Management Report and Recommendations 12/31/1990

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City of Lino Lakes, Minnesota Management Report, Page 41 The City established Tax Increment District #1 -4 during 1990 by resolution 10-90. District #1-4 has anticipated project requirements as follows: Land acquisition Public Improvements Administrative Bond Discount Total Capitalized Interest Total $400,000 1,050,000 100,000 40,000 360,000 $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 1'IF plan. The City estimates that it will sell bonds in an amount not to exceed $1,950,000 to finance the public costs associated with District #1-4. At December 31, 1990 this fund had a deficit balance of $22,262. The City has developer escrow deposits which will eliminate the deficit in 1991. 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.