EDA Minutes 05-26-2015 (Special Meeting)MINUTES
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, May 26, 2015 — 6:15 p.m.
North Mississippi Room, Monticello Community Center
Present: Bill Demeules,Tracy Hinz, Bill Tapper, Jim Davidson, Steve Johnson,
Councilmembers Lloyd Hilgart and Tom Perrault
Absent: None
Others: Mayor Stumpf, Councilmembers Gabler and Posusta, Jeff O'Neill, Angela
Schumann, Wayne Oberg, Tammy Omdahl (Northland Securities)
1. Call to Order
President Bill Demeules called the Special Meeting of the Monticello Economic
Development Authority (EDA) to order at 6:15 p.m. A roll call was taken and a quorum
declared. It was noted that remaining members of the City Council were also present.
2. Purpose of Workshop: Discussion of a potential EDA and/or HRA levy for 2016
Angela Schumann explained that the EDA will be discussing the process for
implementing an EDA and/or HRA levy for the 2016 budget process. EDA will be asked
to consider recommending that the City Council authorize a letter of intent to be
submitted to Wright County. Council has been invited to listen in as they will be
considering action on this request during their regular meeting.
3. Review of potential EDA and/or IRA levy for 2016 and request to send a
notification of intent letter to Wright County
Angela Schumann talked about how an EDA and/or HRA levy fits in with the EDA
Annual Work Plan and the goals that are identified in the Work Plan. As the EDA is
looking at property acquisitions, relocations, and property redevelopment, they are facing
limited financial resources to help in funding their goals. One tool that has been
considered is to institute an EDA levy. If this would be pursued for 2016, it is necessary
to submit a letter of intent to the County.
The EDA has the authority by statute to establish an EDA levy; however, the process is
handled through the City's budgeting process. In past years, the City has simply budgeted
the requested EDA funding and transferred money to the EDA general fund. If a levy
would be adopted, it is limited to a small percent of the taxable market value of the City;
for 2015, the watho. zed would b pp ly $274,000 d would b
e a roX;rrlatel' v and e
included in the City's overall levy limits. State statutes do not expressly limit the use of
the proceeds, but implies a use for any activity that the EDA is authorized to carry out
such as housing and redevelopment (under HRA act) and economic development.
There is also an option to consider adopting an HRA levy rather than or in addition to an
EDA levy. Since the Monticello EDA also functions as the city's HRA, they have the
Monticello EDA Special Meeting Minutes — May 26, 2015 Page 1
authority to establish an HRA levy as authorized in the HRA Act, subject to consent of
the City Council. The levy may not exceed a small percent of the taxable market value of
the City; for example, the maximum for 2015 would be $280,011. Proceeds of an HRA
levy may be used only for the purposes of the HRA Act, which broadly include
redevelopment to correct or prevent blight, and development or assistance of housing for
low or moderate income persons. An HRA levy is above and beyond any levy limits that
apply to the city, this making this a reliable source of income independent of city
revenues.
Charlotte Gabler asked where this levy would show up for taxation purposes. Tammy
Omdahl explained that the annual Truth in Taxation statement would show that listed as a
"Special Levy" and further defined as HRA or EDA. On the tax statement, it would be
listed under "Other Taxes."
Angela Schumann explained that tonight's decision for the EDA is to recommend
approval to the Council for submission of a letter to Wright County Auditor expressing
the intent to pursue adoption of a levy for EDA and/or HRA. Brian Stumpf asked how
hat would impact the City's general tax levy; he understands that if the City adopted a
total levy of $8 million with $250,000 for the EDA levy, the total taxation would be
based on $8 million. Angela Schurann and T ammy explained that the EDA special levy
would be part of the city's total levy, but show separately on the tax breakdown.
Wayne Oberg and Tammy Omdahl discussed the differences between adoption of an
HRA levy and an EDA levy. HRA levies are not subject to levy limitations, while an
EDA levy would be. For an HRA levy, the EDA prepares an annual budget in
accordance with the city's budget procedures and requests the City Council approve a
levy based on this budget. City Council must review and adopt by resolution to consent
to an HRA levy. An HRA levy is included in the city's preliminary levy certification and
is collected and distributed by the County in the same manner as other city taxes.
However, the distribution is kept in a separate fund and turned over to the EDA directly.
For an EDA levy, the process is similar for adopting this levy. The levy should be
considered part of the city's general levy, rather than a special levy independent of city
revenues.
Ta=y Omdahl explained that a letter to the County is required this year because it is the
initial request for establishing a special levy. In future years, a letter of intent is not
needed. The EDA follows the normal levy processes for an EDA levy and/or an HRA
levy. Angela Schumann clarified that a special levy would replace the general allocation
that is currently budgeted for the EDA fund, with future discussion and decision by
n isnn 1 �n ■ r- t In n m is 4 +1, +F 1 +
cwwnci t�. et C levy an ar lvµnt beyond ..la+, for econom. - development goals as
identified in the work plan. Funds raised through a special levy could be used by the
EDA under its powers according to authority in the state statutes. Angela Schumann
indicated that it is likely that the EDA Annual Work Plan would need to more
specifically define the uses for tax revenues raised by a special levy.
Monticello EDA Special Meeting Minutes — May 26, 2015 Page 2
Brian Stumpf commented on the amount of property owned by the EDA that could
generate funds if they were to be marketed. Bill Tapper spoke on the needs of EDA and
the expenses that have been generated by some of the recent projects. He feels that a
special levy would help guide the EDA in achievement of its goals, such as hiring an
Economic Development Director.
Charlotte Gabler asked what happens to funds remaining when a TIF district is
decertified. Angela Schumann explained that the county settles those fiends back to the
taxing jurisdictions. The city's share goes back into the City's General Fund, not to the
EDA.
BILL TAPPER MOVED FOR ALTERNATIVE #1 TO APPROVE THE SUBMISSION
OF A LETTER OF INTENT TO WRIGHT COUNTY FOR POSSIBLE
ESTABLISHMENT OF AN EDA AND /OR HRA LEVY FOR 2016. TRACY HINZ
SECONDED THE MOTION. MOTION CARRIED 6 -1 WITH TOM PERRAULT
VOTING IN OPPOSITION.
Lloyd Hiigart asked for clarification on the differences between the two levies as far as
flexibility of uses and an explanation of the rationale for the amount that would be sought
for a levy in terms of a minimum or maximum. Tammy Omdahl noted that both an EDA
levy and HRA levy -are similar in respect to what the EDA can do with the funds. By
utilizing both levies, it allows the EDA to maximize its bonding authority. Often times,
an HRA levy is used to fund staffing for an Economic Development Director. Brian
Stumpf asked if establishing a special levy allows the EDA to make purchases without
approval of the City Council. Angela Schumann indicated that the EDA is already
authorized to make land acquisitions outside of city council approval; however, the
current practice is to include Council in EDA meetings so decisions are made in
accordance with EDA and Council approvals.
Jeff O'Neill asked Tammy Omdahl to comment on the EDA's inability to acquire federal
and state grants based on the city's tax base. That was confirmed by Tammy Omdahl,
that some of those funding sources would not be available to Monticello's EDA.
4. Adjournment
BILL TAPPER MOVED TO ADJOURN THE EDA SPECIAL MEETING AT 6:47 P.M.
STEVE JOHNSON SECONDED THE MOTION. MOTION CARRIED 7 -0.
Recorder:
Approved:
Attest:
Catherine M. Shuman
Monticello EDA Special Meeting Minutes — May 26, 2015 Page 3