Management Report and Recommendations 12/31/1991

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City of Lino Lakes, Minnesota Management Report, Page 33 The tax increment plan also includes an annual administrative fee. Minnesota Statutes 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. We recommend that the City determine if this fee will be received as an interfund charge of the General Fund or if applicable expenses will be allocated to the appropriate Capital Project Fund. 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 that the City: 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 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 and 1991 the City had tax increment collections of $130,069 and $191,326 respectively. Additionally, this fund had as of December 31, 1991, $67,103 of delinquent tax increments.