Annually, the city is required to submit TIF reports to the State Auditors Office.  Due to additional reporting requirements and changes in staff, the city contracted with Ehlers and Associates to complete the 2010 TIF reports and in the process examine prior year reportings.  During this reporting process, it was discovered that approximately $357,250 was recorded as interest in TIF 1 ($263,496), TIF 2 ($41,387) and TIF 4 ($52,367) for interest earnings in years prior to July 1, 1997.  Prior to July 1, 1997, municipalities were not required to report 100% interest earnings in the respective TIF account.  Cities had the option to transfer a portion of the interest earnings to funds that were not as restrictive as TIF funds.

A worksession was held on August 30 regarding proposed 2012 General Fund and HRA budgets.  The HRA budget, as presented, reflected expenditures exceeding revenues by $136,302 and the General Fund, though balanced, using funds from the Public Improvement Revolving Fund (PIR Fund) to fund the remaining expenditures attributed to the 2012 street maintenance program.  At this meeting, it was agreed upon that the HRA budget should be balanced by using $136,302 from the transfer of interest earnings from TIF. 

Staff is proposing that the remaining $220,948 of interest earnings be transferred to the PIR fund to offset the 2012 General Fund Budget transfer in the amount of $219,500 for street maintenance program costs.  The PIR Fund was aslo the fund that was used to "hold" the $603,000 in funds when the city amended its fund balance policy in 2010.

 

Pooled TIF interest earnings from the period prior to July 1, 1997.