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HomeMy WebLinkAbout05 20 2013 EDA 8D Sewer and Water Fee Deferral Prog Report O� p ���P �� � v 4646 Dakota Street SE Prior Lake. MN 55372 �� ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: May 20, 2013 AGENDA #: 8D PREPARED BY: Casey McCabe, Community Development Specialist AGENDA ITEM: SEWER AND WATER FEE DEFERRAL PROGRAM STATUS REPORT DISCUSSION: Introduction The purpose of this agenda item is to discuss financing status and alternative funding op- tions for the City of Prior Lake Sewer and Water Fee Deferral Program. Historv On February 11, 2013 the City Council approved the Sewer and Water Fee Deferral Pro- gram as recommended by the EDA. As part of its approval, the Council directed the EDA to fund any local deferrals from its budget in order to fully fund the city's sewer and water accounts. Any application received for sewer and water fee deferral is contingent upon the EDA having sufficient funds to "up-front" the deferral amount. During their February 19, 2013 meeting, the EDA allocated $20,000 from its Professional Services budget to the Sewer and Water Fee Deferral Program. Current Circumstances Artisan Coffee Bistro, Inc. has applied for and received a sewer and water fee deferral in the total amount of $11,844. City staff has also informed new and expanding businesses of the available sewer and water fee deferral program. Most recently, staff has made two businesses aware of the program; Teresa's Mexican Restaurant, which is planning an expansion and Honest-1 Auto Care, which is planning to construct a new building at 16683 Duluth Avenue. Honest-1 has received a SAC Unit determination from the Metropolitan Cor�ncil Environ- mental Services Division of 4 SAC Units with Met Council and City fees totaling $19,740, of which Honest One would be eligible to apply for 80% deferral, totaling $15,792. Teresa's Mexican Restaurant has received a SAC Unit determination from the Metropoli- tan Council Environmental Services Division of 6 SAC Units for the expansion area. Be- cause the total SAC unit determination for Teresa's Mexican Restaurant will exceed 10 total units, Teresa's is not eligible for deferment of the Met Council portion of fees; how- ever, Teresa's will be eligible for deferment of a portion of City fees under Plan B of the approved City of Prior Lake Sewer & Water Fee Deferral Program Policy. The City portion of sewer and water fees for 6 SAC Units totals $15,000. Teresa's would be eligible to apply for an 80% deferral of the total City sewer and water fees totaling $12,000. Conclusion The EDA should discuss additional financial resources which could be used to fund the Sewer and Water Fee Deferral Program. The EDA has an available balance of $8,156 in its sewer and water fee deferral program budget. Should both Teresa's Mexican Restau- rant and Honest-1 apply for deferral of sewer and water fees (totaling $27,792) the EDA would not have sufficient funds to approve both deferral applications. Unless the EDA allocates funds from another budget category such as professional services there will be insufficient funds to finance the two requests. ISSUES: As the EDA is aware, this is a new program intended to encourage the expansions of ex- isting businesses as well as the location of new businesses into our community. It seems to be working. This is the only incentive being received by the two expansion businesses and one new business associated with the deferral program. It is unknown whether these businesses would have expanded or moved here without this program but it does seem prudent to allow the program for work for some reasonable period of time before consider- ing its termination if that is the mindset of the EDA. The EDA is aware that Prior Lake is the first and only community in the metropolitan area that has such a program in conjunc- tion with the Metropolitan Council. FINANCIAL The EDA has obligated $20,000 of its $60,000 Professional Services Budget toward the IMPACT: Sewer and Water Fee Deferral Program; leaving a balance of $40,000 in the Professional Services Budget. This may be a source of funding for this program but it will curtail other efforts in which the EDA may wish to engage. ALTERNATIVES: 1. Motion and second to amend the EDA's budget to transfer $xxx from Profes- sional Services to the Sewer and Water Fee Deferral Program in 2013. 2. Motion and second endorsing a fund transfer from Professional Services to the Sewer and Water Fee Deferral Program should the City of Prior Lake re- ceive additional program applications in 2013. 3. Motion and second to amend the EDA's budget to transfer $xxu from an al- ternate funding source to the Sewer and Water Fee Deferral Program in 2013. 4. Motion and second identifying additional funding sources and endorsing a fund transfer to the Sewer and Water Fee Deferral Program should the City of Prior Lake receive additional program applications in 2013. 5. Provide direction to staff and continue discussion at a future meeting. 6. Take no action. RECOMMENDED As directed by the EDA. MOTION: