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EHLERS <br />& ASSOCIATES INC <br />O To: Roger Larson, City of St. Anthony <br />C From: Rebecca Kurtz & Jim Prosser, Ehlers & Associates <br />Lu Date: June 18, 2003 <br />G I Subject: Decertification of Kenzie Terrace Tax Increment Finance District <br />It is recommended the City of St. Anthony take action to decertify the Kenzie Terrace Tax <br />Increment Finance District. The District was established in 1982 to redevelop the blighted <br />site located in the Southwest corner of the Village. Funding for the redevelopment project <br />was through the issuance of Tax Increment Bonds issued in 1985 (these bonds were paid off <br />in 1993). <br />Presently, the District serves as a funding source for the City Hall/Community Center Bonds <br />issued in 1995. <br />There are several reasons for decertifying the Kenzie Terrace TIF District: <br />Retire the debt. The bonds issued to finance the redevelopment are callable in <br />February 1, 2004, and the City has adequate cash to pay the outstanding debt, <br />therefore paying off all debt associated with the City Hall/Community Center <br />Building. <br />o Savings of interest. By calling the bonds, interest expense of $235,315 will <br />be saved. <br />• Restrictions on the use of funds. Under the current law, other than for the City <br />Hall/Community Center Bonds, the increment from the District cannot be used for <br />other purposes outside of the TIF District boundaries. <br />• Lessen the tax impact. Decertifying the District will place the property back on the <br />City's tax roles. This will provide a significant increase to the City's tax capacity, <br />and the City's expenses will be spread across a larger tax base. Therefore, the tax <br />burden will decrease, and the impact of future debt will not be as significant. <br />• Reduces impact of public facilities bond. Decertification of Kenzie reduces the <br />tax impact of the costs associciated with the building of the new Public Works and <br />Fire Station buildings. <br />LEADERS IN PUBLIC FINANCE <br />3060 Centre Pointe Drive Phone: 651-697-8516 Fax: 651-697-8555 <br />Roseville, MN 55113-1105 rkurtz@ehlers-inc.com <br />