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• MEMORANDUM DATE: October 31, 2000 TO: Mike Mornson, City Manager FROM: Roger Larson, Finance Director ITEM: CHANDLER TIF DISTRICT/CUSTOM LIQUIDATORS Per your request, I reviewed the Chandler TIF District fund balance to determine if the purchase of the Custom Liquidators property is feasible. The analysis indicates that the District is capable of funding the purchase (estimated at $650,000). The projected fund balance at 12/31/00 will be approximately $1,060,045. A review of the commitments for funding and the affect of the purchase on the District are as follows: . • $1,060,045 12/31/00 Fund Balance $ 230,000 Projected 2001 Tax Increment ($ 250,000) Streetscape - 29' Avenue Sidewalks ($ 200,000) Lot by Amoco/Walgreen's ($ 650,000) Custom Liquidators Purchase $ 190,045 12/31/01 Fund Balance In year 2002, the District will receive another $230,000 in tax increment which, combined with the 12/31/01 estimated fund balance of$190,000, projects a year-end balance of$420,000. These funds would be available for other TIF projects and uses at Councils' approval. An important part of this analysis is to discuss the affect that the TIF expenditures in 2001 will have on the.HRA investment portfolio. Obviously, a reduction of cash totaling $1,100,000 in one year will require the liquidation of current investments (current liquid equity'in the portfolio totals $350,000, another $500,000 is needed). The instruments that the State Statutes allow the City to invest are unique in the fact that if individual instruments are kept until maturity, the principal is returned at full face value, with interest earned at the stated rate.