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HomeMy WebLinkAbout5G - Scott County Memo of Under MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT March 6, 2006 rW. 5G \ Frank Boyles, City Manage ". CONSIDER APPROVAL OF A MEMORANDUM OF UNDERSTANDING WITH SCOTT COUNTY WITH RESPECT TO TAX INCREMENT FINANCING DISTRICT AUDIT FINDINGS AND AUTHORIZE THE MAYOR AND CITY MANAGER TO EXECUTE THE DOCUMENT. Introduction The purpose of this agenda item is to consider approval of a memorandum of understanding with Scott County. Historv Last year, the State Auditor's office audited Tax increment Districts 2-7 and 2-8. The audit revealed two things: 1. The City should have published a development district map with its public notice, but did not. 2. The City should have credited $967 and $846 of interest to tax increment accounts 2-7 and 2-8, respectively. Current Circumstances Minnesota Statutes provide that the Scott County Attorney is responsible for the enforcement of the Auditor's findings (despite the fact that we offered to distribute the interest on the day they advised us of finding #2). We have met with the Scott County Attorney's office and a memorandum of understanding has been prepared which would conclude this matter. Conclusion Approval of the memorandum of understanding is recommended as part of the consent agenda. ISSUES: The State Auditor works for the legislature. The legislature is generally very critical of Tax Increment Finance. The Auditor's office had two auditors at City Hall for one week. They complemented us on the organization and comprehensiveness of our files and we actually disclosed to them that because the interest was not a material amount, it was no longer being distributed to the respective TIF accounts. When they revealed their findings, we offered to make the adjustments immediately. We are now in full compliance with the Auditor's recommendations. The interest has been credited to each district. A map was included in the public notice for TIF District 5-1. FINANCIAL IMPACT: None. Funding is being moved from one TIF account to another. ALTERNATIVES: 1. Approve the Memorandum of Understanding. 2. Direct the staff to provide additional information. RECOMMENDED Alternative #1. A copy of the memorandum of understanding is attached for MOTION: City Council information. www.cityofpriorlake.com Fhbn€~~447~4230 / Fax 952.447.4245 MEMORANDUM OF UNDERSTANDING We, Scott County, the regulatory government unit, and the City of Prior Lake, the TIF District creator and administrator, hereby agree as follows: 1. The City of Prior Lake created and administers Tax Increment Financing (TIF) Districts pursuant to Minnesota Statutes. 2. All TIF Districts are regulated by Minnesota Statutes and are subject to oversight by the Office of the State Auditor. 3. The City of Prior Lake was the subject of an audit conducted by the Office of the State Auditor from October 18 through 21,2004. 4. As a result of the audit the Office of the State Auditor made two findings regarding the City of Prior Lake's TIF Districts 2-7 and 2-8. 5. Finding 1 noted that the City of Prior Lake failed to include in the public hearing notice a map of the area of TIF Districts 2-7 and 2-8 from which tax increment would be collected and spent, as required by Minn. Stat. ~ 469.175, subd. 3. 6. Finding 2 noted that interest earned on tax increment from 2001 through 2003 was not credited to TIF Districts 2-7 and 2-8 with the interest earned on those districts' fund balances and thus it could not be determined if the interest earned were used in accordance with the requirements of Minn. Stat. ~ 469.174, subd. 25. 7. The City of Prior Lake concurs with both findings made by the Office of State Auditor. 8. Pursuant to Minn. Stat. ~ 469.1771 the Scott County Attorney is responsible for bringing actions to enforce the provisions of Minn. Stat. ~ 469.174 to 469.1798. 9. The City of Prior Lake has determined that the amount of interest earned on TIF District 2-7 for the years 2001 through 2003 is $967.00 and the amount of interest earned on TIF District 2-8 for the years 2001 through 2003 is $846.00. THEREFORE, IT IS HEREBY AGREED, by the undersigned, as follows: 1. The City of Prior Lake agrees in all future TIF Districts to publish the maps required by Minn. Stat. ~ 469.175, subd. 3 (Supp. 1995 and 1996); and 2. The City of Prior Lake agrees that the amount of interest earned on TIF District 2-7, in the amount of$967.00 and the interest earned on TIF District 2-8, in the amount of$846.00, shall be credited to the appropriate TIF District, via a prior period adjustment, and shall be used in accordance with the requirements of Minn. Stat. ~ 469.174, subd. 25. 3. The Office of the Scott County Attorney agrees to the return of the interest earned on the TIF Districts to the TIF Districts, via a prior period adjustment, to be used in accordance with the requirements of Minn. Stat. ~ 469.174, subd. 25. Date: , 2006 Pat Ciliberto Scott County Attorney 200 Fourth Avenue West, Suite JC340 Shakopee, MN 55379 Date: Frank Boyles Prior Lake City Manager 16200 Eagle Creek Avenue South East Prior Lake, MN 55372 ,2006 Date: ,2006 Jack Haugen City of Prior Lake Mayor 16200 Eagle Creek Avenue South East Prior Lake, MN 55372