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Mounds View EDA January 23, 2006 Regular Meeting Page 12 done when the project was first looked at. The question is what you would net to the EDA once you pay off all the obligations (golf course bond, interfund loan, services, and improvements). At that time, it was about $5.6 million. As you add Phase 2, because of the increase cost they will be paying and contributing to this project, the EDA will net about $6.7 million or a difference of $1.1 million. She explained that difference, as noted in the report, is that Medtronic is paying the $550,000 obligation to relocate one billboard, $400,000 for utility extension, and the available TIF is the City administrative fee of 5%. Since Medtronic is picking up these costs, it means the City has the 5% available to use for other projects and developments within the City. Ms. Kvilvang stated another question was the cost to pay off the bonds and interfund loan. Because it was paid off sooner than anticipated, there was an interest savings of about $70,000 and there were increased permit fees of about $168,000 for that development. So, that is the $1.1 million increased balance. An analysis was completed out to the year 2033. At that time with Phase 1, anticipating a growth of 3% inflation over time, the $5.6 million will grow to $19.5 million. Based on the new calculations, updates, and tax generation numbers, that $6.7 million will grow to about $30.4 million. President Marty referenced Page 3, Phases 1 and 2, financial analysis. He noted that for Phase 1 it indicates with a 3% revenue growth it would net $5,588,000, and for Phase 1 and 2 together it is $6,724,000. So, by adding Phase 2 the difference is $1,136,000. President Marty noted, as he has stated before, Phase 1 was $14.8 million as a cap and for Phase 2, which is more than one- half of Phase 1, it is another $8.1 million so it would only change the difference by $1.136 million. He stated that it does not seem to be as large of a jump as it should be for $8.1 million. Economic Development Coordinator Backman stated that is an “apples versus oranges” comparison. He pointed out that the EDA is not selling the land twice and that proceeds generated the bulk of the $5.5 million. The $1.1 million reflects savings on relocation costs and utility savings as well. President Marty questioned Page 3, item 14, of the Medtronic term sheet that states: “New language will be added to the agreement regarding any tax court petitions. To adjust value Medtronic is required to notify the City of tax court petitions filed with the tax court on the development property. Language will be added that the City will continue to make TIF payments to Medtronic based upon the minimum assessed agreement value in place at the time and any TIF available for payment will be withheld until the petition is resolved by the court.” He stated in the Medtronic term sheet, it sounds like Medtronic is already planning to petition the courts on the assessments just as they did in Fridley. Shelly Eldridge, Ehlers & Associates, stated this new language was her idea because it will protect the EDA from having to deal with the situation that occurred in Fridley. She explained the language is saying that Medtronic cannot petition underneath the minimum assessment agreement, which is State law. At this point, the County’s process is to withhold the amount of the petition from the minimum assessment agreement. But if the County were to change that practice and if Medtronic were to pay the full amount when the petition comes due later on and the County settles the whole amount, this language says the City would only have to pay the