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MAYOR AND CITY COUNCIL <br />PAGE NINE <br />MAY 31, 1990 <br />County roads which are necessary because of a <br />TIF project. Districts that were created <br />prior to this Law and have a tight revenue <br />stream, having to pay these costs, which were <br />likely not budgeted for, could jeopardize the <br />ability to pay debt service costs. The Law <br />does not address this possibility. As a <br />result, a city affected by this requirement <br />would either have to levy for the revenue <br />shortfall or seek resolution through the <br />courts or legislature. <br />Excess Increments - Excess funds in the debt <br />service account at the time bonds are retired <br />and which are distributed to the city, county <br />and school district would result in <br />penalties. Each jurisdiction would have <br />their levies reduced by the amount they <br />receive. This requirement will force cities <br />to retire bonds early, as soon as adequate <br />funds are available or use the increments for <br />other eligible activities in the district <br />rather than redistributing excess increments <br />back to the taxing jurisdictions. <br />LGA Cuts/Levy Limits - <br />As you know, local <br />government aids were cut by 1.53% of 1990 LGA <br />plus total levies. For <br />Mounds View it is <br />expected that this will <br />result in an LGA cut <br />of $31,159. <br />The same amount of LGA <br />is cut in 1991 after <br />the levy limit base calculation has been <br />made. For Mounds View <br />this calculation is as <br />follows. <br />1990 Levy <br />$1,391,306 <br />1990 LGA (before cut) <br />$ 645,260 <br />$2,036,566 <br />x 1.03 (3% Inc.) <br />$2,096,663 <br />31,159 LGA Cut <br />$2,066,504 1991 <br />Levy ($29,938 or <br />1.5% Increase over <br />1990) <br />