Agenda - Economic Development Authority - 09/06/2012

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Economic Development Authority (EDA) 4. 1. Meeting Date: 09/06/2012 Submitted For: Patrick Brama By: Patrick Brama, Administrative Services Title: 2013 EDA Budget and Levy Information Background: Annually, the EDA makes a recommendation to the City Council for the coming year's EDA budget. The EDA levy is included within the City's general levy. The Council will be considering the City's preliminary levy on Tuesday, September 11. The purpose of this case is to develop a recommendation from the EDA board to the City Council for the 2013 EDA levy. Observations: The primary source of revenue for the EDA budget is the EDA levy. Included in this case is a copy of the 2013 requested EDA budget. Overall, the EDA budget is proposed to decrease from 2012 to 2013 ($172,853 to $106,466 -- $66,387 difference). The reason for the decrease is the changed allocation of personnel costs. The levy is based on the City's total taxable market value of the preceding year. For payable 2012, the City would be allowed a maximum levy of $321,996. A significant portion of the levy can be used for personnel services and other operational costs, housing and /or redevelopment costs. The EDA levy can be used to buy property, professional services, marketing activities, and the like. The EDA is being requested to authorize a levy of $104,466. This represents a $65,387 or a 38.5% decrease from the 2012 adopted EDA levy of $169,853. The decrease in levy is attributed to the decrease in personnel costs related to the position of the deputy city administrator not being refilled and the funding of a new economic develoopment/HRA position being 20% funded from the EDA versus 60% in 2012 The proposed levy of $104,466 would place a $11.76 tax on a residential home valued at $200,000. The EDA preliminary levy is scheduled to be approved at the September 11 City Council meeting. In summary, are two major items to consider when reviewing the EDA budget (1) operating expenses (2) personnel. (1) Operating Expenses include everything but City personnel. From 2012 to 2013 the budget remains nearly the same (slight increase). (2) Personnel includes City human resources (referenced as "Wages & Salaries" in the EDA budget). From 2012 to 2013 Wages & Salaries decreased from $103,742 to $35,086 ($ 68,656 difference). The proposed reduction in the budgeted EDA "Wages and Salaries" line item does not reflect a reduction in the core functions of the EDA, it reflects a change in allocation of those functions (i.e. increased role from consultant and administrative staff). The City's finance director will be present at the EDA meeting to answer questions and will be available to discuss the proposed EDA budget in detail. Funding Source: