By MaryHelen Swanson

Even though it was the end of a very long day, Monday, March 12, North Branch City Administrator Bridgitte Konrad was excited about one of the final items on the city council agenda - a State of Minnesota Auditor's report on two tax increment financing districts (TIF).

The two are TIF districts of the city's economic development authority.

They include Housing District 99A-1 (Housing District) and Economic Development District 2000-1 (Economic Development District), commonly referred to as the Senior Housing & Community Center and the Industrial Park II. Both districts are currently active.

The audit report did, however, show two findings that the state felt necessary to note.

One was a failure of the city to comply with record retention for the TIF districts. Initially, the city was unable to provide the redevelopment plan for the housing district. The city responded by providing the document to the auditor's office.

Also in the initial notice, the auditor's office also noted that the city did not provide accounting journal entries with respect to 2001 for both TIF districts. Responding, the city said those documents could not be found.

A second finding in the initial notice was that many accounting entries and financial records related to TIF transactions of both TIF districts lacked transparency.

That meant some of the records were not separated by transaction or activity with the respective TIF, the auditor's office noted, and certain invoices were not coded sufficiently. As a result, the auditors could not distinguish tax increment expenditures from non-tax increment expenditures from the documents.

Responding to this finding, the city separated expenditures by transaction or activity and included spreadsheets, invoices and miscellaneous supporting documents detailing the costs.

With this response, the auditor's office withdrew Finding 2.

In addition, the auditor's office determined that because the city was able to provide sufficient supplementary documents in lieu of the missing accounting journal entries with respect to the year 2001 for both TIF districts, the need for such documentation was mitigated.

Because of this, the auditor's office did not forward Finding 1 to the county attorney pursuant to Minn. Stat. § 49.1771, subd. 1 (b).