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ED Report April 19, 2006 Page 3 3. Reduce the Percent of Captured Tax Capacity. Many residents have taken issue with the percent of tax capacity captured in Mounds View TIF districts in comparison to other municipalities. While “percent” is a straightforward method for comparison purposes, it does not take into consideration the age of districts, the geographical area, or the overall levels of commercial / industrial tax base in a community. Prior to Medtronic even being considered, the City’s “percent” of tax capacity captured in TIF Districts was the highest in Ramsey County at 16.29%. The dollar value of the same tax capacity would rank the City fifth in the County with Shoreview a close sixth: City Total Tax Capacity Tax Increment Tax capacity Percent Captured St. Paul $225,841,494 $19,641,518 8.70 % New Brighton $ 22,011,649 $ 2,795,195 12.70 % Roseville $ 51,588,231 $ 2,524,051 4.89 % Vadnais Heights $ 17,006,853 $ 1,861,727 10.95 % Mounds View $ 10,280,030 $ 1,674,780 16.29 % Shoreview $ 32,218,881 $ 1,665,131 5.17 % The City could reduce the percent of tax capacity captured in TIF districts in one (or a combination) of two ways, either by reducing the market value within a TIF district or by increasing the market value outside of TIF districts. To reduce the amount of captured tax capacity, three of the options identified in “Reduce the Increment” section addressed above would apply here as well—Decertify a district, selective decertification of parcels or modify the fiscal disparities option. The alternative to any of these would be to grow and expand the market value outside of the TIF districts. An example of this approach might include a redeveloped Mounds View Square, reinvestment in the Mustang Drive Industrial Park, redeveloped Skyline Motel or infill residential developments like Hidden Hollow. Assuming property values increase across the board, any increase in value outside of the TIF districts will result in a decreased percent of captured tax capacity without decreasing the amount of increment collected. Implemented in conjunction with actions directed at the TIF districts would have an even greater impact to the percent of captured tax capacity. 4. Reduce the geographic area contained within TIF districts. This approach would reduce the amount of increment collected as well as reduce the percent of tax capacity captured in TIF. This can be done in one of two ways—a wholesale District decertification or a selective decertification of specific parcels. The City has used both approaches and either would be an option if this were the desired outcome. 5. Reduce the financial burden of TIF districts upon non-TIF properties. Any of the actions identified above would have the positive effect of reducing the financial burden to property owners outside of TIF districts. Every dollar of tax capacity removed from a TIF district would be returned to the general fund tax rolls and the other taxing jurisdictions. (The City’s share of every tax dollar is approximately 30%.) Assuming there would be no offsetting levy increase, the amount levied would be spread among a greater base of market value, thus the share paid by non-TIF properties would decrease as a result.