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MINUTES <br />CITY COUNCIL <br />DECEMBER 12, 1990 <br />before a final decision is made, the City will look at <br />what surrounding cities are doing so that the City <br />stays competitive. <br />Quirin asked if taxpayers contributed part of the cost <br />of development projects. <br />Fahey replied that City-initiated watermain projects <br />are assessed at a rate of 80% against the benefitting <br />properties and 20% on general taxes. However, projects <br />initiated by developers are assessed at a rate of 100%, <br />this includes watermain, sanitary sewer, streets, etc. <br />Quirin asked the impact of Tax Increment Financing <br />bonds on the City's future taxes. <br />Blesener replied that the City has used Tax Increment <br />Financing to entice a developer to build a better <br />project. Blesener explained how TIF works, pointing <br />out that when a TIF project is developed, the City, <br />County and School District continue to receive the <br />taxes they normally do on the undeveloped land plus <br />inflationary increases. The additional revenues <br />generated are used to assist the project for an average <br />period of ten years. Blesener pointed out that <br />projects must meet the "But For" test in order to <br />qualify for TIF assistance. That is, the project would <br />not happen "but for" TIF assistance. <br />George commented on the Marketplace Shopping Center <br />losing tenants. <br />Scalze pointed out that it is very difficult for small <br />shopping centers in this area to survive given the fact <br />that Rosedale and Maplewood Mall are within 4 miles of <br />Little Canada. <br />Quirin asked the size of the City's contingency fund. <br />The City Administrator reported a 12/31/90 General Fund <br />balance of $788,092. The City needs to maintain these <br />funds since it does not receive property tax payments <br />from the County until July and December of each year. <br />Local Government Aids and Homestead credit payments are <br />also received in July. Therefore, the City needs these <br />reserves to carry the budget for the first six months <br />of each year. <br />A resident encouraged the City to look for additional <br />ways to cut the budget, reporting that he has <br />successfully done this each year with his business <br />budget. <br />Page 11 <br />