The URL can be used to link to this page

Home My WebLink About2A, 2013 Proposed EDA Final Budgets --A EN HILLS Request for Council Action 2A Prepared By: Patrick Klaers, City Administrator and Sue Iverson, Director of Finance and Council Meeting Date: November 26, 2012 Administrative Services 2013 Proposed EDA Final Budgets Budgeted Amount: Actual Amount: Funding Source: n/a n/a n/a Recommendation: Discussion offering further direction to staff regarding 2013 EDA budget. Supporting Documents: 1. Memorandum dated November 26, 2012, from Patrick Klaers, City Administrator and Sue Iverson, Director of Finance and Administrative Services. 2. EDA Fund Summary. lt �-ARQEN HILLS MEMORANDUM DATE: November 26, 2012 TO: Honorable Mayor and City Council FROM: Patrick Klaers, City Administrator Sue Iverson, Director of Finance and Administrative Services SUBJECT: 2013 Proposed EDA Final Budgets INTRODUCTION In preparation for adoption of the final budgets at the first meeting in December, this memo addresses information on the EDA budgets and preliminary fund balance projections. 2012 EDA BUDGETS In 2008, EDA expenditures were moved from the EDA Fund to the General Fund under the Planning & Zoning department as there was a negative fund balance, and transfers to replenish the fund were budgeted from the General Fund. In 2012 the EDA expenditures were moved from the General Fund back to the EDA Fund and the conduit debt fees from the Presbyterian Homes project were transferred to this fund as seed money. The expenditures in this fund consist of primarily salary and benefit costs, however auditing, accounting, IT, and insurance have also been allocated. There is no transfer from the General Fund to the EDA Fund in the 2013 budget. We have previously noted the changes to the EDA Fund. Staff recommends that a funding source be found for this fund in the future as the current funding source from the TIF District and the conduit debt fees will not be ongoing. There were no significant changes to the other EDA Funds except that there is no transfer from the PIR Fund to the EDA fund budgeted in 2013. GENERAL INFORMATION The EDA needs to formally adopt the budgets of the authority each year. Since it is a Component Unit of the City, it will then be included in the City's overall budget adoption at the December 11, 2012 meeting. Memo - City Council 2013 Proposed Final Budget and Tax Levy 2 In order to finalize the budget, it would be helpful to have additional input from the EDA, this would include reaffirming the final budget amount and indicating any other concerns or priorities. DIRECTION REQUESTED: 1. Further direction to staff regarding 2013 budget. EDA FUND SUMMARY Description The City of Arden Hills currently maintains five EDA Funds. The modified accrual basis of accounting is used for EDA funds. That is, expenditures are recorded at the time liabilities are incurred and revenues are recorded when received. However, compensated absences are expensed when paid for budgetary purposes. EDA fund budgets are not always balanced, meaning budgeted revenues may be greater or less than budgeted expenditures. In these circumstances reserves will show an increase or decrease in the fund's fund balances. Budget Issues See individual fund's for budget issues, because each fund will have its own unique budget issues Budget Summary Revenues By Cassif ication Expenditures By Classification Toral Revenues$370,750 Total Expenditures $426,568 •Personal Services ■Taxes •Materials and ■Special Assessments Supplies ■Licenses&Permits r: Other Services and Charges ■Intergovernmental Revenues ■Capital Outlay ■Charges for Services 0% a0/° a Park Dedication Fees ■Transfers Out Utility Charges To Other Funds u Interest on Investments 1 Actual Actual Budget Amended Year To Date Proposed %Change FY 2010 FY 2011 FY 2012 FY2012 10/31/2012 FY 2013 12 vs 13 Operating Revenue EDA General Fund 35,250 29,281 35,250 35,250 12,532 35,250 0.00% EDA Revolving Fund 3,392 4,290 2,500 2,500 2,591 2,500 0.00% EDA TIF Dist#2 Round Lake 511,739 317,703 508,500 508,500 66,269 290,000 -42.97% EDA TIF Dist#3 Cottage Villa: 40,672 43,348 40,500 40,500 26,264 43,000 6.17% EDA TIF Dist#4 Pres Homes - - - - - - 0.00% Operating Revenues 591,053 394,622 586,750 586,750 107,656 370,750 -36.81% Other Financing Sources EDA General Fund 12,600 12,600 65,000 189,955 124,955 - -100.00% EDA Revolving Fund - - - - - 0.00% EDA TIF Dist#2 Round Lake 0.00% EDA TIF Dist#3 Cottage Villa,, 0.00% EDA TIF Dist#4 Pres Homes - - - - - 0.00% Other Financing Soun 12,600 12,600 65,000 189,955 124,955 -100.00% Total Revenues $ 603,653 $ 407,222 $ 651,750 $ 776,705 $ 232,611 $ 370,750 -52.27% Operating Expenses EDA General Fund 544 3,506 64,397 64,397 37,485 86,048 33.62% EDA Revolving Fund - - - - - - 0.00% EDA TIF Dist#2 Round Lake 1,094 1,716 1,300 1,300 1,295 2,300 76.92% EDA TIF Dist#3 Cottage Villa: 1,673 1,640 4,000 4,000 1,349 4,400 10.00% EDA TIF Dist#4 Pres Homes - - - - 875 300 0.00% Operating Expenses 3,312 6,862 69,697 69,697 41,004 93,048 33.50% Capital Outlay EDA General Fund - - 65,000 65,000 5,050 50,000 -23.08% EDA Revolving Fund - - - - 0.00% EDA TIF Dist#2 Round Lake 0.00% EDA TIF Dist#3 Cottage Villa: 0.00% EDA TIF Dist#4 Pres Homes 0.00% Total Capital Outlay 65,000 65,000 5,050 50,000 -23.08% Other Finance Uses EDA General Fund - - - - 0.00% EDA Revolving Fund - - - - 0.00% EDA TIF Dist#2 Round Lake 281,525 284,325 286,698 286,698 286,698 283,520 -1.11% EDA TIF Dist#3 Cottage Villa! - - - - - - 0.00% EDA TIF Dist#4 Pres Homes - - - - - - 0.00% Other Financing Uses 281,525 284,325 286,698 286,698 286,698 283,520 -1.11% Total Expenditures $ 284,837 $ 291,187 $ 421,395 $ 421,395 $ 332,751 $ 426,568 1.23% Fund Balances-January 1 1,227,769 1,546,585 1.662,620 1,662,620 1,662,620 2,017,930 Excess Revenue Over Expend 318,816 116,035 230,355 355,310 (100,140) (55,818) Fund Balances-December 31 $ 1,546,585 $ 1,662,620 $ 1,892,975 $ 2,017,930 $ 1,562,480 $ 1,962,112 2 EDA GENERAL Function: Economic Development Supervisor: Community Development Director Fund#: 250 Activity#: 47300 Activity Scope This Special Revenue Fund accounts for general administration activities that are not specific to any individual Tax Increment Financing(TIF) District, as well as activities associated with the Economic Development Commission and Economic Development Authority. Obiectives 1. Continue to market the City of Arden Hills 2. Gateway signs at City entrances Issues 1. Consistent administration of the City's policies, plan, ordinances, guidelines, statutes, etc. 2. Promotion of industrial property available. Measurable Workload Data None developed at this time. Budget Commentary The revenue to this fund has been primarily excess increment and interest income in the past years with transfers from the General Fund from 2008 - 2011. A transfer was made in 2012 for the Conduit Debt revenue received in 2011 from the Presbyterian Homes project. The tax increment excess has risen substantially over the past three years, but a tax petition has caused this to decrease recently and the total effect is not known. This funding source will go away after 2015. In 2008, the salary and benefit costs for this activity were transferred to the General Fund in the Planning department. At that time, there was a negative fund balance and a transfer from the General Fund was set up to correct the negative balance and fund Gateway signs. As previously stated, transfers had been routine from 2008 through 2011. With the 2012 budget, the salary and benefit costs had been transferred back to the fund as before. An administrative charge has also been added as this was established in 2008 and all funds are charged back for overhead costs 3 associated with Administration, Finance and Administrative Services, and Government Building departments in the General Fund. Other costs such as auditing,financial software, IT, and insurance have been allocated to this fund also. The expenditure budget shows an increase of 4.3% over the 2012 primarily due to the fund easing into picking up its fair share of the Auditing, Software and technology costs. Budeet Summary Function: Economic Development Department: EDA General Fund Appropriation Detail Actual Actual Budget Amended Year To Date Proposed %Change Activity FY 2010 FY 2011 FY 2012 FY2012 10/31/2012 FY 2013 12 vs 13 Revenues Taxes 35,250 29,281 35,250 35,250 7,482 35,250 0.00% Intergovernmental - - - - - - 0.00% Miscellaneous - - - - 5,050 0.00% Other Financing Sources 12,600 12,600 65,000 189,955 124,955 -100.00% Total Revenues $ 47,850 $ 41,881 $ 100,250 $ 225,205 $ 137,487 $ 35,250 -84.35% Expenditures Total Personal Services - - 41,638 41,638 33,859 43,379 4.18% Total Materials and Supplies - 306 3,000 3,000 - 1,200 -60.00% Other Service Charges 544 3,200 19,759 19,759 3,626 41,469 109.88% Capital Outlay - - 65,000 65,000 5,050 50,000 -23.08% Total Expenditures $ 544 $ 3,506 $ 129,397 $ 129,397 $ 42,535 $ 136,048 5.14% Fund Balance-January 1 20,297 67,603 109,642 109,642 ' 109,642 205,450 Excess Revenue Over Expenditure 47,306 38,376 (29,147) 95,808 94,953 (100,798) Fund Balance-December 31 $ 67,603 $ 109,642 $ 80,495 $ 205,450 $ 204,595 $ 104,652 4 EDA REVOLVING LOAN FUND Function: Economic Development Supervisor: Community Development Director Fund#: 251 Activity#: 47306 Activity Scope This Special Revenue Fund was established to administer economic development loans. The primary revenue source is from investment income. Obiectives 1. To assist local businesses meeting loan criteria established by the EDA. Issues 1. Current economy does not lend itself to expansion or improvements. 2. Promoting the program to the community businesses. Measurable Workload Data None developed at this time. Budget Commentary There are currently no planned expenditures at this time. Activity in this fund would occur if the Economic Development Authority authorized a loan after an application is made. Budget Summary Function:Economic Development Department: EDA Revolving Fund Appropriation Detail Actual Actual Budget Amended Year To Date Proposed %Change Actitity FY 2010 FY 2011 FY 2012 FY2012 10/31/2012 FY 2013 12 vs 13 Revenues Total Miscellaneous 3,392 4,290 2,500 2,500 2,591 2,500 0.00% Total Revenues $ 3,392 $ 4,290 $ 2,500 $ 2,500 $ 2,591 $ 2,500 0.00% Fund Balance-January 1 146,499 149,891 154,374 154,374 154,374 156,874 Excess Revenue Over Expenditure 3,392 4,290 2,500 2,500 2,591 2,500 Fund Balance-December 31 $ 149,891 $ 154,374 $ 156,874 $ 156,874 $ 156,965 $ 159,374 5 EDA TIF DISTRICT #2 - ROUND LAKE Function: Economic Development Supervisor: Director of Finance and Administrative Services Fund#: 252 Activity#: 47307 Activity Scope TIF District No. 2, Round Lake Office,was established as a twenty-five year Redevelopment District on June 29, 1989. This district is located on the northeast quadrant of the I-35W/I694 intersection. This district will decertify on December 31, 2015. Improvements for this district were funded with the issuance of$3,100,000 General Obligation Tax Increment Bonds on March 1, 1998. Debt Service Fund No. 325 created to track repayment of the bond principal and interest. An inter-fund loan from the Permanent Revolving Fund No. 411 was needed for the acquisition of the Indykiewicz property. This loan was repaid in full in 2004. Objectives N/A Issues N/A Measurable Workload Data None developed at this time. Budget Commentary There are no significant changes in this fund in 2013. Annual transfers are made to Debt Service Fund No. 325 for principal and interest payments on the G.O. Tax Increment Refunding Bonds, 2004A. 6 Budget Summary Function: Economic Development Department: EDA TIF District#2 Round Lake Office Park Appropriation Detail Actual Actual Budget Amended Year To Date Proposed %Change Activity FY 2010 FY 2011 FY 2012 FY2012 10131/2012 FY 2013 12,,s 13 Revenue Taxes 493,112 273,765 493,500 493,500 49,212 275,000 -44.28% Miscellaneous 18,627 43,938 15,000 15,000 17,057 15,000 0.00% Total Revenue $ 511,739 $ 317,703 $ 508,500 $ 508,500 $ 66,269 $ 290,000 A2.97% Expenditures Other Services and Charges 1,094 1,716 1,300 1,300 1,295 2,300 76.92% Operating Trans To Debt Services 281,525 284,325 286,698 286,698 286,698 283,520 -1.11% Total Expenditures $ 282,619 $ 286,041 $ 287,998 $ 287,998 $ 287,993 $ 285,820 -0.76% Fund Balance-January 1 972,727 1,201,846 1,233,508 1,233,508' 1,233,508 1,454,010 Excess Revenue Over Expenditure 229,119 31,661 220,502 220,502 (221,724) 4,180 Fund Balance-December 31 $ 1,201,846 $ 1,233,508 $ 1,454,010 $ 1,454,010 $ 1,011,784 $ 1,458,190 7 EDA TIF DISTRICT #3 - COTTAGE VILLAS Function: Economic Development Supervisor: Director of Finance and Administrative Services Fund#: 253 Activity#: 47305 Activity Scope TIF District No. 3, Cottage Villas Housing,was originally certified as a Housing District on May 10, 1993. This district is located on the east side of Cleveland Avenue,just south of County Road E-2/Cleveland Avenue intersection. This 64 unit Cottage Villas Apartment complex is available for low-moderate income seniors. Originally, this district was set to decertify on December 31, 2009. In December, 2009, the City Council extended this district until December 31,2019, to allow the City the possibility of using these funds for other affordable housing projects within the City. The City entered into a "pay-as-you-go" agreement with Cottage Villas of Arden Hills Limited Partnership on February 28, 1994. The Development Agreement calls for the developer to be reimbursed for certain public development activities initially estimated at 5834,286. Repayment to the developer will only be from tax increment actually received from the district. Payments will be 90% of the tax increment received not-to-exceed a total annual payment of 557,557. The City is not obligated to make payments after February 1, 2010. Obiectives N/A Issues N/A Measurable Workload Data None developed at this time. Budget Commentary The City no longer has any obligations to pay the development as of February 1, 2010. Only administrative costs have been planned for 2013. 8 Budget Summary Function:Economic Development Department: EDA T1F District#3 Cottage Villas Appropriation Detail Actual Actual Budget Amended Year To Date Proposed %Change Activity FY 2010 FY 2011 FY 2012 FY2012 10/31/2012 FY 2013 12%s13 Revenues Taxes 38,363 39,063 38,500 38,500 23,422 40,000 3.90% Intergovernmental 64 77 - - - - 0.00% Miscellaneous 2,245 4,208 2,000 2,000 2,842 3,000 50.00% Total Revenues $ 40,672 $ 43,348 $ 40,500 $ 40,500 $ 26,264 $ 43,000 6.17% Expenditures Other Services and Charges 1,673 1,640 4,000 4,000 1,349 4,400 10.00% Total Expenditures $ 1,673 $ 1,640 $ 4,000 $ 4,000 $ 1,349 $ 4,400 10.00% Fund Balance-January 1 88,246 127,245 169,235 169,235 ' 169,235 205,735 Excess Revenue Over Expenditure 38,999 41,707 36,500 36,500 24,915 38,600 Fund Balance-December 31 $ 127,245 $ 169,235 $ 205,735 $ 205,735 $ 194,150 $ 244,335 9 EDA TIF DISTRICT #4 - PRESBYTERIAN HOMES Function: Economic Development Supervisor: Director of Finance and Administrative Services Fund#: 254 Activity#: 47308 Activity Scope Objectives N/A Issues N/A Measurable Workload Data None developed at this time. Budget Commentary No increment has been received as this district has not generated any income at yet. The only budget in this fund is for administrative charges. Budget Summary Function:Economic Development Department: EDA TIF District#4 Pres Homes Appropriation Detail Actual Actual Budget Amended Year To Date Proposed %Change Activity FY 2010 FY 2011 FY 2012 FY2012 10/31/2012 FY 2013 12 vs 13 Revenues Taxes 0.00% Intergovemmental 0.00% Miscellaneous 0.00% Total Revenues $ $ $ $ $ - $ - 0.00% Expenditures Other Services and Charges 875 300 0.00% Total Operating Expenses 875 300 0.00% Total Expenditures $ $ $ $ $ 875 $ 300 Fund Balance-January 1 ' - - Excess Revenue Over Expenditure (875) (300) Fund Balance-December 31 $ $ $ $ $ (875) $ (300) 10