05/05/2008 Council Packet - Laserfiche WebLink

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Sp°insed MEMORANDUM Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.springsted.com TO: Al Rolek, Finance Director FROM: Paul Steinman, Vice President/Consultant DATE: April 30, 2008 SUBJECT: Lino Lakes — Legacy TIF District No. 1 -11 At the City's request, we have updated our financial analysis of Tax Increment Financing District No. 1 -11 based on current information provided by City staff, the County, and other resources. Background The City issued $4.215M of General Obligation (GO) Tax Increment Bonds in 2007 pledging tax increment generated from District 1 -11 to pay debt service. Additional anticipated sources of revenue included annual pooled increment from TIF District 1 -10 until 2010 and MSA Funds through 2016. The City also issued GO Improvement Bonds for projects within and outside of the geographic area of TIF District 1 -11. The most pressing obligation for the City is the GO Tax Increment Bonds of 2007. This memo will primarily address that issue by updating the tax increment analysis related to District 1 -11 and the GO Tax Increment Bonds. These updated tax increment projections for TIF District 1 -11 are based on future projected development, and current development including a hotel and a tax credit residential housing with some commercial. The developer of the existing projects has guaranteed minimum assessment agreements beginning in taxes payable 2008 that total $11.2M. The County has verified the $11.2M value for taxes payable 2008 for the hotel and tax credit projects. Of the $11.2M, $5.5M is commercial valuation (hotel 1st floor retail in the housing project) and $5.7M is residential valuation in the tax - credit residential rental housing project. The City has two interfund loans dependent upon tax increment generated in District 1 -11. The first interfund loan is $950,000 and the second is $556,000. These notes carry an interest rate established as the maximum that can be charged by state law on interfund loans — currently through the end of 08 that is 8 %. Schedules for both notes are attached to this report. Public Sector Advisors