Agenda - Economic Development Authority - 09/08/2004

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CASE # 3 EDA LEVY AUTHORITY By: Sean M. Sullivan, Economic Development / TIF Specialist Background: On November 28, 1998 the City Council approved a resolution creating an Economic Development Authority (EDA) in the City of Ramsey. The resolution gives all the statutory powers of an EDA and Housing and Redevelopment Authority (HRA) to the Ramsey EDA. The EDA budget is funded primarily through two sources: 1) proceeds from the sale of City /EDA owned property and 2) the HRA Levy. It is important for the EDA to have the ability to make purchases of property, sometimes on short notice, so that it able to assemble properties in a ti~nely manner for redevelopment. Additionally, it is also important to have adequate funding in order to utilize consulting tools for development and redevelopment. The EDA is still paying for the acquisition of Alloy Recovery through the HRA levy, and a minimum of $60,959.03 will need to be levied for payable 2005. The enabling resolution adopted in 1998 requires that all recommendations by the EDA be sent to the City Council for approval before any action is taken. Observations: Staff was directed to bring back a proposed budget for 2005. (See attached line item budget). The proposed budget uses the maximum HRA levy discussed at the last meeting. It should be noted that the total budget amount could be increased if an EDA levy is implemented. In order to address future needs for land acquisition and economic and redevelopment opportunities, it would be prudent for the EDA to continue to seek funding. The HRA levy implemented last year is Market Value based and uses a percentage of 0.0144% spread over the tax base of' Ramsey (see chart on next page). It is significant to note that the HRA levy falls outside the State imposed levy limits and will not be subject to restrictions during levy limit years. This year is different from many in the fact that there are no levy limits imposed on cities. This change from the status quo lends itself to discussion on other ways to fund the EDA. The EDA levy is very similar to the HRA levy but allows for 0.01813% of the taxable market value to be utilized. More importantly, however, it allows greater flexibility to the EDA in how the funds may be expended. The EDA levy is not limited to housing and/or redevelopment. EDA levy funds could be spent on items such as vacant land purchases, monument signs and other economic development activities. Recommendation: In order to address future needs for land acquisition and participate actively in future economic and redevelopment opportunities, it would be prudent for the EDA to seek additional funding and to recommend to City Council to levy the amount of $293,739.27 utilizing the EDA Levy.