7.0. EDSR 09-08-2003 ITEM # 7.
01/
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i1kJ
River
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Developmen ,A
DATE: September 8, 2003
SUBJECT: Consider Year 2004 Economic Development Budget
Attachments
• Budget Worksheets -Revised 2004 Proposed Economic Development Budget
• Staff Budget Memo from August 11, 2003 EDA Meeting
Background
• At the August 2003 meeting the EDA reviewed the proposed 2004 budget. Staff has
prepared the attached revised 2004 EDA budget to include modifications that were directed
by the EDA. The attached staff memo from the August meeting provides background on
specific line item expenditures.
Budget Revisions
The attached revised 2004 budget includes the following additional modifications in
expenses:
• Miscellaneous Expense Addition of$2,500
o EDA authorized contribution to the Initiative Foundation.
• Personal Services Reduction of$12,900
o HRA recently approved the EDA's request to divide Personal Services
from 70/30 to 60/40, EDA and HRA respectively.
• Transfer out to General Fund Reduction of$7,200
o Reflects 60/40 split for support staff, etc.
• Dues&Subscriptions Addition of$250
o Year 2004 Elk River Area Chamber of Commerce membership dues.
• Revised Total EDA Year 2004 Projected Revenues $235,850
Revised Total EDA Year 2004 Proposed Expenditures $194,950
Revised 2004 EDA Budget
September 8,2004
Page 2 of 2
• The changes do not affect the EDA's Business Incubator budget.
Recommendation
Staff recommends the EDA consider approval of the Year 2004 EDA Budget as revised,
and EDA Business Incubator Budget.
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F:\SHRDOC\EDA\EDADMIN\EDA Budget\2004BudgetAmend.doc
BUDGET WORKSHEET
2004 Proposed Budget Date: 09/03/03
Time: 2:16pm
CITY OF ELK RIVER Page: 1
Prior Current Year
Year Original Amended Actual Thru Estimated
Month: 08/31/03 Actual Budget Budget August Total Requested Recommended Adopted
ues BDA
Hues
T TAXES
3111 Current Ad Valorem Taxes 167,779 209,750 209,750 100,637 230,350
TAXES 167,779 209,750 209,750 100,637 230,350
GOVT INTERGOVERNMENTAL REVENUE
3322 Homestead Credit 12,851 0 0 0
3342 Other Local Grants 0 0 0 5,000
INTERGOVERNMENTAL REVENUE 12,851 0 0 5,000
OREV OTHER REVENUE
3621 Interest income 2,864 3,000 3,000 1,259 2,000
3629 Miscellaneous Revenue 5,263 0 0 0
OTHER REVENUE 8,127 3,000 3,000 1,259 2,000
TRIM TRANSFERS IN
3949 Transfer-HRA 3,500 3,500 3,500 3,500 3,500
TRANSFERS IN 3,500 3,500 3,500 3,500 3,500
Total Revenues 192,257 216,250 216,250 110,396 235,850
Expenditures
Dept: 620.621 ECONOMIC DEVELOPMENT
PS PERSONAL SERVICES
4101 Regular Pay 59,212 72,600 72,600 37,492 62,050
4102 Overtime Pay 0 0 0 0
4103 Part-time Pay 12,600 12,600 12,600 7,315 12,600
.ERA 3,213 4,400 4,400 2,235 3,800
ICA 4,084 5,300 5,300 2,649 4,600
4107 Medicare 955 1,250 1,250 619 1,100
4108 Insurance 7,743 7,750 7,750 5,503 6,900
4109 Workers Comp 150 250 250 194 200
PERSONAL SERVICES 87,957 104,150 104,150 56,007 91,250
SUPP SUPPLIES
4201 Office Supplies 3,736 1,950 1,950 1,334 3,450
4212 Fuels & Lubs 59 150 150 21 150
SUPPLIES 3,795 2,100 2,100 1,355 3,600
OSC OTHER SERVICES & CHARGES
4304 Legal Fees 4,979 1,750 1,750 -20 1,750
' 4319 Other Professional Services 9,582 11,500 11,500 5,613 10,000
4321 Telephone 54 200 200 38 200
4322 Postage 625 1,500 1,500 533 1,500
4331 Travel, Conferences & Schools 8,107 8,650 8,650 5,836 6,000
4349 Advertising/Marketing 51,207 48,200 48,200 29,763 53,500
4359 Publishing 279 1,000 1,000 111 1,000
4361 Insurance 347 500 500 68 500
4433 Dues & Subscriptions 437 1,600 1,600 1,985 1,400
4440 Miscellaneous 5,960 11,000 11,000 6,020 8,500
OTHER SERVICES & CHARGES 81,577 85,900 85,900 49,947 84,350
CA CAPITAL OUTLAY
4560 Equipment 0 0 0 0
CAPITAL OUTLAY 0 0 0 0
TROD TRANSFERS OUT
BUDGET WORKSHEET
2004 Proposed Budget Date: 09/03/03
Time: 2:16pm
CITY OF ELK RIVER Page: 2
Prior Current Year
Year Original Amended Actual Thru Estimated
Month: 08/31/03 Actual Budget Budget August Total Requested Recommended Adopted
920 EDA
enditures
Dept: 620.621 ECONOMIC DEVELOPMENT
TROD TRANSFERS OUT
4721 Transfer-General Fund 3,000 5,000 5,000 5,000 15,750
TRANSFERS OUT 3,000 5,000 5,000 5,000 15,750
ECONOMIC DEVELOPMENT 176,329 197,150 197,150 112,309 194,950
Total Expenditures 176,329 197,150 197,150 112,309 194,950
EDA 15,928 19,100 19,100 -1,913 40,900
III
BUDGET WORKSHEET
2004 Proposed Budget Date: 08/18/03
Time: 3:19pm
CITY OF ELK RIVER Page: 1
Prior Current Year
Year Original Amended Actual Thru Estimated
Month: 08/18/03 Actual Budget Budget August Total Requested Recommended Adopted
e920EDA
noes
Gept:,.,.621.423 BUSI INCUBATOR
OREV OTHER REVENUE
3629 Miscellaneous Revenue 11,488 12,000 12,000 6,840 15,000
OTHER REVENUE 11,488 12,000 12,000 6,840 15,000
TRIN TRANSFERS IN
3921 Transfers 12,506 22,900 22,900 0 16,300
TRANSFERS IN 12,506 22,900 22,900 0 16,300
BUSINESS INCUBATOR 23,994 34,900 34,900 6,840 31,300
Total Revenues 23,994 34,900 34,900 6,840 31,300
Expenditures
Dept: 620.623 BUSINESS INCUBATOR
SUPP SUPPLIES
4219 Operating Supplies 602 1,000 1,000 29
SUPPLIES 602 1,000 1,000. 29
OSC OTHER SERVICES & CHARGES
4304 Legal Fees 0 0 0 0 1,500
4319 Other Professional Services 6,000 13,000 13,000 7,000 12,000
4349 Advertising/Marketing 533 0 0 0 3,000
4405 Cleaning Services 362 500 500 0
4412 Building Rent 16,497 20,400 20,400 9,595 14,800
OTHER SERVICES & CHARGES 23,392 33,900 33,900 16,595 31,300
PITAL OUTLAY
4 uildings & Structures 0 0 0 0
CAPITAL OUTLAY 0 0 0 0
BUSINESS INCUBATOR 23,994 34,900 34,900 16,624 31,300
Total Expenditures 23,994 34,900 34,900 16,624 31,300
EDA 0 0 0 -9,784
III
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City of
Elk.
liver "'
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Development
DATE: August I I, 2003
SUBJECT: Consider Year 2004 Budget
Attachments
• Budget worksheet-- EDA Projected Revenue&Expenses
• Budget worksheet-- Business Incubator Projected Revenue&Expenses
• Initiative Foundation Information
4111 Economic Development Authority Budget Summary
The Economic Development Department consists of two separate budgets including:
• Economic Development Authority
• Housing&Redevelopment Authority
In the past the City General Fund supported 20% of the personal service expenses. Starting
in 2003 the EDA and HRA levies have been feasible to balance the Economic Development
Department without the General Fund. Revenues are estimated at 10% growth in market
value for year 2004
Personal Service costs (salaries and benefits) are proposed to be divided the same as in 2003,
as follows:
• EDA- 70%
• HRA- 30%
Other common administrative expenses are proposed to be shared by the EDA and the
HRA. As in previous years,the HRA would make a one time transfer in the amount of
$3,500 to the EDA in year 2004 to cover approximately 30% of the shared expenses.
Following is a line item analysis of the proposed year 2004 expenditures for the EDA:
• Personal Services (including commissioners compensation) $104,150
• Office Supplies (shared with HRA) $ 3,450
• • Fuels&Lubricants (shared with HRA) $ 150
• Legal Fees $ 1,750
110
• Other Professional Services $ 10,000
o Ehlers&Assoc.,HRGreen, etc. services
• Telephone (shared with HRA) $ 200
• Postage (some shared with HRA) $ 1,500
• Travel,Conference&Schools (shared with HRA) $ 6,000
• Advertising/Marketing $ 53,500
o Economic Development Web Site updates - $1,000
o New Industrial Park Signage - $ 0
o Advertising (Production&Publication) - $28,500
o Public Relations (Production&Print) - $17,000
o Community Profile (Design&Print) - $1,500
o MN Technology Partnership Assistance Program- $5,000
o Elk River Rotary Membership - $ 500
(was previously in Dues line item)
• Publishing $ 1,000
• Insurance $ 500
• Dues&Subscriptions (shared with HRA) $ 1,150
• Miscellaneous
o Chamber of Commerce July 4th contribution $ 6,000
• Transfer out to General Fund for support staff, etc. $22,950
S Total EDA Year 2004 Proposed Expenditures $212,300
Total EDA Year 2004 Projected Revenues $235,850
Please note that the proposed budget does not include a contribution to the Initiative
Foundation in 2004. The EDA budgeted a$5,000 contribution for year 2003. In years 1989
and 1998 the City/EDA contributed a total of$5,000. Staff recommends that commencing
2004,the EDA consider either a biannual contribution in the amount of$5,000 or an annual
contribution of$2,500 to the Initiative Foundation,up to the total amount requested from
the City of Elk River ($9,929 net balance). Information about the Initiative Foundation's
request is attached.
Business Incubator Budget Summary
The EDA Business Incubator budget is based upon the assumption that the program
continues as it has over the past six years in Larry Hickman's building space. In January of
this year the EDA reduced the lease space to 3 suites for a 2-year extension on the Business
Incubator lease with Mr.Hickman. The building owner handles the building maintenance.
Staff continues to explore options for more "technology-friendly" space.
The EDA Business Incubator budget includes projected revenue from rent expected in the
amount of$15,000 in 2004, assuming 65% occupancy. The projected rent revenue also
assumes increasing the cash rent per square foot from$3 to $4. A base rent value of$10.00
1110 per square foot has been used to determine the cash rent/stock value conversion.
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Currently only one of the suites is occupied by KnowledGenetica. Proposed business
incubator expenses include the following:
Other Professional Services (Genesis Business Centers) $12,000
Legal $ 1,500
Advertising/Marketing $3,000
Building Rent (3 suites plus common areas @ $2.10/sf) $14,800
Total Business Incubator Expenditures $31,300
Total Business Incubator Revenues $15,000
The approximate$16,300 shortfall in this budget is proposed, as it has been in the past,to
be funded through the use of funds generated by Tescom Corporation's loan repayment.
The City has a current cash balance in this account of$164,300.
Should a new Incubator concept be considered at any time in the future,the Business
Incubator Program budget would be reviewed by the EDA for adjustment.
Recommendation
Staff recommends the EDA consider approval of the Year 2004 EDA Budget and Business
• Incubator Budget as presented.
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