Management Report and Recommendations 12/31/1987

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City of Lino Lakes, Minnesota Management Report, Page 39 The Housing District Financing Plan indicates that the original assessed value of the District is $19,080. The values within the District are estimated to be-$1,270,000 after completion of the project. This would result in a captured assessed value of $1,250,920. The plan, however, refers to a captured value estimated at $141,131. This inconsistency within the official plan should be corrected. (The $141,131 appears to be the anticipated tax increment taxes receivable from the captured value annually.) 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 mill 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 has incurred preliminary expenditures (legal, administrative, etc.) to establish the District. These expenditures have been paid from the City's General Fund. We recommend that the City establish an Economic Development District #1 Capital Project 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1