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Assumptions Before discussing the findings of the current TIF analysis, it is important to understand the assumptions used in making these projections. 1. Fund balances shown are based on actual audited amounts for December 31, 2010. 2. Pay 2011 revenues are based upon final tax increment calculations, assuming 100%collections. Pay 2012 projections are based on Proposed Pay 2012 revenues, assuming 100%collection. 3. Projected revenues do not account for additional development or inflation of existing values. Projected revenues also do not account for decreases or increases in the tax rate or inflationary changes on taxable value. 4. Interest revenue is projected at 3%of beginning fund balance. Recommendations The financial analysis of the City of New Brighton's TIF Districts offers the following recommendations: Budget Modifications Budget modifications may be recommended for the following TIF Districts: • TIF #8: Rush Lake Business Park: Due to the construction of the new hotel, additional TIF revenues will soon exceed the current budget. This district also needs to address the issue of generating excess increment on the Annual TIF Collection Forms. This modification needs to be done prior to district expiration on 12/31/2012. • TIF#26: Brighton Corporate Business Park III: The TIF revenues for this district are expected to exceed the budget by 2020. • TIF #33: Marv's Transmission: This district should be closely monitored to ensure TIF expenses don't exceed the TIF budget. Management Review&Analysis-Tax Increment Financing Districts February 2012 New Brighton, Minnesota Page 16