment Financing, <br />City Hall addition, park land acquisition or other major capital <br />programs. <br />The Auditor also discussed with the Council the recent Tax Increment <br />project the Council approved pointing out that the project was a <br />small one and it may have been better to pay the cost of the project <br />from the General Fund rather than go TIF. The Auditor pointed out <br />that TIF is a very expensive process, and questioned the $4,000 <br />in project costs the City Planner has budgeted for this TIF project. <br />Council did not feel it would be acceptable to the taxpayers in the <br />City to take the money for this project from the General Fund. <br />Fahey reported that Business Development Services has indicated to the <br />City that it may be possible to use excess tax increment funds for <br />park land acquisition. <br />Voto pointed out that other cities have also used excess TIF funds to <br />help support other TIF projects. <br />Blesener replied that he was not in favor of this if the TIF project <br />could not stand on its own. Blesener pointed out the 15% figure that <br />Business Development Services indicated the City could provide TIF <br />up to and felt this was the maximum the City should provide. <br />Collova stated that he agreed the ~4,000 might be low for the Thunder <br />Bay II Addition TIF, indicating that the City Attorney reported that <br />attorney's fees are budgeted too low. <br />The City Clerk pointed out that the City has already paid $8,000 in <br />setting up the TIF districts in the City. <br />Scalze reported that the Planner indicated a figure of about $2,000 to <br />combine the districts into one as has been recommended by the Auditor. <br />The Auditor stated thathis concern was that all the necessary work <br />has been completed so that when the City gets a TIF project it needs <br />to bond for, everything is in place. <br />Page -?_- <br />