Management Report and Recommendations 12/31/1992

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City of Lino Lakes, Minnesota Management Report, Page 39 District #1 -4 has anticipated project requirements as follows: Estimated Actual Land acquisition $400,000 Public improvements 1,050,000 Administrative 100,000 S29,009 Bond discount 40,000 Capitalized interest 360,000 Total $1,950,000 S29,009 District #1 -4 is an Economic Development District. The duration of the district is eight years from the date of the receipt of the first increment or ten years from the date of approval of the TIF plan. At December 31, 1992 this fund had a deficit balance of $13,399. The City established Tax Increment District #1 -5 pursuant to MS 469.174 Subdivision 11 which qualifies it as a Housing District. The duration of the District is twenty -five years from the date of the first increment. The plan for District #1 -5 was approved and adopted on December 14, 1992. As of December 31, 1992 this District has not been certified with Anoka County pending financing of the project. Tax increment proceeds are based on the increased captured valuation of property within the District. Forecasted values are based on estimates of future increases and other factors including the effects of State legislation on the property tax system. The 1990 Legislature reduced the tax capacity rates on commercial property as follows: 1990 1991 1992 1993 1994 Rate Rate Rate Rate Rate First $100,000 of market value 3.30% 3.20% 3.10% 3.00% 3.00% Market value over $100,000 5.26% 4.90% 4.75% 4.70% 4.60% This decrease in rates may adversely affect future tax increment collections. We recommend, therefore, that the City monitor actual revenue flows compared to projected revenues to assure timely availability of cash to meet budgeted expenditures.