Appendix

12 We calculated each TIF District’s annualized EAV growth rate in the following way:

1. We assumed that all TIF Districts were established on January 1 of their designation year.

2. We calculated the number of years each TIF District has existed through 2009 or, if the TIF District terminated before 2009, the year such TIF District terminated. For example, the LaSalle Central TIF District was established in 2006 and still existed in 2009. Therefore, the LaSalle Central TIF District’s term to date is 4 years [2009 - 2006 +1= 4].

3. To annualize the accumulated EAV growth rate over the years the TIF Districts existed, we calculated the compound annual growth rate (CAGR) of EAV for each TIF District based on the following formula:

CAGR = [(Total EAV in 2009 or terminating year/Base EAV)^(1/Existing Year)]-1

For example, the LaSalle Central TIF District’s base EAV was $4,192,663,826 in 2006 and its total EAV was $4,617,238,877 in 2009. The compound annual EAV growth rate of the LaSalle Central TIF District equals 2.44% [ ($4,617,238,877 / $4,192,663,826) ^(1/4) -1 = 2.44%]

For more information on calculating the compound annual growth rate, visit http://www.investopedia.com/terms/c/cagr.asp

13 Total EAV for each TIF District is equal to the base EAV plus the incremental EAV, if any. In certain instances, the incremental EAV could be negative if the total EAV is less than the base EAV. The number of TIF Districts reflects the number of Districts that existed at the end of the year and takes into account newly created Districts and Districts that terminated during that year.

14 One reason for the decrease in the total EAV dollar amount between 2007 and 2008 is that 7 TIF Districts, including the Central Loop TIF District, terminated during that year and therefore the EAV amounts of those 7 Districts are not included in the 2008 EAV amount.

15 The City’s EAV, calculated by Cook County, is equal to the EAV of all tax parcels not located in TIF Districts plus the base EAV for all tax parcels located in TIF Districts. Because our calculation of the TIF District EAV growth rate between 2004 and 2009 is based on a comparison of the total EAV (base EAV and increment EAV) of all tax parcels included in the City’s TIF Districts, the base EAV for all tax parcels included in TIF Districts would be double counted. In addition, because the base EAV of a TIF District remains fixed throughout the term of that TIF District, the base EAV of a TIF District experiences zero growth. If the base EAV of all of the City’s TIF Districts is included as part of the City EAV in the City EAV growth rate calculation, the overall City EAV growth rate would be reduced. In order to make our comparison between the City EAV growth rate and the TIF District EAV growth rate more statistically rigorous, we considered the total EAV of only the parcels outside of the City’s TIF Districts as “City EAV”.