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1 ' <br /> 9 <br /> MEMORANDUM <br /> 1 <br /> ' DATE: December 19, 1997 <br /> TO: Mike Morrison, City Manager <br /> ' FROM: Roger Larson, Finance Director <br /> ITEM: CLASS RATE CHANGES/IMPACT ON TIF DISTRICT <br /> Future Class Rate Chances <br /> ' v' me that the <br /> Bob Thistle from Springsted advised Legislature is considering additional <br /> ' reductions in the class rates for commercial/industrial. It is Mr. Thistle's opinion that <br /> if further reductions are adopted most of the Tax Increment Districts in the state could <br /> be impacted significantly and experience financial difficulties. <br /> The changes to the class rates for collectible 1998 taxes reduced the amount of Tax <br /> Increment Finance revenue Cities will receive. I am in the process of working with <br /> ' Springsted to analyze the impact on St. Anthony. <br /> Early indications are that the League of Minnesota Cities and others will lobby to freeze <br /> 1 the current class rate structure for TIF Districts already in place. Another class rate <br /> change without considering the ramifications to the TIF Districts could produce <br /> statewide financial problems for all TIF Districts. <br /> If further r pp y <br /> eduction were approved, concern would be that the amount of Tax <br /> m <br /> ' Increment Revenue the City receives might not be enough to make existing bond <br /> payments. <br /> 1 An early analysis of our Districts is as follows: (The concerns are in bold) <br /> ' Kenzie Terrace: <br /> 1) No concerns at this time. <br /> 2) The final bond payment of$195,700 is due 2/1/98. <br /> 3) Annual revenues will be $400,000 plus. <br /> 4) Serves as a backup for New City Hall Project (Chandler). <br /> 5) District expires 2008 <br />