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Mounds View EDA January 23, 2006 Regular Meeting Page 11 424 President Marty stated he will then forego that and the City will pay the $400,000. He stated if 425 the EDA does not use TIF on Phase 2, the property would decertify on a greater accelerated rate, 426 definitely not the full 26 years, and that would give everyone in Mounds View a tax reduction 427 that much sooner. 428 429 Commissioner Thomas noted this is assuming the developer chooses to proceed with the 430 development at this level. If they don’t get the TIF assistance or chose not to, then Mounds View 431 has a smaller development. She stated this is the balance and the EDA needs to decide what it 432 wants. 433 434 President Marty stated if they chose not to, then Mounds View is not “on the hook” for another 435 $1.8 million at five percent interest. He noted the spreadsheet says Phase 1 has $23 million in 436 qualified costs and the City is allowing $14.8 million. But with five percent interest on $14.8 437 million over 25 years, it comes to about $16,952,000 and that is what he is concerned about, 438 paying interest on their money. President Marty stated the interest is projected to be greater than 439 what the EDA originally capped Medtronic at. 440 441 Economic Development Coordinator Backman stated there is time value of money and for other 442 projects like Sysco, the EDA has paid interest on the TIF notes. 443 444 City Administrator Ulrich stated the financial advisors have a financial analysis on this project 445 that may answer some questions, or lead to other questions. 446 447 Mr. McCarty stated he would like the EDA to hold a work session on these issues. He 448 referenced the June 17 memorandum from City Administrator Ulrich regarding the development 449 proposal and terms of the purchase agreement and contract for private development proposed by 450 Medtronic. He noted that on the issue of the $400,000 of public improvements, the 451 memorandum states: “The City is required to install all necessary off site water and sewer line 452 improvements necessary for the development. This includes the extension of the water main, 453 sanitary sewer and storm water lines. It is estimated these lines will cost approximately $400,000 454 and the City EDA will be reimbursed through available TIF first from this district and as needed 455 from other available TIF funds.” Mr. McCarty stated these exact words were included in the July 456 8, 2005 contract and then transferred into the executed agreement. He asked if Economic 457 Development Coordinator Backman is saying that it was never settled and it could come from 458 general funds. He suggested that the documentation says otherwise. 459 460 Mr. McCarty stated the Mounds View Citizens Taxpayers Association has been following this 461 very closely and with his records and experience, he is hearing things that do not ring true to him. 462 He stated he thinks these issues should be clarified so there is a better relationship in the future 463 than there has been in the past. He asked the EDA to sit down with them, with those who have 464 served on committees, as Councilmembers and Mayors. He encouraged the EDA to sit down 465