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ARDEN HILLS CITY COUNCIL WORK SESSION—DECEMBER 6, 2010 3 2.A Presbyterian Homes TIF(continued) Ms. Kvilvang noted $4,600 was due in 2010, but clarified the City would be responsible for only the second half 2012 taxes. She explained that all title issues would be resolved by Presbyterian = Homes when the properties are transferred. The Council requested Staff report back with further information on the"sliver property" description. Ms. Kvilvang indicated TIF notes would be financed for $1.115 million for the project at 6.25% interest. A default clause was written into the development agreement to protect the City. She _ explained the City can use up to 20% of the TIF funds for administrative and pooling costs. TIF would have to be utilized properly and could not be used for parks or trails. The funds could be used for roadway, sidewalk and sewer improvements. Staff would need comments from Council on how to proceed with the percentage of TIF requested. City Administrator Klaers explained that this project would provide the City with over $400,000 over a 14 year period for City improvements. He recommended the Council support _ spreading the funds over 14 years as this would give the City a larger amount of money to work with. Discussion ensued regarding the TIF interest rate and percentage requested by the City. Mayor Harpstead questioned when the Council would have to make a final decision. Ms. Kvilvang indicated these numbers would have to be included in the development agreement, which is to be approved on December 13�h. Councilmember Grant asked if conduit financing would be used. Ms. Kvilvang stated if Presbyterian Homes pursued conduit financing, the City would have to approve. She explained this would be a more expensive option, but has been done by Northwestern College. She indicated that the City could pursue conduit debt fees up front if the Council desired. Mayor Harpstead indicated there was more value to the City to pool money outside the district and take the funds up front. Councilmember Grant agreed but noted the City would have to make plans for these funds. Mayor Harpstead questioned whether these fund decisions would hinge on the needs of the City or if they should be disbursed over time. Councilmember Holmes asked if Presbyterian Homes had a preference regarding payment of conduit debt fees over time or as a lump sum up-front payment. She felt the Council did not have a preference at this time.