Management Report and Recommendations 12/31/1991

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City of Lino Lakes, Minnesota Management Report, Page 35 District #1-4 has anticipated project requirements as follows: Land acquisition $400,000 Public improvements 1,050,000 Administrative 100,000 Bond discount 40,000 Capitalized interest 360,000 Total $1,950,000 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, 1991 this fund had a deficit balance of $10,379. 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 Rate Rate Rate Rate First $100,000 of market value 3.30% 3.20% 3.10% 3.00% Market value over $100,000 5.26% 4.90% Targeted to eventually be 4% 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. Interim Construction The Interim Construction Fund was established in 1985 to account for the preliminary construction costs prior to permanent bonding or other financing determination. The various projects accounted for in this fund are detailed in Exhibit 4 of the 1991 Annual Financial Report. The fund balance of this fund was a deficit of $183,653 at December 31, 1991. We recommend the City review the status of the various projects in this fund and determine financing sources to eliminate the deficit of this fund.