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CASE # 5 Distributed October 29, 1991 TAX INCREMENT FINANCING ADMINISTRATIVE COSTS By: Sandra Ashley Heiling, Finance Officer Background: 1990 legislation significantly increased the reporting requirements on Tax Increment Financing Districts. As some of these requirements were assigned to counties for the 1991 assessment year, the following provision was made regarding county expenses for same: Section 469.176, Subd. 4h County Costs. (a) Tax increment may be used to pay for the county's actual administrative expenses under sections 469.174 to 469.179 The county may require payment of those expenses by February 15 of the year after the year in which the expenses are incurred. The amount of these payments is not required to be set forth in the tax increment financing plan for the project. To obtain payment for actual administrative costs, the county auditor must submit to the authority a record of costs incurred by the county auditor related to administration of the authority's tax increment financing districts. For 1991, the City of Ramsey has been charged by Anoka County as follows: Maintenance costs at $7.11 per parcel and @270.16 per district for a total of Additional costs - prior year original certification Pay 1991 Anoka County Administrative Costs $4,998.19 1.886.48 $6,884.67 Anoka County has identified a total cost of approximately $57,000 in support of tax increment financing districts, and this cost will be borne by the cities. Observations: i The City Administrator and 1 attended a meeting at Anoka County to discuss these charges. · Representatives from other cities in Anoka County also attended this meeting. The meeting ~ began and ended on a friendly note with the main discussion focused on how the County had \ determined the cost. Anoka County included costs for staff, supplies and administrative ~ .~expenditures, and when questioned as to what administrative expenses were included - the ~esponse was primarily the cost of facilities (heat, light, building repair, etc. on a square foot asis). While there is no question but the County does incur cost for tax increment reporting, this is another example of additional costs incurred at the expense of cities. Committee Action: None - discussion only. Review Checklist: Finance Officer City Administrator 10/29/91