06-02-25 - Council Work Session Agenda

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2024 Note 14 TAX INCREMENT DISTRICTS The City is the administrating authority for three tax increment districts. The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which could have a material effect on the financial statements. The following table reflects values at December 31, 2024: TIF 1-11 Legacy at TIF 1-12 Woods Clearwater TIF 1-13 Edge Creek Lyngblomsten Authorizing law M.S. 469 M.S. 469 M.S. 469 Year established 2005 2017 2019 Final year of district 2031 2026 2030 Net tax capacity: Original $15,468 $21,416 $14,101 Current 497,507 760,670 560,607 Captured - retained $482,039 $739,254 $546,506 The City provides tax abatements pursuant to Minnesota Statutes 469.174 to 469.1794 (Tax Increment Financing) through a pay-as-you-go note program. Tax increment financing (TIF) can be used to encourage private development, redevelopment, renovation and renewal, growth in low to moderate income housing, and economic development within the City. TIF captures the increase in tax capacity and property taxes from development or redevelopment to provide funding for the related project. Tax increment revenue from TIF District 1-11 was used to finance debt service payments on the G.O. Improvement Bonds of 2016B. The bonds matured in 2021. Future tax increment collections will eliminate the deficit in TIF Fund 1-11. TIF District 1-12 had a pay-as-you-go revenue note. Tax Increment Revenue Note Series 2017 was issued in the principal sum of $1,200,000 and was payable solely from available tax increments. Current year payments on the note totaled $94,040 and the outstanding balance at December 31, 2024 was $0. TIF District 1-13 has an outstanding pay-as-you-go revenue note. The Tax Increment Revenue Note was issued in the principal sum of $3,656,000. The note is not a general obligation of the City and is payable solely from available tax increments. Accordingly, the note is not reflected in the financial statements of the City. Principal payments are due February 1st and August 1st and are equal to 95% of the tax increment revenues collected in the preceding six months. Current year payments on the note totaled $159,511 and the outstanding balance as of December 31, 2024 was $3,496,489. 83