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06-12-23-R
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06-12-23-R
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-44- <br />NOTE 9 – DEFICIT FUND BALANCES/NET POSITION <br />The City had deficit fund balances/net position at December 31, 2022 as follows: <br />Amount <br />Governmental funds <br />Nonmajor – EDA TIF District No. 5 23,617$ <br />Nonmajor – TCAAP 194,879 <br />Total 218,496$ <br />These fund deficits will be eliminated with future contributions, grants, and internal fund transfers, if <br />needed. <br />NOTE 10 – TAX ABATEMENT AGREEMENTS <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 had one agreement that <br />would be considered a tax abatement under GASB Statement No. 77. <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 agreed to abate 75 percent of the <br />incremental taxes received through February 2028, through execution of a tax increment revenue note to <br />be retired in 2028. The outstanding principal balance as of December 31, 2022 is $0, and the City rebated <br />$53,853 in the current year, to retire this agreement in advance of the originally scheduled payment date. <br />The City is no longer obligated under this agreement as of December 31, 2022. <br />The City is authorized to create a tax increment financing plan under Minnesota Statutes, <br />Chapter 469.175. The criteria that must be met under the statutes are that, in the opinion of the <br />municipality: <br />•The proposed development or redevelopment would not reasonably be expected to occur solely <br />through private investment within the reasonably foreseeable future; <br />•The increased market value of the site that could reasonably be expected to occur without the use <br />of tax increment financing, would be less than the increase in the market value estimated to result <br />from the proposed development after subtracting the present value of the projected tax increments <br />for the maximum duration of the district permitted by the plan. The requirements of this item do <br />not apply if the district is a housing district; <br />•The tax increment financing plan conforms to the general plan for the development or <br />redevelopment of the municipality as a whole; and <br />•The tax increment financing plan will afford maximum opportunity, consistent with the sound <br />needs of the municipality as a whole, for the development or redevelopment of the project by <br />private enterprise.
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