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HomeMy WebLinkAbout2022/09/19 - ADMIN - Minutes - Economic Development Authority - Regular Official minutes EDA meeting St. Louis Park, Minnesota Sept. 19, 2022 1. Call to order President Rog called the meeting to order at 6:20 p.m. 1a. Roll call Commissioners present: President Rog, Tim Brausen, Sue Budd, Lynette Dumalag, Larry Kraft Commissioners absent: Nadia Mohamed, Jake Spano Staff present: City Manager (Ms. Keller), Deputy City Manager (Ms. Walsh), Finance Director (Ms. Schmitt), Economic Development Manager (Mr. Hunt), City Attorney (Mr. Mattick), Communications and Technology Manager (Ms. Smith) 2. Approval of agenda By general consensus, the agenda was approved as presented. 3. Approval of agenda and items on consent calendar- none 4. Approval of EDA minutes a. EDA meeting minutes of Sept. 6, 2022 By general consensus, the EDA meeting minutes of Sept. 6, 2022, were approved as presented. 5. Unfinished business - none 6. New business a. Adopt EDA Resolution authorizing the 2023 preliminary HRA levy. EDA Resolution No. 22-39 Ms. Schmitt presented the staff report. Commissioner Brausen pointed out the city does not determine these formulas noting they are determined by the State of Minnesota. He added as certain segments of the city go down, there is less tax burden. Ms. Schmitt stated that is correct. DocuSign Envelope ID: BACCA749-0C1E-4C4F-90F0-3BE52035EECE Economic Development Authority -2- Sept. 19, 2022 Ms. Schmitt noted the HRA levy is requested at .0185% of estimated market value and cannot exceed this value. She added this percentage calculates to $1,582,696 for 2023 based on Hennepin County data. Commissioner Kraft stated he appreciated these conversations, adding he supports this now as it is, but is looking forward to more data regarding investing more in affordable housing and also giving taxpayers a break this year. Commissioner Budd agreed with Commissioner Kraft and looks forward to more data, noting for now she supports this. Commissioner Brausen stated he also supports this. He noted this levy has been set at the same percentage of .0185 since 2001, so it’s been a consistent funding mech anism available to the city to do infrastructure improvements, and now also for affordable housing. He noted the City has generated over 800 affordable housing units in the last 7 years, adding this has been an effective tool to utilize these funds and others. Commissioner Dumalag stated she will also support this and looks forward to further discussion. President Rog concurred adding she sees the HRA levy fund enmeshed with the city’s affordable housing program of which she is very proud. She added she also looks forward to further discussion on this. It was moved by Commissioner Brausen, seconded by Commissioner Dumalag to adopt EDA Resolution No. 22-39, authorizing the 2023 preliminary HRA levy. The motion passed 5-0 (Commissioners Spano and Mohamed absent). b. Adopt the 2023 Preliminary EDA levy. Ms. Schmitt presented the staff report. She noted the EDA levy is requested at 0.00586% of estimated market value, noting it cannot exceed this value and the maximum levy would account for $1,551,042. The EDA requested council pass a preliminary EDA levy for $500,000. Commissioner Kraft asked if there is a projection on the development fund cash balance, through the end of the year. Ms. Schmitt noted staff did not include that amount as they don’t know if the land will be sold yet. She stated it is difficult to predict because there are such large transactions, such as the $6 million the land would be sold for. Commissioner Kraft asked the status of the sale. Mr. Hunt stated the proposed purchase is slated to close at the end of September and they fully expect to close on this . He DocuSign Envelope ID: BACCA749-0C1E-4C4F-90F0-3BE52035EECE Economic Development Authority -3- Sept. 19, 2022 added they continue to work with Sherman & Associates on the sale of the property related to Beltline Station and are working on the business terms of the market rate component and are still planning to proceed with that, hoping for an October or November closing. Commissioner Kraft asked if there was no EDA levy, would the city be in danger of running out of funds in the development fund. Ms. Schmitt stated the city would not run out of funds, but the fund would be below $7 million, and it would be difficult if other opportunities came up. Commissioner Kraft stated he will vote against the EDA levy. He stated he opposed it last year because of transparency and clarity issues. He continued that the major focus around levies is that we were so focused on the general levy that it obscured the general impact to taxpayers of the full tax amount. He noted last year with the EDA levy it moved the total levy up to almost 8%. Commissioner Kraft commended staff on tonight’s presentation, explaining he has less issue with transparency this year. He noted he still has an issue with clarity and the necessity for a separate levy when salaries are paid for out of the general fund. He stated it makes more sense to not have an EDA levy and funding for climate inve stment and development funding should be listed separately. He added there was discussion on the level of funding for salaries and while the EDA levy is proposed to stay constant, it increased from $200,000 last year to $500,000 this year noting this will have an impact. He stated it was discussed to keep it at $200,000 so as to keep ¾ of a percent of the overall levy impact down. He stated if the EDA levy was not approved tonight, it could be folded into the general levy. Commissioner Brausen noted the all-inclusive tax levies slide shows the overall percentage increase at 7.76%, which is below the 8%. He added it shows how each levy impacts taxpayers, adding there are several tools and ways to collect taxes. He pointed out the State of MN collects tax on the individual, corporate, retail sales taxes, excise taxes, motor vehicle taxes, fuel taxes, cigarette and liquor taxes, statewide property taxes, gross earning tax, gambling taxes, and estate taxes, plus additional revenue through the lottery and many other tools. He stated the city does not have that many, but it does have these three and the city has been very open about this , how it’s being used, and how salaries are paid from different funds. He stated this is below 8% and he is certainly supportive of the preliminary EDA levy. Commissioner Dumalag added she is also supportive of the preliminary EDA levy, noting the salaries within the separate levies. She added she looks forward to additional discussions in October on this. Commissioner Budd stated she is supportive of the preliminary EDA levy and noted this gives the most flexibility through the end of the year. DocuSign Envelope ID: BACCA749-0C1E-4C4F-90F0-3BE52035EECE Economic Development Authority -4- Sept. 19, 2022 President Rog stated she will oppose the preliminary EDA levy noting the levy is a useful tool, and she is glad to have it, but added it should be used with discretion based on what happens year to year. She stated in looking at 2023, this is not the year, and the city is in a debt bubble which is a fixed cost . She added the development fund is relatively healthy this year with the possibility of significant incoming funds, however, the economy and inflation, as well as a school district levy will be an added burden. She noted the EDA levy is only for salary this year with none for climate, although she stated she understands this. She stated she may support this in years to come but will oppose it this year. It was moved by Commissioner Brausen, seconded by Commissioner Dumalag, to adopt the 2023 Preliminary EDA levy. The motion did not pass because four of the seven commissioners must vote in favor of the preliminary EDA levy. The vote was 3-2 with Commissioners Spano and Mohamed absent, and Commissioner Kraft and Rog opposed. 7. Communications – none 8. Adjournment The meeting adjourned at 6:50 p.m. ______________________________________ ______________________________________ Melissa Kennedy, secretary Nadia Mohamed, president DocuSign Envelope ID: BACCA749-0C1E-4C4F-90F0-3BE52035EECE