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Mr. March noted checks were cut for the developer and landowner for 90% of the amounts paid. He indicated he is proposing a compromise for all parties involved. Council Member Broussard Vickers asked if the pay back would be a percentage • of the value or a dollar amount. Mr. March indicated the property owners were under the understanding it would be a dollar amount. Mr. March explained two (2) payments had been made to Northern Forest Products. He indicated the City is looking to do a tax abatement for one (1) year to give Paul McDowell the incentive to expand his current building. Mr. March stated Mr. McDowell is not in favor of this as it would keep the City running his business. Mr. March then stated he would like to see Mr. McDowell expand his building and approve the tax abatement with no strings attached. He noted the City is hoping to modify the two (2) notes and go to a closing with Mr. McDowell in September to allow the owner increased incentives. Mr. March noted that Northern Forest Products has created jobs and runs a clean operation within the City. He noted the City is willing to abate up to $25,000 as a maximum based on the size of the addition constructed on the property. Council Member Nelson noted she was in favor of the proposal as it would benefit the City in the long run. She indicated this was a win win situation for all those involved. Motion by Council Member Nelson, seconded by Council Member Broussard • Vickers to approve Resolution 00 -16 regarding the tax abatement for Northern Forest Products. All in favor. Motion carried unanimously. 2001 Draft Budget Mr. March indicated that by September 15, 2000 the levy amount would need to be set by the City. He stated the City's gross tax capacity was roughly $2,000,000, which was $400,000 higher than the previous year. Mr. March explained this allows the City greater spending power for future years. Mr. March noted the City could levy 1,200,000 at the current tax capacity rate without raising taxes. He indicated he felt this was the consensus of the Council at this time due to the increase in the tax base. Mayor Wilharber asked if the levy limits were still in place by legislature. Mr. March indicated the legislature did eliminate the levy limit increase amounts for next year. Mr. March reviewed the assumptions for 2001 as it related to the budget. He indicated the number of building permits is anticipated to decrease in turn decreasing revenues. Mr. March noted that police costs would increase for 2001 while the aid to small governments would decrease to $45,000. 6