Discussion:
EDA's have the statutory authority to levy a small percentage (up to 0.0185%) of the city's estimated market value, which for 2021 would be a maximum of approximately $936,750. The EDA and City Council can set the levy at any amount up to this cap.
Prior to 2018, the EDA has routinely received a transfer from the city's General Fund in order to fund operations, facade loans and other development related activities. In essence these prior transfers from the General Fund came from a portion of the city's tax levy. The EDA special benefit levy was considered a budget neutral change as the city's general levy no longer includes this transfer to the EDA.
The advantage of the EDA special benefit levy is that the levy is applied to all taxable properties within the city including properties that are currently part of a tax abatement or TIF district. 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 a preliminary EDA levy of $350,000 for 2021, which is the same levy amount as each of the previous three years.
The budget includes $178,500 for wages and benefits which includes the Economic Development Specialist plus a portion of the Planning & Development Director's time. The EDA budget also includes $20,000 for legal services, $20,000 for engineering services, $125,000 in professional services ($100,000 for facade loan requests/$25,000 miscellaneous) and $25,000 for the Main Street Program.