Agenda - Economic Development Authority - 09/04/2008

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CASE # 1 2009 EDA BUDGET By: Sean M. Sullivan, Economic Development Coordinator Background: On November 28, 1998 the City Council approved a resolution creating an Economic Development Authority (EDA) in the City of Ramsey. The resolution gives all the statutory powers of an EDA and Housing and Redevelopment Authority (HRA) to the Ramsey EDA. The EDA budget is funded primarily through two sources: 1) proceeds from the sale of City IEDA owned property and 2) the EDA Levy. It is important for the EDA to have the ability to make purchases of property, sometimes on short notice, so that it able to assemble properties in a timely manner for redevelopment. The addition of Retail Projects to the EDA scope of services further emphasizes the importance of a strong budget to fund these new opportunities. Additionally, it is also important to have adequate funding in order to utilize consulting tools for development and redevelopment. ' The enabling resolution adopted in 1998 requires that all levy recommendations by the EDA be sent to .the City Council for approval before any action is taken. Observations: The 2008 adopted budget is attached. (See attached line Hem budget) It is anticipated that the EDA will be involved in purchasing land for a future industrial park in the near future. The proposed 2009 budget uses the same line item amounts amount levied last year (except for capital expenditures) with no inflationary increases. Unlike the past 3 years, for 2009-11 there have been levy limit imposed by the State of Minnesota. The EDA levy allows for 0.01813% (see proposed levy below) of the taxable market value to be utilized. Last year the EDA levied $393,375 which was 95% of the maximum levy amount. This year the City Council has requested that the EDA reduce its budget by $101,670 to account for the newly imposed levy limits. That request reduces the 2009 levy to $291,705, or 67.7% of the maximum levy. City Council has also discussed reducing the City tax rate further but that ultimately will be decided at a later date. The estimate balance. of the EDA fund will be $1,182,297 at the end of2008. EDA levy funds could be spent on items such as vacant land purchases, redevelopment projects, monument signs and other economic development activities. The success of the Cominunity Revitalization project and the positive public perception makes the choice to continue EDA . involvement a very rational move. Council 2008 (Pay 2009 Taxable Market Value Statutory Maximum Levy Rate Maximum Levy Amount Requested Levy Amount Tax Le er Dollar of Market Value 67.7% of Max. Le Tax Levy for $150,000 home Tax Levy for $200,000 home 2,368,528,100 0.01813% $ 430,598 $ 291,705 $ 0.0001227 $ 18.40 $ 24.54 9