01-26-2000 Council Agenda - Laserfiche WebLink

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MAYOR Michael I. Fahey COUNCIL Beverly Scalze Jim LaValle Steve Morelan Bob Pedersen 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 484 -2177 / FAX: (651) 484 -4538 Joel R. Hanson Email: cityhall @ci.little - canada.mn.us DATE: December 29, 1999 TO: Mayor Fahey & Members of the City Council FROM: Julie Manville -Camp, Accountant RE: Provinces Payment in Lieu of Taxes As you may recall, the City approved the issuance of tax exempt mortgage revenue bonds to finance the acquisition and renovation of the Provinces and Montreal Courts apartment complexes in 1996 and 1997 respectively. In doing so, we established provisions to generate payments in lieu of taxes should they pursue 4(d) class rate designations. (This was done to protect the City's property tax base.) These provisions remain in effect throughout the term of the bond issues. In 1999 the provisions came into play, and a payment was received from Montreal Courts in the amount of $25,871, on which the Council took action in November. We have now received a payment from the Provinces in the amount of $6,156 which will require like action. The issue for the Council to consider is where to post this money now and how it should be handled in future budgets. As with the Montreal Courts monies, the options are as follows: ♦ Place it in the General Fund. In 1999, this would generate additional surpluses that would then transfer to the General Capital Improvement Fund. (It could specifically help with the additional costs of lighting Pioneer Park.) In future years, it could help offset expenses thereby holding the line on tax increases. • Place it in the General Capital Improvement Fund. As was discussed at a recent meeting, needs outweigh revenues. This would help alleviate that problem. It would also avoid creating a dependency situation that would arise if it were placed in the General Fund. ♦ Place it in the Infrastructure Replacement Fund. This is pretty much the same analysis as the previous option. The difference is the importance placed on the need for funding. ♦ Place it in a fund for economic development. Assuming the Rice Street/Little Canada Road project moves forward at some point, dollars will definitely be needed in this area beyond what TIF and land sales will generate. The Montreal Courts monies were placed in the General Capital Improvement Fund at your direction, and I would recommend the same designation for the Provinces funds as the needs in this area often exceed the available funds. You may also be interested to know that the Provinces Sprinkler Escrow Account has been established and the first deposits were credited last week. The City contributed $38,850 from our Economic Development fund as per the agreement, and the Provinces contributed $17,921 per the attached calculation. Page 221