EDA Meeting Date: August 25, 2025
To: Members of the Economic Development Authority
From: Nate Carlson, Economic Development Coordinator
Title
2026 EDA Budget
Body
Action Requested:
The EDA Board shall review the draft of the 2026 EDA budget and make a motion.
BACKGROUND:
Staff has prepared a draft of the 2026 EDA budget for consideration by the EDA Board. 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 the maximum levy allowed by Minnesota Statute of 0.01813 percent of the previous year’s taxable market value, which is based on the County-determined 2025 Estimated Market Value.
Based on this information, the maximum EDA levy could be $422,121. This represents a 6.6% increase from the approved levy of 2025, which is less than the 9% increase from the prior year. In addition to the levy, the EDA receives additional revenue from other sources such as investments and loan interest payments. Additionally, staff are presenting a transfer of $68,500 from reserves in 2026 to help pay for the redesign of the city’s zoning code (Chapter 34 - Land Development Code of the Code of Ordinances). The redesign of the zoning code is designed to address ease of growing the tax base, building more homes, and is expected to be a shared cost between the HRA and EDA levies and the General fund levy ($200,000 budgeted total for the work). A total of $522,621 in estimated revenues are included in the draft 2026 EDA budget. The levy increase amount is due to an overall increase in estimated market value of all taxable property in the City. As the community builds out and increases in density, the estimated market value is likely to increase, which in turn can increase our maximum levy opportunity.
Expenditures
Personal Services: The 2026 EDA personnel budget provides funding for 1.5 full-time equivalent (FTE) staff, which represents the actual salary and overhead, including benefits, for the Economic Development Coordinator and the department’s Administrative Assistant, Program Associate, and Community Development Director positions.
Professional Services: This line item is for professional consulting services related to economic development including market studies, land surveys, retail trade analysis, and marketing activities.
Legal Services: This line item has increased over the past few years due to the increasing complexity of projects initiated by the EDA.
Advertising: This line item has increased significantly compared to previous years due to the City’s strategic initiatives, including pursuing community branding. The EDA has a significant role in marketing the community for economic development success.
Dues and Memberships: The EDA sponsors memberships to the Northfield Chamber of Commerce, the Southern Minnesota Initiative Foundation (SMIF), and the Economic Development Association of Minnesota (EDAM). The EDA could recommend sponsoring additional memberships for staff and elected and appointed officials to access more professional development and marketing/communications/lobbying support if desired. Some options include membership in the National League of Cities, the National Community Reinvestment Coalition, and the Coalition of Greater Minnesota Cities.
Other Projects: This line item is for EDA work plan initiatives and other new projects that may be included in the strategic plan.
The EDA renewed the Façade Improvement Program in June 2023 for another three years starting in 2024 and ending in 2026. The EDA allocated $20,000 to this successful program. The EDA established the Façade Improvement Program in 2019 to incent property owners to invest in their buildings, specifically in the downtown district. Over the course of the three-year pilot program, the EDA granted $137,279 in façade improvement funds to 13 different recipients. Including the match amounts and total investments made by applicants, the program spurred a $300,000 total investment in the aesthetics and vitality of the Downtown.
Staff are preparing to present a “Micro-Lending” program for the EDA to consider in 2026. Communities throughout the state have started to consider offering low-interest loans of $5,000 - $10,000 to assist businesses access funding. With interest rates remaining high and banks having little interest in small loan offerings, the EDA can fill a need for small business owners. Staff have dedicated $30,000 for 2026. EDA interns were tasked with developing the program criteria for this future program. Staff has included that as an attachment for reference. The program criteria will need to be approved by the EDA before the program can be established.
Staff have allocated $30,000 to assist in the site preparation of industrial land. The strategic objective of the City Council to expand the tax base requires new buildings to be constructed. By assisting in site preparation such as environmental testing, surveying, studying, and submitting applications for local and state grants, more industrial land can be “shovel ready.” Staff will complete this work as it is a directive of the adopted Citywide Strategic Plan.
Partnership Programs: This item includes EDA funding for the Riverwalk Market Fair (RWMF) and possible contract with the Latino Economic Development Center (LEDC).
In 2022, the EDA renewed the contract with the Riverwalk Market Fair for three years, which concludes at the end of 2025. The EDA adjusted the 2025 contract fees following a request from RWMF in April, which made the total contribution $35,000. EDA staff are working with RWMF leadership to determine the terms for a new contract. Staff anticipates that contract will be available for Board review later this fall. Staff have drafted a placeholder of $35,000 to fund a future contract for RWMF.
The EDA will have the opportunity later this fall to determine whether to choose the Latino Economic Development Center (LEDC) as the technical assistance consultant for Northfield businesses. Since 2022, the Northfield EDA has consulted with the Metropolitan Consortium of Community Developers (MCCD) to provide technical assistance. The EDA executed a six-month Memorandum of Understanding (MOU) with LEDC to trial run the potential switch in consulting services. LEDC has experienced great success in Northfield. A future contract has been drafted, and the initial cost for the services is $25,000 for 2026.
In this time of economic uncertainty Staff would like to take the time to remind the EDA board that there are other potential partners working on economic development and business recruitment, retention, and expansion initiatives in Northfield, and those entities may come before the EDA board to make requests. Some of those groups include the Friends of Downtown Northfield, Rice County Neighbors United/Mercado Local, the Northfield Arts Guild, the Key/Northfield Union of Youth, Age Friendly Northfield/50 North, etc.
Micro Grant Program: Staff recommends allocating $15,000 for the Micro-Grant program for 2026. Staff is committed to improve marketing of the program. Staff will also explore partnership opportunities to leverage additional funding.
EDA Reserves: Following the adoption of the City’s Comprehensive Plan, Community Development staff initiated a redesign to the city’s zoning code. The redesign is intended to streamline development processes and provide a more easily understood document and set of rules for development. This effort is costly for community development to begin, and the EDA is being asked to contribute one-third of the cost, which is $68,500. The HRA will contribute similarly. The EDA reserves can accommodate this request, and the transfer in from reserves is part of the attached draft budget.