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REQUEST FOR COUNCIL ACTION <br /> Date: 9/09/13 <br /> Item No.: 7.f <br />Department Approval City Manager Approval <br />Item Description: Consider Authorizing the Transfer of Tax Increment Funds between TIF Districts <br />B <br />ACKGROUND <br />1 <br />On August 8, 2011 the City Council adopted Resolution #10918 (Attachment B) formally authorizing a <br />2 <br />temporary inter-fund loan from City Tax Increment Financing (TIF) District #11 to TIF District #17. <br />3 <br />Both districts covered portions of the Twin Lakes Redevelopment Area. A map depicting the area <br />4 <br />encompassed in the two districts is included in Attachment C. The formal authorization of the internal <br />5 <br />loan was in response to a new documentation requirement from the Minnesota State Auditor’s Office. <br />6 <br />The loan itself had actually been made a couple of years prior. <br />7 <br />8 <br />The loan was necessary to provide for land acquisition and infrastructure improvements in TIF District <br />9 <br />#17 that were made in advance of the City receiving developer reimbursements or until such time that <br />10 <br />sufficient increment would be generated to repay the costs of these improvements. The temporary loan <br />11 <br />was preferred to TIF Bond financing and was made possible with available funds in the older TIF <br />12 <br />District #11. <br />13 <br />14 <br />Since this loan was initially made, development activity in the Twin Lakes Redevelopment Area failed <br />15 <br />to meet original expectations due to a downturn in the economy. This in turn hampered the City’s <br />16 <br />ability to capture tax increment in TIF District #17. In addition, it appears that the City will realize <br />17 <br />significantly less reimbursement from developers than originally anticipated. Given these extenuating <br />18 <br />circumstances the Council is now asked to re-categorize the loan as a direct transfer of monies. <br />19 <br />20 <br />The City’s Bond Counsel of Briggs & Morgan has drafted the attached resolution formally authorizing <br />21 <br />the re-categorization in accordance with State Statutes. <br />22 <br />PO <br />OLICYBJECTIVE <br />23 <br />Not applicable. <br />24 <br />FI <br />INANCIAL MPACTS <br />25 <br />Not applicable. <br />26 <br />SR <br />TAFF ECOMMENDATION <br />27 <br />Staff recommends the Council adopt the attached resolution formally re-categorizing the temporary <br />28 <br />internal loan from TIF District #11 to TIF District #17, as a direct transfer of monies. <br />29 <br />RCA <br />EQUESTED OUNCIL CTION <br />30 <br />Motion to adopt the attached resolution transferring funds from TIF District #11 to TIF District #17. <br />31 <br />32 <br />Page 1 of 2 <br /> <br />