9.0. EDSR 08-08-2005 - Laserfiche WebLink

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Consider Year 2006 EDA Budget and Resolution Regarding EDA Levy August 8,2005 EDA Meeting Page 3 of 3 • In 2003 the EDA reduced the lease space to 3 suites (6,569-square feet). In February of this year, the EDA and Mr. Hickman extended the lease for an additional 2 years at a rate of $2.19 per square foot. Mr. Hickman's staff handles the building maintenance. The current lease with Mr. Hickman expires April 15, 2007. The EDA Business Incubator budget includes projected revenue of$15,600 from rent expected in 2006, assuming a 60% occupancy rate. The projected rent revenue assumes cash rent per square foot at$4.00. A base rent value of$11.00 per square foot has been used to determine the cash rent/stock value conversion. A cash rent of approximately $5.25 would be required from 3 tenants in order to break even on the annual operating expenses. Currently,K-Netica occupies one suite in the Incubator. Proposed Business Incubator expenses include the following: Other Professional Services (Genesis Business Centers) $13,500 Advertising/Marketing $ 3,000 Building Rent (3 suites plus common areas) $15,600 Total Business Incubator Expenditures $32,100 Total Business Incubator Revenues $15,600 The approximate $16,500 shortfall in this budget is proposed, as it has been in the past, to • be funded through the use of funds generated by Tescom Corporation's loan repayment. The cash balance in this account could fund the annual estimated financial gap of the Incubator Program for the next several years. If a new Incubator concept is considered at any time in the future, the Business Incubator Program budget would be reviewed by the EDA for adjustment. Recommendations Staff recommends that the EDA approve the year 2006 EDA Budget including the year 2006 Business Incubator Budget as presented. In addition, staff recommends that the EDA approve the attached Resolution establishing the EDA tax levy for collection in year 2006. •