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Office of: <br />JOEL R. HANSON, Administrator <br />515 Little Canada Road <br />Little Canada, MN 55117 <br />612-484-2177 <br />FAX: 612-484-4538 <br />CITY OF LITTLE CANADA <br />RAMSEY COUNTY, MINNESOTA <br />MEMORANDUM <br />TO: Mayor Fahey and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: May 18, 1990 <br />RE: Tax Increment Financing Policy <br />MAYOR <br />Michael Fahey <br />COUNCIL <br />Beverly Scalze <br />Bill Biesener <br />Rick Collova <br />Jim LaValle <br />Attached is a memo received from Dan Wilson that was presented at the last <br />Council meeting. Based on the information I have reviewed to -date, it is <br />virtually impossible to undertake an Economic Development Tax Increment <br />District without causing a reduction in our local government aid or HACA <br />(Homestead Agricultural Credit Aid) in an amount equal to 1/3 of the tax <br />increment captured. This being the case, it would be my recommendation <br />that the City not pursue any new Economic Development Tax Increment <br />Districts unless rulings from our Bond Counsel would indicate otherwise. <br />In the case of the Howe /DeBace project proposed for Country Drive and <br />South Owasso Boulevard, the financial feasibility of utilizing TIF to aid <br />this project appears non - existent. <br />For housing districts and re- development districts, the impact of <br />legislative changes is not as severe. However, you must be careful in <br />pursuing these types of projects in any new districts due to the new <br />financial implications imposed. Our best bet for pursuing tax increment <br />projects is to work within our existing districts where we are not <br />encumbered by the new statutory requirements. <br />Therefore, it is my recommendation that the City continue to investigate <br />impacts of the new legislation and to place a moratorium on any economic <br />development district projects which would necessitate the creation of new <br />tax increment financing districts. It would also be my recommendation <br />that the City not take immediate action on the enactment of any new tax <br />increment financing assistance policy until the impacts of the new <br />legislation can be more adequately determined. It is my opinion that we <br />need to retain our flexibility while maintaining our financial integrity. <br />JRH:kpv <br />Enclosure <br />PAGE 45 <br />