Management Report and Recommendations 12/31/1989

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City of Lino Lakes, Minnesota Management Report, Page 36 Financial activity of this fund from inception is as follows: Prior Years 1989 Total Revenue and other sources: Tax increments $49,808 $82,798 $132,606 Homestead Credit 90 8,593 8,683 Interest on investments 198 5,261 5,459 Total revenue and other sources 50,096 96,652 146,748 Expenditures and other uses: Professional services 0 940 940 Net increase in fund balance $50,096 $95,712 145,808 Fund balance - January 1,1988 0 Fund balance - December 31, 1989 $145,808 The tax increment plan also includes an annual administrative fee. 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 required 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.