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.  Since 2018, the Shakopee EDA has levied their own separate tax or "Special Benefit Levy", which is not part of the city's general property tax levy.

The 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 2022 is estimated to be $1,024,959.  The EDA special benefit 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.

The EDA levy has been the same amount since 2018, for 2022 staff is recommending an increase in the EDA levy of $150,000 from $350,000 to $500,000.  The additional funding would provide for increasing operational costs (primarily personnel), additional professional services, and flexibility for economic development opportunities that may arise.  The EDA levy is specifically designated for economic development activities and any funds unspent from year to year will remain in this fund for this purpose.

For the median value home the 2021 annual property taxes amount to $15.  If the proposed levy of $500,000 is approved the 2022 annual property taxes on the median value home would increase to $22 ($7 increase).

State statutes require the approval of City Council, prior to the tax levy becoming effective.  The EDA special benefit levy will be forwarded to Council for approval.  Similar to the city's levy, the final levy can be reduced, but cannot be increased. 

Attached is a 2022 proposed EDA budget.  The budget includes $210,800 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, $225,000 in professional services ($100,000 for facade loan requests/$100,000 for cultural corridor national historical designation, $25,000 miscellaneous) and $25,000 for the Main Street Program.