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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 129 administrative/office functions. He stated that Staff is recommending that the EDA adopt the 130 resolution approving the development agreement to provide $250,000.00 in TIF assistance to 131 SYSCO Food Services of Minnesota. 132 133 Economic Development Coordinator Backman indicated that Ehlers has recommended revising 134 two elements within the proposed draft agreement and referenced page four, where it discusses 135 tax increment definitions noting that each of the development agreements typically has various 136 definitions that refer to what the district is. He explained that they should specify a percentage in 137 the definitions noting that due to the way it is currently written SYSCO would potentially receive 138 all of the increments and this is a healthy district right now with a balance of over $300,000.00. 139 He further explained that if they don’t change it, it would basically be paid off in a year even 140 though they have a term of three-years and if it is in this language the increment would come in 141 and basically take care of the note. He referenced C-1, Exhibit B, stating that this is the TIF Note 142 itself, and if they look at the third paragraph, which outlines the payment schedule over three-143 years and should clarify the intent. He stated that the sentence stating ‘on each payment date the 144 authority shall pay by check or draft and mail to the person registered as the owner of the note, at 145 the close of the last business day of the authority preceding such payment date an amount equal 146 to the sum of the tax increments received by the authority during the six-month period preceding 147 such payment date’ adding that rather than an amount equal to the sum of the increments it 148 should be 30-percent of the increments. He stated that there should be a reference to ‘an amount 149 equal to the sum of 30-percent’. He stated that he would review this with Staff to ensure that 150 they have the correct language adding that it should be consistent throughout the document. He 151 explained that if these changes are not incorporated and it is generating a $309,000.00 increment 152 the note would be paid off in less than a year. He stated that these are the two areas of change 153 and assured the Commission that Staff would review the document to make sure that all other 154 areas are accurate. 155 156 Commissioner Thomas asked why Staff recommended 30-percent and what other scenarios were 157 used to determine the payment structure. 158 159 Economic Development Coordinator Backman explained that if they are looking at payments 160 over three years and the amount is $250,000.00 they would have the principal of approximately 161 $83,333.00 and then factor in the interest would bring the payment to approximately $90,000.00 162 for one year, which would represent approximately one-third of the increment that is currently 163 being generated. He stated that this would reflect a three-year scenario. 164 165 Commissioner Flaherty asked if this is based on 2006 or 2008 dollars and asked for clarification 166 as to why it would be a good thing to extend this out over a three-year period. 167 168 Economic Development Coordinator Backman explained that it is not so much the time value of 169 money it is more in terms of cash flow and making sure that the City covers their obligations. He 170