HomeMy WebLinkAbout03 18 2013 EDA 7A Sewer and Water fee Deferral Prog O PR1Q+
4646 Dakota Street SE
Prior Lake. MN 55372
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ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: March 18, 2013
AGENDA #: 7A
PREPARED BY: Dan Rogness, Community and Economic Development Director
AGENDA ITEM: SEWER AND WATER FEE DEFERRAL PROGRAM FUNDING OPTIONS
DISCUSSION: Introduction
The purpose of this agenda item is to encourage EDA discussion and agreement regarding the
funding source and annual amount to be available to the SAC Deferral Program.
History
At the February EDA meeting, a motion was approved to transfer $20,000 from its 2013 Profes-
sional Services budget line item to support the Sewer and Water Fee Deferral Program. At the
same time, Commissioners discussed ways to provide a sustainable funding source (Le., annual
tax levy or revenue bond). The cost associated with each local Sewer/Water fee deferral is
$2,500 per SAC Unit, but then reduced to $2,000 per unit due to the required 20% initial payment
by the business.
The City Council's approval of the Sewer and Water Fee Deferral Program Policy in February re-
quires the EDA to financially support all local fee deferrals with up -front funding. This funding is
used to make the city's sewer and water accounts "whole" rather than having the city see those
accounts have deficits Therefore, the EDA must identify funding sources that sustain the fee de-
ferral program in order to make it accessible and effective in Prior Lake.
Current Circumstances
Jerilyn Erickson, EDA Treasurer, has considered some alternative funding sources and developed
projections that will help lead discussion on current and future funding needs for this program.
She will review these projections at the March 18 meeting.
Conclusion
The EDA should have further discussion on how to establish a funding source and amount that
will support the effective use by eligible businesses of the Sewer and Water Fee Deferral Pro-
gram. The EDA should evaluate potential funding needs in 2013 as well as future ongoing fund-
ing for 2014 +.
ISSUES: EDA members must consider how funding this program impacts other funding needs for economic
development in Prior Lake, including initiatives that are identified in its 2012/2013 Business Plan.
FINANCIAL There will be direct costs within the EDA budget, although this program will essentially be a re-
IMPACT: volving account with payments being made by businesses for their deferred fees (plus interest).
For 2013, the EDA previously allocated $20,000 to support the program from the Professional
Services account of $60,000. A subsequent agenda item (7C) relates to a request to provide ad-
ditional funding of approximately $27,000 for broadband consulting in 2013, which would be taken
from the Professional Services balance of $40,000.
ALTERNATIVES: 1. Begin the discussion on desired funding sources and levels.
2. Establish a funding source and level.
3. Wait until the EDA Budget cycle begins to assess the proper source(s) and level of fund-
ing..
RECOMMENDED As directed by the EDA.
MOTION:
2