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City of Elk River, Minnesota Section V Estimated Impact on Other Taxing Jurisdictions 110 Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. Section W Local Government Aid Penalty Tax increment financing districts established or expanded after April 30, 1990 may cause a reduction in the local government aid (LGA/HACA) received by the City from the State. For tax increment financing plans approved on of after July 1, 1995, the City may elect at the time of such approval to make qualifying local contributions to the project, and thereby be exempt from any loss of local government aid. For redevelopment districts these contributions must equal 5.0% of the annual increment generated by the district. If the City elects to make the local contribution but fails to do so in any year, a reduction in local government aid will occur. The loss of aid will equal the greater of 1) the required local contribution or 2) the loss of aid which would have been incurred had the local contribution election not been made. Local contributions must be made out of unrestricted money and may not be made, directly or indirectly, with tax increments or developer payments. The contributions must be used to pay • project costs and cannot be used for general government purposes or for costs which would have been incurred absent the project. The City may request contributions from other local governmental entities that will benefit from the establishment of the district. The City elects to make the qualifying local contributions to the project. Section X Prior Planned Improvements The City shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. Section Y Development Agreements If within a project containing a redevelopment district, more than 25% of the acreage of the property to be acquired by the City is purchased with tax increment bonds proceeds (to which tax increment from the property is pledged), then prior to such acquisition, the City must enter into an agreement for the development of the property. Such agreement must provide recourse for the City should the development not be completed. The City anticipates entering • into an agreement for development. SPRINGSTED Page 10