Discussion:
Prior to 2018, the EDA had routinely received a transfer from the 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 is budget neutral as the city's general levy no longer includes this transfer to the EDA.
In 1995, the Shakopee Housing and Redevelopment Authority (HRA) transferred its authority to the Shakopee EDA. 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 2021 is estimated to be $936,750.
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 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 preliminary levy of $350,000 for collection in 2021. This is the same levy as the previous three years.
State statutes require the approval of the City Council, prior to the tax levy becoming effective. The EDA preliminary special benefit levy will be certified to the County Auditor by deadline of September 30, 2020. The final EDA levy will be approved in December. Similar to the city's levy, the final levy can be reduced but cannot be increased.
Also, attached is a 2021 preliminary EDA budget. The EDA budget will be reviewed in further detail as part of the overall city budget. 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.