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<br /> <br />Item #: 5A <br />Meeting Date: August 21, 2015 <br />Type of Business: EDC <br /> <br />City of Mounds View Staff Report <br /> <br /> <br /> <br /> <br />To: Economic Development Commission <br />From: Jim Ericson, City Administrator <br />Item Title/Subject: Consider an EDA Levy for to Support Economic <br />Development Program <br /> <br />Background <br /> <br />The Mounds View City Council has shown support for transitioning the Business <br />Development Coordinator position to fulltime from its present ¾ time status in 2016; this <br />will add an additional $23,000 in wages and benefits to the EDA Budget. Even without <br />the expansion of the coordinator’s time, the EDA will need additional revenue to <br />generate enough administrative fees to cover 2015 budgeted spending levels. The <br />projected EDA deficit for 2016 is about $37,000, which includes the additional time for <br />the Business Development Coordinator. <br /> <br />As the City Council has been advised, there are two ways to address this imbalance: <br />increase the transfer to the EDA from the general fund, which would in turn bump up the <br />levy increase by a corresponding amount, or the City could adopt a special EDA levy. <br /> <br />Minnesota statutes allow EDA’s to levy a small amount to support economic <br />development activities. For Mounds View, the statutory limit would be about $161,000, <br />or, about a 3.7% levy, separate from any general fund levy increase. The benefit of <br />adopting an EDA levy in 2016 is that residents wouldn’t see as much of an impact due <br />to the decertification of TIF #2. Having a separate levy would also allow the EDA to <br />build up some reserves in the event the EDC and the Authority would want to purchase <br />a parcel, offer a development incentive or offer micro-loans to businesses. Without a <br />levy, there are no dollars that could be used unless budgeted for in the general fund. <br /> <br />The City could certainly levy less than the maximum. Below are those numbers. <br /> <br />1% EDA Levy: $43,503 2% EDA Levy: $87,121 3% EDA Levy: $130,509 <br /> <br />Staff Recommendation <br /> <br />Staff requests that the EDC make a recommendation to the EDA clearly stating whether <br />an EDA levy would be supported and appropriate, with specific reasons for or against. <br />The EDC’s recommendation will be used to assist the City Council in making an <br />informed decision. <br /> <br />Respectfully submitted, <br /> <br /> <br />____________________________ <br />Jim Ericson, City Administrator <br />