10.04 - TIF District 1-7 Babinski Decertification

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Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,MN 55101-2887 Springsted -- � Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com MEMORANDUM TO: Nancy Malecha, City Administrator FROM: Mikaela Huot, ConsultantNice President DATE: July 21, 2015 SUBJECT: Decertification of TIF 1-7 The City of Pequot Lakes previously established Tax Increment Financing District No. 1-7 on March 7, 2000. In 2015, the projects have been completed, all obligations to which tax increment from the District has been pledged have been paid in full or defeased, and the City has determined that it is in the best interests of the City to terminate and decertify the District. Attached to this memorandum is a resolution for the City Council to consider at its November 3, 2015 meeting relating to the termination of Tax Increment Financing District No. 1-7. Following that meeting and assumed approval of the resolution, the City will send a copy of the resolution and a Confirmation of Decertification Form (also attached) to the County Auditor. The County Auditor has previously been notified regarding the decertification and is awaiting the resolution and completed Confirmation of Decertification Form from the City to complete the decertification effective December 31,2015. The City has the ability to use up to 10%of the total tax increment expenditures authorized by the plan or the total tax increments, whichever is less,to finance eligible administrative expenditures. We have estimated that TIF District 1- 9 has some capacity within the 10% limitation to pay outstanding administrative expenditures(approximately$1,000, including 2015 activities). A portion of the existing fund balance from TIF 1-7 may be used to pay any remaining outstanding administrative expenses and/or transfer to TIF 1-13 to reduce the interfund loan balance (up to 10% total). We recommend that the City retain the funds in TIF 1-7 until the end of the year and following 2nd half collection of increment determine the remaining available amount that could be transferred to TIF 1-13 with any remaining increment returned to the County by December 31, 2015.