EDSR MEMORANDUM 08-08-1995 ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
• MEMORANDUM
TO: Economic Development Authority
FROM: William Rubin, Executive Direct ri
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DATE: August 8, 1995
SUBJECT: Agenda Memo for August 8, 1995
EDA Meeting
INTRODUCTION
6. August Financial Update
This item should be deleted from the EDA Agenda due to the EDA's meeting one
week earlier this month. Assistant City Administrator Lori Johnson will prepare
the financial summary and submit it to EDA Commissioners wider separate cover
sometime next week.
1111 8. Tax Increment Financing Request from TL Feeding Systems
This item has been outlined in greater detail in a separate memo in the agenda
packet.
9. "Qualifying Local Contribution"Rowry/Neos. Inc. TIF Project
This is a carryover item from the EDA's July 10, 1995 meeting. At that meeting,
one option EDA Commissioners discussed regarding the ongoing fimding of this
annual contribution to the Neos TIF District was to retain the lion's share of the
proceeds from the cash sale of an industrial site to District 728.
In addition, EDA Commissioner suggested that another alternative was to include
the qualifying local contribution as part of a respective year's budget. No decision
was made at the July meeting as it was unclear whether or not a budgeted item
could meet the State's test of those fiords then being `unrestricted". hi a
subsequent conversation with City Attorney Peter Beck, the writer of this memo
has been advised that an annual budgeted expenditure equal to a Tif Project's
qualifying local contribution could indeed be considered unrestricted funds. The
downside, of course, is that the EDA will be using a portion of its funds as a
qualifying contribution rather than for other economic development initiatives.
• With one TIF district this may not be a problem. However, as more new TIF
districts are created, more and more budget funds will have to be committed to the
local contribution.
P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment
• From the July meeting, it was understood that the first qualifying local contribution
for the Neos TIF District would occur in 1997 and would be approximately
$1,400.00. Due to the backorder of concrete panels, Mr. Mowry has advised the
writer of this memo that his expansion project may not occur until the spring of
1996. If this is the case, the EDA's first obligation for a local contribution will
occur in 1998. Regardless of the delay, it is advisable that Mr. Mowry and the
EDA certify TIF District No. 12 and have all documents in place so that this
district meets the intent of current legislation rather than running the risk of
certifying a district under a new set of rules in early 1996.
Action Requested
Since the local contribution to the Neos TIF Project will not affect public funds
until 1997 or 1998 no action is requested at this time. However, it is advisable to
reach some closure on the proceeds of the District 728 sale, and, to determine
whether or not these proceeds are a good fit for the local contribution.
10. 1996 EDA Budget and Levy
This item is outlines in greater detail in a separate memo that was previously
included in the FDA's July agenda packet. However, the following changes are
• noted. The "Personal Services" portion of the 1996 budget was overstated by
$2,500, thereby reducing this line item to $42,850. The extra $2,500 is moved
down to 'Development Activities", which increases this item to$6,550 for 1996.
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