Resolution requesting the establishment of a property tax levy for the Economic Development Authority for property taxes to be collected during the 2027 fiscal year.

Adoption of the attached resolution.

In 2007, the City approved an Economic Development Authority Levy, which is reflected in the Economic Development Fund and has historically been used to support economic development, redevelopment, building rehabilitation, and community partnership activities.

Minnesota Statutes, Section 469.107, enables a city to levy a tax for the benefit of an Economic Development Authority. The amount of the levy may not exceed 0.01813 percent of estimated market value.

From 2013 through 2020, the EDA levy was established at $225,000 and supported the following activities:

• $10,000 – Southern Minnesota Initiative Foundation
• $25,000 – City Center Partnership
• $40,000 – Arts and Culture District in the City Center
• $50,000 – GMG Regional Services Agreement, partially funded by the levy
• $25,000 – Parking Lot Development or City Center Redevelopment
• $75,000 – Building Rehabilitation

Historically, funding for the City Center Partnership, Arts & Culture, and Parking Lot Development/City Center Redevelopment supported implementation goals identified in the City Center Renaissance Plan and/or action steps in the Arts, Culture, & Community Enhancement Plan. More broadly, the EDA levy and other economic development incentive programs have primarily been directed toward reinvestment in building infrastructure and supporting redevelopment activities rather than ongoing operational expenses. These investments are intended to leverage additional private and public investment, increase the tax base, and maintain the viability of the City's building stock. The funding provided to the Southern Minnesota Initiative Foundation is an example of supporting a semi-public entity that provides capital and resources to public and private ventures.
Recent EDA Levy History
Beginning in 2021, the EDA levy was increased to $365,000 to reflect increased expenses associated with partnership funding. One significant example is the fee for Greater Mankato Growth (GMG) services through the Regional Economic Development Alliance (REDA) partnership. The City's fee increased from $99,714 in 2009 to $195,733.44 in 2023.

The City Council approved a new REDA Joint Services Agreement on October 10, 2023, which expires December 31, 2029. Under the current agreement, the per-capita rate used to calculate the fees will be stabilized at the same rate among all partners by the end of the agreement. Mankato's fee is expected to be reduced to $186,581.29 in 2027. In prior years, savings resulting from reductions in the REDA fee have been redirected toward commercial and residential building rehabilitation.

The following table summarizes activities funded with EDA levy proceeds from 2021 through 2026:

Activity	2021	2022	2023	2024	2025	2026
Southern Minnesota Initiative Foundation	$10,000	$10,000	$10,000	$10,000	$10,000	$10,000
City Center Partnership	$25,000	$25,000	$25,000	$25,000	$25,000	$25,000
Arts & Culture (Twin Rivers and CityArt)	$40,000	$40,000	$40,000	$40,500	$40,500	$40,500
GMG Regional Services Agreement (REDA Partnership)	$195,000	$195,000	$195,000	$193,650	$192,116.40	$190,946.49
Commercial & Residential Building Rehabilitation	$70,000	$95,000	$95,000	$95,850	$97,383.60	$98,553.51
Affordability Partnership Initiatives	$25,000	—	—	—	—	—

2027 Levy Request and Budget Considerations
The preliminary 2027 EDA levy request is to remain at $365,000. This request establishes the amount that may be levied for EDA purposes; it is not intended to represent a final commitment to specific expenditures or allocations within the Economic Development Fund.

The 2027 EDA levy budget shall include the GMG Regional Services Agreement (REDA Partnership) fee, which will be $186,581.29 in 2027. The remainder of the budget may be left to the discretion of the EDA through the budgeting process.

As previously reported to the City Council, the preliminary property tax levy may be reduced through subsequent budget considerations but may not be increased. The same principle applies to the requested EDA levy. Accordingly, establishing the preliminary EDA levy at $365,000 provides the EDA and Council with the ability to consider the full range of potential funding needs while retaining the opportunity to reduce the levy as the budget process continues.

Resolution
The attached resolution formally requests establishment of the EDA levy pursuant to Minnesota Statutes, Section 469.107. Adoption of the resolution does not constitute final approval of the specific allocation of levy proceeds.

The final decision regarding the amount of the EDA levy and the allocation of EDA levy proceeds is expected to occur as part of the September–December 2026 budget process. Future budget discussions can be used to evaluate funding options and determine which programs, partnerships, and economic development activities best align with current community needs and City priorities.