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N. MODIFICATIONS OF THE TAX INCREMENT FINANCING DISTRICT IIIIn accordance with Minnesota Statutes, Section 469.175, Subdivision 4, any reduction or enlargement of the geographic area of the project or tax increment financing district, increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized, increase in the portion of the captured tax capacity to be retained by the City or Authority, increase in total estimated tax increment expenditures or designation of additional property to be acquired by the City or Authority shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original plan. The geographic area of a tax increment financing district may be reduced, but shall not be enlarged after five years following the date of certification of the original tax capacity by the county auditor or by approximately August 2004. If an economic development district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of Sections 469.174, subdivision 12, must be documented. The requirements of this paragraph do not apply if(1) the only modification is elimination of parcel(s) from the project or district and (2)(A) the current tax capacity of the parcel(s) eliminated from the district equals or exceeds the tax capacity of those parcel(s) in the district's original tax capacity or (B) the authority agrees that, notwithstanding Sections 469.177, subdivision 1, the original tax capacity will be reduced by no more than the current tax capacity of the parcel(s) eliminated from District No. 21. The City or EDA must notify the County Auditor of any modification that reduces or enlarges the geographic area of District No. 21 or Development District No. 1. Modifications to the District No. 21, in the form of a budget modification or an expansion of the II boundaries, will be recorded in this Plan. O. LIMITATION ON ADMINISTRATIVE EXPENSES In accordance with Minnesota Statutes, Section 469.174, Subdivision 14 and Minnesota Statutes, Section 469.176, Subdivision 3, administrative expenses means all expenditures of an authority other than amounts paid for the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the district, relocation benefits paid to or services provided for persons residing or businesses located in the district or amounts used to pay interest on, fund a reserve for, or sell at a discount bonds issued pursuant to Section 469.178. Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. No tax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for the project, whichever is less. Pursuant to Minnesota Statutes, Section 469.176, Subdivision 4h, tax increments may be used to pay for the county's actual administrative expenses incurred in connection with District No. 21. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to Minnesota Statutes, Section 469.177, Subd. 11, the County Treasurer shall deduct an • amount equal to .25 percent of any increment distributed to the City or Authority and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund. Tax increment Financing District No.21 Page 11-7