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AR—DEN HILLS CITY COUNCIL—December 14, 2009 11 6A. Truth in Taxation Hearing (continued) Councilmember Holden asked if this was a new category. Finance Director Iverson clarified that this category was created in 2008. Councilmember Grant stated he had done what Ms. McClung had done and evaluated his own property taxes from 2005 to the present. He found that the largest portion of increase was for the schools. Compared to the rate of inflation, the City's increases were under the rate of inflation, the County's rate of increases were at the rate of inflation and the school's rate of increases were three times the rate of inflation. He stated that there was a decline in inflation in 2009 and the City is requesting an increase in taxes. B. Public Hearing for Modification to the Tax Increment Financing Plan for Tax Increment Financing District No. 3 (A Housing District) Within Development No. 1 Finance Director Iverson stated the Cottage Villa TIF district is set to expire on December 3 1, 2009. State Statutes allow the City to extend the district until December 3 1, 2019. There has been some discussion with the City Council about extending the district and possibly using the remaining funds for other housing projects, such as the Arden Village, the Old City Hall Property, or the B2 District. Ms. Stacie Kvilvang, Ehlers & Associates, presented the background of the TIF District for the Council. She clarified that the reason the City had to have a public hearing was because the City was increasing the budget. She also reviewed the boundaries of District No. 1 and District No. 3. Councilmember Grant stated generally TIF Districts had to spend the funds from the TIF District inside the district but this is not the case in this particular situation because the rules changed in 1997. He asked Ms. Kvilvang to clarify this for the Council. Ms. Kvilvang stated that the rules did change in 1997. Other housing legislation has happened that states for housing districts that don't have pooling limitations the City has the ability to use any of the funds from that housing district for affordable housing anywhere else in the district. Typically 75% of the funds would have to be used inside the TIF District but this is not the case in this situation. The City can use the funds within the boundaries of Development District No. 1.