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MINUTES <br />CITY COUNCIL <br />NOVEMBER 28, 2012 <br />The foregoing resolution was duly seconded by Montour. <br />Ayes (5). <br />Nays (0). Resolution declared adopted. <br />INTERFUND The City Administrator recommended an increase to the Interfund Loan <br />LOAN — for TIF District 6 -1 (2966 Arcade Street) from $300,000 to $400,000. <br />TIF DISTRICT This increase is necessary due to the accrual of interest on the amounts <br />6 -1 previously advanced and to ensure the fund balance at the end of 2012 is <br />in positive territory. The Administrator reported that interest has been <br />accruing at 6.5% on the terms of the City's development agreement with <br />Masterpiece Homes relative to the acquisition of 2966 Arcade Street. <br />Staff has learned that there are statutory restrictions limiting the interest <br />rate to 5% on the initial amount and 4% on the additional $100,000. <br />The Administrator reported that the redevelopment project appears to be <br />poised to move forward in 2013 with the acquisition of 2959 LaBore Road <br />and the pending acquisition of 2945 LaBore road by Masterpiece Homes. <br />As a result, this Interfund Loan will be retired in 2013 when new terms of <br />the development agreement are established. The Administrator indicated <br />that it should be noted that interfund loans act as an investment for the <br />City and yield a higher return than could be generated by other <br />investments. <br />Montour introduced the following resolution and moved its adoption: <br />RESOLUTION NO. 2012 -11 -210 — AMENDING THE TERMS OF AN <br />INTERNAL LOAN IN CONNECTION WITH TAX INCREMENT <br />FINANCING DISTRICT NO. 6 -1 EFFECTIVE DECEMBER 31, 2011 <br />AS RECOMMENDED BY THE CITY ADMINISTRATOR <br />The foregoing resolution was duly seconded by Boss. <br />Ayes (5). <br />Nays (0). Resolution declared adopted. <br />2013 BUDGET The City Administrator reported that in September the Council certified <br />UPDATE a 1.97% gross levy increase for the 2013 Preliminary Budget. Since that <br />there have been no significant changes to either the expense or revenue <br />portions of the proposed budget. City staff did revised Local Government <br />Aid (LGA) allocations to eliminate $86,685 in the General Fund by <br />transferring it to the General Capital Improvement Fund. The GCIP <br />funds' levy was reduced by a corresponding amount and added to the <br />General Fund levy. This action has no net levy impact, but moves the City <br />closer to eliminating dependence on LGA in the operating budget. <br />11 <br />