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City Administrator Norman indicated the County has indicated they would rewrite the Joint Powers Agreement to match what is being proposed; the City would receive a payment from the County in time for the bond payment once per year if the City were to bond the entire amount. Mayor Gamec asked if the City would be refunded for this purchase through the RALF program. City Administrator Norman replied that is unknown at this time. Chairperson Strommen stated she appreciates staff's attempts to be creative with this financing, but she is a bit nervous about committing these TIF funds; the City is in the middle of several projects in TIF District No.2 and this would put a halt on them. The City has spent money to acquire property and will not be able to do what needs to be done to clean the property up or offer incentives on the property to get businesses into the sites if there is not TIF available as a tool. Councilmember Elvig requested clarification that the City would put approximately $4 million into the overall deal, with $1 million down, and that the County will pay half of the cost with payments every year. Finance Officer Lund explained the County's share would be based off of how this is funded. The annual payment for a five-year CD would be $2.6 million. Councilmember Elvig questioned if there would be any TIF funds remaining under these options. Finance Officer Lund replied not until 2011. Mayor Gamec expressed concern in the City being unable to offer TIF Financing to prospective companies in the future. City Administrator Norman explained most projects create their own TIF revenue. What would be lost with these options is additional revenue that could be applied to other community projects. Councilmember Elvig noted Town Center would be an example of where additional TIF revenues could be used. By spending the TIF funds for this purchase there will be a $2-Y2 million dollar loss of spending it elsewhere, at a time when cash is tight and needs are high. Mayor Gamec noted revenue would not be generated into the TIF Districts by holding the Boike property, and it will be money that is lost if the City is not reimbursed. Consensus of the Committee was that they are uncomfortable with the financing mechanism presented for the purchase of the Boike property. The Committee directed staff to continue consideration of the purchase and to determine the overall objective of the purchase, as it is not certain at this time that a corridor is planned for this area. Finance Committee / June 27, 2006 Page 3 of5