2021.07.27 WS Packet v.2 - Laserfiche WebLink

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2. Executive Summary: Tax Increment Financing District Review V The primary purpose of the review is to understand the current financial status for each of the City's TIF Districts and to determine what flexibility there may be in each district to deal with excess increments, deficits, pooling, administrative payments, additional expenditures, etc. In preparing this report, Baker Tilly has relied on information provided by the City based on previously prepared reports and district activities. Due to the timing for availability of information, the report is based on a combination of 2019 and 2020 financial data. When available, all estimates will be updated with current information. For the purpose of this report we have evaluated the City's districts and placed them into separate categories dependent upon the type of district and the date of approval and certification. Statutory powers relate directly to the type and certification dates of a TIF district. The City has currently one type of TIF District: Redevelopment District certified post-1990 as any other types of districts have been decertified. The ability to use tax increment revenues is dependent upon the type and establishing dates of a TIF District. The City is in compliance with the requirements of each district. Several of the districts are supporting existing pooled debt obligations and have some flexibility regarding the use of future funds. Post-90 districts have less flexibility as outlined in the first sections of the report and were established to assist with development and redevelopment of individual projects within the districts. Once the obligations have been fulfilled, there will be limited opportunities to finance additional projects. The City has been utilizing special legislation that eliminates the restrictions on pooling for several of its districts including TIF District 20 and 26. Available increment from those districts are authorized to be spent on TIF Districts 31 and 32 to reduce the existing district obligation burdens. Tax Increment has been a benefit to the City of New Brighton with significant tax capacity and market value growth in the TIF districts. As each district is certified, the captured tax capacity is added to the City's tax base as increased tax capacity that wouldn't have occurred but for the use of this tool. Ongoing, we recommend the City annually review the current status of existing TIF Districts and use available surplus increments to: • Continue to finance authorized project area and district obligations • Annually review budgets to determine when/if modifications may be necessary • Support pooled debt service payments as necessary • Decertify upon fulfillment of obligations • Return/use available increment 4