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CONFIDENTIAL ATIORNEY/CLffiNT PRIVILEGED COMMUNICATION- NOT TO BE DISCLOSED Kurt Ulrich - Executive Direc/Or Economic Development Authority June 10,2005 Page 9 Since the qualified costs exceed the available amount of increment, Medtronic will only be reimbursed for qualified costs in the amount of $14,8 million. Medtronic shall cost certify all such private third party costs and expenses to the reasonable satisfaction of the City and EDA. f. Fiscal Disoarities. Fiscal Disparities will be paid inside the district (B election), meaning there will be no impact on other taxpayers in the community. g. Administration Exoense Allocation. Currently all TIF calculations show 5% of available tax increment being available for on-going administration and capital expenditures forthe District. h. TIF Note. Medtronic will fmance their development costs up front and will receive tax increment on a Pay-As-You-Go (pAYG) basis. This means that as they pay their taxes,. they will receive a portion of their tax dollars back (approximately $.37 on the dollar). The TIF note is being paid at a five (5) percent PAYG mte, which is a low risk mtefor equity in comparison to other typical office/commercial developments, The TIF Note will be issued to Medtronic after certification of qualified costs to the EDA. i. Business Subsidy ReQuirements. Since Medtronic is seeking assistance in excess of $25,000, they are required to follow the City's Business Subsidy criteria, and the CitylEDA is required to hold a public hearing on the terms and conditions of the subsidy (June 20th hearing). The City's business subsidy policy requires any development receiving a subsidy create one (I) new full-time equivalent (FTE) jobs within two (2) years after completion of the development at a wage of 125% of Minimum Wage, or $7.69/hour, exclusive of benefits. Medtronic proposes to create up to 3,200 new jobs within the City of Mounds View in Phase I. For purposes of the Business Subsidy requirement, they agree to create 1,500 new FTE jobs within two (2) years after completion of construction at an average of $34/hour, exclusive of benefits, or $70,000/year, which well exceeds the City's requirement. Medtronic is required to submit annual reports to the EDA summarizing business subsidy goals and results by not later than March I" commencing on March 1,2008. 7. Miscellaneous. a. Wetland Mitigation. It is anticipated that due to the location of buildings and parking areas for Phase I of the development, a portion of Judicial Ditch No. I will need to be relocated/mitigated. It is currently anticipated that the Ditch area to be mitigated equates. to approximately 1 to 1.5 acres, which means Medtronic may have to replace up to three (3) acres. Medtronic will work with the Rice Creek Watershed District on the size and amount of the Ditch to be mitigated, and it is anticipated that the mitigation will be accommodated on the existing site. SJR-263965v} MU205-30