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EDA Agenda 06-20-2012EDA MEETING Wednesday, June 20, 2012 6:00 p.m. Mississippi Room - 505 Walnut Street, Monticello, MN Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie, Rod Dragsten and Council members Tom Perrault and Brian Stumpf Staff. Executive Director Megan Barnett - Livgard, Finance Director Tom Kelly 1. Call to Order 2. Approve Meeting Minutes: a) Regular Meeting May 9, 2012 b) Special Joint Meeting May 9, 2012 (Review Council Approved Minutes) 3. Consideration of additional agenda items 4. Consideration of adopting the 2012 TIF Management Plan Consideration of allocating funds from TIF 1 -5 for a transportation and beautification project 6. Consideration of Appeal Process (via email) 7. Director Report 8. Adjourn MINUTES ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, May 9, 2012 - 6:00 p.m. Commissioners Present: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie, Rod Dragsten and Council Members Tom Perrault and Brian Stumpf Staff: Executive Director Megan Barnett - Livgard 1. Call to Order Bill Demeules called the meeting to order at 6 p.m. 2. Approve Meeting Minutes a) April 9, 2012 BILL TAPPER MOVED TO APPROVE THE APRIL 9, 2012 SPECIAL EDA MEETING MINUTES. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 6 -0. (Rod Dragsten abstained.) b) April 11, 2012 kol BILL TAPPER MOVED TO APPROVE THE APRIL 11, 2012 REGULAR EDA MEETING MINUTES. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 6 -0. (Rod Dragsten abstained.) 3. Consideration of additional agenda items a) Request to change the June meeting date 4. Consideration of adopting Resolution #2012 -041 approving a Purchase Agreement between Fred & Pat Culp and the Monticello EDA The EDA and City Council had agreed to move forward with the purchase of property located at 349 Broadway Street (Fred's Auto), at a price of $84,000. The purchase agreement requires that an environmental assessment be completed on the property prior to closing. There was no discussion. BILL TAPPER MOVED TO ADOPT RESOLUTION 92012 -041 APPROVING THE PURCHASE AGREEMENT BETWEEN FRED AND PAT CULP AND THE MONTICELLO EDA. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 6 -1 WITH TOM PERRAULT VOTING IN OPPOSITION. Economic Development Authority Minutes 05/09/12 Tom Perrault said that he didn't think this was a strategic property to purchase for downtown development at this time and that he'd prefer to save EDA resources for more important purchases. 5. Consideration of authorizing a Phase II Environmental Site Assessment for the property located at 349 Broadway Street (Fred's Auto) Braun Intertec and Pro Source submitted quotes to complete a Phase II Environmental Site Assessment on the property proposed for EDA purchase located at 349 Broadway. The quotes are fairly similar in terms of price and method and staff indicated a willingness to work with either business. Bill Demeules noted that the EDA could save $553 with Pro Source if no contaminants were identified. The Pro Source quote would be $1600 more than the Braun Intertec quote should contamination issues be identified during the assessment. He suggested that Braun Intertec would offer a better level of protection in that it would do 5 soil borings as compared to the 3 borings recommended by Pro Source. He recommended the EDA approve the Braun Intertec quote. Brian Stumpf asked about the time frame involved in the assessment. Staff indicated that both companies anticipate a mid -June completion. He also clarified that funds for purchase would come from EDA General Funds. Tracy Hinz asked if the EDA has used either company. Staff noted that both are reputable. Rod Dragsten asked if Braun Intertec would look for metal contamination. Brian Stumpf noted that Fred's Auto would have been under strict OSHA regulations for collection and disposal of contaminants. He suggested the EDA could ask for summary reports. Staff clarified that the EDA does not need to complete Phase I because bank financing is not required for property purchase and the City is already aware that there are potential environmental concerns on the property. Phase II would identify the type and level of soil contamination. Tracy clarified that there the testing company would not remove the contaminant. Bill Demeules indicated that soil contamination must be reported to the Minnesota Pollution Control Agency (MPCA). Staff stated that the City would work with the MPCA to put together a remediation plan for the site. Bill Tapper suggested that the Braun Intertec proposal would provide greater assurance as to what is in the ground and a better handle on what costs would be. Matt Frie agreed that it would be better to spend the extra funds to be more thorough in the assessment. Economic Development Authority Minutes 05/09/12 BILL TAPPER MOVED TO AUTHORIZE BRAUN INTERTEC TO COMPLETE A PHASE II ENVIRONMENTAL SITE ASSESSMENT ON THE PROPERTY KNOWN AS 329 BROADWAY STREET. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED 7 -0. 6. Director Report (verbal) a) New City Logo — Staff shared the new City logo approved by City Council. b) Commercial Broker Tour — Numerous firms, developers, brokers and representatives from Greater MSP joined staff on a bus tour showcasing Monticello's assets. c) Proposed Podawiltz Development - City Council approved moving forward with the Podawiltz Development housing proposal. Staff obtained additional information from the Housing Finance Agency which indicated a need for this type of housing in the area. The developer will do a housing study in the summer to confirm those findings and start planning and TIF processes in the fall. Construction would be scheduled for next year. d) Grow AN visits- Staff continues to be involved with Chamber site visits to local manufacturers. e) Greater MSP — Greater MSP has indicated that overall development is underway, and that businesses are expanding and looking to relocate to this region. f) Transportation Update City staff continue to conduct meetings with property owners along the proposed Fallon Avenue Overpass. Matt Frie asked if transportation projects would come before the EDA for review. Staff noted that the City Engineer would provide periodic updates on projects but that the EDA would be formally involved only if EDA funds were requested. 7. Consideration of items added to the agenda a) Request to change the June meeting date — The EDA agreed to change the regular meeting June meeting date to June 20th due to staff scheduling conflicts. Northland Securities will present the updated TIF Management Plan at that time. 8. Adiourn BILL TAPPER MOVED TO ADJOURN THE MEETING AT 6:18 PM. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 7 -0. Recorder: Kerry T. Burri Approved: June 20, 2012 Attest: Megan Barnett - Livgard, Executive Director 3 MINUTES SPECIAL JOINT MEETING — MONTICELLO EDA AND MONTICELLO CITY COUNCIL Wednesday, May 9, 2012 -- 6:30 p.m. Mississippi Room, Monticello Community Center Present - EDA: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie, Rod Dragsten, Tom Perrault, Brian Stumpf Present - Council: Mayor Clint Herbst, Glen Posusta Absent - Council: Lloyd Hilgart Others: Megan Barnett Livgard, Jeff O'Neill, Torn Kelly, Angela Schumann, Dan Wilson (Wilson Development), Martha Ingram (Kennedy & Graven) 1. Call to Order EDA President Bill Demeules called the meeting to order at 6:26 p.m. 2. Purpose of Meeting: Update on Montgomery Farms & Downtown Redevelopment Megan Barnett Livgard introduced Martha Ingrain and noted she will be discussing the closing of the Montgomery Farms property. Dan Wilson will be reviewing the relocation process and what to expect. Megan also has some items to review on the Downtown Redevelopment. 3. Montgomery Farms - Closing Status & Tenant Relocation Status Martha Ingram explained that there always seem to be some things that hold up a closing. Due to the fact that the opposing attorney has not provided the requested documents needed for closing, two closing dates have been cancelled. At this time, no closing date has been rescheduled. Martha Ingram is looking for direction regarding several items. • Tenant issues -- residential units: tenants previously paid damage deposits and question is whether Montgomery Farms can keep damage deposits in lieu of unpaid rent. Martha Ingram noted that nonnally it is expected that those damage deposits would transfer to the buyer (City) as a continued damage deposit. Brian Stumpf asked about the back rent and what impact that might have. Martha Ingram noted that unpaid rent would be adjusted in relation to relocation costs. Dan Wilson noted that the City cannot count unpaid rent against the tenant in consideration of terminating their lease until they have established a record of non - payment with the City. Clint Herbst asked what impact continued non - payment of rent would have on the City. Dan Wilson explained that the City would be trying to find a comparable site for the renters and provide them with a 90 -day notice) to vacate the premises. Clint Herbst asked what happens if the renters do not get accepted at another site due to non - payment of rent, Dan Wilson explained how that process would work with the City possibly negotiating prepayment of rent by the City to the new landlord in lieu of relocation costs. Special Joint Meeting Minutes — May 9, 2012 Page 1 Martha Ingram noted that Barbara Lee Dance Studio has given notice that they will be ending their lease as of the end of June. The renter stated to Martha that they paid their first and last month's rent when they signed the lease. Montgomery Farms indicated that they never received a payment for last month's rent at the time they made an agreement with the Dance Studio for the lease. Martha Ingram has informed Montgomery Farms that discussion is between them and the Dance Studio. However, the City could agree to negotiate that and ask for proof from the tenant showing that they paid the last month's rent. Dan Wilson has held discussions with the Dance Studio and the renter indicated that she is interested in moving as soon as possible. He noted that she has not been able to provide evidence that she paid the last month's rent, which she wants to apply to her May rent payment. Brian Stumpf stated that he does not feel it is worth the money to hold up the closing on the properties for these small amounts. Bill Tapper indicated that he is concerned about the length of time this could drag out and increase the costs of attorney fees. Martha Ingram indicated that the closing and subsequent relocations will be a long process. Dan Wilson noted that Montgomery Farms is anxious to close on the sale and would like to get these small issues resolved. Martha Ingram stated that she would like to have a clean closing with as few issues as possible outstanding. Tracy Hinz asked how Martha Ingram views this delay in the closing; Martha Ingram feels these issues are small and it would be best to get past them. If Montgomery Faris would call and want to close this week, she feels it would be in the best interest of the City to get the closing done. + Clint Herbst feels it is wise to take some time with the business relocations to make sure the tenants are satisfied. Tracy Hinz asked if those renters will receive a letter explaining the process of what will happen. Dan Wilson explained that everyone has already received basic information about the process. Glen Posusta asked about the relocation costs related to residential units. Dan Wilson noted that current rates and costs for locating residential tenants into another site that meets satisfactory requirements have to be taken into consideration and they also have to look at their income. Dan Wilson noted it just takes a while to work through all the issues. Bill Demeules asked if the City has any eviction rights and Dan Wilson noted that would be under the same rules as any other landlord, with the City having the right to serve notice for eviction. Dan Wilson explained that if the City must find the residents another place to live; it is usually best to do this in a positive manner. • Glen Posusta asked about the other business tenants in the building. Martha Ingram noted that the other businesses in the strip mall building have signed lease holdover agreements. • Megan Barnett Livgard noted that Dan Wilson will continue to work with the business tenants and there will be invoices coining through for the City /FDA to Special Joint Meeting Minutes — May 9, 2012 Page 2 pay for relocation costs. Dan Wilson explained that each invoice is reviewed for eligibility before submitting for reimbursement. Dan Wilson noted there are five criteria for eligibility and they make sure there is no duplication of costs and the invoices are necessary and reasonable. Dan Wilson noted that there may be instances when advance payments are made, as long as the review process shows that the money would be part of the total relocation costs. • Brian Stumpf asked if Martha Ingram was looking for some direction from the EDA regarding the closing process. Bill Demeules asked for a consensus from the EDA and all agreed to have Martha Ingram move forward as quickly as possible. 4. Downtown Redevelopment Ace Hardware — provided copy of the letter to EDA members from Shawn Grady of Ace Hardware. Mr. Grady's letter outlines an understanding of each parties responsibilities as redevelopment occurs. Old Napa Building — Megan Barnett Livgard and Bill Demeules sat down recently and talked to Julie Reh about her intentions for the property. She is supportive of the Embracing Downtown plan. At such time that a developer would come forward, it would be a good opportunity to work with Julie Reh on the redevelopment of the future anchor block. Clint Herbst noted it is important to work towards soliciting interest from the development community. Residential property on East 4th Street -- Megan Barnett Livgard has been contacted by the property owner to find out whether the City would be interested in purchasing this property for $180,000. Consensus is that there is no interest at this time. Tracy Hinz asked if there are plans to bring back Jinn McComb in the near future to talk about Embracing Downtown. Megan Barnett Livgard noted that she has that on the agenda for the June EDA meeting. Bill Tapper stated that he is very pleased with the work of Dan Wilson in regard to the Montgomery Farm property purchase and relocations. 5. Adjournment EDA President Bill Demeules adjourned the meeting at 7:20 p.m. Recorder: Catherine M. Shuman 80 0, Approved: May 29, 2012 Attest: Ci D inistrator Special Joint Meeting Minutes — May 9, 2012 Page 3 EDA: 5/9/2012 4. Consideration of adopting the 2012 TIF Management Plan. A. REFERENCE AND BACKGROUND: The EDA authorized Northland Securities to complete an update to the 2009 TIF Management Plan. The 2012 draft TIF Management Plan is attached for your review and adoption. Northland Securities will be present to review the document and answer any questions. Al. Budget Impact: The EDA approved $5,500 contract cost at the February 8, 2012 meeting. The fee will be divided equally among the active TIF districts. B. ALTERNATIVE ACTIONS: 1. Motion to adopt the 2012 TIF Management Plan. 2. Motion to table item for further research and discussion. C. STAFF RECOMMENDATION: Staff recommends adopting the 2012 TIF Management Plan. D. ATTACHMENTS: Draft 2012 TIF Management Plan i 1 TIF Analysis and Management Plan Tax Increment Financing Districts Monticello Economic Development Authority DRAFT "2 "2012 UPDATE NORTHLAND STRATEGIES Special Projects Group Contents Introduction ReportOverview .......................................................................................................... ..............................1 StudyApproach ............................................................................................................ ..............................1 Usingthe Report ......................................................................................................... ............................... 2 Overview ofTIF in Monticello .................................................................................. ..............................3 Districtsin 2009 .......................................................................................... ..............................3 ProjectArea ................................................................................................. ..............................3 TheAuthority .............................................................................................. ............................... 3 Management Plan 7 ExecutiveSummary .................................................................................................... ............................... 7 Pre -1990 Districts ....................................................................................... ..............................7 Post1990 - Sound Plans ............................................................................ ..............................7 Post 1990 - Management Issues ............................................................. ..............................7 RegulatoryFramework .............................................................................................. ..............................8 Overall Management Strategy ............................................................................... ............................... 9 TIFRecord Books ........................................................................................ ............................... 9 Coordination With Wright County ......................................................... ..............................9 Administrative Expense ........................................................................... .............................10 Development Agreements ...................................................................... .............................10 AnnualReporting ...................................................................................... .............................10 StatutoryFactors ......................................................................................................... .............................10 Administrative Expense ........................................................................... .............................10 KnockDown ............................................................................................... .............................11 Pooling......................................................................................................... .............................11 FiveYear Rule .............................................................................................. .............................11 Decertification............................................................................................ .............................12 ExpandedTax Base ..................................................................................................... .............................13 IndustrialLand Analysis ............................................................................................ .............................13 District Summary 15 District 1 -5 (Construction 5) .................................................................................... .............................15 District1 -6 ( Raindance) ............................................................................................ .............................18 District 1 -19 (Mississippi Shores) ........................................................................... .............................21 District1 -20 (Prairie West) ........................................................................................ .............................24 District1 -22 ( Downtown) ......................................................................................... .............................27 District 1 -24 (Church of St. Henry) ........................................................................ .............................32 District 1 -29 (Front Porch Associates) .................................................................. .............................34 District 1 -34 (Monticello Interchange) ................................................................ .............................40 District 1 -35 (Landmark Square II) ........................................................................ .............................43 District 1 -36 (Rocky Mountain Group) ................................................................. .............................45 District 1 -37 (SL Real Estate Holdings) ................................................................. .............................47 District1 -38 ( Walker) ................................................................................................. .............................49 District 1 -39 (Otter Creek Crossing) ...................................................................... .............................51 Excerpts from TIF Act AdministrativeExpense ............................................................................................ .............................52 DistrictLimitations .................................................................................................... .............................53 KnockDown .................................................................................................................. .............................54 Poolingand Five -Year Rule ...................................................................................... .............................55 Modificationof Plan ................................................................................................... .............................60 Decertification............................................................................................................. .............................61 52 Report Overview 1 This reports serves as a guide for the management of tax increment finaning (TIF) districts in the City of Monticello. This report was first prepared in 2009 and updated in 2012. The report contains overall manage- 2• ment strategies and key factors that influence the use of TIF in each of the City's existing districts. Actions Taken Since 2009 Report 3 Since adoption of the 2009 Report, the EDA has taken action on many key items that were included in the first report. The key accomplishments are listed be- low: • Completed a downtown study, "Embracing Down- town", focused on marketing, land use, transpor- tation, financing, and implementation strategies. • Purchased property, key parcels, to advance eco- nomic development plans. • Provided funding for key road improvement proj- ects. • Taken action to call bonds and pay in full using available tax increment dollars. • Adopted a spending plan allowing for pooling of available tax increment dollars (under temporary legislative authority) to assist with meeting eco- nomic development goals and job creation. • Continued to meet all obligations on outstanding loans, notes, and bonds. Organization of Report The 2012 report is organized following essentially the same outline used for the 2009 report. The report is organized into three sections: Introduction provides background information about the report, the process used to study the TIF districts, and a general description of system of tax increment financing districts. Management Plan discusses management issues that apply to all tax increment financing districts in Monticello. District Summaries focuses on each individual TIF district. The summaries contain management strategies and financial data for each district. In- formation is provided on actions items and accom- plishments that have occurred since the prior 2009 report. Administrative tasks are suggested; this section in the summaries offers recommendation on administrative follow -up items. Study Approach A similar study approach was followed in 2012 as used in 2009. This study was prepared by Northland Secu- rities. The following steps were taken as part of the study process: • Key data was obtained from project files for each TIF district. This data includes excerpts of TIF plans and development agreements that establish the parameters for the use of TIF. • Dates related to the establishment and certification of the districts were verified. These dates deter- mine the timing constraints for each district. • Wright County provided the current base tax ca- pacity value, and the current increment tax capac- ity value for the districts (for taxes payable 2012). • Historical revenues, expenditures and fund bal- ances come from financial data provided by the City. The financial summaries included in this Introduction 1 report balance to the "EDA Summary Report" prepared by the City. The City's "EDA Summary Report" includes year by year sources and uses of funds and ending balance. The study approach did not include reconciling the "EDA Summary Report" to the annual reports filed with the Office of the State Auditor. • The current balances for bond, note and interfund loan obligations represent the amount outstanding on December 31, 2011. These amounts were pro- vided by the City in the EDA Summary Report. It is also important to note aspects of TIF in Monticello not reviewed as part of this study: • This study was not intended to be an audit of TIF use in Monticello. Northland did not verify the data used in the annual reports. • Northland did not review project data to deter- mine compliance with the terms of development agreements. Using the Report This report is intended to be a practical guide for city staff, Economic Development Authority and City Council on the on -going use of TIF. As shown by use of the 2009 report, much of the information in this re- port has enduring value and will serve to continue to guide management decisions over the life of the TIF district. However, TIF is a dynamic system. Property values, tax rates, statutes and rules change from year - to -year. This report should be the foundation of an annual review and management plan update. This strategy is described in greater detail in the Manage- ment Plan section of this report. Introduction 2 Overview of TIF in Monticello Districts in 2012 The City of Monticello has 14 established and active tax increment financing districts. The oldest district that is still active is No. 1 -5, established in 1985. Dis- trict No. 1 -39 is the newest district established in Au- gust 2011. Certification of 1 -39 is anticipated to be filed in June 2012. The following districts were included in the 2009 re- port but were subsequently decertified and the related funds closed and therefore are not included in this re- port: 1 -2; 1- 26;1 -28; 1 -31; and 1 -33. The table on Page 5 summarizes the primary informa- tion for each Monticello TIF district. This information can also be found in the summary for the specific dis- trict later in this report. The relevance of data will be explained in the Manage- ment Plan section of the report. Project Area All TIF districts are part of Central Monticello Rede- velopment Project Area No. 1. The map on Page 4 shows the boundaries of the Project Area and of each TIF district. The Project Area covers a large portion of Monticello. The primary economic development and redevelopment areas of the City fall into the Project Area. The primary function of the Project Area is to define the areas for use of tax increment financing. State Law requires each TIF district to be located in a project area. Subject to legal constraints applicable to each district, monies from a tax increment financing district can be spent outside the TIF district, but within the Project Area. The flexibility to spend tax increment revenues throughout the City was more relevant in the earlier years of TIF use. Prior to 1990, cities faced relatively little statutory limitation on the ability to spend tax increments on development activities outside of the TIF district. This practice is called "pooling ". In 1990, the Legislature placed specific limits on pooling (see "Pooling" in Management Plan section). These statutory changes significantly diminished the need for an expansive project area as the basis for TIF. Despite these changes, the Central Monticello Rede- velopment Project Area No. 1 continues to serve as a reasonable project area for the establishment of TIF districts. The Authority The Monticello Economic Development Authority (EDA) is designated as the statutory "authority" for all existing TIF districts in Monticello. Some TIF districts were originally established by the Monticello Housing and Redevelopment Authority (HRA). Responsibility for these districts was subsequently assigned to the EDA. The authority is responsible for administering the TIF districts and managing the plans for each district. Generally, unless State Law specifically requires ac- tion by the City Council, all management powers for TIF districts are held by the authority. For Monticello TIF districts, the EDA is responsible for: • Managing TIF Plan to ensure compliance with State Law. • Making decisions about the expenditure of funds collected by each district. • Administering development agreements. Introduction • Preparing annual disclosure and reports. • Determining the appropriate time to decertify a TIF district. The City Council approves the initial establishment of a TIF district. Future City Council approval (and a pu- bic hearing) is needed for certain plan modifications: • Change the area of the district. • Increase bonded indebtedness. • Determine the need to capitalize interest on bonds. • Increase the portion of the captured tax capacity to be retained. • Increase the budget (estimated project costs) for the district. • Designate additional parcels for public acquisition. The City Council is responsible for the issuance of gen- eral obligation bonds. The City and the EDA enter into a pledge agreement for the conveyance of tax incre- ments used to pay principal and interest on the bonds. Introduction 4 Introduction Introduction City Number 1 -5 1 -6 1 -19 1 -20 1 -22 1 -24 1 -29 County Number 16 23 80 620 622 624 629 Mississippi Downtown Church of St. Front Porch Name Construction 5 Raindance Prairie West Shores District Henry Associates Type Redevelopment Redevelopment Housing Redevelopment Redevelopment Housing Housing Established 5/15/85 11/12/85 3/13/95 6/24/96 3/10/97 8/24/98 3/15/02 Certification Requested 5/15/85 12/5/85 4/27/95 12/20/96 6/25/97 1/4/99 6/14/02 Certified 5/15/85 12/5/85 4/28/95 12/23/96 6/30/97 1/8/99 8/22/02 Year of First Increment 1987 1988 1998 1999 1999 2001 2004 4 -Year Knockdown 5/15/89 12/5/89 4/30/99 12/23/00 6/30/01 1/8/03 8/22/06 5 -Year Rule NA NA 4/30/00 12/23/01 6/30/02 1/8/04 8/22/07 Decertification 12/31/12 12/31/13 12/31/23 12/31/24 12/31/24 12/31/26 12/31/29 Original Tax Rate 81.305% 81.305% 111.789% 1 10,581 % 112.618% 118.645% 145.859% Original Tax Capacity Value 708 98 2,523 3,000 157,311 2,500 1,162 Current Base Tax Capacity Value 708 98 2,523 1,672 178,814 441 974 Current (Pay 2012) Tax Capacity 43,638 68,158 32,310 18,323 458,208 41,634 21,721 Parcels 8 3 2 12 58 1 18 City Number 1 -30 1 -34 1 -35 1 -36 1 -37 1 -38 1 -39 County Number 630 634 635 636 637 638 Pending Central MN Monticello Landmark Rocky Mountain SL Real Estate Otter Creek Name Housing Walker Interchange Square II Group Holdings Crossing Partnership Renewal and Economic Economic Economic Economic Type Housing Redevelopment Renovation Development Development Development Development Established 6/24/02 9/12/05 9/12/05 8/22/05 4/24/06 4/11/07 8/22/11 Certification Requested 6/28/02 12/29/05 12/29/05 12/30/05 7/19/06 1011107 Pending Certified 8/22/02 8/1/06 8/1/06 8/1/06 4/16/07 1011107 Pending Year of First Increment 2004 2007 2008 2007 2008 2009 Pending 4 -Year Knockdown 8/22/06 8/1/12 8/1/12 8/1/12 8/1/12 8/1/12 Pending 5 -Year Rule 8/22/07 8/1/16 8/1/16 8/1/11 4/16/12 10/1/12 Pending Decertification 12/31/29 12/31/22 12/31/33 12/31/15 12/31/16 12/31/17 Pending Original Tax Rate 145.859% 110.297% 110.297% 110.297% 99.269% 106.364% Pending Original Tax Capacity Value 1,918 47,897 3,409 4,354 1,614 1,781 Pending Current Base Tax Capacity Value 2,107 32,548 6,068 4,354 1,614 1,781 Pending Current (Pay 2012) Tax Capacity 8,395 285,662 2,962 66,784 26,434 13,674 Pending Parcels 11 13 1 1 1 1 1 6 Executive Summary The plan for managing TIF districts in Monticello con- sists of two sections. The following section contains an overall management plan. It presents strategies and is- sues that apply to all TIF districts. The second section contains a district summary for each TIF district. The district summaries present information and manage- ment strategies for the unique factors of each district. Monticello TIF districts fall into three broad categories: 1. Pre -1990. 2. Post -1990 with sound finance plans. 3. Post -1990 with management issues. Pre -1990 Districts Monticello has two active TIF districts established prior to 1990. The two remaining active pre -1990 dis- tricts (1 -5 and 1 -6) will need to be decertified at the end of 2012 and 2013, respectively. This timing is im- portant because pre -1990 districts are not encumbered by the limitations on pooling and the 5 -year rule (see discussion later in this section). For the two remain- ing districts, the decision facing the EDA is whether these districts should be closed after decertificatoin or whether the remaining resources should be used for public purposes as allowed by the TIF plans and State Law. Post 1990 - Sound Plans The majority of existing TIF districts were established after 1990. The statutory framework for these districts generally limits the ability to use them beyond their original purposes. TIF districts with "sound plans' have tax increment revenues that are projected to be sufficient to meet obligations against the districts (or districts with current fund balance in excess of out- standing obligations). These obligations are either notes with developers or internal loans. In some cases, the projected tax increment shows that the district can be decertified prior to the final date in the TIF plan. Districts in this category are 1 -19, 1 -20, 1 -24, 1 -29, 1 -30, 1 -34, 1 -37, and 1 -38. Post 1990 - Management Issues While the majority of the City's TIF districts are in good financial condition, three of the districts present important financial management issues. District 1 -22 The Downtown TIF District is the largest and most complex. Statutory restrictions on pooling and the 5 -year rule limit the ability to use existing fund bal- ances and future tax increments. The management plan for this district describes strategies for making the most effective use of these resources. District 1 -35 This district consists of two parcels that were removed from the original Downtown district (1 -22) and made into a new redevelopment district. The development anticipated in this district has not occurred. It is im- portant that the EDA facilitate redevelopment within the constraints of the existing TIF district. The factors that enabled the creation of the district have been re- moved. It would be difficult to establish a new TIF district to take the place of 1 -35. District 1 -36 This district is a single parcel economic development district. The projections in this report show that es- timated tax increment reveues will not be adequate Management Plan 7 to repay the interfund loan used for this project. The District also runs a negative fund balance over its life. District 1 -39 The TIF Plan for District 1 -39 was adopted based on property tax rates and tax capacity for taxes payable in 2011. Certification of 1 -39 will now occur in 2012 and therefore will be based on tax rates and tax capacity for taxes payable in 2012. After the District is certi- fied the estimated TIF to be generated over the life of the district should be recalculated and compared with estimates included in the adopted TIF Plan for the Dis- trict to confirm current estimates are consistent with the adopted Plan. Regulatory Framework The challenge of effectively managing TIF districts comes from a complex regulatory framework. The use of tax increments for any district is governed by four distinct factors: 1. State Law at the time the district is created. 2. Current State Law. 3. Adopted plan for the TIF district. 4. Development agreement. Tax increment financing is governed by a complex set of statutes that have changed over time. An important nuance of TIF is the relevance of the laws in existence at the time the district is established. These laws estab- lish the majority of critical criteria for the use of tax in- crement from a district. Most aspects for the on -going use of tax increments from a district are governed by the statutes in effect when the district is established. Among these factors are: • Ability to spend money outside of the TIF district (pooling) • Application of the 5 -year rule. • Limitations on administrative expense. The implications of these factors are discussed in this section and in the individual district summaries. Current State Law sets the parameters for creating new TIF districts. The primary on -going influence of current statutes relates to reporting requirements for districts. All districts, regardless of when created, are subject to the same annual reporting. Within statutory constraints, the City sets the param- eters for the use of tax increment financing in the TIF plan. Tax increments cannot be used for purposes not authorized in the plan. The amount of spending can- not exceed the estimated project costs contained in the plan. The City cannot incur bonded indebtedness un- less so authorized by the plan and the amount of debt cannot exceed limits set in the plan. The plan also sets the maximum period of time the City can collect tax increment from the district. This report contains many of the key management ele- ments from the TIF plans. Direct reference to the actu- al plan should be made before making changes or au- thorizing new uses of tax increment from any district. The development agreement is the final piece of the regulatory framework. A development agreement de- fines the factors that control the use of TIF for specific projects. The agreement describes the actions to be taken by the developer. If these actions are completed, Management Plan E�3 the City agrees to use TIF to pay for certain costs of development. Monticello uses two basic approaches to pay for proj- ect costs: interfund loans and developer notes. Both are considered to be bonds under the TIF statutes. An interfund loan is a means for using EDA reserves (or other funds) to provide immediate assistance to a proj- ect. Tax increments are used to repay the loan with interest. With a developer note, the City agrees to reimburse a developer for specific project costs. The typical development agreement uses a specified per- centage of annual tax increment from the district (or specified parcels in the district) to repay the developer at a stated rate of interest on the unpaid balance. This approach is also called "pay-as-you-go". Overall Management Strategy While the focus of this report is on the management of existing TIF districts, the process of reviewing exist- ing districts identified the need to describe an overall strategy for the ongoing management of TIF districts. Much of the recommended strategy is based on exist- ing practices employed by the City. The purpose of including this information is to clearly identify and in- stitutionalize these practices. TIF Record Books Preceding the 2009 report, the City undertook a records management project. This project organized the docu- ments for each TIF district into a set of record books. The use of record books has been part City practice for new districts in recent years. The real value of TIF record books comes from making them the central re- pository of all document and reporting related to the TIF district. Important documents should be added to the record books over the life of the district. Coordination With Wright County The County is a critical player in the management of TIF districts. The process only begins with the request for certification of a district. Important elements of the relationship with the County include: • Certification Information. It is the City's responsi- bility to review, the Original Tax Capacity value, the Original Tax Rate and the parcel listing to en- sure that the district is properly established. • Changes in the Original Tax Capacity Value. The Original Tax Capacity value may change from the value initially certified by the County. In reality, the County sets the base value of the district using the Estimated Market Value of the parcels in the District. The Original Tax Capacity varies accord- ing to the property classification of the parcels. • Parcel Identification Numbers. Annexation, plat- ting and parcel splits may alter parcel identifica- tion numbers after certification of the district. The City should annually review parcels numbers for each district to track and verify district boundaries. Changes in parcel numbers should be noted in the TIF record book. • Knockdown. Monitoring parcel identification numbers also allows the City to track the value parcels that have been removed through "knock- down" requirements (see Knockdown later in this section). At the end of the knockdown period, the City should inform the County of the parcels (if any) that are subject to knockdown. This approach ensures that parcels are not incorrectly removed from the district. It also places the City in a good position to know the relevant parcels, monitor ac- tivity on each parcel and to seek restoration of the Management Plan value at the earliest opportunity. Administrative Expense Special attention should be given to accounting for administrative expense. The purpose of this strategy is two -fold. First, it allows the City to monitor com- pliance with statutory limitations (see Administrative Expense later in this section). Second, accounting for administrative expense is needed to determine the ca- pacity for spending tax increments outside of the TIF district (see Pooling later in this section). Development Agreements While each development agreement is unique, they all share the need for clear record keeping. Among the items to track for each agreement are: • Documentation of developer expenditures for items eligible for reimbursement with TIF. • Documentation of developer compliance with oth- er elements of agreement needed to receive reim- bursement. • Establishment of date(s) for accrual of interest un- der developer note and calculation of additional principal from accrued interest. • Ongoing amortization of developer note Annual Reporting The 2009 Report and this updated 2012 Report is in- tended to be the foundation for ongoing management of TIF districts. An important recommendation of the 2009 Report was to expand the annual reporting required by State Law to include the updating of the profiles for each TIF district. Parts of the 2009 recom- mendation were implemented and the EDA has been receiving annually (in the spring) a summary of all revenue and expenses and outstanding obligations by district. The annual report provides a process for monitoring the factors described in the previous sec- tion. The updating process also allows the EDA to take a proactive approach with TIF management. Planning begins prior to budgeting for the next fiscal year. De- cisions about district decertification can be made in a time frame that makes the district value available for general taxation in the next year. The current annual reporting process could be ex- panded to include an update of the district profiles in- cluded in this report. Statutory Factors Several elements of State Law are particularly relevant to the ongoing management of TIF districts. Administrative Expense Administrative expense may not exceed the lesser 10% of the total estimated tax increment expenditures au- thorized by the TIF plan or 10% of the total tax incre- ments from the district (excluding any excess taxes un- der 469.177). An example of excess taxes is the taxes paid from captured tax capacity produced by a local tax rate that exceeds the original tax rate for the dis- trict. This rule applies to all districts requesting certi- fications after July 31, 2001. A slightly different limitation applies to older districts. The restriction on excess taxes does not apply. Admin- istrative expense cannot exceed 10% of the lesser of the total estimated tax increment expenditures authorized by the TIF plan or 10% of the total tax increments for the project. This limitation applies to District 1 -24 and older. Management Plan EV Increments used to pay county administrative expense are not subject to the 10% limit on administrative ex- pense (2009 amendment to the TIF Act). Knock Down A current listing of the parcels in a TIF district may not match the parcels in the TIF Plan. Missing parcels may have been removed through the "knock down rule ". State Law (M.S. 469.176, Subd. 6) requires cer- tain activities to occur on each parcel in the TIF district within four years of certification. These activities are: • Demolition, rehabilitation, or renovation of prop- erty. • Qualified improvement of a street adjacent to a parcel but not installation of utility service includ- ing sewer or water systems. • Other site preparation. The value of parcels that fail this test are removed from the tax increment calculations for the district. State Law requires the EDA to provide the County with evidence related to qualifying activity on each parcel by February 1 of the year following end of the knock down period. It is important to note that the parcels are not removed from the district. Parcels that are knocked down can be restored to the district when the EDA certifies to the County Auditor that qualifying activity has com- menced. The value that is restored to the Original Tax Capacity is the most recent tax capacity value of the parcel. In 2009, the Legislature extended the knock down pe- riod for certified on or after January 1, 2005, and be- fore April 20, 2009, For these districts, the period is extended from four to six years. This changes affects Districts 1 -34, 1 -35, 1 -36, 1 -37 and 1 -38. Pooling Pooling is the ability to spend tax increments outside of the TIF district. Limits on pooling were adopted by the Legislature in 1990 and apply to districts request- ing certification after May 1, 1988. Only districts 1 -5 and 1 -6 are exempt from the restrictions on pooling. Redevelopment districts are subject to a 25% limita- tion. The limit for all other TIF districts is 20 %. The pooling limit is calculated based on total revenue de- rived from tax increment. Administrative expense applies to this restriction. The amount that can be spent outside of the TIF district is net of administrative expense. Timing is an important factor in evaluating the poten- tial for expenditures outside of a TIF district. The op- portunity for pooling exists only while there are obli- gations to be paid from tax increments (see Five Year Rule below). Once all obligations have been paid, the district must be decertified. A special exemption to pooling exists for housing TIF districts. Tax increments from housing TIF districts can be spent on other housing projects (authorized in the TIF plan) without regard to limits on pooling or the five year rule. For other types of TIF districts, the statutory pooling restrictions allow for an increase by up to 10% in the out of district expenditures to provide assistance for qualified low- income housing. State Law sets forth the criteria for determining if housing qualifies for this assistance. The TIF plan must be amended to autho- rize expenditures. Management Plan 11 The EDA's ability to pool in order to make new TIF expenditures was expanded on a temporary basis un- der the 2010 Jobs Bill (with an extension in 2011). The authority granted under MN Statutes 469.176, Subd. 4m requires approval of a spending plan and that proj- ect construction commence before July 1, 2012 and tax increments expended by December 31, 2012. Five Year Rule The five -year rule is one of the most important TIF management limitations. In simple terms, the EDA has five years from the date of certification to spend or obligate tax increments. After this time period passes, tax increments can only be spent on prior obligations, on administrative expense, or on authorized expendi- tures that comply with pooling restrictions. The pool- ing restrictions apply regardless of whether the tax in- crements are spent inside or outside of the TIF district. In 2009, the Legislature adopted an exemption to the five -year rule. For a redevelopment district or a re- newal and renovation district certified after June 30, 2003, and before April 20, 2009, the five -year rule pe- riod is extended to ten years after certification of the district. This changes affects Districts 1 -34 and 1 -35. To avoid restriction under the five -year rule, one of the following actions must take place within five years of certification of the district: 1. Revenues are actually paid to a third party with respect to the activity. 2. Bonds used to finance eligible activities are issued and sold to a third party. The proceeds of the bonds must be reasonably expected to be spent before the end of the later of (i) the five -year period, or (ii) a reasonable temporary period within the meaning of the use of that term under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund. 3. Binding contracts with a third party are entered into for performance of the activity before or with- in five years after certification of the district and the revenues are spent under the contractual obli- gation. 4. Costs with respect to the activity are paid before or within five years after certification of the district and the revenues are spent to reimburse a party for payment of the costs, including interest on unreim- bursed costs. 5. Expenditures are for special housing and infra- structure purposes authorized by State Law. All districts with the exception of 1 -5 and 1 -6 are sub- ject to the five -year rule. All districts, with the excep- tion of 1 -34, 1 -35, and the new established 1 -39, have passed the five -year period and are subject to the spending limitations. Decertification The evolution of State Law governing TIF has in- creased the incentive to decertify districts at the earli- est opportunity. The factors that influence the decerti- fication decision include: • The five -year rule and pooling limits restrict the ability to use uncommitted tax increments to sup- port other endeavors. • The value of decertified TIF districts becomes available for general taxation. The result is a lower tax rate. • Excess tax increments are sent to the County for redistribution to taxing jurisdictions. Based on the Management Plan 12 tax rate for taxes payable 2012, the City would re- ceive approximately $0.40 for every dollar of excess tax increments (Total Local Tax Rate - 122.727 %, City Tax Rate - 49.773 %). These monies returned to the City free of the restrictions that encumber TIF. The redistribution of excess tax increments could be given to the EDA and used for economic or redevelopment purposes not suited to a new TIF district. Housing and redevelopment districts may collect in- crements for 25 years after the initial receipt of incre- ment (effectively 26 years). These districts were estab- lished before this interpretation of the TIF Act. All of the maximum decertification dates shown in this re- port have been verified with Wright County and are consistent with the County's records. The EDA is familiar with the actions required to de- certify a district. One of the management strategies in this report is to identify target decertification dates and monitor the financial condition of the districts for decertification. Expanded Tax Base The decertifcation of a TIF district not only allows the City to benefit from the redistribution of excess funds, it also adds to the local tax base. The tax capacity val- ue captured by the TIF district becomes available for general taxation. The removal of parcels described in this report would add approximately $313,000 in tax capacity to the City's tax base. At the City tax rate for 2012, this value produces $156,000 in property taxes to the City. The source of this tax capacity comes from the tax capacity captured within TIF Districts 1 -5 and 1 -6 and from the parcels within 1 -22 that are shown to be decertified at the end of 2012. Industrial Land Analysis One of the desired outcome of the 2009 study was for an analysis to be performed of the use of TIF to write down the cost of land for industrial development. The City has compiled information on expenditures and revenues for the Monticello Business Center Otter Creek Crossing. This includes information on land ac- quisition costs, improvement costs, and the offsetting sources of revenue from cash payments and estimated tax increment revenues. Prior and recent development projects provide some, but not all of the information needed to complete a more in -depth analysis. The critical missing informa- tion is the cost of infrastructure attributable to indus- trial areas. Street sanitary sewer, water, and storm water improvements are made and financed as part of larger improvement projects. Improvement costs have not been specifically allocated to lots within the Otter Creek Business Park. Without this information, the real cost of land and improvements to a potential users cannot be calculated. This analysis should be undertaken by the EDA. The guidance gained from this information is important for planning. Providing adequate locations for industrial development and the creation of jobs is an important objective of the Com- prehensive Plan. The ability to provide affordable de- velopment sites is a critical element of a successful job growth strategy. Management Plan 13 District Summaries The second component of the management plan for Monticello TIF districts is an individual summary for each TIF district. Each summary included in this sec- tion contains the following information: 1. Specific management recommendations for the district. 2. Key TIF management dates. 3. Listing of parcels. 4. Map of district boundaries 5. Financial profile, including prior years expendi- tures, data for 2010 and 2011 annual financial re- port and projections for the remaining life of the district. The projected future tax increment revenue is based on current (Pay 2012) property values and tax rates. (Except for districts where the original tax rate is less than the Pay 2012 rate, than the lower tax rate is used as per MN Statute 469.177, Subd.3(2).) Investment earnings apply a 2% interest rate to the ending balance in the previous year. (A rate that is greater than that presently earned.) These factors will change over the life of the district and alter the financial condition of the district. District Summary 14 District 1 -5 was originally established for the construc- tion of 72 units of apartment housing. The original TIF plan has been modified to authorize additional expenditures for land acquisition, site improvements and public utilities. The District is not subject to the limitations of pooling or the five -year rule. It is due to be decertified by the end of 2012. All obligations in the District have been paid. Actions Taken Since 2009 Funds from this district and TIF district 1 -2 (which is now closed) were used to pay for an update to the City's Downtown Redevelopment Plan. The study, "Embracing Downtown, focused on marketing, land use, transportation, financing, and implementation strategies. Administrative Tasks The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Any future modifications (discussed under Management Strategies below) would also need to be filed with the OSA. While, the budget included in the original and modi- fied TIF Plan shows expenditures in excess of tax incre- ment revenues, the district shows there has been more than sufficient tax increments to cover expenditures. Management Strategies Option 1- Decertify The conservative approach for the District would be to request decertification. Excess tax increments (includ- ing tax increments to be paid in 2012) would be con- veyed to the County and redistributed to the taxing jurisdictions. The EDA would need to coordinate with CityNumber ....................................................................... ............................1 -5 CountyNumber ................................................................. .............................16 Name ........................................ ............................... ...................Construction 5 Type.......................................................... ............................... Redevelopment Established...................................... ............................... ........................3 /15/85 Certification Requested ............. ............................... ........................5 /15/85 Certified........................................... ............................... ........................5 /15/85 Year of First Increment ................... ............................... ...........................1987 4 -Year Knockdown ....................... ............................... ........................5 /15/89 5 -Year Rule ....................................................................... ............................... NA Decertification .................................................... ............................... 12/31/12 Original Tax Rate ........................... ............................... ......................81.305% Original Tax Capacity Value ........... ............................... ............................708 Current Base Tax Capacity Value . ............................... ............................ 708 Current (Pay 2012) Tax Capacity .............................. .........................43,638 Parcels..................................................................................... ..............................8 155 - 050 - 000010 155 - 010 - 000020 155 - 010 - 001010 155 - 010 - 001020 155 - 010 - 001030 155 - 010 - 001040 155 - 010 - 001050 155 - 010 - 002010 Wright County to decertify the District. Currently, the district is scheduled for decertification at the end of 2012. Option 2 - Use Remaining Resources Past modifications show that the EDA has planned for the use of revenues from District 1 -5. The last year for tax increment collections is 2012. The projections show an estimated fund balance of $450,000 at the end of the District. The City could expend the remaining fund balance in 2012 or keep the fund for this Pre -1990 District open after decertification and continue to ex- District Summary District 1 -5 (Construction 5) Redevelopment 15 District Summary pend funds as long as expenditures remain within the • Support improvements to Highway 25. adopted budget amounts. No further amendments to . Improve pedestrian crossing of Highway 25 the budget can be made after decertification. and pedestrian connections to Downtown. This option consists of two steps: 1. Evaluate options and set plan for use of these funds. Technically, increment from this District can be spent within the boundaries of the Project Area for use authorized in the TIF Plan. A specific action plan for the use of the existing fund balance should be established prior to the decertification date of 12/31/2012. Potential uses include the fol- lowing: • Support construction of bridge over Fallen Avenue overpass. The Comprehensive Plan shows a future bridge crossing in this area. Tax increments could be used for the bridge improvements, related improvements to sup- porting roads, or redevelopment of property in this area. • Support east interchange project. The tax in- crements from District 1 -5 could be used to supplement the funding for the east I -94 inter- change funded through District 1 -34. • Facilitate development along 7th Street. The area west of District 1 -5 contains several un- developed parcels. These financial resources could be used to attract new development to this area. • Improvement projects for the corner of 7th and Highway 25. • Encourage redevelopment on the east side of Highway 25. • Implementation of Embracing Downtown on Block 34 and Anchor Block. 2. Determine compliance with Plan. The TIF Plan authorizes additional expenditures that can occur within the boundaries of Project Area No. I. Ide- ally, new uses will have some geographic and de- velopment relationship to the property in District 1 -5. Prior to making any additional expenditures from District 1 -5, it is important to verify that the uses fall within the budget and any parcels for ac- quisition are listed in the plan. At a minimum, the budget should be amended to allocate the $200,000 of expenses assigned to "Other Project Costs' to specific purposes. W-1 District Summary Original TIF Cumulative Accounted Estimated District 1 -5 Plan Budget Modified TIF for in Prior 2010 2011 2012 Total Life Amount Plan Budget Year of District Revenues and Other Financing Sources Tax increment revenue 625,000 4,365,000 1,392,676 54,362 49,007 52,687 1,548,732 Market Value Homestead Credit - Investment earnings 113,313 6,270 13,113 5,894 138,590 Bond proceeds 390,000 390,000 365,000 365,000 Loan proceeds - Special assessments - Sales /lease proceeds - Loan /advance repayments - Developer payment - Interfund loan /transfer - Other - Transfers (in) - Total Revenues /OFS 1,015,000 4,755,000 1,870,989 60,632 62,120 58,580 2,052,321 Expenditures and Other Financing Uses Land /building acquisition 1,400,000 360,310 360,310 Site improvement /preparation costs 301,300 1,201,300 469,838 469,838 Utilities 900,000 - Public parking facilities - Streets and sidewalks - Public park facilities - Social, recreation, or conference facilities - Interest reduction payments - Bond principal payments 390,000 390,000 365,000 365,000 Bond interest payments 433,500 433,500 187,390 187,390 Loan principal payments - Loan /note interest payments - Administrative expenses 30,200 370,200 53,805 365 31,317 500 85,987 Paying agent fees - Other 200,000 - Transfers (out) 132,811 132,811 Total Expenditures /OFU 1,155,000 4,895,000 1,569,154 365 31,317 500 1,601,336 Revenues /OFS Over(Under) Expend itures /OFU (140,000) (140,000) 301,835 60,267 30,803 58,080 450,985 Fund Balance - Begin 301,835 362,102 392,905 - Fund Balance - End 362,102 392,905 450,985 450,985 17 District 1 -6 was originally established for the construc- tion of 33,000 square foot retail center. The original TIF plan has been modified to authorize additional expenditures for public improvements and other (un- specified) project costs. The District is not subject to the limitations of pooling or the five -year rule. It is due to be decertified by the end of 2013. All obligations in the District have been paid. Actions Taken Since 2009 No actions have been taken since 2009 for this district. Administrative Tasks The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Management Strategies Option 1- Decertify The conservative approach for the District would be to request decertification. Excess tax increments (in- cluding tax increments to be paid in 2012) would be conveyed to the County and redistributed to the tax- ing jurisdictions. The EDA would need to coordinate decertification of the District with Wright County. Currently, the district is scheduled for decertification in 2013. Coordination with the County would allow benefits from the expanded tax base in the year follow- ing decertification. Option 2 - Use Remaining Resources Past modifications show that the EDA has planned for the future use of revenues from District 1 -6. The pro- jections show an estimated fund balance of $690,000 at the end of the District in 2013. The City could expend CityNumber ....................................................................... ............................1 -6 CountyNumber ................................................................. .............................23 Name.............................................. ............................... ......................Raindance Type.......................................................... ............................... Redevelopment Established........................................................... ............................... 11/12/85 Certification Requested ............. ............................... ........................12 /5/85 Certified..................................................................... .............................12 /5/85 Year of First Increment ................... ............................... ...........................1988 4 -Year Knockdown ................................................. .............................12 /5/89 5 -Year Rule ....................................................................... ............................... NA Decertification .................................................... ............................... 12/31/13 Original Tax Rate ........................... ............................... ......................81.305% Original Tax Capacity Value ............................................ .............................98 Current Base Tax Capacity Value .................................. .............................98 Current (Pay 2012) Tax Capacity .............................. .........................68,158 Parcels.................................................................................... ............................... 3 155-010-015010 155-019-015040 155- 019- 015070 the remaining fund balance prior to the end of 2013 or keep the fund for this Pre -1990 District open after decertification and continue to expend funds as long as expenditures remain within the adopted budget amounts. No further amendments to the budget can be made after decertification. This option consists of two steps: 1. Evaluate options and set elan for use of these funds. Technically, increment from this District can be spent within the boundaries of the Project Area for use authorized in the TIF Plan. The con- tinued use of District 1 -6 offers opportunities for supporting Downtown redevelopment. Addition- District Summary District 1 -6 (Raindance) Redevelopment ff .*3 al planning should be undertaken to determine the greatest need/best use for the existing fund balance and future tax increments. Potential uses include the following (these are the same as shown for Dis- trict 1 -5): • Support construction of bridge over Fallen Avenue overpass. The Comprehensive Plan shows a future bridge crossing in this area. Tax increments could be used for the bridge improvements, related improvements to sup- porting roads, or redevelopment of property in this area. • Support east interchange project. The tax in- crements from District 1 -5 could be used to supplement the funding for the east I -94 inter- change funded through District 1 -34. • Facilitate development along 7th Street. The area west of District 1 -5 contains several un- developed parcels. These financial resources could be used to attract new development to this area. • Improvement projects for the corner of 7th and Highway 25. • Encourage redevelopment on the east side of Highway 25. • Support improvements to Highway 25. • Improve pedestrian crossing of Highway 25 and pedestrian connections to Downtown. • Implementation of Embracing Downtown on Block 34 and Anchor Block. 2. Determine compliance with Plan. Prior to making any additional expenditures from District 1 -6, it is important to verify that the uses fall within the budget and any parcels for acquisition are listed in the plan. It is anticipated that modifications to the TIF plan will be needed to authorize additional expenditures. At a minimum, the budget should be amended to allocate the expenses assigned to "Other Project Costs" ($83,100 and $610,400) to specific purposes. District Summary Mo District Summary Original TIF Cumulative Accounted Estimated District 1 -6 Plan Budget Modified TIF for in Prior 2010 2011 2012 2013 Total Life Amount Plan Budget Year of District Revenues and Other Financing Sources Tax increment revenue 1,025,000 1,650,000 1,219,352 75,144 77,583 83,528 83,528 1,539,135 Market Value Homestead Credit - Investment earnings 267,000 64,265 7,142 15,930 7,623 8,983 103,943 Bond proceeds 350,000 350,000 350,000 350,000 Loan proceeds - Special assessments - Sales /lease proceeds 62,150 65,000 64,150 64,150 Loan /advance repayments - Developer payment 2,500 - Interfund loan /transfer - Other - Transfers (in) - Total Revenues /OFS 1,437,150 2,334,500 1,697,767 82,286 93,513 91,151 92,511 2,057,228 Expenditures and Other Financing Uses Land /building acquisition 229,000 235,000 232,076 232,076 Site improvement /preparation costs 28,000 28,000 28,000 Utilities 0 Public parking facilities 0 Streets and sidewalks 75,000 250,000 180,276 180,276 Public park facilities 0 Social, recreation, or conference facilities 0 Interest reduction payments 0 Bond principal payments 350,000 350,000 350,000 350,000 Bond interest payments 692,000 692,000 397,373 397,373 Loan principal payments 0 Loan /note interest payments 0 Administrative expenses 38,150 45,000 36,598 365 26 500 500 37,989 Paying agent fees 0 Other 83,100 0 0 Other 610,400 0 0 Transfers (out) 140,654 140,654 Total Expend itures /OFU 1,384,150 2,293,500 1,364,977 365 26 500 500 1,366,368 Revenues /OFS Over(Under) Expend itures /OFU 53,000 41,000 332,790 81,921 93,487 90,651 92,011 690,860 Fund Balance - Begin 332,790 414,711 508,198 598,849 0 Fund Balance - End 414,711 508,198 598,849 690,860 690,860 20 District 1 -19 provides the first example of the contem- porary, single - purpose TIF district in Monticello. The District was initially established to assist with the con- struction of 49 units of senior housing. The tax incre- ment from the District is obligated under a develop- ment agreement with Presbyterian Homes. Ninety percent (90 %) of annual tax increment is used to repay a $363,217 (was originally $332,139) note at an inter- est rate of 8% with the note terminating no later than 2/1/2012. The balance outstanding on the note as of 12/31/2011 is $318,049. The ending date in the agree- ment for the note has passed; the City should act to decertify unless modifications to the developer agree- ment and the note are approved. Actions Taken Since 2009 Annual payments on the outstanding note have con- tinued. Administrative Tasks The City should verify the principal amount of the note that is outstanding to confirm that the reported amount is accurate based on the issuance amount of the note and principal payments made life to date. The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Management Strategy Option 1- Decertify The focus of this District has been the repayment of the note. To date the district has not provided sufficient tax increments to repay the note prior to the note's end date of 2/1/2012. Unless current action is taken CityNumber ...................................................................... ...........................1 -19 CountyNumber ................................................................. .............................80 Name .................................................... ............................... Mississippi Shores Type.................................................. ............................... ........................Housing Established...................................... ............................... ........................3 /13/95 Certification Requested ............. ............................... ........................4 /27/95 Certified........................................... ............................... ........................4 /28/95 Year of First Increment ................... ............................... ...........................1998 4 -Year Knockdown ....................... ............................... ........................4 /30/99 5 -Year Rule ...................................... ............................... ........................4 /30/00 Decertification .................................................... ............................... 12/31/23 Original Tax Rate ................................................. .............................11 1.789% Original Tax Capacity Value .......... ............................... ..........................2,523 Current Base Tax Capacity Value ............................... ..........................2,523 Current (Pay 2012) Tax Capacity ........................ ............................... 32,310 Parcels.................................................................................... ............................... 2 155 - 106 - 002020 155 - 106 - 003020 by the City to modify the development agreement, the district will need to be decertified at the end of 2012. Any tax increments collected in 2012 will need to be returned to the County as excess tax increments. Option 2 - Amend Existing Development Agreement An option to decertification is for the City to amend the development agreement to extend the date(s) in the agreement. This is an option because a balance re- mains outstanding on the original note. If the date is extended, the developer would continue to be subject to meeting the affordable housing requirements for the project. State Law limits the ability of tax increments from this District Summary District 1 -19 (Mississippi Shores) Housing TIC i -19 TF 21 District to be used for other purposes: District 1 -19 is a housing district. Tax increments from this District are to be used solely to facilitate the housing project. The District is subject to the five -year rule. The five -year period ended April 30, 2000. As a housing district, increments can be spent on other housing projects without regard to pooling limits or the five -year rule. Such expenditures must be authorized in the TIF plan and occur be- fore existing obligations are completed. District Summary 22 District 1 -19 Revenues and Other Financing Sources Tax increment revenue Market Value Homestead Credit Investment earnings Bond proceeds Loan proceeds Special assessments Sales /lease proceeds Loan /advance repayments Developer payment Interfund loan /transfer Other Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses Land /building acquisition Site improvement/preparation costs Utilities Public parking facilities Streets and sidewalks Public parkfacilities Social, recreation, or conference facilities Interest reduction payments Bond principal payments Bond interest payments PAYG principal payments PAYG interest payments Administrative expenses Paying agent fees Other Other Transfers (out) Total Expend itures /OFU Revenues /OFS Over(Under) Expenditures /OFU Fund Balance - Begin Fund Balance- End Note Outstanding OriginalTIF Cumulative Accounted Plan Budget Modified TIF for in Prior Amount Plan Budget Year 1,063,750 1,063,750 374,135 2010 32,457 2011 32,687 2012 2013 2014 2015 *Decertification required in 2012, under Option 1. 33,299 33,299 33,299 33,299 2016 33,299 2017 33,299 2018 33,299 2019 33,299 2020 33,299 District Summary Estimated 2021 2022 2023 Total Life of District 33,299 33,299 33,299 838,862 0 6,547 398 869 412 916 1,428 1,947 2,474 3,009 3,552 4,104 4,663 5,231 5,808 6,393 47,750 0 0 0 0 0 0 (14,910) (14,910) 0 0 0 1,063,750 1,063,750 380,682 17,945 33,556 33,710 34,214 34,726 35,246 35,773 36,308 36,851 37,402 37,962 38,530 39,106 39,691 871,702 0 100,173 100,173 0 62,000 62,000 0 48,657 143,657 0 0 0 0 0 0 0 38,154 3,271 3,743 45,168 737,920 737,920 272,872 25,940 25,675 324,487 20,000 20,000 34,963 91 27 100 100 100 100 100 100 100 100 100 100 100 100 36,281 0 20,000 0 0 75,000 0 0 1,063,750 0 1,063,750 0 345,989 34,693 29,302 (11,357) 34,693 29,445 4,111 23,336 100 33,610 27,447 100 34,114 61,057 100 34,626 95,172 100 35,146 129,798 100 35,673 164,943 100 36,208 200,616 100 36,751 236,824 100 37,302 273,575 100 37,862 310,877 100 38,430 348,739 100 39,006 387,169 100 39,591 426,175 405,936 465,766 0 23,336 27,447 61,057 95,172 129,798 164,943 200,616 236,824 273,575 310,877 348,739 387,169 426,175 465,766 465,766 325,063 321,792 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 318,049 23 District 1 -20 is a redevelopment TIF district established for the construction of 10 single - family housing units. The tax increment from the District is used to support two obligations. The first obligation is a $65,000 in- ternal fund loan. Fifty -four percent (54 %) of the tax increment is used to repay this loan from the EDA. The balance outstanding on the loan as of 12/31/2011 is $10,957. The second obligation is a note to reimburse the developer for land acquisition expense. The note is currently held by Riverwood Bank. The $65,000 note is paid with 36% of the annual tax increment ending no later than 8/1/2018. The balance outstanding on the note as of 12/31/2011 is $76,723 (including interest ac- crual). The District will be decertified no later than December 31, 2024. Actions Taken Since 2009 Annual payments on the outstanding interfund loan and note have continued. Administrative Tasks The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Management Strategy Option 1- Discharge Obligations The focus of this District will be the repayment of the loan and note. Under the assumptions used in this report, the District has sufficient tax increment fund balance to pay both the loan and the note. The EDA could act to discharge the loan and the note with exist- ing fund balance. Projections suggest that future years tax increment col- lections will not be sufficient to fully pay the developer CityNumber ...................................................................... ...........................1 -20 CountyNumber ................................ ............................... ............................620 Name................................................................. ............................... Prairie West Type.......................................................... ............................... Redevelopment Established ...................................... ............................... ........................6 /24/96 Certification Requested .................................. ............................... 12/20/96 Certified................................................................ ............................... 12/23/96 Year of First Increment ................... ............................... ...........................1999 4 -Year Knockdown ............................................ ............................... 12/23/00 5 -Year Rule ........................................................... ............................... 12/23/01 Decertification .................................................... ............................... 12/31/24 Original Tax Rate .......................... ............................... .....................110.581% Original Tax Capacity Value .......... ............................... ..........................3,000 Current Base Tax Capacity Value ............................... ..........................1,672 Current (Pay 2012) Tax Capacity .............................. .........................18,323 Parcels.................................................................................... .............................12 155-104-001010 155-104-001020 155-104-001030 155-104-001040 155 - 104 - 001130 155 - 104 - 001140 155 - 104 - 001150 155 - 104 - 001160 155 - 104 - 001170 155 - 104 - 001180 155 - 104 - 001190 155 - 104 - 001200 note prior to its ending date of 8/1/2018. Rather than discharge the note with existing fund balance, the EDA could decide to increase the share of annual increment applied to the note after the loan is paid in 2012. The District can be decertified once the loan and note are fully paid. The timing of decertification will de- pend on decisions made about use of fund balance for payments. Under either of these scenarios, use of fund balance or no use of fund balance for payments, the District Summary District 1 -20 (Prairie West) Redevelopment 1.20 24 District will have excess increments that will need to be returned to the County for redistribution. Option 2 - Use Remaining Resources As noted in the Pooling section of the Management Plan, additional out -of- district expenditures are autho- rized for qualified low- income housing. District 1 -20 is projected to have excess tax increment that could be use to support a housing project at another location in the Project Area. Beyond this type of housing, State Law limits the ability of tax increments from this Dis- trict to be used for other purposes: • The District is subject to the five -year rule. The five -year period ended April 30, 2000. • The District is subject to pooling limits. District Summary 25 District 1 -20 Revenues and Other Financing Sources Tax increment revenue Market Value Homestead Credit Investment earnings Bond proceeds Loan proceeds Special assessments Sales /lease proceeds Loan /advance repayments Developer payment Interfund loan /transfer Other Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses Land /building acquisition Site improvement /preparation costs Utilities Public parking facilities Streets and sidewalks Public parkfacilities Social, recreation, or conference facilities Interest reduction payments Bond principal payments Bond interest payments PAYG principal PAYG interest Interfund loan principal Interfund loan interest Administrative expenses Paying agent fees Other Transfers (out) Total Expenditures /OFU Revenues /OFS Over(Under) Expenditures /OFU Fund Balance - Begin Fund Balance - End Note Outstanding Interfund Loan Outstanding OriginalTIF Cumulative Accounted Plan Budget Modified TIF for in Prior Amount Plan Budget Year 628,300 628,300 205,291 2010 21,945 2011 21,021 2012 18,413 2013 18,413 2014 18,413 2015 18,413 2016 18,413 2017 18,413 2018 18,413 District Summary Estimated 2019 2020 2021 2022 2023 2024 Total Life of District *Decertification required under Option 1. 18,413 18,413 18,413 18,413 18,413 18,413 487,624 16,465 2,146 18,611 23,183 2,214 4,550 2,129 2,209 2,372 2,578 2,788 3,000 3,216 3,435 3,756 4,081 4,411 4,745 5,085 73,753 200,000 200,000 828,300 200,000 828,300 200,000 244,939 26,305 25,571 20,542 20,622 20,785 20,991 21,201 21,413 21,629 21,848 22,168 22,494 22,823 23,158 23,498 579,988 - 200,000 200,000 7,261 3,626 375 11,262 408,300 408,300 62,067 2,646 8,612 6,521 6,521 6,521 6,521 6,521 6,521 6,521 118,975 28,478 15,673 9,892 8,210 2,747 65,000 20,000 20,000 16,115 91 26 500 500 500 500 500 500 500 500 500 500 500 500 500 22,732 828,300 828,300 113,921 22,036 18,905 15,231 9,768 7,021 7,021 7,021 7,021 7,021 500 500 500 500 500 500 217,969 0 0 131,018 4,269 6,666 5,311 10,853 13,763 13,970 14,179 14,392 14,608 21,348 21,668 21,994 22,323 22,658 22,998 362,019 131,018 135,287 141,953 147,264 158,117 171,880 185,850 200,029 214,421 229,028 250,377 272,045 294,039 316,362 339,020 - 135,287 141,953 147,264 158,117 171,880 185,850 200,029 214,421 229,028 250,377 272,045 294,039 316,362 339,020 362,019 362,019 80,724 77,098 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 76,723 36,522 20,849 10,957 2,747 0 0 0 0 0 0 0 0 0 0 0 0 - 26 The Downtown TIF District (1 -22) is the largest and most complex district in Monticello. This district provides an excellent illustration of the challenges of implementing a large TIF district subject to the con- straints of the five -year rule. The five -year rule time period has ended. Fund bal- ance may only be spent on the following activities: • Existing obligations • Administrative expense • Development activities authorized in the TIF plan and within the pooling restrictions. Tax increments from District 1 -22 is pledged to pay- ment of bonds. The pledge of increment to the G.O. Tax Increment Bonds, Series 2004A, ended in 2010 when the bonds were called and prepaid in full. (This issue was a current refunding of the original $2,150,000 G.O. Temporary Tax Increment Bonds, Series 2001.) In addition to the prior pledge to the now retired 2004 bonds, tax increment from District 1 -22 is pledged to the payment of two developer notes. 1. The development agreement with Master Fifth Avenue, Inc. provides for a note in the amount of $185,000 (shown as 22.5 Amoco in projections). The note is payable with tax increments from parcels 155 - 010 - 036130 and 155 - 010 - 036140. The note has an outstanding balance of $184,816 as of 12/31/2011. The note does not accrue interest. The note is set to terminate no later than 2/1/2023. 2. The development agreement with BBF Properties, Inc. provides for a note in the amount of $500,000. The total principal on the note has grown to $1,047,919 with the accrual of unpaid interest, as City Number............ County Number..... Name .......................... Type............. ............................... Established ............................... Certification Requested ...... Certified ..... ............................... Year of First Increment.......... 4 -Year Knockdown ................. 5 -Year Rule . ............................... Decertification ......................... Original Tax Rate ...... ............................... Original Tax Capacity Value ................. Current Base Tax Capacity Value....... Current (Pay 2012) Tax Capacity........ Parcels ........................... 155- 010 - 002011 155- 010 - 005090 155- 010 - 051100 155- 010 - 011030 155- 010 - 052110 155- 010 - 016070 155- 010 - 069080 155- 010 - 017030 155- 137- 000100 155- 010 - 018080 155-137-000400 155- 010 - 032020 155- 137- 000700 155- 010 - 034130 155- 144 - 001030 155- 010 - 035120 155- 144 - 001060 155- 010 - 036061 155- 144 - 001090 155- 010- 036130 155- 010- 051060 155- 010- 007020 155- 010- 052060 155- 010- 014050 155- 010- 054030 155- 010- 016100 155- 076 - 001010 155- 010- 018060 155- 137- 000300 155- 010- 020030 155- 137- 000600 155- 010- 034060 155-144-001020 155- 010- 035060 155-144-001050 155-010-036040 155-144-001080 155- 010- 036111 1 -22 . ............................... 622 ..Downtown District Redevelopment .. ........................3 /10/97 .......................... 6/25/97 .. ........................6 /30/97 ..... ...........................1999 ..........6/30/01 ..........6/30/02 ....... 12/31/24 112.618% .......... 157,311 ..........178,814 ..........458,208 ..................... 58 155- 010 - 005010 155- 010 - 006040 155- 010 - 052010 155- 010 - 011040 155- 010 - 053130 155- 010 - 016090 155- 040 - 002100 155- 010 - 017060 155- 137- 000200 155- 010 - 020010 155- 137- 000500 155- 010 - 033011 155- 144 - 000010 155- 010 - 034150 155- 144 - 001040 155- 010 - 035130 155- 144 - 001070 155- 010 - 036110 155- 010 - 036140 District Summary District 1 -22 (Downtown) Redevelopment FA 27 of 12/31/2011 (shown as 22.1 Cub in projections). The note is payable with tax increments from par - cel 155- 076 - 001010. The note is set to terminate no later than 2/1/2020. Tax increment from District 1 -22 was pledged to pay for up to $281,250 in redevelopment costs related to the construction of the Community Center. The EDA (HRA) agreed to pay the City $5,625 semi - annually be- ginning August 1, 2000. The status of the payments is under review by the City to confirm the amount of the outstanding obligation, if any. Actions Taken Since 2009 Outstanding bonds from Series 2004A were called and paid in full in 2010. The City requested guidance from Kennedy & Grav- en (memo dated February 2, 2010) and Ehlers (memo Dated July 5, 2011) on options for use of funds from TIF District 1 -22. The City adopted a spending plan that allows for the temporary expansion of spending authority for Dis- trict 1 -22, as granted by MN Statute 469.176, SubdAm. The spending plan provides authority to use TIF from this District for the purpose of stimulating construc- tion. Construction must commence before July 1, 2012 and the TIF must be spent by December 31, 2012. Ab- sent the temporary flexibility offered by this authority, the EDA would have been required to remove all but three (3) parcels from TIF District 1 -22 after the out- standing obligation for the 2004 Bonds was satisfied in 2010. Administrative Tasks The City is in the process of completing the task of re- viewing expenditure transactions that occurred under temporary pooling authority and as authorized by the spending plan adopted by the EDA. The results of this review may cause the projected fund balance amounts to vary from what is shown in this report. Management Strategies District 1 -22 poses a significant management challenge. The area within the District is an important redevelop- ment focus area in the Comprehensive Plan. An exist- ing TIF district and the fund balance in the district cre- ate financial tools needed to facilitate redevelopment projects. However, the five -year rule limits the options and ability of the EDA to use these resources. Temporary Pooling Authority The temporary pooling authority provided by the Leg- islature in the Jobs Bill provided a short term window to access the available fund balance for offering assis- tance to project that would otherwise not qualify for use of funds from District 1 -22. In 2009, the EDA acted to approve a spending plan under the temporary pool- ing authority to assist with development (Walgreens). Additional Investigations As recommended in the 2009 TIF Management Report for this District, before making final decisions about ac- tions related to District 1 -22, several additional investi- gations are still needed. This additional investigation remains important. These investigations will provide important information about the District. This works was outside of the scope of this report. It is recommended that no new project expenditures (other than administrative expense) should be made from this District until the following issues are ad- dressed: District Summary a:3 District Summary 1. Verify knockdown status of parcels. Over the life show that District 1 -22 has the legal and financial of this District, it is likely that parcels have been capacity to continue to undertake development ac- removed under the knockdown provisions of State tivities in the Downtown area. Law. It is also possible that parcels that should be dropped remain in the District. In planning for the Satisfy Commitment to Community Center future of this District (including use of funds un- The investigations conducted for this study did not der the temporary pooling authority) it will be im- determine the tax increments previously paid to the portant to ensure that the tax capacity calculations City for Community Center area redevelopment costs. are based on the correct parcels. This was outside Existing fund balance should be used to pay the re- of the scope of the current study. maining amount, if there is an outstanding balance. 2. Analyze pooling capacity. Accurate informa- The City will perform this analysis. tion on the ability to make expenditures within partial Decertification Required the pooling limits (not inclusive of the temporary The projections show the decertification of the District pooling authority granted by MN Statute 469.176, for all parcels except for the three parcels committed to Subd. 4m) is needed to evaluate future options for developer notes (155- 076 - 001010, 155 - 010 - 036130 and the District. This analysis requires two pieces of 155 - 010 - 036140). District 1 -22 would remain in exis- information: (1) total administrative expense and tence with these three parcels until 2/1/2020 at which (2) total revenues that must be included in this time only two parcels will remain (155- 010 - 036130 calculation. Given the importance of this analysis, and 155 - 010 - 036140) until the end decertification date. information should not be taken directly from an- Based on current property values and tax rates, avail - nual reports. A thorough review of revenues and able tax increments are not projected to fully pay the expenses over the life of the District will ensure developer notes over the life of the District. that data is properly accounted for this purpose. This analysis should also consider if any qualified Redistribute Excess Funds housing projects could be undertaken with the After the temporary pooling authority expires at the ability to increase the pooling amount. This analy- end of 2012, unspent tax increments that are not com- sis is beyond the scope of the current study. mitted to payment on the two outstanding developer 3. Analyze District revenues. The EDA should re- notes will need to be declared as excess increments. view all revenues collected in this District to deter- mine if any funds are not "tax increments'. Such This strategy leads to the redistribution of excess monies could be retained by the EDA on decerti- funds to Wright County for return to the relevant tax - fication of the District. The statutory definition of ing jurisdictions. Current projections presently show tax increment includes the actual tax revenues and a potential redistribution of $3,267,000 in fund bal- other funds that are derived from tax increments. ance. (This amount is subject to change (be reduced) by expenditures that have or will occur under the 4. Identify Key Investments. These steps will likely temporary pooling authority and adopted spending 29 plan.) Based on the 2012 tax rates, the City would re- ceive $645,000 (20 %) of this amount. It is essential that the City review and verify these results with Wright County prior to taking actions to remove parcels from the District. District Summary 0C District 1 -22 Revenues and Other Financing Sources Tax increment revenue Original TIF Cumulative Accounted Plan Budget Modified TIF for in Prior Amount Plan Budget Year 39,000,000 39,000,000 2,581,433 2010 362,053 2011 325,380 2012 314,648 2013 2014 2015 2016 *Increment from 3 parcels remaining in District 78,624 78,624 78,624 78,624 2017 78,624 2018 78,624 2019 78,624 District Summary Estimated 2020 2021 2022 2023 2024 Total Life of District "Incrementfrom 2 remaining parcels 14,656 14,656 14,656 14,656 14,656 4,207,161 Market Value Homestead Credit 12,902 1,210 0 0 0 0 0 0 0 0 0 0 0 0 0 0 14,112 Investment earnings 424,036 42,237 91,572 52,901 610,746 Bond proceeds 39,000,000 39,000,000 3,095,000 3,095,000 Loan proceeds 56,468 56,468 Special assessments - Sales /lease proceeds 313,232 313,232 Loan /advance repayments - Developer payment - Interfund loan /transfer 140,142 140,142 Other - Loan downpayment - Legal fee reimbursement - Additional TIF fees - Local contribution 950,000 950,000 - TIF application fee - Transfers (in) 890,000 890,000 Total Revenues /OFS 78,950,000 Expenditures and Other Financing Uses 78,950,000 7,513,213 405,500 416,952 367,549 78,624 78,624 78,624 78,624 78,624 78,624 78,624 14,656 14,656 14,656 14,656 14,656 9,326,861 Land /building acquisition 4,275,000 4,275,000 684,912 684,912 Site improvement /preparation costs 4,275,000 4,275,000 114,455 114,455 Installation of public utilities 4,275,000 4,275,000 75,377 75,377 Public parking facilities 4,275,000 4,275,000 90,753 90,753 Streets and sidewalks - Public park facilities - Social, recreation or conference facilities 270,000 270,000 Interest reduction payments - Bond principal payments 39,000,000 39,000,000 2,625,000 470,000 3,095,000 Bond interest payments 20,000,000 20,000,000 305,336 (113,821) 191,515 PAYG principal 184 0 0 0 0 0 0 0 0 0 0 0 0 0 0 184 PAYG interest 193,627 68,938 61,487 77,794 77,794 77,794 77,794 77,794 77,794 77,794 77,794 13,826 13,826 13,826 13,826 13,826 1,015,533 Interfund loan principal 140,142 140,142 Interfund loan interest - Administrative expenses 1,900,000 1,900,000 158,292 11,470 197 197 197 197 197 197 197 197 197 197 197 197 197 197 172,520 Paying agent fees - Schief loan - BBF project interest - Bond closing /paying agent Engineer costs - Landmark SQI interest PAYG 25,785 25,785 Application fee reimbursement 3,000 3,000 Downtown Study (Administrative) 21,051 21,051 Hawkins loan payments 950,000 950,000 61,737 61,737 Misc 7,638 7,638 Property tax 7,114 1,860 1,756 10,730 Schlief CFD payment 12,017 12,017 Fiscal agent fees - Peterson transformation (pooling $) 19,846 19,846 Breiwick transformation (pooling $) 20,000 20,000 Transfers (out) Total Expenditures /OFU Revenues /OFS Over(Under) Expenditun Fund Balance - Begin 78,950,000 0 78,950,000 0 20,000 4,835,215 2,677,998 0 438,447 84,491 (32,947) 332,461 2,677,998 2,645,051 77,991 289,558 2,977,512 77,991 77,991 633 633 3,267,070 3,267,703 77,991 77,991 633 633 3,268,336 3,268,969 77,991 633 3,269,602 77,991 633 3,270,235 77,991 14,023 633 633 3,270,868 3,271,501 14,023 14,023 14,023 14,023 633 633 633 633 3,272,134 3,272,767 3,273,400 3,274,033 20,000 6,052,195 3,274,666 0 Fund Balance - End Bonds Outstanding Note Outstanding (22.1 Cub) Note Outstanding (22.5 Amoco) 2,645,051 938,347 184,816 2,977,512 1,010,043 184,816 3,267,070 3,267,703 1,087,216 1,170,286 184,816 184,816 3,268,336 1,259,704 184,816 3,268,969 3,269,602 1,355,953 1,459,556 184,816 184,816 3,270,235 1,571,075 184,816 3,270,868 3,271,501 1,691,115 1,820,327 184,816 184,816 3,272,134 1,888,589 184,816 3,272,767 1,888,589 184,816 3,273,400 3,274,033 3,274,666 1,888,589 1,888,589 1,888,589 184,816 184,816 184,816 31 3,274,666 1,888,589 184,816 District 1 -24 was established to assist with the con- struction of 60 units of senior housing. The tax incre- ment from the District is obligated under a develop- ment agreement with St. Cloud Hospital Corporation (dba St. Benedict's Center). Ninety percent (90 %) of annual tax increment is used to repay a $440,000 note at an interest rate of 8% ending no later than 2/1/2026. The District will be decertified no later than December 31, 2026. Actions Taken Since 2009 Annual payments on the outstanding note have con- tinued. Administrative Tasks There are no outstanding administrative items. Management Strategy The focus of this District will be the repayment of the note. The projections in this report shows that the note will be repaid in 2016, prior to the final decertification date. Option 1- Decertify The District should be decertified when the note is fully paid. Option 2 - Use Remaining Resources State Law limits the ability of tax increments from this District to be used for other purposes: • District 1 -24 is a housing district. Tax increments from this District are to be used solely to facilitate the housing project. • The District is subject to the five -year rule. The five -year period ended January 8, 2004. • As a housing district, increments can be spent on City Number............ County Number..... Name .......................... Type ............. Established Certification Requested ....... Certified ...... ............................... Year of First Increment.......... 4 -Year Knockdown ................. 5 -Year Rule ................. ............................... Decertification .......... ............................... Original Tax Rate ...... ............................... Original Tax Capacity Value ................. Current Base Tax Capacity Value....... Current (Pay 2012) Tax Capacity........ Parcels.......................... ............................... 155-115-001040 1 -24 .... ............................... 624 Church of St. Henry .. ........................Housing ...........................8 /24/98 ............................. 1/4/99 .......... 1/8/99 ..............2001 .......... 1/8/03 .......... 1/8/04 12/31/26 118.645% ............... 2,500 .................. 441 ............ 41,634 .......................1 other housing projects without regard to pooling limits or the five -year rule. Such expenditures must be authorized in the TIF plan and occur be- fore existing obligations are completed. District Summary District 1 -24 (Church of St. Henry) Housing I Y TIC TF L -24 f� 32 District 1-24 Revenues and Other Financing Sources Tax increment revenue OriginalTlF Cumulative Accounted Plan Budget ModifiecITIF for in Prior Amount Plan Budget Year 1,335,000 1,335,000 513,120 2010 48,158 2011 47,023 2012 48,873 2013 48,873 2014 48,873 2015 48,873 2016 48,873 2017 2018 2019 2020 2021 2022 *Decertification would be required, effective 12/31/2016, under Option 1 48,873 48,873 48,873 48,873 48,873 48,873 District Summary Estimated 2023 2024 2025 2026 Total Life of District 48,873 48,873 48,873 48,873 1,341,403 Market Value Homestead Credit - Investmentearnings 5,000 5,000 5,926 195 470 670 768 868 970 1,075 1,858 2,860 3,882 4,924 5,987 7,071 8,177 9,305 10,455 11,629 77,089 Bond proceeds - Loan proceeds Special assessments Sales /lease proceeds Loan /advance repayments Developer payment Interfund loan /transfer Other TIF application fee Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses 1,340,000 1,340,000 519,046 48,353 47,493 49,543 49,642 49,742 49,844 49,948 50,732 51,733 52,755 53,797 54,860 55,944 57,050 58,178 59,329 60,502 - 1,418,491 Land /building acquisition 140,000 140,000 - Site improvement /preparation costs 220,000 220,000 Installation ofpublic utilities 170,000 170,000 Public parking facilities Streets and sidewalks Public park facilities Social, recreation or conference facilities Interest reduction payments Bond principal payments Bond interest payments - PAYG principal 205,265 25,055 57,109 31,780 34,323 37,069 40,034 9,365 440,000 PAYG interest 676,500 676,500 233,750 23,287 (14,788) 12,206 9,663 6,917 3,952 749 275,736 Loan principal payments - Loan /note interest payments Administrative expenses 133,500 133,500 8,228 91 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 18,703 Paying agent fees - Other TIF deposit refund - Transfers (out) Total Expenditures /OFU Revenues /OFSOver(Under) Expenditures /OFU Fund Balance• Begin 1,340,000 0 1,340,000 0 42,750 489,993 29,053 48,433 (80) 29,053 42,970 4,523 28,973 44,635 4,908 33,496 44,635 5,006 38,404 44,635 5,107 43,411 44,635 5,209 48,517 10,763 39,185 53,726 649 50,083 92,911 649 51,084 142,993 649 52,106 194,078 649 53,148 246,184 649 54,211 299,332 649 55,295 353,543 649 56,401 408,838 649 57,529 465,239 649 58,680 522,769 649 59,853 581,448 42,750 777,190 641,302 0 Fund Balance• End Note Outstanding 234,735 28,973 209,680 33,496 152,571 38,404 120,791 43,411 86,468 48,517 49,399 53,726 9,365 92,911 0 142,993 0 194,078 0 246,184 0 299,332 0 353,543 0 408,838 0 465,239 0 522,769 0 581,448 0 641,302 0 641,302 0 Ocl District 1 -29 is a housing TIF district established for the construction of owner - occupied housing for per- sons of low and moderate income. The tax increment from the District is used to support a note to reimburse the developer for land acquisition and site improve- ment expenses. The $220,000 note, with interest at a rate of 7.25 %, is paid with 80% of the annual tax incre- ment ending no later than 2/1/2020. The District will be decertified no later that December 31, 2029. Actions Taken Since 2009 Payments on the outstanding note, principal and inter- est, have been made to the extent increment has been available to do so. Administrative Tasks The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Management Strategy Option 1- Decertify The focus of this District will be the repayment of the note. The projections in this report shows that the note will not be repaid in full by 2/1/2020. The District should be decertified when the note is fully paid or the final date for payment on the note is reached. Option 2 - Use Remaining Resources State Law limits the ability of tax increments from this District to be used for other purposes: • District 1 -29 is a housing district. Tax increments from this District are to be used solely to facilitate City Number............ County Number..... Name .......................... Type ............. Established Certification Requested ....... Certified ...... ............................... Year of First Increment.......... 4 -Year Knockdown ................. 5 -Year Rule ................. ............................... Decertification .......... ............................... Original Tax Rate ...... ............................... Original Tax Capacity Value ................. Current Base Tax Capacity Value....... Current (Pay 2012) Tax Capacity........ Parcels.......................... ............................... 155- 139- 001010 155- 139- 001030 155- 139- 001050 155- 139- 001070 155- 139- 001090 155-139-001110 155-139-001130 155-139-001150 155-139-001170 1 -29 ...... ............................... 629 Front Porch Associates Housing 3/15/02 6/14/02 8/22/02 ..............2004 8/22/06 8/22/07 ...... 12/31/29 145.859% ...............1,162 .................. 974 ............ 21,721 .....................18 155- 139- 001020 155- 139- 001040 155- 139- 001060 155- 139- 001080 155-139-001100 155-139-001120 155-139-001140 155-139-001160 155-139-001180 the housing project. • The District is subject to the five -year rule. The five -year period ended August 22, 2007. • As a housing district, increments can be spent on other housing projects without regard to pooling limits or the five -year rule. Such expenditures District Summary District 1 -29 (Front Porch Associates) i Housing 34 must be authorized in the TIF plan and occur be- fore existing obligations are completed. District Summary 35 Distrid 1.29 Revenues and Other Financing Sources Tax increment revenue Market Value Homestead Credit Investment earnings 9 Bond proceeds Loan proceeds Special assessments Sales /lease proceeds Loan /advance repayments Developer payment Interfund loan /transfer Other TIF application Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses Land /building acquisition Site improvement /preparation costs Installation of public utilities Public parking facilities Streets and sidewalks Public park facilities Social, recreation or conference facilities Interest reduction payments Bond principal payments Bond interest payments PAYGO principal payments PAYGO interest payments Administrative expenses Paying agent fees Other Legal publication Vine Place fees Transfers (out) Total Expenditures /OFU Revenues /OFS Over(Under) Expenditures /OFU Fund Balance • Begin Fund Balance • End Note Outstanding District Summary OriginalTIF Cumulative Accounted Estimated Plan Budget ModifiedTIF for in Prior 2010 2011 2012 2013 2014 2015 2016 2011 2018 2019 2020 2021 2022 2023 2024 2025 2026 2021 2028 2029 Total Life of Amount Plan Budget Year District "Decertification would be required, effective 1213112019, under Option 1. 925,000 925,000 146,083 26,164 28,206 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 25,462 658,112 18,906 3,819 22,125 5,039 145 1,661 1,441 1,565 1,685 1,808 1,933 2,060 2,190 2,323 2,458 3,004 3,560 4,121 4,106 5,291 5,899 6,513 1,140 1,119 12,944 0 500,000 500,000 0 0 0 0 0 0 0 0 0 1,425,000 1,425,000 110,028 30,128 29,813 26,909 21,021 21,141 21,210 21,395 21,522 21,652 21,185 21,920 28,466 29,022 29,590 30,168 30,159 31,361 31,915 32,602 33,241 154,441 500,000 500,000 23,001 6,169 5,603 6,984 1,491 8,034 8,616 9,241 9,911 10,629 11,400 101,619 425,000 425,000 81,611 12,521 13,693 13,385 12,819 12,336 11,154 11,129 10,459 9,140 8,910 198,489 90,000 90,000 11,292 91 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 649 23,114 1,425,000 1,425,000 118,943 19,381 19,945 21,019 21,019 21,019 21,019 21,019 21,019 21,019 21,019 649 649 649 649 649 649 649 649 649 649 332,915 0 0 51,085 11,341 9,928 5,891 6,008 6,128 6,251 6,316 6,504 6,634 6,166 21,211 21,811 28,313 28,941 29,519 30,110 30,112 31,326 31,953 32,592 421,526 51,085 62,426 12,354 18,245 84,253 90,381 96,632 103,008 109,512 116,146 122,912 150,184 118,000 206,314 235,314 264,834 294,943 325,656 356,982 388,935 0 62,426 12,354 18,245 84,253 90,381 96,632 103,008 109,512 116,146 122,912 150,184 118,000 206,314 235,314 264,834 294,943 325,656 356,982 388,935 421,526 421,526 196,999 190,230 184,621 111,643 110,152 162,118 153,502 144,261 134,351 123,121 112,321 112,321 112,321 112,321 112,321 112,321 112,321 112,321 112,321 112,321 112,321 112,321 36 District 1 -30 is a housing TIF district established for the construction of 11 owner- occupied housing unit for persons of low and moderate income. The tax increment from the District is used to support an in- terfund loan in the amount of $163,013. The loan is repaid with an interest rate of 5% using 90% of annual tax increment. The balance on the loan is $153,167, as of 12/31/2011, ending no later than 2/1/2030. The Dis- trict will be decertified no later that December 31, 2029. Actions Taken Since 2009 Payments have been made on the interfund loan, both principal and interest. Administrative Tasks The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Management Strategy Option 1- Discharge Obligation The focus of this District will be the repayment of the internal loan. The projections shows that tax incre- ment collection for the maximum life of the District will not be sufficient to repay the loan. It is anticipated that the District will be not be decertified until the end of the District in 2029. The City may want to pursue a potential option of pooling tax increment from another housing district that has sufficient fund balance in order to discharge the obligation from District 1 -30, also a housing dis- trict. Option 2 - Use Remaining Resources State Law limits the ability of tax increments from this City Number......... County Number.. Name ....................... Type........................ Established........... Certification Requested ... Certified .. ............................... Year of First Increment...... 4 -Year Knockdown ............. ..1 -30 .......................... ............................... 630 Central MN Housing Partnership ........................ ........................Housing ......................... ........................6 /24/02 ......................... ........................6 /28/02 ............8/22 /02 ..................2004 ............. 8/22/06 5 -Year Rule ............................................................... ..............................8 /22/07 Decertification .................................................... ............................... 12/31/29 Original Tax Rate .......................... ............................... .....................145.859% Original Tax Capacity Value .......... ............................... ..........................1,918 Current Base Tax Capacity Value ............................... ..........................2,107 Current (Pay 2012) Tax Capacity . ............................... ..........................8,395 Parcels.................................................................................... .............................11 155 - 145 - 001010 155 - 145 - 001020 155 - 145 - 001030 155 - 145 - 001040 155 - 145 - 001050 155 - 145 - 001060 155 - 145 - 001070 155 - 145 - 001080 155 - 145 - 001090 155 - 145 - 001100 155 - 145 - 001110 District to be used for other purposes: • District 1 -30 is a housing district. Tax increments from this District are to be used solely to facilitate the housing project. • The District is subject to the five -year rule. The five -year period ended August 22, 2007. • As a housing district, increments can be spent on other housing projects without regard to pooling District Summary District 1 -30 (CMHP) Housing 37 r � limits or the five -year rule. Such expenditures must be authorized in the TIF plan and occur be- fore existing obligations are completed. District Summary a.*] District 1.30 Revenues and Other Financing Sources Tax increment revenue Market Value Homestead Credit Investment earnings Bond proceeds Loan proceeds Special assessments Sales /lease proceeds Loan /advance repayments Developer payment Interfund loan /transfer Other Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses Land /building acquisition Site improvement /preparation costs Utilities Public parking facilities Streets and sidewalks Public parkfacilities Social, recreation, or conference facilities Interest reduction payments Bond principal payments Bond interest payments Interfund loan principal Interfund loan interest Administrative expenses Property taxes Paying agent fees Transfer of land sales to HRA Housing development Transfers (out) Total Expenditures /OFU Revenues /OFS Over(Under) Expenditures /OFU Fund Balance -Begin Fund Balance -End Internal Loan Outstanding Original TIF Cumulative Accounted Plan Budget ModifiecITIF forinPrior Amount Plan Budget Year 545,000 545,000 60,551 2010 10,982 2011 11,338 2012 7,717 2013 7,717 2014 7,717 2015 7,717 2016 7,717 2017 7,717 2018 7,717 2019 7,717 2020 7,717 2021 7,717 2022 7,717 2023 7,717 2024 7,717 2025 7,717 District Summary Estimate 2026 2027 2028 2029 dTotal Life of District 7,717 7,717 7,717 7,717 221,778 12,491 2,387 14,878 9,307 941 1,967 996 1,018 1,041 1,064 1,088 1,112 1,137 1,162 1,187 1,214 1,240 1,268 1,295 1,324 1,353 1,382 1,412 1,443 33,948 250,000 250,000 163,013 163,013 42,750 42,750 795,000 125,000 795,000 125,000 288,112 125,000 14,310 13,305 8,713 8,735 8,758 8,781 8,805 8,829 8,854 8,879 8,904 8,931 8,957 8,985 9,012 9,041 9,070 9,099 9,129 9,160 476,368 125,000 70,000 70,000 17,750 17,750 25,000 25,000 25,000 25,000 25,000 25,000 250,000 250,000 5,809 4,038 9,847 200,000 200,000 24,286 4,075 3,930 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 6,945 157,308 50,000 50,000 6,975 91 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650 19,416 4,500 4,500 10,843 10,843 50,000 50,000 33,000 33,000 795,000 0 795,000 0 247,354 40,758 9,975 4,335 40,758 8,618 4,687 45,093 7,595 1,117 49,780 7,595 1,140 50,897 7,595 1,162 52,037 7,595 1,186 53,199 7,595 1,209 54,385 7,595 1,234 55,595 7,595 1,258 56,828 7,595 1,283 58,086 7,595 1,309 59,370 7,595 1,335 60,679 7,595 1,362 62,014 7,595 1,389 63,376 7,595 1,417 64,765 7,595 1,445 66,182 7,595 1,474 67,628 7,595 1,504 69,102 7,595 1,534 70,606 7,595 1,565 72,140 402,664 73,704 0 0 45,093 49,780 50,897 52,037 53,199 54,385 55,595 56,828 58,086 59,370 60,679 62,014 63,376 64,765 66,182 67,628 69,102 70,606 72,140 73,704 73,704 163,013 157,204 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 153,167 39 District 1 -34 is the only renewal and renovation TIF district. This District was established to provide a por- tion of the funding to construct the east interchange with Interstate 94. The tax increments from this Dis- trict are pledged to pay a portion of debt service on the $10,735,000 G.O. Refunding Bonds, Series 2011A (the original issuance was Series 2005A). Bond records contain a specific flow of funds for the "TIF Portion" of the debt service plan. This portion of the bond issue consists of $5,325,000 in principal. The flow of funds assumes $280,697 of annual tax incre- ment revenues for the years 2013 through 2022. Other revenues needed to pay debt service on this portion of the bond issue include special assessments, general tax levy and County revenues. District 1 -34 is scheduled to be decertified no later than December 31, 2022. Actions Taken Since 2009 The City has transferred funds from this District for payment of the Bonds which has been in excess of available tax increment. This District is in a negative fund balance position. Administrative Steps The TIF plan estimates on file with the Office of the State Auditor (OSA) for this district needs review to confirm the OSA has the correct authorized expendi- tures amounts. Management Strategy Option 1- Discharge Obligations The focus of this District will be the repayment and management of the outstanding 2011A Bonds. It is anticipated that all of the tax increment revenue from CityNumber ...................................................................... ...........................1 -34 CountyNumber ................................ ............................... ............................634 Name ..................... ............................... .....................Monticello Interchange Type ................. ............................... ........................Renewal and Renovation Established...................................... ............................... ........................9 /12/05 Certification Requested .................................. ............................... 12/29/05 Certified..................................................................... ............................... 8/1/06 Year of First Increment ................... ............................... ...........................2007 4 -Year Knockdown ................................................. ............................... 8/1/12 5 -Year Rule ....................................... ............................... .........................8 /1/16 Decertification .................................................... ............................... 12/31/22 Original Tax Rate .......................... ............................... .....................110.297% Original Tax Capacity Value ........ ............................... .........................47,897 Current Base Tax Capacity Value ............................. .........................32,548 Current (Pay 2012) Tax Capacity ............................. ........................285,662 Parcels.................................................................................... .............................13 155 - 011 - 000151 155 - 011 - 000152 155 - 011 - 000161 155 - 011 - 000162 155 - 011 - 000165 155 - 178 - 000040 155-205-001010 155-205-001020 155- 205 - 001030 155- 500 - 182300 155-500-182302 155-500-182303 155- 178- 001010 this District will be used to pay debt service for the entire life of the District. The finance plan for the 2011A Bonds calls for $280,697 per year in tax increment revenues. This is greater than the estimated annual revenue from current values and rates. Additional development in this District may increase tax increment revenues beyond the planned amount. However, the increase may not be sufficient District Summary District 1 -34 (Monticello Interchange) Renewal & Renovation rw 11U HC to cover the planned transfer of funds for payment on the outstanding Bonds and to eliminate the cumula- tive negative cash balance for this District. Additional funds will likely be needed from the City for future cash flow management of this complex bond issue. This District benefits from extended knock -down and five -year rule periods approved by the Legislature in 2009. District Summary 41 District 1 -34 Revenues and Other Financing Sources Tax increment revenue OriginalTIF Cumulative Accounted Plan Budget Modified TIF for in Prior Amount Plan Budget Year 5,500,000 5,500,000 584,406 2010 301,517 2011 269,290 2012 279,177 2013 279,177 2014 279,177 2015 279,177 2016 279,177 2017 279,177 2018 279,177 2019 279,177 District Summary Estimated 2020 2021 2022 Total Life of District 279,177 279,177 279,177 4,226,162 Market Value Homestead Credit 0 Investment earnings 100,000 100,000 612 4,159 7,642 (2,667) (2,753) (2,840) (2,929) (3,020) (3,113) (3,208) (3,304) (3,403) (3,503) (3,606) (21,934) Bond proceeds 5,400,000 5,400,000 0 Loan proceeds 500,000 500,000 0 Special assessments 0 Sales /lease proceeds 0 Loan /advance repayments 0 Developer payment 0 Interfund loan /transfer 0 Other 0 0 Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses Land /building acquisition 11,500,000 3,000,000 11,500,000 3,000,000 585,018 305,676 276,932 276,510 276,424 276,337 276,248 276,157 276,064 275,969 275,873 275,774 275,674 275,571 0 4,204,228 0 Site improvement /preparation costs 500,000 500,000 0 Utilities 100,000 100,000 0 Public parking facilities 0 Streets and sidewalks 1,000,000 1,000,000 3,983 3983 Public parkfacilities 0 Social, recreation, or conference facilities 0 Interest reduction payments 0 Bond principal payments 5,400,000 5,400,000 0 Bond interest payments 750,000 750,000 0 Loan principal payments 500,000 500,000 0 Loan /note interest payments 0 Administrative expenses 550,000 550,000 25,704 91 100 100 100 100 100 100 100 100 100 100 100 100 26995 Paying agent fees 0 Other 0 Interest PAYGO 0 Transfers (out) for debt service Total Expenditures /OFU Revenues /OFSOver(Under) Expenditures/OFU Fund Balance - Begin 11,800,000 (300,000) 11,800,000 (300,000) 637,546 667,233 (82,215) 317,277 317,368 (11,692) (82,215) 316,279 316,379 (39,447) (93,907) 280,696 280,796 (4,286) (133,354) 280,696 280,796 (4,372) (137,640) 280,696 280,796 (4,459) (142,012) 280,696 280,796 (4,548) (146,471) 280,696 280,796 (4,639) (151,019) 280,696 280,796 (4,732) (155,658) 280,696 280,796 (4,827) (160,390) 280,696 280,796 (4,923) (165,217) 280,696 280,796 (5,022) (170,140) 280,696 280,796 (5,122) (175,162) 280,696 280,796 (5,225) (180,284) 4,358,758 4,389,736 (185,508) 0 Fund Balance - End Bond Outstanding (93,907) 3,403,935 (133,354) 3,087,656 (137,640) 2,806,960 (142,012) 2,526,264 (146,471) 2,245,568 (151,019) 1,964,872 (155,658) 1,684,176 (160,390) 1,403,480 (165,217) 1,122,784 (170,140) 842,088 (175,162) 561,392 (180,284) 280,696 42 (185,508) 0 (185,508) District 1 -35 is a redevelopment TIF district. The Dis- trict was established to assist with the construction of 11,000 square foot commercial building. The District was created from parcels removed from District 1 -22. This approach established new time limits that con- strain use of increments in District 1 -22. The tax incre- ment from District 1 -35 is obligated to repay a $170,000 developer note at an interest rate of 6 %. The note will end at a date no later than 2/1/2023. Ninety percent (90 %) of annual tax increment is used to make pay- ment on the note. The District will be decertified no later than December 31, 2033. The development planned for District 1 -35 has not happened. Actions Taken Since 2009 Funds have been transferred into TIF District 1 -35 from TIF District 1 -22 to cover administrative expenses incurred for TIF 1 -35. Administrative Steps There are no outstanding administrative items. Management Strategy The strategy for District 1 -35 focuses on using the ex- isting district to undertake redevelopment on this par- cel. The factors that allow the creation of a new re- development district have been removed. A new TIF district is not an option. Clearance of the site satisfied the criteria of the 4 -year knock down requirements. Management of this District benefits from 2009 amend- ments to the TIF Act. The limitations of the five -year rule are extended to ten years for the District. Obli- gations for the use of tax increments must now be in CityNumber ...................................................................... ...........................1 -35 CountyNumber ................................ ............................... ............................635 Name .................................................. ............................... Landmark Square II Type.......................................................... ............................... Redevelopment Established...................................... ............................... ........................9 /12/05 Certification Requested .................................. ............................... 12/29/05 Certified..................................................................... ............................... 8/1/06 Year of First Increment ................... ............................... ...........................2008 4 -Year Knockdown ................................................. ............................... 8/1/12 5 -Year Rule ....................................... ............................... .........................8 /1/16 Decertification .................................................... ............................... 12/31/33 Original Tax Rate .......................... ............................... .....................110.297% Original Tax Capacity Value .......... ............................... ..........................3,409 Current Base Tax Capacity Value ............................... ..........................6,068 Current (Pay 2012) Tax Capacity . ............................... ..........................2,962 Parcels..................................................................................... ..............................1 155 - 010 - 036030 place by August 1, 2016. The financial implications and options for this District cannot be fully analyzed until development occurs. District Summary District 1 -35 (Landmark Square II) Redevelopment FZ �i Qi �. ■I� ■fit �� T".;.��fll,�f/J/ t / ■ ■/ // /,■ jf /, _, �, �11 sir■ /i /. ■0� �i�/ f�/ /� /// r■�i, fy �� /i ■f/ � f�� , � ryi ry ■�i I�f� /i 43 District 1.35 Revenues and Other Financing Sources Tax increment revenue Market Value Homestead Credit OriginalTIF Cumulative Accounted Plan Budget ModifiedTIF for in prior Amount Plan Budget Year 450,000 2010 2011 2012 0 2013 0 2014 0 2015 0 2016 0 2011 0 2018 0 2019 0 2020 0 2021 0 2022 0 2023 0 2024 0 2025 0 2026 0 2021 0 2028 0 District Summary Estimated 2029 2030 2031 2032 2033 Total Life of District 0 0 0 0 0 0 0 Investment earnings 1,082 204 415 96 91 99 100 102 103 105 106 108 109 111 113 114 116 118 120 122 124 125 121 129 131 4,116 Bond proceeds 0 Loan proceeds 0 Special assessments 0 Sales /lease proceeds 0 Loan /advance repayments 0 Developer payment 0 Interfund loan /transfer 0 Other 0 Deposit (2004) 0 Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses 21,500 450,000 0 28,582 (7,500) (7,296) 415 96 91 99 100 102 103 105 106 108 109 111 113 114 116 118 120 122 124 125 121 129 131 20000 24,116 Land /building acquisition 100,000 503 503 Site improvement /preparation costs 35,000 0 Public parking facilities 35,000 0 Streets and sidewalks 35,000 0 Public park facilities 10,000 0 Social, recreation, or conference facilities 0 Other qualifying improv., social /reciconf facilities 0 Interest reduction payments 0 PAYG principal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 PAYG interest 190,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Loan principal payments 0 Loan /note interest payments 0 Administrative expenses 45,000 16,284 91 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 16,996 Paying agent fees 0 Other Interest PAYGO 0 0 Transfers (out) Total Expenditures /OFU Revenues /OFSOver(Under) Expenditures/OF( Fund Balance• Begin 450,000 0 16,181 0 0 11,195 91 (7,381) 11,195 21 388 4,408 21 69 4,196 21 10 4,865 21 12 4,935 21 13 5,001 21 15 5,080 21 16 5,155 21 18 5,231 21 19 5,308 21 81 5,388 21 82 5,468 21 84 5,551 21 86 5,635 21 81 5,120 21 89 5,808 21 91 5,891 21 93 5,988 21 95 6,081 21 91 6,115 21 98 6,212 21 21 100 102 6,310 6,411 21 104 6,513 0 11,499 6,611 0 Fund Balance• End Note Outstanding 4,408 110,000 4,196 110,000 4,865 110,000 4,935 110,000 5,001 110,000 5,080 110,000 5,155 110,000 5,231 110,000 5,308 110,000 5,388 110,000 5,468 110,000 5,551 110,000 5,635 110,000 5,120 110,000 5,808 110,000 5,891 110,000 5,988 110,000 6,081 110,000 6,115 110,000 6,212 110,000 6,310 110,000 6,411 6,513 110,000 110,000 44 6,611 110,000 6,611 District 1 -36 is an economic development TIF district. The District was established to assist with the construc- tion of 54,000 square foot office /warehouse facility for Dahlheimer Distributing. The tax increment from the District is obligated to repay an interfund loand from the EDA in the amount of $439,224. The loan is pay- able until the last date of increment is collected. All available tax increment is committed for payments on the note. The District will be decertified no later than December 31, 2015. Actions Taken Since 2009 Payments on the note are being made. In addition, there has been activity with transfers in and out of funds each year to cover the negative balance that ex- ists. In 2011, the City transferred in $62,015 of cash to eliminate the negative balance. Administrative Tasks There are no outstanding administrative tasks. Management Strategy The projections for this District show a stable cash flow position. However, future projected tax incre- ments may not be sufficient to repay the outstanding balance on the note. City Number............ County Number..... Name .......................... Type ............. Established Certification Requested ....... Certified ...... ............................... Year of First Increment.......... 4 -Year Knockdown ................. 5 -Year Rule ................. ............................... Decertification .......... ............................... Original Tax Rate ...... ............................... Original Tax Capacity Value ................. Current Base Tax Capacity Value....... Current (Pay 2012) Tax Capacity........ Parcels.......................... ............................... 155- 181- 001010 1 -36 ......... ............................... 636 . Rocky Mountain Group Economic Development . ............................... 8122105 12/30/05 .......... 8/1/06 .............2007 .......... 8/1/12 .......... 8/1/11 12/31/15 110.297% ............... 4,354 ...............4,354 ............ 66,784 .......................1 District Summary District 1 -36 (Rocky Mountain Group) Economic Development 45 y'� o 7 District Summary Original TIF Cumulative Accounted Estimated District 1 -36 Plan Budget Modified TIF for in Prior 2010 2011 2012 2013 2014 2015 Total Life Amount Plan Budget Year of District Revenues and Other Financing Sources Tax increment revenue 680,000 188,264 68,185 68,185 68,858 68,858 68,858 68,858 600,068 Market Value Homestead Credit - Investment earnings 20,000 4,116 876 1,845 171 233 297 362 7,900 Bond proceeds 500,000 - Loan proceeds 100,000 - Special assessments - Sales /lease proceeds - Loan /advance repayments - Developer payment - Interfund loan /transfer 77,818 75,163 - 152,981 Other - Deposit - Transfers (in) 62,015 62,015 Total Revenues /OFS 1,300,000 0 270,198 144,224 132,045 69,029 69,092 69,155 69,220 822,963 Expenditures and Other Financing Uses Land /building acquisition 50,000 1,500 1,500 Site improvement /preparation costs 50,000 38,568 38,568 Public parking facilities 200,000 - Streets and sidewalks - Public park facilities 200,000 - Utilities 116,221 116,221 Social, recreation, or conference facilities - Social, recreation or conference facilities - Interest reduction payments - Bond principal payments 500,000 - Bond interest payments 132,000 - PAYG principal 88,964 42,692 45,512 48,382 51,527 54,876 58,443 390,395 PAYG interest 22,084 19,264 17,034 13,889 10,540 6,973 89,783 Interfund loan principal 77,818 75,163 152,981 Interfund loan interest 100,000 - Administrative expenses 68,000 8,159 1,948 26 500 500 500 500 12,133 Paying agent fees - Other - Property taxes - Trunk fees - Transfers (out) - Total Expend itu res/OF U 1,300,000 0 331,230 141,887 64,802 65,915 65,915 65,915 65,915 801,581 Revenues /OFS Over(Under) Expend itures/OF U 0 0 (61,032) 2,337 67,243 3,114 3,176 3,240 3,304 21,382 Fund Balance- Begin (61,032) (58,695) 8,548 11,662 14,838 18,078 0 Fund Balance- End (58,695) 8,548 11,662 14,838 18,078 21,382 21,382 Interfund Loan Outstanding 75,163 - - - - - - - Note Outstanding 350,260 307,568 262,056 213,674 162,147 107,272 48,829 48,829 46 District 1 -37 is an economic development TIF district. The District was established to assist with the con- struction of 20,000 square foot production /warehouse facility for Karlsburger Foods. The tax increment from the District is obligated to repay a $142,113 interfund loan from the EDA at an interest rate of 6 %. All avail- able tax increment is committed for payments on the loan. The District will be decertified no later than De- cember 31, 2016. Administrative Tasks There are no outstanding administrative tasks for tins district. Actions Taken Since 2009 Payment on the outstanding note has been made. Management Strategy The focus of this District will be the repayment of the note. Cash flow projections for this District show the note paid in full in 2015, one year before scheduled de- certification. The District should be decertified when the note is fully paid. State Law limits the ability of tax increments from this District to be used for other purposes: • District 1 -37 is an economic development district. Tax increments from this District are to be used solely to facilitate eligible economic development activities. • The District is subject to the five -year rule. The five -year period will end April 16, 2012. • The District consists of a single parcel and is sub- ject to pooling limits. City Number ............................. County Number ...................... Name............ ............................... Type.............. ............................... Established . ............................... Certification Requested ....... Certified ...... ............................... Year of First Increment.......... 4 -Year Knockdown .. ............................... 5 -Year Rule ................. ............................... Decertification .......... ............................... Original Tax Rate ...... ............................... Original Tax Capacity Value ................. Current Base Tax Capacity Value....... Current (Pay 2012) Tax Capacity........ Parcels.......................... ............................... 155- 191- 001010 1 -37 ......... ............................... 637 .SL Real Estate Holdings Economic Development ........ ........................4 /24/06 7/19/06 4/16/07 ...............2008 4/16/13 4/16/12 ...... 12/31/16 ....... 99.269% ..............1,614 ..............1,614 ........... 26,434 ......................1 District Summary District 1 -37 (SL Real Estate Holdings) Economic Development 47 I 7 District 1 -37 Revenues and Other Financing Sources Tax increment revenue Market Value Homestead Credit Investment earnings Bond proceeds Loan proceeds Special assessments Sales /lease proceeds Loan /advance repayments Developer payment Interfund loan /transfer Other Interfund loan TIF application fee Transfers (in) Total Revenues /OFS Expenditures and Other Financing Uses Land /building acquisition Public parking facilities Streets and sidewalks Public park facilities Social, recreation, or conference facilities Public park facilities Social, recreation or conference facilities Interest reduction payments Bond principal payments Bond interest payments PAYG principal PAYG interest Interfund loan principal Interfund loan interest Administrative expenses Paying agent fees Other Interfund loans Transfers (out) Total Expenditures /OFU Revenues /OFS Over(Under) Expenditures /OFU Fund Balance - Begin Fund Balance - End Note outstanding Original TIF Cumulative Plan Budget Modified TIF Amount Plan Budget 175,000 Accounted for in Prior Year 48,093 2010 24,787 2011 24,787 2012 24,639 2013 24,639 2014 24,639 District Summary Estimated 2015 2016 Total Life of District 24,639 24,639 220,860 0 9,090 1,798 3,665 146 80 35 14 301 15,130 0 0 0 0 0 0 0 0 150,000 0 0 0 325,000 94,000 0 57,183 2,737 26,585 28,452 24,785 24,718 24,674 24,653 24,940 235,989 2,737 5,000 5,000 5,000 5,000 5,959 5,959 5,000 35,724 17,171 19,296 19,211 20,364 21,586 8,761 142,113 50,000 6,001 7,197 4,216 4,195 3,043 1,821 526 (0) 26,998 4,195 3,043 1,821 526 (0) 9,584 16,000 1,491 91 26 500 500 500 500 500 4,108 150,000 325,000 0 0 0 56,912 271 24,459 2,126 271 23,538 4,914 2,397 28,102 (3,317) 7,311 26,949 (2,231) 3,994 25,727 (1,054) 1,763 10,312 14,340 709 500 24,440 15,050 196,500 39,489 0 2,397 7,311 3,994 1,763 709 15,050 39,489 39,489 106,389 89,218 69,922 50,711 30,347 8,761 (0) (0) (0) 48 District 1 -38 is an economic development TIF district. The District was established to assist with the construc- tion of a production /warehouse facility for Walker In- Store. The tax increment from the District is obligated to repay a $152,460 interfund loan from the EDA at an interest rate of 8 %. All available tax increment is com- mitted for payments on the loan. The District will be decertified no later than December 31, 2017. Administrative Tasks There are no recommended administrative tasks for this district. Actions Taken Since 2009 Payment on the outstanding note has been made. Management Strategy Based on current property values, the tax increment from this District will not repay the note. The current estimated annual tax increment will only pay interest on the note. Future value in the District will determine the actual ability to retire this debt. State Law limits the ability of tax increments from this District to be used for other purposes: • District 1 -38 is an economic development district. Tax increments from this District are to be used solely to facilitate eligible economic development activities. • The District is subject to the five -year rule. The five -year period will end October 1, 2012. • The District consists of a single parcel and is sub- ject to pooling limits. City Number............ County Number..... Name .......................... Type ............. Established Certification Requested ....... Certified ...... ............................... Year of First Increment.......... 4 -Year Knockdown ................. 5 -Year Rule ................. ............................... Decertification .......... ............................... Original Tax Rate ...... ............................... Original Tax Capacity Value ................. Current Base Tax Capacity Value....... Current (Pay 2012) Tax Capacity........ Parcels.......................... ............................... 155- 194- 001020 1 -38 ......... ............................... 638 ... ............................... Walker Economic Development .... ............................4111107 .... ............................1011107 10/1/07 ..............2009 10/1/13 10/1/12 12/31/17 106.364% ...............1,781 ...............1,781 ............13,674 .......................1 District Summary District 1 -38 (Walker) Economic Development EEO District Summary Original TIF Cumulative Accounted Estimated District 1 -38 Plan Budget Modified TIF for in Prior 2010 2011 2012 2013 2014 2015 2016 Total Life Amount Plan Budget Year of District Revenues and Other Financing Sources Tax increment revenue 120,000 12,604 12,604 13,596 12,650 12,650 12,650 12,650 12,650 102,053 Market Value Homestead Credit 0 Investment earnings 0 0 0 0 0 0 Bond proceeds 0 Loan proceeds 0 Special assessments 0 Sales /lease proceeds 0 Loan /advance repayments 0 Developer payment 0 Interfund loan /transfer 0 Other 0 Interfund loan 160,000 0 TIF application fee 0 Transfers (in) 0 Total Revenues /OFS 280,000 0 12,604 12,604 13,596 12,650 12,650 12,650 12,650 12,650 102,053 Expenditures and Other Financing Uses Land /building acquisition 53,000 401 401 Public parking facilities 5,000 0 Streets and sidewalks 5,000 0 Public park facilities 0 Social, recreation, or conference facilities 5,000 0 Public park facilities 0 Social, recreation or conference facilities 0 Interest reduction payments 0 Bond principal payments 0 Bond interest payments 0 Loan principal payments 160,000 9,469 3,262 3,261 1,700 1,700 1,700 1,700 1,700 24493.885 Loan /note interest payments 40,000 3,135 14,843 9,384 10,317 10,317 10,317 10,317 10,317 78947 Administrative expenses 12,000 452 91 26 26 26 26 26 26 699 Paying agent fees 0 Other 0 Interfund loans 0 Transfers (out) 0 Total Expenditures /OFU 280,000 0 13,457 18,196 12,671 12,043 12,043 12,043 12,043 12,043 104,541 Revenues /OFS Over(Under) Expenditures /OFU 0 0 (853) (5,592) 925 606 606 606 606 606 (2,488) Fund Balance - Begin 0 (853) (6,445) (5,520) (4,914) (4,307) (3,701) (3,094) 0 Fund Balance - End (853) (6,445) (5,520) (4,914) (4,307) (3,701) (3,094) (2,488) (2,488) Note outstanding 142,991 147,638 144,377 142,677 140,976 139,276 137,575 135,875 135,875 50 District 1 -39 is an economic development TIF district. The District was established to assist with the con- struction of a 40,000 square foot manufacturing facility in the City. The tax increment from the District is obli- gated to repay a $413,994 interfund loan at an interest rate of 4 %. The note is payable through the last date of receipt of increment. All available tax increment is committed for payments on the loan. Actions Taken Since 2009 This District was established after the 2009 TIF Man- agement Report. Administrative Tasks This district was adopted on August 22, 2011. The Dis- trict has not been certified with Wright County. Certi- fication is anticipated to be filed in June 2012. Management Strategy The focus of this District will be the repayment of the interfund loan. The original tax rate for this District will be based on the property tax rate and value for the parcel that is current at the time the District is certified. The rate and value will be different than the estimates included in the TIF Plan. There is no financial data included for District 1 -39. Once the District is certified, the City will want to pre- pare an updated TIF cash flow analysis to determine the estimated amount of tax increment the District may generate given the certified rate and value. The updated TIF cash flow analysis should be compared with what is included in the adopted TIF Plan to con- firm that estimates remain accurate given final certi- fied rates and tax capacity. CityNumber ...................................................................... ...........................1 -39 CountyNumber ................................ ............................... ............................639 Name ..................... ............................... ..........................Otter Creek Crossing Type .......................................... ............................... Economic Development Established............................................................... ..............................8 /22/11 Certification Requested ............ ............................... ........................Pending Certified.................................................................. ............................... Pending Year of First Increment ............... ............................... ........................Pending 4 -Year Knockdown .............................................. ............................... Pending 5 -Year Rule ............................................................. ............................... Pending Decertification .............................. ............................... ........................Pending Original Tax Rate .......................... ............................... ........................Pending Original Tax Capacity Value ...... ............................... ........................Pending Current Base Tax Capacity Value ........................... ........................Pending Current (Pay 2012) Tax Capacity ............................ ........................Pending Parcels..................................................................................... ..............................1 155 - 191 - 000030 District Summary District 1 -39 (Otter Creek Crossing) Economic Development 51 This appendix contained selected elements of State Law governing the use of TIF and related to the man- agement of Monticello TIF districts. These statutes are current in 2011. Laws governing TIF may change in the future. This appendix is intended solely as an in- formational reference. Specific management actions must be based on a review of the relevant statutory language in effect at the time. Administrative Expense Administrative Expense Defined (469.174, Subd. 14) "Administrative expenses" means all expenditures of an authority other than: (1) amounts paid for the purchase of land; (2) amounts paid to contractors or others providing materials and services, including architectural and en- gineering services, directly connected with the physi- cal development of the real property in the project; (3) relocation benefits paid to or services provided for persons residing or businesses located in the project; (4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursu- ant to section 469.178; or (5) amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the requests for certifications were made before August 1, 1979, or after June 30,1982, "administrative expenses" includes amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Appendix Limitation on Administrative Expenses (469.176, Subd. 3) (a) For districts for which certification was requested Excerpts from TIF Act before August 1, 1979, or after June 30, 1982 and be- 2011 Statutes fore August 1, 2001, no tax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total estimated tax increment expenditures authorized by the tax increment financ- ing plan or the total tax increment expenditures for the project, whichever is less. (b) For districts for which certification was requested after July 31, 1979, and before July 1, 1982, no tax incre- ment shall be used to pay administrative expenses, as defined in Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the total tax in- crement expenditures authorized by the tax increment financing plan or the total estimated tax increment ex- penditures for the district, whichever is less. (c) For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay any administrative expenses for a project which exceed ten percent of total estimated tax increment ex- penditures authorized by the tax increment financing plan or the total tax increments, as defined in section 469.174, subdivision 25, clause (1), from the district, whichever is less. (d) Increments used to pay the county's administrative expenses under subdivision 4h are not subject to the percentage limits in this subdivision. District Limitations Redevelopment Districts (469.176, Subd. 4j) At least 90 percent of the revenues derived from tax increments from a redevelopment district or renewal 52 and renovation district must be used to finance the cost of correcting conditions that allow designation of redevelopment and renewal and renovation dis- tricts under section 469.174. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary to development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the authority, including the cost of preparation of the de- velopment action response plan, may be included in the qualifying costs. Housing Districts (469.176, Subd. 4d) Revenue derived from tax increment from a housing district must be used solely to finance the cost of hous- ing projects as defined in sections 469.174, subdivision 11, and 469.1761. The cost of public improvements di- rectly related to the housing projects and the allocated administrative expenses of the authority may be in- cluded in the cost of a housing project. Economic Development Districts (469.176, Subd. 4c) (a) (a) Revenue derived from tax increment from an economic development district may not be used to provide improvements, loans, subsidies, grants, inter- est rate subsidies, or assistance in any form to develop- ments consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a purpose other than: (1) the manufacturing or production of tangible per- sonal property, including processing resulting in the change in condition of the property; (2) warehousing, storage, and distribution of tangible personal property, excluding retail sales; (3) research and development related to the activities listed in clause (1) or (2); (4) telemarketing if that activity is the exclusive use of the property; (5) tourism facilities; (6) qualified border retail facilities; or (7) space necessary for and related to the activities list- ed in clauses (1) to (6). (b) Notwithstanding the provisions of this subdivi- sion, revenues derived from tax increment from an economic development district may be used to pro- vide improvements, loans, subsidies, grants, inter- est rate subsidies, or assistance in any form for up to 15,000 square feet of any separately owned commer- cial facility located within the municipal jurisdiction of a small city, if the revenues derived from increments are spent only to assist the facility directly or for ad- ministrative expenses, the assistance is necessary to develop the facility, and all of the increments, except those for administrative expenses, are spent only for activities within the district. (c) A city is a small city for purposes of this subdivi- sion if the city was a small city in the year in which the request for certification was made and applies for the rest of the duration of the district, regardless of wheth- er the city qualifies or ceases to qualify as a small city. Appendix 53 (d) Notwithstanding the requirements of paragraph (a) and the finding requirements of section 469.174, subdivision 12, tax increments from an economic de- velopment district may be used to provide improve- ments, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, if all the following conditions are met: (1) the municipality finds that the project will create or retain jobs in this state, including construction jobs, and that construction of the project would not have commenced before July 1, 2012, without the author- ity providing assistance under the provisions of this paragraph; (2) construction of the project begins no later than July 1, 2012; (3) the request for certification of the district is made no later than June 30, 2012; and (4) for development of housing under this paragraph, the construction must begin before January 1, 2012. The provisions of this paragraph may not be used to assist housing that is developed to qualify under sec- tion 469.1761, subdivision 2 or 3, or similar require- ments of other law, if construction of the project begins later than July 1, 2011. Knock Down Action Required (469.176, Subd. 6) (a) If, after four years from the date of certification of the original net tax capacity of the tax increment fi- nancing district pursuant to section 469.177, no demo- lition, rehabilitation, or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of util- ity service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financ- ing plan, no additional tax increment may be taken from that parcel, and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation, or renovation or other site preparation on that parcel including qual- ified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced, and the county auditor shall certify the net tax capacity thereof as most recently cer- tified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provi- sions of this subdivision. The authority must submit to the county auditor evidence that the required activ- ity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the par- cel was certified as included in the district. For pur- poses of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. (b) For districts which were certified on or after Janu- ary 1, 2005, and before April 20, 2009, the four -year pe- riod under paragraph (a) is increased to six years. Appendix 54 Pooling and Five -Year Rule (469.1763) Subdivision 1.Definitions. (a) For purposes of this section, the following terms have the meanings given. (b) "Activities' means acquisition of property, clearing of land, site preparation, soils correction, removal of hazardous waste or pollution, installation of utilities, construction of public or private improvements, and other similar activities, but only to the extent that tax increment revenues may be spent for such purposes under other law. (c) "Third party" means an entity other than (1) the person receiving the benefit of assistance financed with tax increments, or (2) the municipality or the de- velopment authority or other person substantially un- der the control of the municipality. (d) "Revenues derived from tax increments paid by properties in the district" means only tax increment as defined in section 469.174, subdivision 25, clause (1), and does not include tax increment as defined in sec- tion 469.174, subdivision 25, clauses (2), (3), and (4). Subd. 2.Expenditures outside district. (a) For each tax increment financing district, an amount equal to at least 75 percent of the total revenue derived from tax increments paid by properties in the district must be expended on activities in the district or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities in the district or to pay, or secure payment of, debt service on credit en- hanced bonds. For districts, other than redevelopment districts for which the request for certification was made after June 30, 1995, the in- district percentage for purposes of the preceding sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax increments paid by properties in the district may be expended, through a development fund or other- wise, on activities outside of the district but within the defined geographic area of the project except to pay, or secure payment of, debt service on credit enhanced bonds. For districts, other than redevelopment dis- tricts for which the request for certification was made after June 30, 1995, the pooling percentage for purpos- es of the preceding sentence is 20 percent. The revenue derived from tax increments for the district that are expended on costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calcu- lating the percentages that must be expended within and without the district. (b) In the case of a housing district, a housing project, as defined in section 469.174, subdivision 11, is an ac- tivity in the district. (c) All administrative expenses are for activities out- side of the district, except that if the only expenses for activities outside of the district under this subdivision are for the purposes described in paragraph (d), ad- ministrative expenses will be considered as expendi- tures for activities in the district. (d) The authority may elect, in the tax increment fi- nancing plan for the district, to increase by up to ten percentage points the permitted amount of expendi- tures for activities located outside the geographic area of the district under paragraph (a). As permitted by section 469.176, subdivision 4k, the expenditures, in- cluding the permitted expenditures under paragraph (a), need not be made within the geographic area of Appendix 55 the project. Expenditures that meet the requirements of this paragraph are legally permitted expenditures of the district, notwithstanding section 469.176, subdi- visions 4b, 4c, and 4j. To qualify for the increase under this paragraph, the expenditures must: (1) be used exclusively to assist housing that meets the requirement for a qualified low- income building, as that term is used in section 42 of the Internal Rev- enue Code; and (2) not exceed the qualified basis of the housing, as defined under section 42(c) of the Internal Revenue Code, less the amount of any credit allowed under section 42 of the Internal Revenue Code; and (3) be used to: (i) acquire and prepare the site of the housing; (ii) acquire, construct, or rehabilitate the housing; or (iii) make public improvements directly related to the housing; or (4) be used to develop housing: (i) if the market value of the housing does not ex- ceed the lesser of: (A) 150 percent of the average market value of single - family homes in that municipality; or (B) $200,000 for municipalities located in the met- ropolitan area, as defined in section 473.121, or $125,000 for all other municipalities; and (ii) if the expenditures are used to pay the cost of site acquisition, relocation, demolition of existing structures, site preparation, and pollution abate- ment on one or more parcels, if the parcel contains a residence containing one to four family dwelling units that has been vacant for six or more months and is in foreclosure as defined in section 325N.10, subdivision 7, but without regard to whether the residence is the owner's principal residence, and only after the redemption period stated in the no- tice provided under section 580.06 has expired. (e) For a district created within a biotechnology and health sciences industry zone as defined in section 469.330, subdivision 6, or for an existing district lo- cated within such a zone, tax increment derived from such a district may be expended outside of the district but within the zone only for expenditures required for the construction of public infrastructure necessary to support the activities of the zone, land acquisition, and other redevelopment costs as defined in section 469.176, subdivision 4j. These expenditures are consid- ered as expenditures for activities within the district. (f) The authority under paragraph (d), clause (4), ex- pires on December 31, 2016. Increments may continue to be expended under this authority after that date, if they are used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph (a), if December 31, 2016, is considered to be the last date of the five -year period after certification under that pro- vision. Subd. 3.Five -year rule. (a) Revenues derived from tax increments are consid- ered to have been expended on an activity within the district under subdivision 2 only if one of the follow- ing occurs: (1) before or within five years after certification of the district, the revenues are actually paid to a third party Appendix 1 with respect to the activity; (2) bonds, the proceeds of which must be used to fi- nance the activity, are issued and sold to a third party before or within five years after certification, the rev- enues are spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, rea- sonably expected to be spent before the end of the later of (i) the five -year period, or (ii) a reasonable temporary period within the meaning of the use of that term under section 148(c)(1) of the Internal Rev- enue Code, or are deposited in a reasonably required reserve or replacement fund; (3) binding contracts with a third party are entered into for performance of the activity before or within five years after certification of the district and the rev- enues are spent under the contractual obligation; (4) costs with respect to the activity are paid before or within five years after certification of the district and the revenues are spent to reimburse a party for pay- ment of the costs, including interest on unreimbursed costs; or (5) expenditures are made for housing purposes as permitted by subdivision 2, paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted by subdivision 2, paragraph (e). (b) For purposes of this subdivision, bonds include subsequent refunding bonds if the original refunded bonds meet the requirements of paragraph (a), clause (2)• (c) For a redevelopment district or a renewal and reno- vation district certified after June 30, 2003, and before April 20, 2009, the five -year periods described in para- graph (a) are extended to ten years after certification of the district. This extension is provided primarily to accommodate delays in development activities due to unanticipated economic circumstances. Subd. 4.Use of revenues for decertification. (a) In each year beginning with the sixth year following certification of the district, if the applicable in- district percent of the revenues derived from tax increments paid by properties in the district exceeds the amount of expenditures that have been made for costs permit- ted under subdivision 3, an amount equal to the dif- ference between the in- district percent of the revenues derived from tax increments paid by properties in the district and the amount of expenditures that have been made for costs permitted under subdivision 3 must be used and only used to pay or defease the following or be set aside to pay the following: (1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b); (2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4); (3) credit enhanced bonds to which the revenues de- rived from tax increments are pledged, but only to the extent that revenues of the district for which the credit enhanced bonds were issued are insufficient to pay the bonds and to the extent that the increments from the applicable pooling percent share for the dis- trict are insufficient; or (4) the amount provided by the tax increment financ- ing plan to be paid under subdivision 2, paragraphs (b), (d), and (e). (b) The district must be decertified and the pledge of tax increment discharged when the outstanding bonds Appendix 57 have been defeased and when sufficient money has been set aside to pay, based on the increment to be col- lected through the end of the calendar year, the follow- ing amounts: (1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) and (4); (2) the amount specified in the tax increment financ- ing plan for activities qualifying under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds qualifying under paragraph (a), clause (1); and (3) the additional expenditures permitted by the tax increment financing plan for housing activities under an election under subdivision 2, paragraph (d), that have not been funded with the proceeds of bonds qualifying under paragraph (a), clause (1). Subd. S.Credit enhanced bonds. Except as otherwise provided in this section, revenues derived from tax increments may be used to pay debt service on credit enhanced bonds issued to finance ac- tivities outside of the district from which the revenues are derived, regardless of when the district is created. For purposes of this subdivision, "district" includes a district or a project area for which certification to col- lect increments was requested before August 1, 1979. Subd. 6.Pooling permitted for deficits. (a) This subdivision applies only to districts for which the request for certification was made before August 1, 2001, and without regard to whether the request for certification was made prior to August 1, 1979. (b) The municipality for the district may transfer avail- able increments from another tax increment financing district located in the municipality, if the transfer is necessary to eliminate a deficit in the district to which the increments are transferred. The municipality may transfer increments as provided by this subdivision without regard to whether the transfer or expenditure is authorized by the tax increment financing plan for the district from which the transfer is made. A deficit in the district for purposes of this subdivision means the lesser of the following two amounts: (1)(i) the amount due during the calendar year to pay preexisting obligations of the district; minus (ii) the total increments collected or to be collected from properties located within the district that are available for the calendar year including amounts collected in prior years that are currently available; plus (iii) total increments from properties located in other districts in the municipality including amounts col- lected in prior years that are available to be used to meet the district's obligations under this section, ex- cluding this subdivision, or other provisions of law (but excluding a special tax under section 469.1791 and the grant program under Laws 1997, chapter 231, article 1, section 19, or Laws 2001, First Special Session chapter 5); or (2) the reduction in increments collected from prop- erties located in the district for the calendar year as a result of the changes in class rates in Laws 1997, chap- ter 231, article 1; Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001, First Special Session chapter 5, or the elimination of the general education tax levy under Laws 2001, First Special Ses- sion chapter 5. Appendix *3 The authority may compute the deficit amount un- der clause (1) only (without regard to the limit under clause (2)) if the authority makes an irrevocable com- mitment, by resolution, to use increments from the district to which increments are to be transferred and any transferred increments are only used to pay pre- existing obligations and administrative expenses for the district that are required to be paid under section 469.176, subdivision 4h, paragraph (a). (c) A preexisting obligation means: (1) bonds issued and sold before August 1, 2001, or bonds issued pursuant to a binding contract requir- ing the issuance of bonds entered into before July 1, 2001, and bonds issued to refund such bonds or to reimburse expenditures made in conjunction with a signed contractual agreement entered into before Au- gust 1, 2001, to the extent that the bonds are secured by a pledge of increments from the tax increment fi- nancing district; and (2) binding contracts entered into before August 1, 2001, to the extent that the contracts require payments secured by a pledge of increments from the tax incre- ment financing district. (d) The municipality may require a development au- thority, other than a seaway port authority, to transfer available increments including amounts collected in prior years that are currently available for any of its tax increment financing districts in the municipality to make up an insufficiency in another district in the municipality, regardless of whether the district was established by the development authority or another development authority. This authority applies not- withstanding any law to the contrary, but applies only to a development authority that: (1) was established by the municipality; or (2) the governing body of which is appointed, in whole or part, by the municipality or an officer of the municipality or which consists, in whole or part, of members of the governing body of the municipality. The municipality may use this authority only after it has first used all available increments of the receiving development authority to eliminate the insufficiency and exercised any permitted action under section 469.1792, subdivision 3, for preexisting districts of the receiving development authority to eliminate the in- sufficiency. (e) The authority under this subdivision to spend tax increments outside of the area of the district from which the tax increments were collected: (1) is an exception to the restrictions under section 469.176, subdivisions 4b, 4c, 4d, 4e, 4i, and 4j; the ex- penditure limits under section 469.176, subdivision 1c; and the other provisions of this section; and the percentage restrictions under subdivision 2 must be calculated after deducting increments spent under this subdivision from the total increments for the dis- trict; and (2) applies notwithstanding the provisions of the Tax Increment Financing Act in effect for districts for which the request for certification was made before June 30, 1982, or any other law to the contrary. (f) If a preexisting obligation requires the development authority to pay an amount that is limited to the incre- ment from the district or a specific development with- Appendix in the district and if the obligation requires paying a higher amount to the extent that increments are avail- able, the municipality may determine that the amount due under the preexisting obligation equals the higher amount and may authorize the transfer of increments under this subdivision to pay up to the higher amount. The existence of a guarantee of obligations by the indi- vidual or entity that would receive the payment under this paragraph is disregarded in the determination of eligibility to pool under this subdivision. The author- ity to transfer increments under this paragraph may only be used to the extent that the payment of all other preexisting obligations in the municipality due during the calendar year have been satisfied. (g) For transfers of increments made in calendar year 2005 and later, the reduction in increments as a result of the elimination of the general education tax levy for purposes of paragraph (b), clause (2), for a taxes pay- able year equals the general education tax rate for the school district under Minnesota Statutes 2000, section 273.1382, subdivision 1, for taxes payable in 2001, mul- tiplied by the captured tax capacity of the district for the current taxes payable year. Modification of Plan (469.175, Subd. 4) (a) A tax increment financing plan may be modified by an authority. (b) The authority may make the following modifica- tions only upon the notice and after the discussion, public hearing, and findings required for approval of the original plan: (1) any reduction or enlargement of geographic area of the project or tax increment financing district that does not meet the requirements of paragraph (e); (2) increase in amount of bonded indebtedness to be incurred; (3) a determination to capitalize interest on the debt if that determination was not a part of the original plan; (4) increase in the portion of the captured net tax ca- pacity to be retained by the authority; (5) increase in the estimate of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the district; or (6) designation of additional property to be acquired by the authority. (c) If an authority changes the type of district to an- other type of district, this change is not a modification but requires the authority to follow the procedure set forth in sections 469.174 to 469.179 for adoption of a new plan, including certification of the net tax capacity of the district by the county auditor. (d) If a redevelopment district or a renewal and reno- vation district is enlarged, the reasons and supporting facts for the determination that the addition to the dis- trict meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or subdivision 10a, must be documented. (e) The requirements of paragraph (b) do not apply if (1) the only modification is elimination of parcels from the project or district and (2)(A) the current net tax ca- pacity of the parcels eliminated from the district equals or exceeds the net tax capacity of those parcels in the district's original net tax capacity or (B) the authority agrees that, notwithstanding section 469.177, subdivi- sion 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcels Appendix W eliminated from the district. The authority must notify the county auditor of any modification that reduces or enlarges the geographic area of a district or a project area. (f) The geographic area of a tax increment financing district may be reduced, but shall not be enlarged af- ter five years following the date of certification of the original net tax capacity by the county auditor or after August 1, 1984, for tax increment financing districts authorized prior to August 1, 1979. Decertification (469.177, Subd 12) The county auditor shall decertify a tax increment financing district when the earliest of the following times is reached: (1) the applicable maximum duration limit under sec- tion 469.176, subdivisions 1a to 1g; (2) the maximum duration limit, if any, provided by the municipality pursuant to section 469.176, subdivi- sion 1; (3) the time of decertification specified in section 469.1761, subdivision 4, if the commissioner of rev- enue issues an order of noncompliance and the maxi- mum duration limit for economic development dis- tricts has been exceeded; (4) upon completion of the required actions to allow decertification under section 469.1763, subdivision 4; or (5) upon the later of receipt by the county auditor of a written request for decertification from the author- ity that requested certification of the original net tax capacity of the district or its successor or the decertifi- cation date specified in the request. Appendix A EDA: 6/20/2012 5. Consideration of allocating $400,000 TIF funds from District 1 -5 for a transportation and beautification proiect. A. REFERENCE AND BACKGROUND: TIF District 1 -5 is set to expire at the end of 2012. If the EDA does not allocate the funds by December 31, 2012 the EDA will be required to return the funds to the County for redistribution between the local taxing authorities. It is estimated that the fund balance will be approximately $480,000. Staff would like the EDA to consider allocating $400,000 of TIF funds to complete a transportation and beautification project on the corner of Highway 25 and 7t' Street East. The project would include the following improvements: a. Constructing right turn lane from east bound 7t' Street to Highway 25 b. Constructing a two tier retaining wall along Highway 25 and a single tier retaining wall along 7t' Street adjacent to the cemetery c. Monument signs The improvement project would greatly improve the aesthetics into downtown (see graphic below) and turning movement from 7t' Street to Highway 25. The project would also include developing a plaza at the corner of Highway 25 and 6t' Street. EDA dollars cannot be utilized for park or plaza purposes. However, the City Council allocated $75,000 to improve the appearance of the landscape wall along Highway 25 that abuts the cemetery. These funds would be utilized for the development of the 6t' street plaza. The Embracing Downtown plan outlines the need to improve the aesthetics along Highway 25 and identifies a green plaza at the corner of 6t' Street and Highway 25. The proposed improvement projects are eligible expenses within TIF 1 -5. Signage would include a City of Monticello sign on the corner of 7t' Street and Highway 25 as illustrated in the above drawing and a monument/directional sign on the corner of 6t' Street and Highway 25 within the proposed plaza area. The Downtown Steering Committee reviewed the concept at their June 6, 2012 meeting. The group is supportive of the concept. The group did state that they would like to continue to encourage City Staff and policy boards to continue to prioritize TIF funds for redevelopment project costs (i.e. land purchases, demolition, site improvements). Staff would like to note that funds balances are still accessible in Districts 1 -6 and 1 -22, EDA general fund, and through EDA: 6/20/2012 the creation of a new TIF District. As private investment projects come to fruition staff will work with the policy boards to ensure the best and most useful funding source is utilized. Al. Budget Impact: TIF 1 -5 has budgeted 1,201,300 for site improvements. To date a total of $469,838 has been expended. It appears a budget amendment would not be needed. However, if the EDA supports the proposed project staff will verify with Kennedy and Graven that an amendment is not needed. B. ALTERNATIVE ACTIONS: 1. Motion to allocate $400,000 of TIF funds from District 1 -5 to complete transportation and beautification improvements along Highway 25 and east bound 7t' Street contingent upon City Council authorizing the project. 2. Motion to deny allocating surplus TIF for transportation and beautification improvements along Highway 25 and eastbound 7t' Street. 3. Motion to table for further research and discussion. C. STAFF RECOMMENDATION: City staff recommends the EDA allocate $400,000 of TIF funds to complete transportation and beautification improvements along Highway 25 and 7t' Street East. TIF 1 -5 has adequate funds to assist in creating a beautiful entrance to downtown Monticello. The proposed improvements would also provide for a needed right hand turn lane from 7t' Street eastbound to State Highway 25. The city as a whole would benefit from the proposed improvements by providing better access to Highway 25 at a busy corner and creating better traffic site lines along Highway 25 and 6t' Street. The proposed project also complies with the Embracing Downtown plan and would be another example of an implementation project. Staff will continue to work with the ReStoring Downtown Steering Committee and policy boards to ensure adequate dollars are allocated for both short term and long term redevelopment and site improvements projects. Upon EDA acceptance and approval, the proposed improvement project will be discussed with the City Council for their review and approval. Once both policy boards have generally accepted the concept of the improvement project staff will detail exact funding sources for the project components between the City and EDA. It would then be staff's intention to complete the required engineering and bidding process during the summer and fall for an anticipated construction start date of Spring 2013. D. ATTACHMENTS: None 7. Economic Development Director Updates: Redevelopment: Soil borings were completed on Fred's Auto Body property the week of June 4, 2012. Staff anticipates receiving the assessment in the next few weeks. Staff anticipates a closing date in early July. Staff is often asked what the EDA is going to do with the property after closing. The EDA will need to review options and opportunities within the next few months. Staff has received a few inquiries for the property. Interested users include construction office and storage of vehicles. The next step will also be to apply for clean up grants. The next grant application deadline is in November. We successfully closed on the two Montgomery Farms buildings located at the corner of Highway 25 and Broadway Street. Staff is working through all of the leaseholder agreements. Now that the EDA is the owner, we have to write new holdover leases for each tenant, obtain their signature, and try to receive appropriate rent payments. Dan Wilson is working with the residential and commercial tenants to help them transition into new locations. Dr. Wong (Lakeland Dental) recently closed on the old Monticello Times Building and submitted a building permit for necessary site improvements. It is anticipated that site improvements, remodeling, and moving the business will take approximately 6 months. ReStoreing Downtown: The Downtown Leadership Team has established an Ambassadors, Appearance, and Fundraising team. The Ambassadors will be going out into the downtown community ensuring everyone has accurate information and continue to gain support for the Embracing Downtown vision. The Appearance team will be working on getting new banners and planter's downtown. The fundraising committee will sell investor opportunities to businesses, property owners, others as deemed appropriate. Inquiries: Staff responded to another data center request and is working with a broker who is representing a manufacturing company that is interested in the Monticello area. Staff will continue to be proactive with these two leads. Marketing: A new marketing piece has been completed and will be mailed to appropriate audiences by the end of June. Business Communications & Retention Initiatives: Please mark your calendars for Tuesday, June 19th for two business tours: 3:00pm — Suburban Manufacturing 4:00pm — Dahlheimer Distribution Staff is working to coordinate additional business tours and Mayor /Administrator breakfast meetings. MISC.: Bertram Chain of Lakes: The Community Development Director has set up a tour of Bertram Lakes for Friday, June 22nd. The tour is scheduled from 9:00 AM — 11: AM. The IEDC and the EDA are welcome to attend that tour. Please contact Angela via email or phone (763.295.2711 or Angela. Schumann&ci.monticello.mn.us) to RSVP. Walking shoes are highly recommended. At the end of 2012, the City of Monticello and Wright County will own over half of the 1,200 acre regional park property. (See attached map.) In addition, the City has applied for a grant for the first acquisition of property related to the planned City athletic fields, to be located north of Bertram Lake. Beginning this summer, canoe access to both Long and Bertram Lakes will be available to the public and maintained hiking trails will be open throughout the acreage owned by the City and County. (Map attached.) In addition, the YMCA of the Greater Twin Cities has received approval of their new Bertram Lakes day camp Conditional Use Permit through Wright County Planning Commission. Their new camp location is at the northwest end of Long Lake. The existing camp is currently located on the north side of Bertram Lake. The YMCA intends to begin construction of their new camp facilities in late 2012, which will clear the way for acquisition of parcels surrounding Bertram Lake — including the beach property. Logo: In April, the City Council adopted a new logo for the City. The logo represents a blending of the two assets the community is most known for — the Mississippi River and the Trumpeter Swan. The logo will be gradually introduced in all City communication pieces and on City equipment over the coming years. The logo can also be customized for the various City enterprises, such as FiberNet and the Community Center. Changes to the City's newsletter and websites are already in progress. CITY OF Monticello EDA June 20, 2012 Great River Trailways & Trailhead Update Please find attached the most recent mapping of the Great River Trailways Project. The City has been successful in receiving both federal and state grant funding for various components of the project (all of trail segments 1 and 2 and portions of trail segments 3, 4 and the trailhead). Staff is waiting to hear back from the DNR on a last round of grants, which may result in full funding by state and federal agencies of the construction of all components shown on the map. The City's local share will include only the engineering and environmental costs. The underpass component of the project is already in place and construction on the fully funded components is scheduled to begin this fall. EDA June 20, 2012