OSA Weekly Update - 4/18/2025

1. Message from Auditor Blaha

2. Fire Relief Associations: Opportunity for Input

3. TIF Pooled Debt Form

4. Avoiding Pitfall: "Administrative" TIF Plan Modifications

5. Job Openings

1. Message from Auditor Blaha

2. Fire Relief Associations: Opportunity for Input

The OSA’s Pension Division plans to release a redesigned version of the Schedule Form next year, which is completed annually by fire relief associations that pay defined benefit lump-sum service pensions. The form is used to estimate member liability amounts, determine the plan’s funded status, and calculate whether any city or town contributions are required for the upcoming calendar year. The redesigned form will streamline and reduce data entry and enhance accessibility. 

We’re looking for input on the new layout from relief association officers, municipal officials, and accountants who complete or use the form. If you’d like to be one of the first to see the redesigned form and have an opportunity to share your thoughts before we move to the next phase of development, send the Pension Division an email.

3. TIF Pooled Debt Form

In addition to filing an Annual TIF Report Form for each tax increment financing (TIF) district, authorities must also submit a TIF Pooled Debt Form for any outstanding pooled debt, if applicable. The forms will be made available in May and are due August 1. Authorities that have new pooled debts should notify our office as soon as possible to enable the new form to be available when the other forms are posted in the State Auditor Form Entry System (SAFES).

To learn more, visit the OSA website.

If you have any questions, contact us at TIF@osa.state.mn.us.

4. Avoiding Pitfall: "Administrative" TIF Plan Modifications

From time to time, the Office of the State Auditor (OSA) sees language in tax increment financing (TIF) plans that may reflect an incorrect understanding of the process required to implement particular types of modifications to the TIF plan in the future. While the TIF Act allows some modifications to the TIF Plan to be made without the authority having to go through the more robust consultation, notice, public hearing process that was followed for the original Plan, other types of modifications require that full process. See Minnesota Statutes, section 469.175.

One example of confusion that sometimes arises has to do with changes in cost line items in the TIF Plan. Some TIF Plans include language that suggests that the authority may make changes to the amounts of specific line items describing costs without following the full notice and hearing process, provided that the "overall" or "total" cost remains unchanged. However, this may not be in compliance with the TIF Act, depending on what costs are being addressed.

The TIF Act distinguishes between estimates of the "cost of the project, including administrative expenses," and estimates of "interest as a financing cost." Therefore, if the "total" or "overall" cost that is not changing includes both line items related to (1) the cost of the project, including administrative expenses, and (2) estimates of interest as a financing cost, then the authority needs to determine whether there is an increase to the cost of the project, including administrative expenses. If there is, then even if there are reductions in the estimates of interest as a financing cost that completely offset that increase, the modification does require the authority to follow the consultation, notice, public hearing, and findings process.