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k" <br />REQUEST FOR COUNCIL ACTION <br />Date: 8/08/11 <br />Item No.: 7. e <br />City Manager Approval <br />Item Description: Formally Authorize a Temporary Inter-fund Loan between 'TIC' Districts <br />11 BACKGROUND <br />2 The Minnesota State Auditor's Office is charged with various oversight duties over Tax Increment Finance <br />3 (TIC') Districts. The State Auditor's Office has enacted a new requirement that requires cities to formally <br />4, authorize any temporary internal loans that might occur between TIC' districts. Prior to this new <br />5 requirement, cities merely had to recognize these loans on a standard reporting form. <br />6 <br />"7 Temporary loans between districts are fairly commonplace especially in situations where a TIC' District is <br />8 created and TIC'-eligible costs are incurred early in the district's life and prior to the district generating any <br />9 tax increment. This is the case for TIC' District x#19 (Applewood Pointe) which was recently created. <br />110 <br />11 Loans are also sometimes necessary when a district provides for land acquisition or infrastructure <br />12 improvements in advance of developer reimbursements and/or before sufficient increment is generated to <br />13 repay the improvements. This is the case for TIC' District 917 (new Twin Lakes district), where a <br />14, temporary loan was preferred to TIC' Bond financing. <br />116 The City's Bond Counsel of Briggs & Morgan has drafted the attached resolutions that formally authorize <br />1 7 the temporary internal loans. The temporary loans are being provided for by the City's TIC' district 911 (old <br />11 111",,'11 Twin Lakes district) which has sufficient monies. The loans are expected to be paid back no later than <br />119 2016 through the future capture of tax increment as well as developer payments. <br />20 POLICY OBJECTIVE <br />2 i Not applicable. <br />22 FINANCIAL IMPACTS <br />23 Not applicable. <br />24, STAFF RECOMMENDATION <br />25 Staff recommends the Council adopt the attached resolutions formally authorizing a temporary internal loan <br />26 among various TIC' Districts. <br />27 REQUESTED COUNCIL ACTION <br />28 Motion to adopt the attached resolutions formally authorizing a temporary internal loan among various TI' <br />29 Districts. <br />Page I of 2 <br />