HomeMy WebLinkAbout09 16 2013 EDA Report 7A
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: September 16, 2013
AGENDA #: 7A
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: 2014 EDA BUDGET WITH TECHNOLOGY VILLAGE PHASE II
DISCUSSION: Introduction
The purpose of this agenda item is to i) adopt the Phase II Technology Village
Business Plan and ii) approve a resolution adopting the proposed 2014 EDA
Budget and Tax Levy.
History
During their August 19, 2013 meeting, the EDA recommended approval of the
proposed EDA Budget and Tax Levy for 2014. The EDA also kept the Technology
Village Budget line items open in order for staff to return with their recommended
2014 budget, including Phase II resources.
Current Circumstances
The EDA and City Council have supported the Technology Village Business
Accelerator operations thus far with an initial allocation of $50,000 from the General
Fund Reserve Account to the EDA’s budget in 2012. The EDA has expressed its
support to continue to grow the Technology Village program which will require an
additional funding commitment for 2014 operations.
Staff has attached a revised 2014 proposed EDA budget with recommended
Technology Village Phase II resources which results in an increase of $20,050 to
the previously approved EDA budget.
The attached Phase II Technology Village Business Plan was drafted by the
Technology Village Board of Directors. The plan outlines the current status of the
program and provides an overview of phase II development including program
participant focus, proposed rental/subsidy rates, selection criteria and estimated
2014 operating budget.
A major component of the Phase II Business Plan is the proposed rental
reimbursement (subsidy) plan. As the EDA may recall, the Technology Village
subcommittee originally considered leasing space in privately owned office space
in the community and then sub-lease that space to program participants at a
reduced rental rate. This phase II business plan also envisions private lease space
in Prior Lake; however, the EDA would not be entering into a lease agreement with
a private landlord. The program participant is required to locate their own office
space, with the assistance of city staff and the Technology Village board, and then
a rental reimbursement would be provided by the EDA to the participant after the
monthly rent payment was received by the landlord. When compared to the idea
of the EDA leasing space, this option will drastically reduce the cost responsibilities
of the EDA and will also eliminate the risk of the EDA leasing space which is not
occupied by program participants.
Conclusion
The Technology Village Board of Directors has proposed a rental rate
reimbursement structure, detailed in the business plan, which would require a
rental subsidy from the EDA. Based on its estimations and the expected increase
in program participation, the board anticipates a $19,315 shortfall in the Technology
Village budget needed to expand and operate the program in 2014.
ISSUES: Article 10.2 of the EDA bylaws requires that the EDA budget be approved by the
City Council.
FINANCIAL The proposed revisions to the 2014 EDA budget result in an increase of $20,050
IMPACT:
to the EDA budget from what was recommended by the EDA on August 19, 2013.
A portion of that will come from General Fund Reserves ($11,500) with the
remaining amount from the EDA fund balance.
ALTERNATIVES: 1. Motion and second adopting the Phase II Technology Village Business Plan as
proposed or with amendments.
2. Motion and second to approve a resolution adopting the proposed 2014 EDA
Budget and Tax Levy.
3. Deny approval of the Resolution.
4. Take no action and continue discussion at a future meeting.
RECOMMENDED Alternatives 1 and 2.
MOTION:
ATTACHMENTS: 1. Phase II Business Plan - Technology Village Business Accelerator
2. EDA Resolution
3. Proposed EDA 2014 Budget