RDA Finances Below you will find information on the following aspects of RDA finances: Tax Increment RDA Funding Allocation & Expenditure RDA Budget Process & Budget Documents RDA Audit Process & Audit Documents RDA Funding: Tax Increment The financial engine that drives an RDA’s urban renewal efforts is tax increment financing. Tax increment is the increase (or “increment”) in the property taxes generated within a project area, over and above property taxes generated in that same area prior to the establishment of the RDA project area. The establishment of a project area and the collection of tax increment funds must be approved by the RDA Board of Directors and the local taxing entities (school district, library, water districts, county, etc.). The tax increment generated in a project area is reinvested into that same project area, thus recycling the funds for a specified period of time, usually 20-25 years, after which the tax increment will again be available to the local taxing entities. During the life of the project area, the taxing entities continue to receive the same amount of property taxes that they received prior to the establishment of the project area, along with any share of the increment they may have negotiated with the RDA. Improved redevelopment project areas contribute to the overall health and vitality of the city by reversing the negative effects of blight, while increasing the tax base from which the taxing entities draw their funds. In Salt Lake City, Redevelopment Project Areas’ tax bases have historically grown at twice the rate of surrounding areas that are not designated as RDA project areas. RDA Funding Allocation and Expenditure RDA funds are spent on a variety of projects, as well as loan programs and infrastructure improvements. The RDA also allocates funds for property acquisition and maintenance, and marketing RDA-owned properties for reuse. The RDA budget also includes funds to cover debt service payments, previously arranged tax increment reimbursements, and administrative costs, all of which must be paid from the RDA's tax increment proceeds.

RDA Budget Process & Budget Documents Every year, the RDA undertakes a budget process that requires recommendations from its Redevelopment Advisory Committee (RAC) and the Chief Administrative Officer (Mayor), and approval by its Board of Directors. Per State statute, the RDA must request tax increment funds from Salt Lake County for the upcoming budget year by November 1st of the previous budget year. The RDA makes its funding application available to City departments and the public in January. All requests for RDA funding are submitted to RAC for review prior to its budget ranking meeting in April. All funding applicants are interviewed by RAC and Board members prior to the ranking process. Once RAC and Mayor have ranked the funding applications, the Board reviews the recommendations, and makes the final decision regarding the allocation of funds for the coming fiscal year. This forms the basis for the RDA budget, which must be adopted in June. Understanding the Budget "Certain funds" refers to tax increment that the RDA is likely to receive in the following budget year. "Uncertain funds" refers to tax increment that the RDA may or may not receive in the following budget year. For this reason projects are ranked in order of priority. Projects receiving an allocation from "uncertain funds" will not be started until the RDA receives its final distribution from the Salt Lake County, usually at the end of March. This enables the RDA to establish a budget allocation for the uncertain funds, but to easily drop or scale back a project if the uncertain funds do not materialize. Budget amendments occur each April after the County distributes to the RDA its final portion of tax increment for the previous tax year (current fiscal year). When the funds are actually received by the RDA, "uncertain funds" are no longer uncertain and the previously approved budget is adjusted to reflect actual amounts received.  Expenditures are made according to the prioritized rankings adopted by the Board of Directors the previous June. Recent Annual Budgets 2011-2012 RDA Annual Budget (PDF) 2011-2012 RDA Annual Budget Narrative (PDF) 2010-2011 RDA Annual Budget (PDF) 2010-2011 RDA Annual Budget Narrative (PDF) 2009-2010 RDA Annual Budget (PDF) 2009-2010 RDA Annual Budget Narrative (PDF) Proposed Annual Budget 2011-2012 RDA DRAFT Annual Budget (PDF)   Public Funding Application Process *Now Accepting Applications*   The Funding Application Deadline for the 2012-2013 Fiscal Year is Tuesday, February 21 at 4:00 pm. Below you will find the current funding application and 2012-2013 RDA General Goals, as well as the goals for each project area.   In January or February of each year, the RDA makes its funding application available to City departments and the public. All complete applications received by the deadline will be included in the ranking process undertaken by the RDA Board, the Mayor, and the Redevelopment Advisory Committee (RAC) during the annual budget process. The budget will be finalized by June 30 of the preceding fiscal year.   For a funding application to be considered, it must fulfill an RDA Project Area goal. Visit our maps page to see if your project is located within one of our 10 RDA Project Area. To learn more about how your project might be eligible for RDA funding, download the funding application below and read the RDA's goals for each of its project areas. Feel free to contact the RDA if you have any questions about the application or the process.   2012-2013 RDA Funding Application 2012-2013 RDA Goals

RDA Annual Audit & Audit Documents Understanding the Audit The RDA is required by Utah Code Section 17C-1-604 to conduct, approve, and publish an independent audit of its financial condition. The primary purpose of this audit is to report the amount of tax increment collected by the RDA for each project area; the amount of tax increment paid to each taxing entity; the outstanding principal amount of bonds or loans; the amount expended for acquisition of property, site improvements, public utilities, or other public improvements; and the RDA’s administrative costs. While the last few pages of the audit provide some information on a project area basis, the majority of the audit combines revenues and expenses from all RDA activities. While the audit serves these functions well, the final report does not reflect many of the nuances of the RDA’s finances. In the past, this has caused confusion among those reading the audit without a full understanding of other RDA-related obligations and requirements. In particular, the audit’s reference to “unrestricted cash,” without explanation, can be misleading. The term “unrestricted,” while having a very specific meaning in accounting parlance, carries an unfortunate implication that the funds are completely available for any purpose, which is not the case. There are three primary limitations on the use of “unrestricted cash” by the RDA: 1. Payment of debt service and tax increment reimbursements through previous agreements. Some of the funds included in the total dollar figure represented as “unrestricted cash” are already committed through various contracts and agreements the RDA has executed. For example, the RDA periodically enters tax-increment reimbursement agreements with private developers, whereby a portion of the increased property taxes associated with a particular development will be refunded to that developer, in exchange for the developer’s provision of some public benefit, such as structured public parking, restoration of an historic building, or creation of public spaces or plazas. The funds for payment of this obligation must be budgeted each year, and, until the payment is made, those funds remain in our accounts as “unrestricted cash.” Technically, the RDA Board could elect to spend those funds for some other purpose, but doing so would entail defaulting on the RDA’s agreement with that developer. Likewise, the RDA sometimes enters Interlocal Agreements with other agencies, such as Salt Lake City, that obligate it to make ongoing payments totaling a certain amount. The funds for those payments remain as “unrestricted cash” until the payment is made. 2. Project area restrictions. The annual audit treats all of the RDA’s funds as a single account. But state law requires that funds generated in an RDA project area be spent within the boundaries of that area, subject to a few narrow exceptions. Therefore, while the total pooled cash of the RDA is characterized by the audit as “unrestricted,” it is, in fact, available only to be spent in the project area where it was generated. The RDA carefully tracks the funds collected by the project area of origin, and treats each project area as a separate and distinct account, ensuring that funds generated from a particular area are expended only within that area. While the RDA’s budget process described above clearly allocates expenditures by project area, the annual audit does not make this distinction, sometimes creating the inaccurate impression that the full cash balances of the RDA could be spent on a single project in a single project area. 3. Allocations over time – savings-based approach. Another detail that is not articulated in the annual audit is the RDA’s practice of budgeting funds for large projects over time, and then paying cash for the projects when sufficient funds are accumulated to proceed. This savings-based, or cash-based approach is very conservative, and enables the RDA to tackle large infrastructure projects without having to assume debt. Because tax increment proceeds are often viewed by banks as unpredictable, borrowing against future revenues is often not possible, and, even if possible, loans are not offered on favorable terms. Therefore, the RDA’s established practice and policy is to allocate funds as available a little at a time. This process of accumulating funds for a project often leads to large cash balances in RDA accounts. A good recent example is the repair and renovation of the Gallivan Utah Center. Beginning in the early 2000s, the RDA anticipated that in approximately 2008-2010, the RDA would need to undertake significant repairs and renovations to the Gallivan Utah Center. Beginning in 2006, the RDA Board allocated funds each year to be saved for that renovation project, ultimately accumulating the more than $7 million needed to complete the design and construction. Those funds were always characterized by the audit as “unrestricted cash.” Again, the saved amounts could technically be allocated by the Board for some other use, but doing so would reduce or eliminate the funds needed for the renovation and repair project. Please feel free to contact the RDA staff at 801-535-7240 or by email if you have any questions or comments regarding the RDA’s Budget or Annual Audit.   Recent Annual Audits 2009-2010 Audit (PDF) 2008-2009 Audit (PDF) 2007-2008 Audit (PDF)