Management Report and Recommendations 12/31/1992

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City of Lino Lakes, Minnesota Management Report, Page 37 The tax increment plan also includes an annual administrative fee. Minnesota Statute 469.176 Subd. 3 reads as follows: Limitation on administrative expenses. (a) For districts for which certification was requested before August 1, 1979, or after June 30, 1982, no tax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for the project, whichever is less. During 1992 the City transferred $3,172 to the EDA Fund from the Tax Increment Financing District Capital Project Funds 1 -1 and 1 -2 for past and current year qualifying administrative expenditures. Tax increment districts often generate surplus amounts over the anticipated receipts. The 1988 legislative session reduced the probability of such excesses by requiring excess amounts caused by tax rate increases to be spread to all taxing authorities. Excess amounts may still be generated from captured values in excess of anticipated values. As such, we recommend that if tax increment bonds are sold, the City should: 1. Include a bond provision which allows tax increment collections to be receipted to the Economic Development #1 Capital Project Fund. 2. Approve and transfer funds from the Capital Project Fund as needed to the Debt Service Fund. The above procedures will provide the City greater options if surpluses develop. Such surpluses may then be allocated to the other improvements within the District as allowed by the (amended) plan. The City received initial tax increments of $49,808 in 1988. In 1990, 1991 and 1992 the City had tax increment collections of $130,069, $191,326 and $217,819 respectively. Additionally, this fund had as of December 31, 1992, $12,030 of delinquent tax increments.