Agenda - Economic Development Authority - 07/09/2015

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RELEVANT LINKS: Minn. Stat. § 275.70. Minn. Stat. § 275.066. Minn. Stat. § 469.192. Minn. Stat. §§ 469.090 to 469.1082. Minn. Stat. § 469.098. Minn. Stat. § 469.101, subds 1, 2. Minn. Stat. § 469.101, subd. 1. Minn. Stat. § 469.102. The typical EDA levy is different from the HRA levy discussed above. It is not a levy raised by the EDA—it is a levy set by a city at the request of the EDA. Basically, the city simply appropriates part of the money the city collects in the general city levy to the EDA. Because the EDA levy is part of the city levy, it is not a "special levy" under state law and thus the EDA levy is subject to the city's overall levy limit. However, as noted above, many EDA -enabling resolutions adopt all the powers of an HRA. If so, the EDA may levy a separate tax or "HRA levy," and then the EDA functions as a special taxing district as if it were an HRA and that levy is not subject to levy limits or to city debt limits. An EDA using the levy powers of an HRA is still limited to a levy no more than 0.0185 percent of the total taxable market value in the city. 2. EDA loans An EDA is authorized to make a loan to a business, a for-profit or nonprofit organization, or an individual. Before taking an action or making a decision which could substantially affect an EDA commissioner's or an employee's financial interests or those of an organization with which the commissioner or an employee is associated, a commissioner or employee of an authority must comply with specific requirements to disclose the conflict and obtain prior approval. Failure to do so may result in criminal charges. Loans must be for a purpose the EDA is authorized to carry out under the law. An authorized purpose must deal with or contribute to economic or industrial development. EDAs have the ability to use pooled bond reserving. In most development programs, each bond issue is independent of any other bond issue with a separate service or sinking fund account. EDAs, however, may create a single common bond reserve fund. Under this arrangement, each project's revenues go into a common fund, which in turn pays the bondholders on all projects. Through this pooling mechanism, the security of each project's bond increases and borrowing costs decrease as long as the pool has the necessary volume and diversity of cash flow. 3. Other EDA powers EDAs can acquire property and facilities but cannot issue debt without an election. The city must authorize the issuance of debt in the resolution creating the EDA. In addition, EDAs can create economic development districts but the districts must be contiguous. League of Minnesota Cities Handbook for Minnesota Cities 11/4/2014 Community Development and Redevelopment Chapter 151 Page 10