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Item No. 5 <br />Meeting Date: April 5, 2004 <br />Type of Business: Work Session <br />City Administrator Review: ______ <br /> <br />City of Mounds View Staff Report <br />To: Honorable Mayor and City Council <br />From: Charles Hansen, Finance Director <br /> James Ericson, Community Development Director <br />Item Title/Subject: Long Range Financial Plan – Tax Increment <br />Financing Districts <br /> <br />The City of Mounds View has operated several Tax Increment Financing (TIF) <br />Districts since the 1980s. These have provided the City with a source of <br />revenues to accomplish redevelopment projects. Numerous important projects <br />have been completed. <br /> <br />Bonds were sold on several occasions to finance large projects with subsequent <br />TIF collections paying the principal and interest on the bonds. Most recent of <br />these were the bonds of 1994B, 1996A, 1996B, and 2001A. <br /> <br />Bonds of 1994 made their final payments on February 1, 2003. Bonds of 1996A <br />and 1996B will make their final payments on February 1, 2005. Money for the <br />principal and interest payments are transferred from the TIF Districts to the debt <br />service funds on December 31st prior to the payment. <br /> <br />Bonds of 2001A were sold to support the addition of the hotel to the Mermaid. <br />Ninety percent (90%) of the incremental tax collections on the Mermaid are <br />immediately transferred to the trustee for the bonds. Final payment of principal <br />and interest on these bonds will occur on February 1, 2013. <br /> <br />Status of Tax Increment Financing Districts: <br />There are three active TIF Districts in the City of Mounds View. <br /> District No. 1 (Mounds View Business Park) was established in 1986, has <br />had two modifications that added parcels to the district, and is required to <br />terminate on December 31, 2014. <br /> District No. 2 (Highway 10 Corridor) was established in 1988, and is <br />required to terminate on December 31, 2015. <br /> District No. 3 (Sysco Area) was also established in 1988, but is required to <br />terminate a year earlier than District 2, by December 31, 2014. <br /> <br />Tax Rate Compression: <br />All TIF districts throughout the State of Minnesota have been adversely affected <br />by three major and numerous minor property tax changes since the 1980s. <br />These have reduced property tax rates for all property classes. However, the