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Mounds View EDA January 23, 2006 Regular Meeting Page 10 from available TIF first from this district. Economic Development Coordinator Backman explained that the EDA didn’t decide the source of the $400,000. It could come from available TIF, general funds, or capital funds for the water and sewer extensions. Under the proposed agreement, Medtronic will pick up 100% of that cost. President Marty stated the way this agreement is written, in a literal translation, the City would be reimbursed through available tax increment from this district. He stated the City should do that and plug that into the $14.8 million and let Medtronic build Phase 2 but not use TIF, which would help that district pay itself off sooner and get back on the City’s tax rolls. Commissioner Thomas asked President Marty whether he has honestly been under the assumption for the last six months that Medtronic was somehow supposed to pay the $400,000 which had been listed as the City’s responsibility and that it would come from the $14.8 million that they were paying. She asked President Marty if he has been under that misassumption. President Marty stated he figured that he would try it since it does not say otherwise. Commissioner Thomas stated significant addendums say otherwise, that it is the City’s responsibility to pay approximately $400,000 for infrastructure to the site. President Marty stated he will then forego that and the City will pay the $400,000. He stated if the EDA does not use TIF on Phase 2, the property would decertify on a greater accelerated rate, definitely not the full 26 years, and that would give everyone in Mounds View a tax reduction that much sooner. Commissioner Thomas noted this is assuming the developer chooses to proceed with the development at this level. If they don’t get the TIF assistance or chose not to, then Mounds View has a smaller development. She stated this is the balance and the EDA needs to decide what it wants. President Marty stated if they chose not to, then Mounds View is not “on the hook” for another $8.1 million at five percent interest. He noted the spreadsheet says Phase 1 has $23 million in qualified costs and the City is allowing $14.8 million. But with five percent interest on $14.8 million over 25 years, it comes to about $16,952,000 and that is what he is concerned about, paying interest on their money. President Marty stated the interest is projected to be greater than what the EDA originally capped Medtronic at. Economic Development Coordinator Backman stated there is time value of money and for other projects like Sysco, the EDA has paid interest on the TIF notes. City Administrator Ulrich stated the financial advisors have a financial analysis on this project that may answer some questions, or lead to other questions. Mr. McCarty stated he would like the EDA to hold a work session on these issues. He