03-20-2017 Work Session Complete AgendaSPECIAL CONCURRENT CITY COUNCIL AND HOUSING AND REDEVELOPMENT
AUTHORITY WORKSESSION
RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM
MARCH 20, 2017
6:00 PM
Call to order
Discussion regarding the formation of an Economic Development Authority (Council Memo No. 28/HRA
Memo No. 8)
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at
least 96 hours in advance to the City Clerk at 612-861-9738.
CITY OF RICHFIELD, MINNESOTA
Office of City Manager
March 16, 2017
Council Memorandum No. 28 HRA Memorandum No. 8
Housing and Redevelopment
The Honorable Mayor Authority Commissioners
And City of Richfield
Members of the City Council
Subject: Consideration of Forming an Economic Development Authority
Council Members:
As part of its 2016 goalsetting process, the City Council directed staff to "Explore other
funding sources to expand Kids @ Home program [and other Community Development
programs]." In the Proposed 2017 Budget presented to the City Council and HRA in
August 2016, staff recommended a "stopgap" funding approach for Kids @ Home and
for the Transformation Home Loans programs, but noted that we would be researching
the establishment of an Economic Development Authority (EDA) as a way to better fund
and manage these programs as well as more traditional economic development
activities.
Since that time, staff has learned more about the formation, operations, and powers of
an EDA and has, with the help of HRA legal counsel Julie Eddington (of Kennedy &
Graven) and City/HRA financial advisor Rebecca Kurtz (of Ehlers, Inc.), put together a
relevant "Q&A" document (attached).
Staff is recommending this as a topic for further City Council and HRA discussion and
has scheduled a Special Joint Work Session of the City Council and Richfield HRA on
Monday, March 20 at 6:00 p.m.
Respectfully submitted,
Steven L. 'Devich
City Manager
SLD:jcs
Email: Assistant City Manager
Department Directors
Attachments
City of Richfield
Economic Development Authority Q&A
What is an EDA?
• An EDA is an Economic Development Authority
• Legally authorized by Minnesota Statutes 469.09 through 469.108
• Any municipal body can have an EDA (regardless of whether they have any other type of
development authority — such as an HRA)
How does an EDA differ from an HRA?
• See attached chart
What cities have multiple development authorities?
• Woodbury (EDA & HRA)
• St. Louis Park (EDA & HRA)
• Bloomington (Port Authority and an HRA)
• St. Paul (Port Authority and an HRA)
• Belle Plaine (EDA & HRA)
• White Bear Lake (Port Authority and an HRA)
• Minneapolis has Port Authority powers that may be utilized by the City Council and the MCDA
• Columbia Heights (EDA & HRA)
• South St. Paul (EDA & HRA)
• Coon Rapids (EDA & HRA)
Why would Richfield want an EDA in addition to our HRA?
• To provide a consistent funding source for activities that we are already doing which are EDA
eligible (e.g. Transformation Home Loans)
• To fund other existing City/HRA programs in order to free up City/HRA funding for Kids @ Home
• To fund existing "economic development" activities
• To provide a funding source for new activities designed to assist the local business community
When (and how) would we consider adding the EDA authority?
• In order to establish an EDA the City Council must adopt an Enabling Resolution.
• Staff is recommending that these actions be taken in May (to coincide with staff budget
preparation) and become effective on January 1, 2018.
Who would serve on the EDA Board?
• Either the City Council or HRA could also serve as the board of commissioners for an EDA
• A separately appointed body could also serve, but staff would advise against that
Do they have to have separate meetings? How frequent?
• Yes, even if the membership of the EDA were coincidental to the membership of the City Council
or HRA, they would still need to conduct a separate meeting.
• At this point, staff would recommend a monthly meeting added onto the end of either the HRA
or City Council meeting. It is possible, especially in the early days of this body, the agenda might
be very brief.
How much could a Richfield EDA levy?
Based on the preliminary Pay 2017 market value for the City of Richfield, an EDA levy could generate up
to $561,017 annually.
What would this mean in terms of financial impact on an average Richfield household?
A typical Richfield single family home with a value of $175 - $200,000 would be taxed 28 to 33 cents per
year (see attached memo from Rebecca Kurtz of Ehlers Associates, Inc.)
What can an EDA fund?
• Loans for Economic Development
• Provide Seed or Venture Capital for the establishment or growth of private businesses
• Advance funds for Development and Redevelopment
• Studies for Economic Development
• Housing and Housing Loans
What (specifically) would an EDA in Richfield fund?
• The precise amounts of each of these items would be presented this summer as part of the
normal City budget process
Existing Programs
• Transformation Home Loans
• Open to Business (including marketing)
• Dues/participation in the Chamber of Commerce and EDAM
• Staffing for all of the above (at 10-15% of project/program costs)
New Initiatives
• Business Facade Improvement Loan/Grant
• Apartment Remodeling Grant (requiring tenant preservation)
Other Potential Uses
• Staff and legal/financial consultants are continuing to explore whether an EDA could directly
fund Kids @ Home, the existing Bike Rack Cost -Share Program and a Public Arts Fund
10 IE H L -F -IRIS
LEADERS IN (PUBLIC IF
If�AIhICE
Memo
ra: John Stark, City of Richfield
I..°'lh°Ihll; Rebecca Kurtz, Ehlers
Date: March 15, 2017
Subject: Estimated EDA Levy Impact
Following up to our discussion, an EDA may have its City levy a tax up to 0.01813% of
estimated market value for the benefit of the EDA. The City may increase this levy by following
the "reverse referendum" procedure specified in the Statute. Based on the preliminary Pay 2017
market value for the City of Richfield, an EDA levy could generate up to $561,017 annually.
The estimated annual tax impact of the maximum levy follows:
TAX IMPACT ANALYSIS
Estimated
Proposed
Type of Property
Market Value
City Tax
$ 75,000
$ 0.08
100,000
0.13
125,000
0.18
150,000
0.23
Residential
175,000
0.28
Homestead
200,000
0.33
225,000
0.38
250,000
0.43
300,000
0.53
400,000
0.72
$ 100,000
$ 0.27
200,000
0.59
Commercial/Industrial
300,000
0.95
400,000
1.31
500,000
1.68
1,000,000
3.49
Apartments
$ 200,000
$ 0.45
(4 or more units)
500,000
1.13
1,000,000
2.27
The money obtained from the levy could be used for any purpose for which the City's general fund
moneys could be used. A chart summarizing EDA and HRA governance and powers is attached.
Please do not hesitate to contact me if you have questions.
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