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Item No: 6B Meeting Date: April 19, 2006 Type of Business: Other City of Mounds View Staff Report To: Mounds View Planning Commission From: Jim Ericson, Community Development Director Item Title/Subject: Discuss Economic Development Funding Priorities and Philosophy Background: The Economic Development Commission (EDC) and Economic Development Authority (EDA) have determined that it would be in the City’s best interest to review all Economic Development related policies and to formalize an economic development strategy in support of the City Council’s articulated goals and vision. Presently, no such “comprehensive” economic development strategy or philosophy exists. On March 29, 2006, the City Council reviewed the existing economic development policies and the present status of the TIF revenues. While the Council discussed potential TIF- supported expenditures, it became clear that additional feedback was desired from the Planning Commission and the Economic Development Commission. The Council is asking for input from the Commissioners regarding desired outcomes and funding prioritization. Discussion: In an effort to move forward with the preparation of a comprehensive business subsidy philosophy and economic development strategy, the City needs to ascertain and determine the desired outcomes of its economic development policies. While some outcomes may be difficult to quantify, there should be some benchmark or other means by which success can be measured. Other outcomes may be more easily quantified, such as “the reduction of tax capacity captured with TIF Districts.” Such a goal could be measured simply by comparing the percent of tax value captured from one year to the next. Regardless of the ease of quantification, action steps would need to be formulated to achieve the desired outcome. The following represents a sampling of potential desirable outcomes (broad as they may be) that the City could consider. 1. Maximize the flow of Increment for articulated ED purposes (status quo.) 2. Reduce the amount of increment collected for ED purposes 3. Reduce the % of tax capacity captured in TIF Districts 4. Reduce the geographic area (acres) contained within TIF districts 5. Reduce the financial burden of TIF districts upon non-TIF properties While perhaps obvious, it should be noted that any reduction to the amount of TIF collected will have a correspondingly negative impact on the scale or scope of projects that could be funded via increment.