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Mounds View EDA August 22, 2005 Regular Meeting Page 9 cannot be increased but can be reduced. To increase the amount the City would have to repeat the entire public hearing process. President Marty asked about the costs. Mr. Inman stated they have to be statutory qualified costs. President Marty asked for an explanation of the charts on Page 2-9, Impact on Tax Base and Impact on Tax Rates. Mr. Inman explained it is a statutory requirement to set forward the percent of the tax or tax capacity as a percentage of the whole. Right now the City’s tax capacity is $6.679 million and when adding Medtronic into the tax capacity, it will be approximately 14.28% of the City’s total tax capacity. The other chart is showing it in tax rate. The charts show what taxes each taxing jurisdiction would get based on that tax rate. Also, there is a State education tax that is not required to be included in this chart for that calculation. President Marty referenced Page 2-10, Subsection 2-16, Definition of Tax Increment Revenues, sub. 1, that indicates: “Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S. Section 469.177.” He asked what those taxes would be. Mr. Inman reviewed the rate and explained if approved, it will be a frozen tax rate. So, if Mounds View and the County increases the levy rate, that increase does not go back to the District. President Marty referenced Page 2-11, Subsection 2-17, Modifications to the District, and read sub. 5 and 6 that indicates: “5. Increase in the estimate of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the EDA or City, Shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan.” President Marty noted that prior to this it states “during the first five years” and asked if it could be enlarged. Mr. Inman explained the District could not be enlarged or the budget increased without going through the same notice and public hearing process. City Attorney Riggs stated the same would be true of the special legislation. President Marty read the last paragraph indicating: “…the tax increments may be used to pay for the County’s actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred.”