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GAP STRATEGIES <br />N0.4 <br />Reduce Citv Administrative Fees <br />The Tax Increment Act allows a city to retain up to 10% of the tax increment for <br />its administrative expenses and the city is required to justify the amount it retains. <br />Given the amount of tax increment generated by this project, it may not be <br />necessary to utilize the entire 10%. As the amount of tax increment retained for <br />administrative fees is reduced, additional tax increment is available for other <br />project costs. The total amount of tax increment potentially generated by this <br />project is $78.6 million. (This assumes a 2.5% inflation rate and that fiscal <br />disparities are taken �r�r� inside the tax increment district.) The chart below <br />illustrates the present value of the savings available for other project costs for <br />varying percentages of administrative expenses as compared to 10%. The higher <br />the percentage, the lower the savings. <br />Present Value <br />Percenta�e of Savin s� <br />1�.�'4�� � � <br />�.5 7��,1�� <br />5.4 1,���,��8 <br />�.5 �,��.�,�4� <br />If fiscal disparities are taken firom outside the t� increment district, then the above <br />savings will increase because there will be more tax increment available. <br />1 � of 3� <br />