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a change can affect the levy approved by the City Council. The preliminary levy will be reviewed at the City Council meeting of September 11. Mr. Brama noted the proposed 2013 levy is attached as well as the actual numbers from the 2010, 2011 and 2012 levy. He pointed out that what has changed from 2012 to proposed 2013 is a decrease from 172,000 to 106,000 which equates to a $66,000 net decrease. The chief reason is personnel — two vacated positions — Deputy City Administrator and the EDA Marketing Director. The levy is divided into two separate sections. The operating cost increased slightly but does not include City personnel. With regard to the reduction and functions; it does not reflect a reduction in the core functions of the EDA, it reflects a change in allocation of those functions, e.g. an increased role from an economic development consultant and administrative staff. Mr. Brama called attention to the proposed budget/levy included in the agenda. Finance Director Lund stated that page 4 of the budget presentation shows that the other line items, outside of personnel, have stayed constant or increased. She suggested that if an Economic Development/HRA Manager were rehired, 20 percent of those personnel costs would come from the EDA, 20 percent would come from TIF, and 60 percent from HRA. Ms. Lund showed the levy comparison. The City -wide levy proposed for 2013 is $8 million compared to $8.4 million for 2012. The HRA is at the maximum but has been reduced by $40,000 based on what's happened with market value. City Administrator Ulrich reported that what's driving this in terms for the City Council is the tax capacity rate. It is just under 40% which has continually gone up because even if we decrease it, it still goes up due to the drop in property valuations. It pushes our tax rate up so there is pressure to reduce the levy. The EDA has an excess of over $200,000 that they could levy and the City Council ultimately has to approve that. The pressure is to try to keep that down overall. If the EDA levied additional dollars, that would go into a fund balance to provide working capital for development purposes. If the EDA goes above what's proposed, it would be good to target that money and give a good explanation to the City Council as to why you desire to do this — such as a specific project, etc. Chairperson Riley stated he wants to understand the process that brought us here. The EDA gave direction in June that the EDA budget should remain the same; however, the next time we see it - it's a different amount. A couple months pass and there is no budget review on our agenda and now the budget review requires a quick — special meeting. He suggested that what was the consensus of the EDA was never brought to the Council. Mr. Ulrich stated he understood when the budget was presented in June, the main staffing component was too high — new EDA personnel were included. The levy, as proposed, was shifting personnel and having the HRA pay a higher percentage of these positions. It was not meant to be misleading. He added he is accepting the responsibility for not bringing the budget back to the EDA. The direction was to add different staffing and keep line items the same. He realized this should have come back to the EDA sooner, apologized, and added he did not have a good excuse for not getting this done. Economic Development Authority /September 6, 2012 Page 2 of 6