7. HRSR 08-06-2007ITEM # 7.
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MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Catherine Mehelich, Director of Economic Development/~~~
DATE: August 6, 2007
SUBJECT: Consider Year 2008 HRA Budget and Resolution Regarding HRA Levy
Attachments
Budget Worksheet -Proposed 2008 HRA Revenue & Expenditures
Services, Goals, Measures and Budget Summary
Resolution Establishing the HRA Tax Levy for Collection in Year 2008
Summary
The Economic Development Division consists of two separate budgets including:
• Economic Development Authority
• Housing & Redevelopment Authority
Since 2003, the EDA and HRA levies have been enough to balance the Economic
Development Division without General Fund revenues. HRA revenues are estimated at 7%
growth in market value for the year 2008. In addition, 2008 revenues include a transfer in
from TIF District 16 in the estimated amount of $52,500 to repay the HRA for eligible
expenditures related to the King & Main TIF Project.
The proposed revenues also included rental income in the amount of $7,800 derived from
the existing lease with First National Bank of Elk River for the 716 Main Street. At its May
2007 meeting it was the consensus of the HRA to rent the building space to temporary uses
in order to 1) maintain an active, viable image for downtown and 2) retain flexibility to
remove the buildings when parking demand warrants the need for more supply.
In 2004 the Personal Services costs (salaries and benefits) were adjusted from 70/30 percent
EDA and HRA respectively, to 60/40 percent due to staff time allotted to the Downtown
Revitalization Project. It is proposed that this continue in 2008.
Other common administrative expenses axe proposed to be shared by the EDA and the
HRA. As in previous years, the HRA would make a one time transfer to the EDA in the
amount of $3,500 to cover approximately 40% of the shared expenses. The shared expenses
Consider Year 2008 HRA Budget and Resolution Regarding HRA Levy
August 6, 2007 HRA Meeting
Page 2 of 2
appear in the EDA budget and include the following line items -Office Supplies, Fuels,
Telephone and Travel.
Below is a line item analysis of the proposed Year 2008 expenditures for the HRA:
• Personal Services $ 68,550
• Legal Fees (TIF, relocation, acquisitions, etc.) $ 10,000
• Other Professional Services $ 55,000
o Ehlers & Assoc. (feasibility studies, TIF runs, etc.)
o BDM Consulting Engineers (engineering services)
o Comprehensive market analysis of city's housing
inventory, condition and demand projections
• Postage $ 500
• Publishing (ongoing project communications) $ 16,000
• Insurance (includes property) $ 3,050
• Utilities (716 & 720 Main Street) $ 1,200
• Dues & Subscriptions $ 400
• Debt Service (716 & 720 Main Street property) $ 118,150
• Transfer out to General Fund (support staff, etc) $ 9,500
• Transfer out to EDA (approx. 40% shared expenses) $ 3,500
• Transfer out to HRA Redevelopment Fund 86 600
Total HRA Year 2008 Proposed Expenditures: $ 372,450
Total HRA Year 2008 Proposed Revenue: $ 372,450
An amount of $86,600, which reflects the estimated cash balance after general operating
expenses, is proposed to be transferred out into a separate HRA Redevelopment Fund
account for future housing or redevelopment project expenses. Capitalizing this fund is
especially critical for the HRA to have the financial means to initiate property acquisitions
and related expenses in priority redevelopment areas as authorized through an adopted
redevelopment plan (e.g. 716 & 720 Main Street).
Attached to this memo you will find a Resolution establishing the tax levy for the Elk River
HRA, which requests that the City Council levy such maximum amount for the authority for
the year 2008, as in previous years. The City must certify its proposed maximum levy,
including EDA and HRA levies, to Sherburne County annually in September.
Recommendation
Staff recommends that the HRA approve the year 2008 HRA Budget as presented, and
approve the attached Resolution Establishing the HRA Tax Levy for Collection in Year
2008.
S:\EDA\HRA\AGENDAU-IRA Budget\08Budget.DOC
BUDGET WORKSHEET
Page: 1
713112007
CITY OF ELK RIVER 8:07 AM
Prior -----°--------- ----------------Cu rrent Year ------------------------------ (6) C7) I8)
Year Original Amended Actual Thru Estimated
t 7/3112007 Actual Budget Budget July Total Requested Recommended Adopted
end: 910 - HRA
Revenues
Dept: 000.000
Acct Class: 3100 General property taxes
3111 Current Ad Valorem Taxes 222,678 245,700 245,700 127,946 0 310,150
General property taxes 222,678 245,700 245,700 127,946 0 310,150 0 0
Acct Class: 3300 Intergovernmental revenue
3312 Federal grant 400,000 0 0 0 0
3322 MV Credit 10,475 0 0 0 0
Intergovernmentalrevenue 410,475 0 0 0 0 0 0 0
Acct Class: 3400 Charges for services
3475 Building Rent 650 0 0 36,418 0 7,800
Charges for services 650 0 0 36,418 0 7,800 0 0
Acct Class: 3620 Other revenue
3621 Interest Income 5,319 1,100 1,100 1,715 0 2,000
3625 Refunds & Reimbursements 41,831 0 0 0 0
3629 Miscellaneous Revenue 0 0 0 0 0
Other revenue 47,150 1,100 1,100 1,715 0 2,000 0 0
Acct Class: 3910 Other financing sources
3~" Sale of Assets 0 0 0 0 0
3b , . Capital Lease 720,000 0 0 0 0
Other financing sources 720,000 0 0 0 0 0 0 0
Acct Class: 3920 Transfers in
3921 Transfers 0 0 0 0 0
3947 Transfer-TIF 0 45,000 45,000 26,236 0 52,500
Transfers in 0 45,000 45,000 26,236 0 52,500 0 0
Dept: 000.000 1,400,953 291,800 291,800 192,315 0 372,450 0 0
Total Revenues 1,400,953 291,800 291,800 192,315 0 372,450 0 0
Expenditures
Dept: 610.610 HOUSING & REDEVELOPMENT
Acct Class: 4100 Personal services
4101 Regular Pay 48,729 52,600 52,600 23,436 0 54,900
4102 Overtime Pay 0 0 0 0 0
4103 Part-time Pay 0 0 0 0 0
4104 PERA 2,787 3,300 3,300 1,526 0 3,550
4105 FICA 3,018 3,250 3,250 1,513 0 3,400
4107 Medicare 706 750 750 354 0 800
4+^" Insurance 4,967 5,550 5,550 3,264 0 5,750
4 , _ _ JVorkers Comp 188 150 150 119 0 150
Personal services 60,395 65,600 65,600 30,212 0 68,550 0 0
Acct Class: 4200 Supplies
BUDGET WORKSHEET
Page: 2
713112007
CITY OF ELK RIVER 8:07 AM
Prior --------------- ----------------Cu rrent Year ----------- ------------------- (6) (7) (8)
Year Original Amended Actual Thru Estimated
Month:713t12007 Actual Budget Budget July Total Requested Recommended Adopted
Fund: 910 - HRA
Expenditures
Dept: 610.610 HOUSING & REDEVELOPMENT
Acct Class: 4200 Supplies
4201 Office Supplies 43 0 0 105 0
Supplies 43 0 0 105 0 0 0 0
Acct Class: 4300 Other services & charges
4304 Legal Fees 20,027 10,000 10,000 12,577 0 10,000
4319 Other Professional Services 18,213 31,000 31,000 18,390 0 55,000
4321 Telephone 0 0 0 0 0
4322 Postage 335 500 500 57 0 500
4331 Travel, Conferences & Schools 153 0 0 5 0
4349 AdvertisinglMarketing 0 0 0 1,563 0
4359 Publishing 20,075 12,500 12,500 1,689 0 16,000
4361 Insurance 215 250 250 0 0 3,050
4389 Utilities 0 0 0 492 0 1,200
4433 Dues & Subscriptions 209 200 200 0 0 400
~ -axes & Licenses 0 0 0 7,890 0
4440 Miscellaneous 2,294 0 0 -1,362 0
Other services & charges 61,521 54,450 54,450 41,301 0 86,150 0 0
Acct Class: 4500 Capital outlay
4510 Land 0 0 0 0 0
4530 Improvement Project Contract 0 0 0 0 0
Capital outlay 0 0 0 0 0 0 0 0
Acct Class: 4600 Debt service
4601 Principal 216,000 0 0 43,964 0 91,900
4611 Interest 3,578 0 0 15,120 0 26,250
Debt service 219,578 0 0 59,084 0 118,150 0 0
Acct Class: 4700 Transfers out
4720 Transfers -Redevelopment Fund 0 0 0 0 0 86,600
4721 Transfer-General Fund 9,500 9,500 9,500 9,500 0 9,500
4725 Transfer-Capital Outlay Reserv 0 0 0 0 0
4735 Transfer-EDA 3,500 3,500 3,500 3,500 0 3,500
Transfers out 13,000 13,000 13,000 13,000 0 99,600 0 0
HOUSING & REDEVELOPMENT 354,537 133,050 133,050 143,702 0 372,450 0 0
Total Expenditures 354,537 133,050 133,050 143,702 0 372,450 0 0
HRA 1,046,416 158,750 158,750 48,613 0 0 0 0
Description of Services: The Housing & Redevelopment Authority is responsible for
undertaking redevelopment and housing activities that will result in the preservation and
enhancement of residential and commercial areas of the city. The services include:
• Undertake focus area redevelopment planning and implement initiatives
• Respond to and assist redevelopment proposals
• Serve as information resource for housing assistance inquiries and referral to programs
offered through partner organizations.
• Monitor city's housing market and conditions
Goals for 2008 budget:
• Implement priority strategies identified in Greater Downtown Area Redevelopment
flan.
• Capitalize an HRr~ Redevelopment Fund Account for future acquisitions and related
expenses.
• Provide consistent communications to public regarding redevelopment planning
activities, and opportunities for the development community.
• Conduct a comprehensive market analysis of city's current housing inventory,
condition and demand projections.
• .identify areas of the city in need of focus area redevelopment plan and initiatives.
Performance Measures:
Increase private investment and market value in the Greater Downtown Area
Develop and update various tools (website, Q&A newsletter) for ongoing public
communications a minimum of four times per year.
Complete a report of housing supply/demand to serve as basis of understanding and
responding to future housing programs/activities.
Staffing Levels:
2006 2007 2008
Number of Employees (FTEs) .8 .8 .8
(Note: i~°fE is- reflective of 40% Economic Development Division staff time spent on HRA activities-.)
Budget Summary:
The major changes in the budget fox 2008 are outlined as follows:
• Debt service expenditure and related expenses for 716 & 720 Main St. buildings: X118,168
Establish a separate HRA Redevelopment Fund Account
In addition to the HRA tax levy, the HRA derives revenues from the following miscellaneous
sources:
• TIF 16 Revenue (Ding & Main) ~ 52,500
• Kent Kevenue (basement of 716 Main St.) ~ 7,800
RESOLUTION 07-
A RESOLUTION OF THE ELK RIVER
HOUSING AND REDEVELOPMENT AUTHORITY
A RESOLUTION ESTABLISHING THE TAX LEVY FOR THE ELK RIVER
HOUSING AND REDEVELOPMENT AUTHORITY FOR COLLECTION IN
2008
WHEREAS, Minnesota Statute Section 469.033, Subdivision 6, authorizes a Housing and
Redevelopment Authority to levy an amount not to exceed .0144 percent of the
taxable market value of property within the city to be used for housing and
redevelopment purposes; and,
WHEREAS, the Elk River Housing and Redevelopment Authority anticipates expenditures in
2008 for various housing and redevelopment activities; and,
WHEREAS, the Housing and Redevelopment Authority will adopt and approve its budget before
a special tax can be levied.
NOW, THEREFORE, BE IT RESOLVED that the Housing and Redevelopment Authority
requests that the City Council of the City of Elk River, Minnesota, levy a special tax not to exceed
the statutory limit of .0144 percent of taxable market value of the city for the benefit of the
Authority to be used for purposes as provided in Minnesota Statutes.
Passed and adopted by the Elk River Housing and Redevelopment Authority this 6`h day of
August, 2007.
Stewart Wilson, Chair
ATTEST:
Catherine Mehelich, Executive Director
S:\EDA\HRA\RESOLUTI\2007\07- I IRA08LEVY.DOC