Resolution requesting the establishment of a property tax levy for the Economic Development Authority for property taxes to be collected during the 2025 fiscal year.

Adoption of the attached resolution.

In 2007, the City approved the Economic Development Authority Levy, which is reflected in the Economic Development Fund and used for the purposes summarized below. Minnesota Statutes 469.107 enables cities to levy a tax for the benefit of an Economic Development Authority (EDA). The amount of the tax must not be more than 0.01813 percent of the estimated market value. 
 
From 2013 to 2020, the levy was set at $225,000 and used for the following purposes in the Economic Development Budget:

 

$10,000	-	Southern Minnesota Initiative Foundation
$25,000	-	City Center Partnership
$40,000	-	Funding for the Art and Culture District in the City Center
$50,000	-	Funding for GMG Regional Services Agreement
		(partially funded by levy)
$25,000	-	Parking Lot Development or City Center Redevelopment
$75,000	-	Funding for Building Rehabilitation

 
The 2021 EDA levy was increased to $365,000 to reflect an increase in expenses associated with partnership funding. An example includes the fee for Greater Mankato Growth (GMG) services (REDA partnership) that increased from $99,714 in 2009 to $195,733.44 in 2023. The REDA fee is the largest line-item expense in the Economic Development Budget besides staffing costs. The City Council approved a new REDA Joint Services Agreement at their October 10, 2023, meeting which will expire on December 31, 2029. Under the current REDA Joint Services Agreement, the per capita rate that is used to calculate the fees will be stabilized to the same rate between all the partners and Mankato’s fee will be reduced to $192,116.40 in 2025. Future adjustments will be based on population estimates. For 2025, the savings from the reduced REDA fee have been reallocated to commercial/residential rehabilitation.
  The recommended EDA levy is $365,000 and the following items reflected in the proposed 2025 budget would be funded by the levy.   

 

$10,000	-	Southern Minnesota Initiative Foundation
$25,000	-	City Center Business Association
$40,500	-	Funding Arts and Culture
		(Twin Rivers and City Art)
$192,116.40	-	Funding for GMG Marketing Services
		(REDA Partnership)
$97,383.60	-	Funding for Commercial & Residential Building Rehabilitation

 
The attached resolution conforms to Minnesota Statute 469.07 whereby the EDA formally requests the establishment of the levy.  The final decision of the EDA/Council regarding the levy and allocation of funding is expected to occur between September and December 2024. As was reported to the Council, the preliminary levy may be decreased through budget considerations, but not increased. This also applies to the requested EDA levy.