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City of Mounds View Staff Report November 21s`, 2000 Page 2 4. Keep pre -1997 interest earnings in existing TIF funds to be spent on TIF eligible activities. 5. A combination of the aforementioned options. 6. Other suggestions. Policy Issues: The expenditure of public resources represents a significant policy decision. Accordingly, certain questions require consideration including: • Does the source of revenue (funds associated with TIF) align with proposed expenditures and/or fund? What are current community priorities and (Infrastructure, Redevelopment, Aesthetic Improvements? Redevelopment? Housing Development/Redevelopment? Other? Financial Considerations: needs? Parks and Trails? County Highway 10 Enhancements, Safety Concerns)? Street Revitalization? Future Residential and Business Spreadsheets highlighting available cash, future increment projections, and existing obligations for each of the three TIF districts has been included for your review as Attachment 1. Aside from the monetary amount of funds that could be transferred out, two other financial issues should be addressed. First, if funds are transferred out, would there be a revenue shortfall? If so, how would the revenue shortfall be funded? One option would be to borrow money from an existing City fund to be repaid with future increments. This is commonly referred to as an intertund loan. Second, the potential impact on existing TIF funds and related programs needs to be assessed. Spreadsheets highlighting the impact of transferring $2,276,116 (spreadsheets based on transferring out $2.6 million) out of the TIF districts have also been attached for your review as Attachment 2. Finance Director Bruce Kessel will be available to provide further clarification and to address any questions that the Commission may have. Finally, a long-term financial plan for future TIF funds should be considered regardless of whether funds are transferred. This may be done in conjunction with the forthcoming Economic Development Plan when economic development priorities and programmatic objectives are further articulated. Necessary Actions: Evaluate and recommend a use for pre -1997 interest earnings to the EDA Aaron Parrish, Economic Development Coordinator (763) 717-4029 Attachment 1: Existing TIF Projections Attachment 2: TIF Projections Illustrating the Impact of Transferring out $2.6 million.