In 1995, the Shakopee Housing and Redevelopment Authority (HRA) transferred its authority to the Shakopee EDA via Resolution No. 4206. This action allows the EDA to levy a separate tax or "Special Benefit Levy", which is not part of the city's general property tax levy. This EDA special benefit levy is subject to a limit of 0.0185 percent of the city's estimated market value. The EDA levy cap for 2020 is estimated to be $938,200. 

Prior to 2018, annual transfers were made from the City's General Fund to the EDA to cover operational costs, façade loan funds and other development related activities. The EDA levy eliminates this transfer from the General Fund, thus reducing the city’s general levy and is considered a budget neutral change.

The advantage of the EDA special benefit levy is that the levy is applied to the market value of all taxable properties within the city including properties that are currently part of a tax abatement or TIF plan. The EDA levy is also identified on property tax statements as a separate local tax outside of the city's general property tax. 

Staff is recommending an EDA special benefit levy of $350,000 for 2020, which is the same levy amount as 2019. A home valued at $272,600 for taxes payable 2020 would pay approximately $19 towards this EDA levy.

State Statutes require the consent of the City Council, prior to the tax levy becoming effective. The City Council will need to act on this item in conjunction with the city's levy and budget at the December 17 council meeting.   

Also attached is the 2020 EDA budget. The budget includes $197,800 for wages and benefits which includes the Economic Development Specialist and a portion of the Planning & Development Director's salary. The EDA budget also includes $30,000 for façade loan requests, $25,000 for the Main Street Program, $30,000 for BakerTilly economic development consulting services, and $25,000 for miscellaneous studies and services.