Item Coversheet

*4.A.1.


Shakopee City Council
August 2, 2017

FROM:Darin Nelson, Finance Director
TO:Mayor and Council Members
Subject:
Transfer of $2,319,076 from the Amazon TIF District #17 Fund to the Capital Improvement Fund, Sanitary Sewer Fund and Storm Drainage Fund to reimburse respective funds for the 4th Avenue reconstruction project.
Policy/Action Requested:
Approve the interfund transfer of $2,319,076 from the Amazon TIF District #17 to Capital Improvement Fund, Sanitary Sewer Fund and Storm Drainage Fund in the amounts of $1,892,029.08, $294,337.59 and $132,709.33, respectively.
Recommendation:
Approve the motion as requested.
Discussion:
The 4th Avenue reconstruction project #15-7 was spurred by the Amazon development which was accounted for in the Capital Improvement Fund. The increment generated by the district over the next nine years beginning in 2017 will cover a majority of the project costs. The project costs to date are $2,371,867 with additional retainage of approximately $40,000 remaining. The city's increment available through the TIF district is limited to $2,319,076. The approximately $93,000 of expenditures beyond the increment cap are funded with available fund balance within the Capital Improvement Fund.   

 

Rather than reimburse the funds each year via annual increment payments, it is cleaner to reimburse the funds incurring the project costs via one lump-sum transfer from the Amazon TIF #17 Fund. The annual increment payments will then remain in the Amazon TIF #17 fund to replenish the fund's negative cash balance.

 

This project incurred sanitary sewer and storm drainage costs of $294,337.59 and $132,709.33, respectively. The transfer from the Amazon TIF #17 Fund will reimbursement these funds in full with the remaining available increments funds of $1,892,029.08 being transferred to the Capital Improvement Fund.

Budget Impact:
No budget impact - This transfer is a reallocation of cash balances.