06-12-23-R - Laserfiche WebLink

Home Browse Search

-44- NOTE 9 – DEFICIT FUND BALANCES/NET POSITION The City had deficit fund balances/net position at December 31, 2022 as follows: Amount Governmental funds Nonmajor – EDA TIF District No. 5 23,617$ Nonmajor – TCAAP 194,879 Total 218,496$ These fund deficits will be eliminated with future contributions, grants, and internal fund transfers, if needed. NOTE 10 – TAX ABATEMENT AGREEMENTS The City, in order to spur economic development and redevelopment, will enter into private development and redevelopment agreements to encourage a developer to construct, expand, or improve new or existing properties and buildings or clean-up and redevelop blighted areas. These agreements may in substance be a tax abatement, but will depend on their individual circumstances. The City had one agreement that would be considered a tax abatement under GASB Statement No. 77. In 2013, the City entered into a development agreement with Presbyterian Homes of Arden Hills, Inc. to aid in financing certain public development costs and administrative costs of a project undertaken. For this agreement, the City used an economic development vehicle known as tax increment financing, whereby tax increment revenue is generated on the incremental increase in value above a base value established on the date that the tax increment district is created. The City agreed to abate 75 percent of the incremental taxes received through February 2028, through execution of a tax increment revenue note to be retired in 2028. The outstanding principal balance as of December 31, 2022 is $0, and the City rebated $53,853 in the current year, to retire this agreement in advance of the originally scheduled payment date. The City is no longer obligated under this agreement as of December 31, 2022. The City is authorized to create a tax increment financing plan under Minnesota Statutes, Chapter 469.175. The criteria that must be met under the statutes are that, in the opinion of the municipality: •The proposed development or redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; •The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing, would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the plan. The requirements of this item do not apply if the district is a housing district; •The tax increment financing plan conforms to the general plan for the development or redevelopment of the municipality as a whole; and •The tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise.