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Tax increment Financing in Minnesota <br /> • <br /> City Administrative Costs <br /> The creation of a TIF district and the negotiation of thorough <br /> Development Agreement requires substantial time commitments by <br /> the City staff and its consultants. A large portion of that time is <br /> expended prior to the signing of the Developer Agreernert; and <br /> before actual construction of the new development Furthermore, <br /> additional City staff time is needed to monitor and report or, the <br /> performance of the TIF district over its entire duration. The <br /> legislature has anticipated these City costs by providing sir a <br /> reimbursement for administrative costs. This reimbursement is <br /> limited to the lesser of 10% of project costs or 10% of increment <br /> revenue, and is intended to cover all staff and consultant costs <br /> other than engineering. <br /> The City should consider two relevant policy questions. <br /> • Does the City wish to receive a guarantee of its costs from <br /> • the landowner for the period from inception of the TIF process <br /> until signing of the Development Agreement? This guarantee <br /> covers the situation whereby the project terminates during the <br /> negotiation phase. <br /> • What is the appropriate level cf administrative cost <br /> reimbursement? <br /> • <br />