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ARDEN HILLS CITY COUNCIL WORK SESSION-TCAAP MDA- May 24,2007 3 Councilmember Holden stated she does not feel there should be one huge TIF district, but multiple districts. Mr. Bubul indicated there may be some problems if they finance infrastructure because it creates pooling problems and that is one of the reasons why many times it is advantageous to create the larger district. He also stated it might be possible to get special legislation. Ms. Kvilvang indicated once they start to understand a little bit more about the need and timing a decision would be made on how to do the district. Mayor Harpstead indicated he felt as short as possible and as targeted as possible gives you the best outcome from literature he read on TIF. Council had discussion of fiscal disparities. Ms. Kvilvang indicated she is assuming Council wants the shortest term possible. Mr. Inman indicated they always recommend as far as the tax increment goes, that the City not issue tax increment bonds, but do a pay-as-you-go where they promise to pay. Mayor Harpstead wanted to know if there were any cost differences in terms of organizing or managing the two different types of financing. Ms. Kvilvang indicated that on pay-as-you-go, where you have a floating or variable rate, interest rates are as high as 9 \4 and for tax exempt, the interest rate is in the 5 percent range. Ms. K vilvang indicated if Council were willing to pursue Special Legislation if they deem it's warranted for various reasons. Council was in consensus. Ms. K vilvang indicated she thought they discussed bonding for roadway improvements and those types of things, and that this would be paid 100 percent by assessments. Council concurred. Councilmember Holden had questions on the maintenance of the infrastructure and also if they partner with someone and they default. Mayor Harpstead indicated the City would give the title for land but would require the developer to have a bond or some form of performance that allows for a safe position. He indicated that since the City is carrying the development they should be able to set the terms. Council had discussion on options if clean up of the land was completed and then the redevelopment did not occur for several years. Councilmember McClung indicated they should require that certain areas be developed first.