11/02/2009 Council Packet - Laserfiche WebLink

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Kennedy Graven CHARTERED TO: FROM: DATE: RE: 470 US Bank Plaza 200 South Sixth Street Minneapolis MN 55402 (612) 337 -9300 telephone (612) 337-9310 fax hup://www.kennedy-graven.com MEMORANDUM Mary Alice Divine Stephen Bubul August 28, 2009 EDA v City Powers You asked me to explain the respective powers of the EDA and the City in economic development matters. The general rule is that the Council decides, in the enabling resolution, what actions the EDA may take with or without Council approval. See, for example, Section 469.092, subdivision 1, which explains that the enabling resolution may require prior City Council approval for almost any action of the EDA. In the case of the Lino Lakes EDA, the original enabling resolution imposes very few limits on the EDA's power, and does not generally require City Council approval of any EDA action. Presumably, this is because the enabling resolution designates the City Council itself as the board of commissioners, so requiring separate approval by the Council was thought to be redundant. So, under the current Lino Lakes enabling resolution, actions by the EDA require Council approval only where some other statute requires it. A good example is tax increment financing ( "TIF "). Under Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act'), the EDA may establish TIF districts, but only if the City Council holds a public hearing, makes the required findings, and approves the TIF Plan. But once the City Council has approved the TIF district, the City Council has no further right to control what happens to the tax increment revenues or the development activities. The EDA can enter into development contracts, buy and sell land, give pay -as- you -go TIF Notes, and even issue tax increment revenue bonds, all without Council approval (so long as everything the EDA does is within the scope of the Council- approved TIF Plan). • • •