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Executive Director Ulrich agreed with staff's analysis of the Anoka County HRA funds not being used for operational support; however, those funds may be used for scattered site acquisition. Chairperson Backous asked about the expenditure of $15,060 for group insurance under personnel. Finance Director Lund explained that relates to salaries and how the employees elected coverage. She explained this method results in a truer reflective cost than included in previous budgets. Chairperson Backous noted that item is about the only difference from the 2013 HRA budget. Commissioner Tossey stated HRA levies are not included in the tax capacity rate, so he finds that including insurance is kind of hiding the cost. He supported a drastically reduced HRA levy for 2014 and would prefer those types of expenses to be reflected in the tax capacity rate. Finance Director Lund explained that for employees with the Enterprise Fund, their insurance has been counted against the Enterprise Fund. Chairperson Backous stated he finds this to be a "shadow tax" as it is not reflected within the tax capacity rate. He stated he wanted the HRA levy to go down or at least stay the same in 2014. Chairperson Backous reviewed past HRA levies, noting it has been substantially reduced in recent years but he thinks the HRA has been perversed into a development agency instead of addressing housing and redevelopment of blighted areas. Commissioner Strommen stated it is standard procedure to fund the proportional cost of the salary, including benefits, which is done with other funds such as the Enterprise Fund and is consistent with the City's policy. She stated the issue for her, as the HRA looks towards the 2015 budget, is whether to pay any portion of personnel from HRA or if it should be moved to the General Fund and how to phase out the HRA. Commissioner Tossey stated support for the City to take a stand, come forward, and suggest to the Legislature that HRAs and port authorities be part of general tax levies. Chairperson Backous stated he agrees with the methodology of allocating true costs to the HRA and that the HRA should take a hard look at reducing personnel costs within the HRA budget. Executive Director Ulrich stated the City Attorney is doing an analysis on eliminating the HRA and combining it with the EDA. Motion by Commissioner Strommen, seconded by Commissioner Kuzma, to adopt HRA Resolution #13-12-222 Authorizing Approval of the Final 2014 HRA Levy in the amount of $207,802 and to adopt HRA Resolution #13-12-223 Authorizing Approval of the Final 2014 HRA Budget in the amount of $207,802. Housing and Redevelopment Authority / December 10, 2013 Page 3 of 4