10-10-2007 Council Agenda - Laserfiche WebLink

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TIF District Overview Form of financing: The project will be financed primarily through bonded indebtedness /interfund loan/transfer. Administrative fee: Interfund Loan Requirement. 4 Year Activity Rule (¢ 469.176 Subd. 6) Up to 10% of annual increment, if costs are justified. If the City wants to pay for administrative expenditures from a tax increment fund, it is recommended that a resolution authorizing a loan from another fund be passed PRIOR to the issuance of the check. After four years from the date of certification of the District one of the following activities must have been commenced on each parcel in the District: • Demolition • Rehabilitation • Renovation • Other site preparation (not including utility services such as sewer and water) If the activity has not been started by approximately June 2011, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity. 5 Year Rule (§ 469.1763 Subd. 3) Within 5 years of certification revenues derived from tax increments must be expended or obligated to be expended. Tax increments are considered to have been expended on an activity within the District if one of the following occurs: • The revenues are actually paid to a third party with respect to the activity • Bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party, the revenues are spent to repay the bonds, and the proceeds of the bonds either are reasonably expected to be spent before the end of the later of (i) the five year period, or (ii) a reasonable temporary period within the meaning of the use of that term under §. 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund • Binding contracts with a third party are entered into for performance of the activity and the revenues are spent under the contractual obligation • Costs with respect to the activity are paid and the revenues are spent to reimburse for payment of the costs, including interest on unreimbursed costs. Any obligations in the District made after approximately June 2012, will not be eligible for repayment from tax increments. The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution. Page 2 EHLERS .5-