11-08-1989 Council Agenda - Laserfiche WebLink

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2. "But for" Finding In addition to finding a public purpose for a project or program, it will be necessary to determine that the proposed project would not go forward within the City "but for" the assistance to be provided by the EDA. The City and /or Authority must demonstrate need for public assistance to the private entity and must make specific findings supporting that need. The public purpose and "but for" determinations will have to be made on a case by case basis, looking at the particular facts of a proposed project or program. 3. Loan of Credit Article Xi, S2 of the Minnesota Constitution provides that, The credit of the state shall not be given or loaned in aid of any individual, association or corporation . . . The Minnesota Supreme Court has consistently held that this provision applies only to the state, and not to its political subdivisions. Visina v. Freeman, 89 N.W.2d at 649; Davidson v. County Commissioners of Ramsey County, 18 Minn. 482. Accordingly, an Authority need not be concerned that a given project or program will be considered an impermissible loan of the City's or Authority's credit. D. Availability and Appropriate Utilization of Revenue Sources An EDA has several options for funding its activities. These include use of excess tax increments, general fund moneys of the City, proceeds of Bonds, proceeds from the levy of taxes and others. Crucial to the use of any of these revenue sources is that the Authority be able to find that "but for" such use, the economic development project the Authority is thereby trying to facilitate would not have occurred. 1. Tax Increments. A city may use excess tax increments to fund its Economic Development Authority. However, the use of such tax increments carries with it limitations that make it somewhat less useful than other sources of funds. 20 Page 22