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CASE #1 TlrFIA~]: 2006 HRA BUDGET AND 2006 PAYABLE HRA LEVY BY: City Finance Officer Diana Lund INTROI)UCTION: On March 8, 2005, the City Council adopted the enabling resolution to establish a I lousing and Redevelopment Authority (HRA). On March 22, 2005, the by-laws (under Minncsota Statute Chapter 469) were established for the HRA. Included in these bylaws arc that the Ramsey City Council will serve as the HRA Board of Commissioners. When the HRA was established, it was determined that an HRA was needed in the City o1' Ramsey to assist in the redevelopment of substandard, blighted areas and to create safe and decent dwellings for low and moderate income persons and families. For the HRA to carry out these needs, a funding source needs to be established that will allow for these activities to occur. I)ISCUSSION POINTS: As year 2006 is the first complete year of the City having an HRA, probable expenditures will consist of staff time, consulting services and the possibility of the lmrchase/purchases of redevelopment property. (A copy of the proposed 2006 HRA budget is attached). Thc I IRA budget could be funded through the issuance of a property tax levy. Like the El)A, thc lIRA is allowed to pass a levy on the taxable market value in the City. For year 2006, the HRA would be allowed to pass a total levy of $271,339 which represents .0144% (Statutory Maximum Levy Rate) of the City's total taxable market value of' $1,884,300. An example of the effect of a property taxpayer would be: $28.80 on a homeowner with a market value of $200,000. Unlike thc EDA levy, thc HRA levy falls outside of levy limits. Thus, if levy limits were imposed in 2007, the HRA would not be included in the overall total that the City may levy. A preliminary levy needs to be adopted before September 15, 2005, and cannot be increased alter this date. All levies, EDA, HRA and General Fund/Special levies will be adopted at thc Regular City Council meeting of September 13, 2005. The recommendation of the HRA will be passed onto the regular City Council meeting for fbrmal adoption. It should be noted that even though the HRA consists of all City Council members, the HRA can only levy the tax, but final approval of the tax needs to bc madc by the City Council.