EDA Meeting Date: October 28, 2024
To: Members of the Economic Development Authority
From: Nate Carlson, Economic Development Coordinator
Title
2025 Economic Development Authority Budget Update
Body
Action Requested:
The Board shall review the updated proposed 2025 budget and consider approving the budget as updated.
Summary Report:
Staff has prepared an updated draft of the 2025 Economic Development Authority (EDA) budget for consideration by the EDA Board. The primary concern is the yearly review of the three EDA Funds: Fund 290, Fund 292, and Fund 293.
The funds represent how the EDA’s levy of $395,848 is allocated:
Fund 290: General operating funds related to personnel and professional services.
Fund 292: Community investments such as loans, grants, and partnerships.
Fund 293: Repository for Minnesota Investment Funds, a state-based program.
The EDA Board received a staff presentation on August 26, 2024, of the draft 2025 budget and approved the initial budget during that meeting.
Staffing: Community Development submitted a request to the City Council for creation of a position shared between the EDA and the Housing and Redevelopment Authority (HRA) to assist with program administration. The EDA budget has shifted because the request was approved by the City Council.
Advertising: This line item has historically increased significantly in the short-term compared to previous years to support the City’s overall strategic initiatives, including the community re-branding initiative. The EDA has a significant role in marketing the community for economic development success. Staff has decreased this budget by $2,000 from the August budget presentation.
Other projects: This line item is for existing work plan initiatives and potential new projects that may be included in the upcoming update to the citywide strategic plan.
Property acquisition: This line item has been removed for 2025. Should an opportunity arise, the EDA may use the fund reserves held in Fund 292 to support potential property acquisition.
New initiatives: Staff initiated the U of M Extension Business, Retention, and Expansion program <https://extension.umn.edu/research-communities/connecting-businesses-and-community>, now known as “Connecting Business to Community,” earlier this month. This project is a multi-year effort, with the cost for this programming paid out of the 2024 budget allocation. Staff looks forward to fulfilling the desired outcomes of this initiative in partnership with the EDA Board and other community-based partners.
Staff is also preparing to present a new Micro-Lending program for the EDA to consider in 2025. Communities throughout the state have started to consider offering low-interest loans of $5,000 to $10,000 to assist businesses who need access to financial capital. With interest rates remaining high and banks having little interest in small loan offerings, the EDA can fill a gap in the market needed for and identified by small business owners. Staff has dedicated $30,000 for 2025. The program criteria will need to be approved by the EDA before the program can be established. This is a decrease from the initial draft of $50,000 proposed for a program.
Alternative Options:
The EDA can consider allocating funds differently.
Financial Impacts:
The City Council has set the maximum levy of $395,848 for 2025, consistent with prior years. Unspent funds from prior years, minus six months of operating expenses, are held in reserve in Fund 290.
Tentative Timelines:
August 2024 - EDA approved preliminary 2025 budget
September 2024 - Council reviewed preliminary budgets for EDA/HRA
October 2024 - EDA approves final 2025 budget
December 2024 - Council approves EDA/HRA levy requests for 2025