Agenda - Council - 10/14/1997 - Laserfiche WebLink

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CASE AUTHORIZE AGREEMENT WITH SPRINGSTED, INC. TO PERFORM TIF COMPLIANCE AUDIT By: Jessie Hart, Finance Officer Background: As you are aware the City of Ramsey has been involved in the use of tax increment financing [TIF] within the City for several years. This use of TIF has afforded the City the opportunity to expand its tax base [both residential and commercial] and entice quality businesses to the City. The City currently has two Development Districts which incorporate six tax increment financing districts. Under the law, pooling of funds within a development district has always been allowed and the reporting to the State had always been required by development district. The 1995 legislature, in an attempt to ensure that TIF funds were not being misused, implemented very stringent reporting guidelines for the 1995 year-end reporting forms. These guidelines required that each TIF district be reported separately. This requirement was retroactive to the inception of each district. The 1995 reports were filed with the State in mid-July of 1996. At that time it was noted to the State TIF Department that there were some inadequacies in the accounting information from the early years [apparent computer system malfunctions and retention of records] and that the changes in categories for reporting purposes had caused what appeared to be discrepancies from the budgeted amounts. This same note was made with the 1996 reports when they were filed earlier this year. While I am comfortable that we are in compliance under legal standards, there is concern that the budgets within each district need to modified with the inception of each new development agreement or at least once each year o which I don't believe has been done. There has also been concern expressed as to the need for "more" detail as it pertains to each distr/ct. On that same note, the changes in this last legislative session have potential negative impacts on each district as it pertains to future increment collections and outstanding commitments. The above information was shared with the auditors during the 1996 audit and based on that discussion the auditors issued a comment in their annual management report suggesting that we contract with an outside agency to complete a compliance audit on all of our districts [Exhibit Al. In discussions with the staff at the State, it was suggested that we utilize a fiscal agent that is familiar with the City and its TIF activity. The fiscal agent that we have used on a consistent basis is Springsted, Inc. They have been involved in our TIF related bond sales as well as assisting in the preparation of cash flows for each district. They are also currently very active in this type of compliance audit.