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<br />-44- <br />NOTE 8 – DEFICIT FUND BALANCES/NET POSITION <br /> <br />The City had deficit fund balances/net position at December 31, 2017 as follows: <br /> <br />Amount <br />Governmental funds <br />Equipment, Building, and Replacement 259,269$ <br />Nonmajor – Parks 29,516 <br />Nonmajor – TCAAP 150,362 <br />Proprietary funds <br />Internal service funds – Engineering 7,020 <br />Internal service funds – Central Garage 26,797 <br />Internal service funds – Technology 31,790 <br />504,754$ <br /> <br />These fund deficits will be eliminated with future contributions, grants, and internal fund transfers, if <br />needed. <br /> <br /> <br />NOTE 9 – TAX ABATEMENT AGREEMENTS <br /> <br />The City, in order to spur economic development and redevelopment will enter into private development <br />and redevelopment agreements to encourage a developer to construct, expand, or improve new or existing <br />properties and buildings or clean-up and redevelop blighted areas. These agreements may in substance be <br />a tax abatement, but will depend on their individual circumstances. The City currently has two <br />agreements that would be considered a tax abatement under GASB Statement No. 77. <br /> <br />In 2013, the City entered into a development agreement with Presbyterian Homes of Arden Hills, Inc. to <br />aid in financing certain public development costs and administrative costs of a project undertaken. For <br />this agreement, the City used an economic development vehicle known as tax increment financing <br />whereby tax increment revenue is generated on the incremental increase in value above a base value <br />established on the date that the tax increment district is created. The City will abate 90 percent of the <br />incremental taxes received through February 2019, and 75 percent of the incremental taxes received <br />through February 2028, through execution of a tax increment revenue note to be retired in 2028. The <br />outstanding principal balance as of December 31, 2017, was $865,947 and the City rebated $183,598 in <br />the current year. <br /> <br />In 2016, the City entered into an abatement agreement with Land O’Lakes, Inc. The City did not have <br />any collections or rebate of property tax increment in the current year. <br />