7.0. EDSR 08-19-2002 Item # 7.1.
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City of
Elk - -�
River
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Developmen
DATE: August 19, 2002
SUBJECT: Consider Year 2003 Budget
Attachments
• Budget worksheet—Page 1 &2—EDA Projected Revenue& Expenses
• Budget worksheet—Page 3 —Business Incubator Projected Revenue &Expenses
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. The
EDA and HRA levies are now at a point that it is feasible to balance the Economic
Development Department without the General Fund. Revenues are estimated at 8%growth
in market value for year 2003.
Personal Service costs (salaries and benefits) are proposed to be divided 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 2003 to cover approximately 25% of the shared expenses.
Following is a line item analysis of the proposed year 2003 expenditures for the EDA:
• Personal Services $104,150
• Office Supplies (shared with HRA) $ 1,950
• Fuels &Lubricants (shared with HRA) $ 150
• • Legal Fees $ 1,750
• • Other Professional Services $ 7,500
o Update City Strategic Economic Development Plan
o Ehlers &Assoc. &HRGreen services
• Telephone (shared with HRA) $ 200
• Postage (shared with HRA) $ 1,500
• Travel, Conference &Schools $ 8,650
o Includes 2 Economic Development Finance
Professional Courses for Economic Development Assistant
• Advertising/Marketing $ 48,200
o Economic Development Web Site - $4,000
o New Industrial Park Signage - $5,000
o Advertising (Production&Publication) - $28,000
o Public Relations Writer- $10,000
o Marketing Worksession (Duckor&Assoc) - $1,200
• Publishing $ 1,000
• Insurance $ 500
• Dues & Subscriptions (shared with HRA) $ 1,600
• Miscellaneous
o Donation to Chamber of Commerce $ 6,000
• Transfer out to General Fund $ 5,000
Total EDA Year 2003 Proposed Expenditures $188,150
• Total EDA Year 2003 Projected Revenues $201,500
Please note that the proposed 2003 budget does not include a contribution to the Initiative
Foundation. The EDA may consider making a contribution out of its fund reserve balance
if the Commission wishes to make a contribution in 2002.
Business Incubator Budget Summary
The EDA Business Incubator budget is based upon the assumption that the program
continues as it has over the past five years in Larry Hickman's building space. Staff is
currently exploring options, as directed by the Incubator Advisory Committee, for more
"technology-friendly" space. In addition, the Incubator Advisory Committee is
recommending the EDA consider increasing the fee for services to Genesis Business
Centers (Harlan Jacobs) from$500 per month to $1,000 per month.
The EDA Business Incubator budget includes total revenue from rent expected in the
amount of$12,000 in 2003. Current tenants include Vertical Publishing,Bixby Energy
Systems and Knowledgenetica. Proposed business incubator expenses include the following:
Operating supplies $ 1,000
Other Professional Services (Genesis Business Centers) $12,000
Legal $ 1,000
Cleaning Services $ 500
• Building Rent (after March 2003 not to exceed$3/s f) $20,400
• Total Business Incubator Expenditures $34,900
Total Business Incubator Revenues $12,000
The approximate $22,900 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.
One of the Incubator facility options being explored is a 10,000 square foot building
addition to the proposed Cymbet manufacturing facility expansion. The developer and
proposed building owner have indicated to staff an interest in making an incubator addition
to the facility. Details of the new Business Incubator space will be discussed as part of the
Cymbet Corporation Expansion Siting Proposal on the August 19, 2002 EDA agenda.
Should the proposed Incubator concept be approved and eventually finalized, the Business
Incubator Program budget would be reviewed by the EDA for adjustment.
Recommendation
Staff recommends the EDA consider approval of the Year 2003 EDA Budget and Business
Incubator Budget as presented.
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BUDGET WORKSHEET PAGE 1
August 19 Proposed Budget Date: 08/16/02
Time: 10:01am
CITY OF ELK RIVER Page: 1
Prior Current Year
Year Original Amended Actual Thru Estimated
M 2/31/02 Actual Budget Budget December Total Requested Recommended Adopted
Fun : 920 EDA
Revenues
TAX TAXES
3111 Current Ad Valorem Taxes 146,521 153,950 153,950 86,089 195,000
TAXES 146,521 153,950 153,950 86,089 195,000
GOVT INTERGOVERNMENTAL REVENUE
3322 Homestead Credit 12,126 0 0 0
INTERGOVERNMENTAL REVENUE 12,126 0 0 0
OREV OTHER REVENUE
3621 Interest Income 3,479 3,000 3,000 1,748 3,000
3629 Miscellaneous Revenue 10,500 5,000 5,000 0
OTHER REVENUE 13,979 8,000 8,000 1,748 3,000
TRIN TRANSFERS IN
3949 Transfer-HRA 6,500 3,500 3,500 3,500 3,500
TRANSFERS IN 6,500 3,500 3,500 3,500 3,500
Total Revenues 179,126 165,450 165,450 91,337 201,500
Expenditures
Dept: 620.621 ECONOMIC DEVELOPMENT
PS PERSONAL SERVICES
91iiiigular Pay 47,282 65,250 65,250 18,975 57,900 72,600
4l ertime Pay 0 0 0 0
4103 Part-time Pay 12,600 12,600 12,600 5,285 12,600 12,600
4104 PERA 2,406 3,750 3,750 1,150 3,550 4,400
4105 FICA 3,693 4,800 4,800 1,563 4,400 5,300
4107 Medicare 863 1,100 1,100 365 1,050 1,250
4108 Insurance 3,716 5,800 5,800 2,580 6,650 7,750
4109 Workers Comp 107 350 350 57 200 250
PERSONAL SERVICES 70,667 93,650 93,650 29,975 86,350 104,150
SUPP SUPPLIES
4201 Office Supplies 1,606 3,000 3,000 2,281 1,950 1,950
4212 Fuels & Lubs 57 150 150 33 150 150
SUPPLIES 1,663 3,150 3,150 2,314 2,100 2,100
OSC OTHER SERVICES & CHARGES
4304 Legal Fees 715 1,750 1,750 3,741 1,750 1,750
4319 Other Professional Services 1,442 9,000 9,000 5,057 6,500 7,500
4321 Telephone 84 200 200 23 200 200
4322 Postage 486 1,500 1,500 392 1,500 1,500
433 ravel, Conferences & Schools 3,762 5,000 5,000 3,434 8,650 8,650
4 ertising/Marketing 51,346 40,000 40,000 13,791 40,000 48,200
4359 Publishing -201 1,000 1,000 239 1,000 1,000
4361 Insurance 391 500 500 110 500 500
BUDGET WORKSHEET PAGE 2
August 19 Proposed Budget Date: 08/16/02
Time: 10:01am
CITY OF ELK RIVER Page: 2
Prior Current Year
Year Original Amended Actual Thru Estimated
M 2/31/02 Actual Budget Budget December Total Requested Recommended Adopted
Fun : 920 EDA
Expenditures
Dept: 620.621 ECONOMIC DEVELOPMENT
OSC OTHER SERVICES 6 CHARGES
4433 Dues & Subscriptions 1,636 700 700 197 1,600 1,600
4440 Miscellaneous 6,162 6,000 6,000 5,960 6,000 6,000
OTHER SERVICES 6 CHARGES 65,823 65,650 65,650 32,944 67,700 76,900
CAP CAPITAL OUTLAY
4560 Equipment 0 0 0 0
CAPITAL OUTLAY 0 0 0 0
TROD TRANSFERS OUT
4721 Transfer-General Fund 3,000 3,000 3,000 3,000 3,000 5,000
TRANSFERS OUT 3,000 3,000 3,000 3,000 3,000 5,000
ECONOMIC DEVELOPMENT 141,153 165,450 165,450 68,233 159,150 188,150
Total Expenditures 141,153 165,450 165,450 68,233 159,150 188,150
IDA 37,973 0 0 23,104 -159,150 13,350
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BUDGET WORKSHEET PAGE 3
August 19 Proposed Budget Date: 08/14/02
Time: 4:03pm
CITY OF ELK RIVER Page: 1
Prior Current Year
Year Original Amended Actual Thru Estimated
12/31/02 Actual Budget Budget December Total Requested Recommended Adopted
Fund: 920 EDA
Revenues
Dept Group: 600 HOUSING & ECONOMIC DEVELOPMENT
Dept: 620.623 BUSINESS INCUBATOR
OREV OTHER REVENUE
3629 Miscellaneous Revenue 4,998 7,000 7,000 5,782 12,000 12,000
OTHER REVENUE 4,998 7,000 7,000 5,782 12,000 12,000
TRIN TRANSFERS IN
3921 Transfers 21,618 18,200 18,200 0 22,900
TRANSFERS IN 21,618 18,200 18,200 0 22,900
BUSINESS INCUBATOR 26,616 25,200 25,200 5,782 12,000 34,900
HOUSING & ECONOMIC DEVELOPMENT 26,616 25,200 25,200 5,782 12,000 34,900
Total Revenues 26,616 25,200 25,200 5,782 12,000 34,900
Expenditures
Dept Group: 600 HOUSING 6 ECONOMIC DEVELOPMENT
Dept: 620.623 BUSINESS INCUBATOR
SUPP SUPPLIES
4219 Operating Supplies 391 2,200 2,200 254 1,000 1,000
SUPPLIES 391 2,200 2,200 254 1,000 1,000
OSOHER SERVICES 6 CHARGES
4 er Professional Services 6,203 6,000 6,000 3,500 7,000 13,000
4349 Advertising/Marketing 0 2,500 2,500 533
4405 Cleaning Services 0 500 500 362 500 500
4412 Building Rent 20,243 14,000 14,000 8,952 20,400 20,400
OTHER SERVICES & CHARGES 26,446 23,000 23,000 13,347 27,900 33,900
CAP CAPITAL OUTLAY
4520 Buildings 6 Structures 0 0 0 0
CAPITAL OUTLAY 0 0 0 0
BUSINESS INCUBATOR 26,837 25,200 25,200 13,601 28,900 34,900
HOUSING & ECONOMIC DEVELOPMENT 26,837 25,200 25,200 13,601 28,900 34,900
Total Expenditures 26,837 25,200 25,200 13,601 28,900 34,900
EDA -221 0 0 -7,819 -16,900
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