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Item No: 1 Meeting Date: November 3, 2014 Type of Business: Work Session Administrator Review: _____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Review Selected Budgets for 2015 Attached are the budgets for the Economic Development Authority (EDA) fund and the Special Projects Fund for your additional review and consideration. The Council conducted an initial review of the above funds at the October work session. EDA Fund With all but one TIF district ending after 2015, the primary funding source for future economic development activities will be limited to 5% (approx. $65,000) of the increment revenue in TIF District 5 (Medtronic). The Council may direct additional revenue from other sources to provide additional support or the Council could consider an EDA levy in the future or EDA activities could be reduced. The Council has included a $10,000 transfer from the General Fund to cover proposed economic development activities in 2015. The 5% increment from TIF District 5 and the $10,000 General Fund transfer will be insufficient to fund EDA activities at the current level after 2015. (will need an additional $25,000 in 2016) Staff is not looking for direction at this time but wanted the City Council to have some advanced notice that the level of activities will need to decline or revenues will need to increase after 2015. Special Projects Fund The City maintains four capital project funds each with a different funding source. The Special Projects fund was created to support one-time or infrequent projects that were unable to be funded by other City funds. Transfers from the General Fund provided the initial funding and investment earnings provided subsequent funding. There have been no subsequent transfers from the General Fund since 2003. The balance has declined and low investment rates have not provided sufficient income to maintain the fund balance. With the level of proposed projects for 2015, the fund will be depleted. The City has experienced increased development activity in 2014 and Local Government Aid is at its highest level in the last five years so the General Fund may generate a current year surplus. This surplus could be transferred to the Special Projects fund to provide enough funds for the proposed projects. In the future the City Council my want to consider budgeting for a transfer to special projects to provide funding for one-time and longer term projects similar to the Vehicle and Equipment fund. Respectfully Submitted, Mark Beer, Finance Director