2016.11.02 EDC Combined - Laserfiche WebLink

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• Page 13 discusses the assumptions made with regard financial analysis. • Page 14 provides recommendations based on the financial analysis completed. Gundlach stated that based on the Recommendations noted on page 14, there are no immediate actions that need to be taken with regarding to the overall financial health of New Brighton’s TIF program. Two TIF districts are recommended to be more closely monitored, those being districts #26 & #33. Future budget modifications may need to be made. This information is for review and discussion purposes only. Ehler’s staff will provide a brief review of the information and the Commission is encouraged to discuss the plan and provide feedback. Jason Aarsvold, Ehlers, reviewed the TIF management plan in further detail with the EDC noting this document was updated often in order to keep the City appraised of the financial situation. Jeanne Vogt, Ehlers, described the circumstances in which tax increment surplus was returned to the City. She then discussed the City’s policy for using surplus tax increment. Further discussion ensued regarding the City’s TIF budget, existing interfund loans, the tax base and existing TIF districts. Chair Zisla requested further information on the municipal development fund. Gundlach discussed the history and use of the municipal development fund with the EDC, describing how this fund assisted the City with redevelopment. Mr. Aarsvold explained the goal would be to replenish this fund over time in order to continue redevelopment projects. Chair Zisla questioned how the City’s TIF budgets were at this time. Mr. Aarsvold believed the City’s TIF budgets were fine at this time, but would continue to be monitored. He appreciated the City’s ongoing efforts to review and address their TIF Districts. New Brighton Exchange Financial Dashboard Gundlach explained Ehler’s recently updated the New Brighton Exchange Dashboard, which is a financial tool staff, the EDC, and Council use to understand the financial impact of the New Brighton Exchange, development block by development block. The dashboard reflects realized development and/or projected development, year built or projected to be built, finished market values, and total estimated TIF. The bottom line of the dashboard reflects a variety of spreadsheets regarding TIF collection, bond payments, and projected repayments to the City’s Municipal Development Fund, also referred to as Fund 460. Gundlach reported this dashboard was originally developed to understand the minimum development necessary to generate enough tax increment to pay back the bonds, also referred to as the “break even” or “minimum development” scenario. Over the last couple of years it has become apparent New Brighton Exchange has enough development to generate adequate tax increment to pay back the bonds. This allows staff, the Commission, and Council to focus on repayment of the Municipal Development Fund loan. The greater capacity to repay principal and interest of the interfund loan, which is currently valued at approximately $12 million, the more able financially the City will be to undertake future redevelopment projects. The updated dashboard reflects a cash balance at the end of year 2035, the year the TIF districts expire, of $11,720,799. The updated dashboard takes into consideration the following revisions from the previous dashboard reviewed by the Commission and Council: • Pay 2016 values and collected tax increment, assuming 100% collection • Pay 2017 values and projected tax increment, using Pay 2016 tax rates and assuming 100% collection • The timing of development for Blocks E and F was moved from 2017 to 2019