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Executive Summary Management Review & Analysis-Tax Increment Financing Districts Revenue from tax increment financing (TIF) districts is a financial asset of the City of New Brighton for the projects which were initially assisted and for the City as a whole. This revenue will first be used to pay initial obligations. A portion (but not all) of the remaining revenues can be used to participate in other eligible development projects. Ehlers & Associates worked with City staff to create the following plan for the management of TIF districts and the related obligations. We prepared the financial projections for revenues and repayment of obligations based on actual activity to date. The payments were calculated based on terms in development agreements and actual bond schedules. We did not review prior year's transaction detail. The management of TIF districts is an ongoing activity. TIF requires administrative oversight for reporting, tracking parcel information, compliance with use restrictions in the TIF law and the development agreements, and annual income and debt service. The factors that produce tax increment revenues such as tax rates, assessor's values, and class rates change every year. The state property tax laws have changed significantly since 1997, including the major reforms enacted in 2001. The revenues from the City's districts are largely site specific, meaning that the revenues are restricted by law and by contract with the developers. The TIF must be used primarily to address housing or redevelopment needs for the parcels in the TIF district within a specified period of time. The Office of the State Auditor (OSA) has a TIF division which is mandated by state law to collect annual reporting forms and, if necessary, audit the use of TIF. Such audits could result in a letter to the county attorney or attorney general for enforcement actions. O Management Review&Analysis-Tax Increment Financing Districts February 2012 New Brighton, Minnesota Page 5