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

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ACCOUNTING AND REPORTING COMMENTS In the last few years, the State Legislature and State Auditor's Office have focused a lot of attention on the use of tax increment districts. Laws regulating the use of tax increment financing have been made more restrictive for new districts, and a lot of time and effort has been spent reviewing existing districts for budgetary and legal compliance. The annual reporting forms municipalities must submit each year were significantly expanded in 1995. Since then, the State Auditor has been closely reviewing these reports and auditing many districts. A number of these audits have resulted in significant amounts of tax increment financed expenditures being disallowed, and the municipalities asked to pay for the disallowed costs. Some of the areas being focused on are; assuring tax increment plan documents are up to date and in good order, that expenditures of tax increment funds are within the approved purpose and budget of the financing plan, and that all funded expenditures (especially allocated costs such as administrative expenses) are legitimate and supported by proper documentation. We recommend that the City review its current tax increment plans and record keeping to assure they are complete, up-to-date, and in compliance. In our experience, there is not always complete agreement on TIF compliance issues between a City and the State Auditor-'s Office. You may find it helpful to contract with an outside consultant to review your particular TIF plans and make appropriate recommendations to ensure compliance with applicable requirements. ADOPTION OF GASB STATEMENT NO. 27 During the ended December 31, 1996, the City adopted Governmental Accounting Standards Board year (GASB) Statement No. 27, "Accounting for Pensions by State and Local Governmental Employers. In accordance with GASB Statement No. 27, the City changed the format of the Defined Benefit Pension Plan footnote in the City--'s Annual Financial Report. These changes were made to improve the readers understanding of the City's participation in the Public Employee's Retirement Association (PEP, A) pension plan and give the necessary information in a condensed format. This statement was not applied to the City's presentation of the Ramsey Fire Department Relief Association, as the Association must fh'st adopt GASB Statement No. 25,"Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans", which is effective for fiscal years beginning after June 15, 1996. -14- ltl