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Mounds View EDA August 8, 2005 Regular Meeting Page 4 positions would include 12 drivers, 12 would be sales, 10 in the warehouse and six would be administrative/office functions. He stated that Staff is recommending that the EDA adopt the resolution approving the development agreement to provide $250,000.00 in TIF assistance to SYSCO Food Services of Minnesota. Economic Development Coordinator Backman indicated that Ehlers has recommended revising two elements within the proposed draft agreement and referenced page four, where it discusses tax increment definitions noting that each of the development agreements typically has various definitions that refer to what the district is. He explained that they should specify a percentage in the definitions noting that due to the way it is currently written SYSCO would potentially receive all of the increments and this is a healthy district right now with a balance of over $300,000.00. He further explained that if they don’t change it, it would basically be paid off in a year even though they have a term of three-years and if it is in this language the increment would come in and basically take care of the note. He referenced C-1, Exhibit B, stating that this is the TIF Note itself, and if they look at the third paragraph, which outlines the payment schedule over three- years and should clarify the intent. He stated that the sentence stating ‘on each payment date the authority shall pay by check or draft and mail to the person registered as the owner of the note, at the close of the last business day of the authority preceding such payment date an amount equal to the sum of the tax increments received by the authority during the six-month period preceding such payment date’ adding that rather than an amount equal to the sum of the increments it should be 30-percent of the increments. He stated that there should be a reference to ‘an amount equal to the sum of 30-percent’. He stated that he would review this with Staff to ensure that they have the correct language adding that it should be consistent throughout the document. He explained that if these changes are not incorporated and it is generating a $309,000.00 increment the note would be paid off in less than a year. He stated that these are the two areas of change and assured the Commission that Staff would review the document to make sure that all other areas are accurate. Commissioner Thomas asked why Staff recommended 30-percent and what other scenarios were used to determine the payment structure. Economic Development Coordinator Backman explained that if they are looking at payments over three years and the amount is $250,000.00 they would have the principal of approximately $83,333.00 and then factor in the interest would bring the payment to approximately $90,000.00 for one year, which would represent approximately one-third of the increment that is currently being generated. He stated that this would reflect a three-year scenario. Commissioner Flaherty asked if this is based on 2006 or 2008 dollars and asked for clarification as to why it would be a good thing to extend this out over a three-year period. Economic Development Coordinator Backman explained that it is not so much the time value of money it is more in terms of cash flow and making sure that the City covers their obligations. He