Agenda - Economic Development Authority - 08/14/2014

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Economic Development Authority (EDA) Meeting Date: 08/14/2014 By: Diana Lund, Finance Title: 2015 Proposed EDA Budget & Levy Purpose /Background: Background: Annually, the EDA makes a recommendation to the City Council for the coming year's EDA budget and levy. The EDA levy is included within the City's general levy and calculates into the city's overall tax capacity rate. The City Council will be considering the City's preliminary levy on Tuesday, September 9, 2014. As noted, all budgets and levies are preliminary and will not become finalized until December 2014. The purpose of this case is to develop a recommendation from the EDA board to the City Council for the 2015 EDA levy. Notification: 4. 1. Observations /Alternatives: The primary source of revenue for the EDA budget is the EDA levy. Included in this case is a copy of the 2015 proposed EDA budget. Overall, the EDA budget is proposed to increase from $128,050 (adopted 2014) to $217,609 for a net increase of $89,559. The net increase is attributed to the dissolving of the Housing and Redevelopment Authority (HRA) for year 2015. Personnel who previously were budgeted under the HRA fund have now been distributed to the budgets of the General Fund and the EDA fund. The following is a breakout of the respective positions and percentages to be funded from the EDA for year 2015 in comparison to year 2014: EDA positions & funding percentages: - Assistant to City Administrator - 20% EDA (15% HRA in 2014) - City Administrator — 20% EDA (5% EDA & 39% HRA in 2014) - Econ Dev Manager - 80% EDA (34% EDA & 46% HRA in 2014) - Comm Dev Director - 10% EDA (15% EDA & 15% HRA in 2014) As noted, the increase in the EDA budget is attributed to personnel services. All other line items within the EDA budget are held fairly constant. The levy is based on the City's total taxable market value of the preceding year. For payable 2015, the City would be allowed a maximum levy of $325,610. 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 $217,609. This represents a $95,821 or a 78% increase over the 2014 adopted EDA levy of $121,788. The increase in levy is attributed to the increase in personnel costs as noted above. The proposed levy of $217,609 would place a $23.93 tax on a residential home valued at $200,000. Funding Source: EDA levy supports the EDA operating budget.