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The original local tax rate for the purpose of the projecting cashflow for District No. 20 will be the • tax rate for taxes payable in 1998 of 1.11504. The certified original local tax rate for District No. 20 will be the tax rate for taxes payable in 1999. Each year, the Sherburne County Auditors Office will measure the amount of increase or decrease in the total tax capacity of District No. 20 to calculate the tax increment payable to the City and the Authority. In any year in which there is an increase in total tax capacity in the tax increment financing district above the average annual percentage increase based upon the 5 years prior to certification of the district, a tax increment will be payable. In any year in which the total tax capacity in District No. 20 declines below the original net tax capacity, no additional valuation will be captured and no tax increment will be payable. The County Auditor shall certify in each year after the date the ONTC was certified, the amount the ONTC has increased or decreased as a result of: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district; 3. change due to stipulations, adjustments, negotiated or court-ordered abatements; 4. change in the use of the property and classification; or 5. change in state law governing class rates. K. AMOUNT OF CAPTURED TAX CAPACITY AND TAX RATE Pursuant to Minnesota Statutes, Section 469.174 Subdivision 4 and Minnesota Statutes, Section S 469.177, Subdivision 1f and Subdivision 2, the estimated Captured Net Tax Capacity (CTC) of District No. 20, upon completion of Phase I of the project, will annually approximate tax increment revenues as shown in the table below. The City requests 100 percent of the available increase in tax capacity for repayment of debt and current expenditures, beginning in the tax year payable 2000. The original tax capacity and project tax capacity are estimated at current market values and class rates to be the total amount when all development is in place and uses of the property have changed. Original Estimated Project Tax Capacity (upon completion of project) $32,310 less: Original Tax Capacity 1,350 Estimated Captured Tax Capacity 30,960 Estimated Annual Tax Increment (CTC x Tax Rate) $34,522 L. DURATION OF THE DISTRICT Pursuant to Minnesota Statutes, Section 469.175, Subdivision 1b, the duration of District No. 20 must be indicated within the Plan. The duration of District No. 20 will be 9 years from payment of the first tax increment expected in 2000. Thus it is estimated that District No. 20, including any modifications of the Plan for subsequent phases or other changes, would terminate at the end of the year 2008. The City and the Authority reserve the right to decertify District No. 20 prior to the • legally required date. Tax Increment Financing District No.20 Page II-6