Interfund Loan- Parking/ Real Estate SalesTO William P. Craig
INTER OFFICE MEMO
FROM John E. Schedler
SUBJECT Interfund Loan Parking /Real Estate Sales
CITY OF HOPKINS
1010 FIRST STREET SOUTH PHONE 936-8474
HOPKINS, MINNESOTA 55343
DATE Dec. 13, 19 83
The Parking Fund revenues are inadequate at their present levels to maintain
the annual principle and interest payment on the $150,000 loan made by the
Real Estate Sales Fund in 1980. The repayment schedule had been established
for a period of 15 years requiring a P I annual payment of $16,469.
The cash flow in the Parking Fund has been insufficient and thus a temporary
year end loan of about $4,000 has been needed each year until the fees for
the new year are received.
With the recent change in the law, tax increment funds are now proper to use
for a project adjacent to a TI district, which the parking lot at 1st Street
North and 10th Avenue is. The tax increment cash balance as of November 1983
is $347,583 and a $250,000 plus settlement is due next week from the county
against which future commercial loans is the major potential commitment at
this time.
If the TI funds were to pay off this loan it would free up the Real Estate
Fund cash for other projects in the City. The benefits of the parking lot
location should aid in the downtown development of the tax increment district.
As of January 1, 1983 the principle balance on the loan was $130,309.64. The
1983 interest of $9,156.67 will be covered by revenues, but not the principle
and a negative cash balance of $3,000 plus is projected.
I would recommend that Fund 208, C.B.D. Redevelopment Fund, where the TI funds
are accounted for, pay off the balance of the loan at the end of 1983 in the
amount of $127,000.00. This would be the balance after the Parking Fund pays
the 1983 interest and approximately half ($3,809.64) of the 1983 principle
payment. This procedure would leave a small cash balance in the Parking Fund
at the end of 1983.