DATE: July 18, 2019
TO: Northfield Economic Development Authority Board of Directors
FROM: Nate Carlson, Economic Development Coordinator
Title
Consider approval of 2020 EDA Budget
Body
SUMMARY AND ACTION REQUESTED:
Review the 2020 EDA Budget and consider action to approve the budgets of EDA Funds 290 and 292.
BACKGROUND:
Staff has prepared the 2020 EDA budget for consideration by the EDA Board of Directors. Budget spreadsheet and supporting documents are attached. The primary concern for the EDA is the yearly review of the EDA Funds (i.e. Fund 290, Fund 292, and Fund 293).
Revenues
The EDA has traditionally requested maximum level allowed by Minnesota Statute of 0.01813 percent of taxable market value. The County Assessor typically provides an estimate of the next year’s taxable market value in October. Until these estimates are received, staff is utilizing the 2019 certified levy as a baseline for budget forecasting.
Based on this information, the 2020 EDA levy would be approximately $261,891. In addition to the levy, the EDA receives additional revenue of approximately $25,500 from other sources. These include approximately $15,500 from interest on investments and $10,000 from interest payments on loans. A total of $287,891 in estimated revenues are included in the draft 2020 EDA budget. This a 3.9% increase from 2019 budget, which totaled $277,094. The 3.9% increase is the smallest increase to the EDA’s budget since 2014.
The Rice and Dakota County taxable market value for 2020 has not yet been finalized. Once finalized, the levy may provide additional revenue in 2021 to the EDA assuming the City Council continues to support the statutory maximum levy of 0.01813 of Northfield’s taxable market value.
Expenditures
The draft expenditure budget is balanced with projected revenues equal to expenditures at $287,891. The total expenditures in Fund 290 are $207,891. The total proposed expenditures in Fund 292 remain the same as 2019 for $80,000. The following line items are key expenditure areas included in the EDA budget:
Personal Services: The 2020 personal services budget is based on actual salary and benefits for the Economic Development Coordinator and a portion of support staff and department administration. The 2020 EDA budget provides funding for 1.2 FTE staff members, which includes 10% of the Administrative Assistant position and 10% of the Community Development Director position. The total estimated expenses for Fund 290, line item personnel services, in 2020 is $115,993.
Professional Services: This line item is utilized for professional consulting services related to economic development including market studies, land surveys, retail trade analysis, and marketing activities. The preliminary 2020 EDA budget for Fund 290, line item professional services, includes $10,000 for these activities.
Legal Services: The preliminary 2020 EDA budget for Fund 290, line item legal services, includes $5,000 for legal services. While this line item was not fully utilized in the last few years, the EDA has traditionally incurred $3,500 - $5,000 in legal fees.
Partnership Programs: This line item includes EDA funding for the Riverwalk Market Fair and the Northfield Enterprise Center (NEC). In 2017, the EDA entered into a two-year contract with the NEC for $50,000 each year. This contract is currently in effect through the end of 2019 and will be reviewed before the end of the year. Other than personal services, this is the largest single line item in the EDA budget. Staff has submitted $50,000 as a placeholder for 2020 Budget.
The consultant service contract with the Riverwalk Market Fair also comes from this line item. In 2018, the EDA extended the contract with the Riverwalk Market Fair for two years. The current contract provides $7,000 for 2020 with the potential for an additional $3,000 if the Market Fair matches revenues. The 2020 Budget accounts for $10,000 for the Riverwalk Market Fair.
The 2020 EDA preliminary budget for Fund 292, line item partnership programs, includes $50,000 for the NEC as well as $10,000 for the River walk Market Fair for a total of $60,000.
Micro Grant Program: With consistent activity in the Micro-Grant program for 2019, staff recommends allocating $20,000 for the Micro-Grant program.
Other Projects: This line item in Fund 290 is for EDA work plan initiatives and other new projects that will be included in the 2018 - 2020 strategic plan. The preliminary 2020 EDA budget for Fund 290 includes $46,425 for other project. Staff will present two new programs for 2020 that will use the Other Projects Line Item.