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ARDEN HILLS CITY COUNCIL - MAY 8, 2006 5 . property sale yielded the City a profit of $796,300. The difference between the outstanding loan balance and the proceeds from sale of the land was $84,535. He indicated the remaining loan balance in TIF District #2 was $84,535. The fund had approximately $300,000 in net working capital (fund balance). Therefore, the City could payoff the remaining outstanding balance from this fund. This would be an eligible expense that could be charged to TIF District #2. The City Council could also consider forgiving the loan balance and keep the funds in reserves for future use. Any unspent funds at the expiration of a TIF district are distributed to Ramsey County, Mounds View School District, and the City of Arden Hills general fund. He stated that currently the TIF district was generating adequate tax revenue to meet the debt service requirements for the outstanding bonds the City had issued for the improvement of this district. Last year, the district generated approximately $100,000 more in revenue than the debt service requirements. City staff is not sure if an excess of this magnitude would continue in the future due to future law changes or the possibility of the property going into forfeiture. Although staff does believe that the current fund has adequate reserves to absorb any unanticipated reduction in tax revenue collected and was recommending the City Council consider paying off the remaining balance to the PIR Fund. He recommended the Council authorize staff to pay off the remaining loan balance in the amount of$84,535 to the PIR Fund from TIF District #2 Fund as of the close of the 2005 year end. . Councilmember Grant stated he believed this was a good idea to pay off the TIF loan balance. He asked if City trails could be constructed with the TIF funds. Mr. Siddiqui responded he was not sure ifTIF funds could be used for this purpose, but he would look into this. MOTION: Councilmember Holden moved and Councilmember Grant seconded a motion to authorize staff to payoff the remaining loan balance in the amount of$84,535 to the PIR Fund from the TIF District #2 as of the close of year end 2005. The motion carried unanimously (4-0). E. Motion to Approve Additional Lel!al Services for the City Hall Arbitration Case Ms. Wolfe stated the City would be entering into an arbitration hearing on June 19,2006. This arbitration concerns the still-open contract for the construction of the Arden Hills City Hall. During the summer of 2003, the City participated in a mediation process with the General Contractor, Rochon, in order to try and settle the dispute. The mediation process was not successful, so the determination was made to proceed to arbitration. The arbitration had been scheduled and rescheduled several times. However, the arbitrator had indicated he will allow no further delays and the hearing would commence on June 19. . She indicated until recently, City Attorney Jerry Filla had been exclusively representing the City in this matter. As the problems with the building had continued and more testing had been conducted, the case had continued to grow in complexity. She stated it would significantly