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CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />3. Detailed Notes on All Funds (Continued) <br />E. Tax Increment Districts <br />The City of Hugo enters into property tax abatement agreements through the use of tax <br />increment financing districts with local businesses under various Minnesota Statutes. Under <br />these statutes, the City annually abates taxes collected above the districts' base tax capacity <br />which is established during adoption of the tax increment district. These agreements are <br />established to foster economic development and redevelopment through creating jobs, <br />removing blight and providing affordable housing. The City uses Minnesota Statutes 469.001 <br />to 469.047 and 469.174 to 469.179 (The Tax Increment Act) to create these districts. <br />The City of Hugo is the administering authority for the City of Hugo Tax Increment Financing <br />District, No. 1-1 and for the City of Hugo Tax Increment Financing District, No. 1-2. The <br />districts are redevelopment type and authorized under Minnesota law chapter 469.174 to <br />469.179 (The Tax Increment Act). District No. 1-1 was certified in 1997 and will continue until <br />December 31, 2023. District No. 1-2 was certified in 2010 and will continue until 2036. <br />Information regarding District No. 1-1 and 1-2 is as follows: <br />Original net tax capacity <br />District No. 1-1 District No. 1-2 <br />$ 429 $ 296,578 <br />Current net tax capacity 82,356 244,991 <br />Captured net tax capacity: <br />Retained by authority <br />Total general obligation tax increment bond issued <br />Amounts redeemed <br />81,927 <br />4,030,000 <br />4,030,000 <br />Outstanding bonds at December 31, 2016 $ $ <br />The City did not abate any property taxes related to these tax increment districts during the year <br />ended December 31, 2016. <br />52 <br />