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CITY COUNCIL AGENDA ITEM 1E STAFF ORIGINATOR Al Rolek MEETING DATE December 9, 2013 TOPIC Consider Resolution No. 13-128Authorizing an Interfund Loan From the Municipal Buildings and FacilitiesFund to the 2005A G.O. Improvement Debt Service Fund VOTE REQUIRED Simple Majority BACKGROUND Asthe City Council is aware, the property fortheLegacy at Woods Edge projectwenttax forfeitin 2010. As such, delinquencies in the collection of special assessments levied against the property have been unpaid and, in fact, the assessments have been de-certified. The special assessments financedthe installation of public improvements in the development and wereneeded to service the outstanding debt on those improvements. Due to the delinquency of special assessments on the developed parcels, a cash deficit now exists in the debt service fund. Since 2008staff has recommended that interfund loans be authorized at necessary intervals to service the outstanding debt until the delinquent special assessments are collected or until alternative financing solutions are available, at which time the loans will be repaid. Most recently theMunicipal Buildings and Facilitiesfundhas been the source of the interfund loans.Special legislation approved in 2011 allows the city to use tax increments from TIF District 1-10 toward the retirement of this debt, reducing the burden on the Municipal Buildings and Facilities fund.Additionally, the expansion of the Lino Lakes Assisted Livingfacilityhas resulted in the payment of the outstanding special assessments on that parcel, significantlyreducing the amount of interfund loan needed for paying annual debt service. Resolution No. 13-128authorizes an interfund loan from the Municipal Buildings and Facilities Fund to the 2005A G.O. Improvement Debt Service Fund to temporarily service the unfunded outstanding debt and eliminate the existing cash deficit. RECOMMENDATION Staff recommends the approval of Resolution 13-128. ATTACHMENTS Resolution 13-128.