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<br />The MSA Construction Fund has suffered from a failure by the City’s engineer, S.E.H., <br />to get timely or complete reimbursements of MSA money from the State of Minnesota. <br />This is of great concern to me because the City has lost thousands, if not tens of <br />thousands of dollars of interest earnings on money left at the State. There is also a risk <br />that the State may decide to unallot MSA money and the City might never get <br />reimbursed for some costs. <br /> <br />TIF District #1 was able to repay a large part of its loan from the Community Fund <br />during 2003 due to reduced debt service payments following the final payment on the <br />TIF bonds of 1994. <br /> <br />The loan to the Recycling Fund continued in 2003 because there again was a delay in <br />getting the recycling grant from Ramsey County, although the amount decreased. <br /> <br />The loan to the Golf Course Fund needs to increase by $312,922 in order to maintain <br />the $309,000 cash reserves required by the bond covenants. <br /> <br />It also authorizes new inter-fund loans as needed from the Community Fund to the TIF <br />Districts up to the cash balance of $362,483 in the Community Fund. This meets a <br />requirement in state law that inter-fund loans to TIF Districts be approved in advance by <br />the City Council. <br /> <br />TIF District #1 should have an operating surplus in 2004 and pay back most, or all, of its <br />loan. TIF District #2 should have a surplus and TIF District #3 should about break even. <br />However, it is possible that new projects or unforeseen evens could cause any of the <br />TIF Districts to need to initiate loans. <br /> <br />The resolution also sets an interest rate of 3.0% on all inter-fund loans for the year <br />2004. This is a reduction from the 4.0% rate in 2003 and is more in line with interest <br />rates available in the market this year. <br /> <br /> <br />Respectfully Submitted, <br /> <br /> <br /> <br /> <br />Charles Hansen