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• Shift $8,000 of previously-approved expenses to absorb the request <br /> • by the City Council; <br /> • Absorb the additional $8,000 in expenses through the EDA's fund <br /> balance; or, <br /> • Respectfully deny the request from the City Council. <br /> Each of these options are laid out in greater detail. <br /> Option 1 If it is a matter of shifting expenses, the following items are <br /> offered: <br /> Reduce the Chamber of Commerce contribution from $6,000 to $2,400, <br /> thereby saving $3,600. In addition, it is proposed that the quarterly <br /> Economic Development newsletter not be printed and distributed <br /> during 1995, thereby saving an additional $4,400. The total savings is <br /> $8,000. <br /> Option 2 EDA Fund Balance - A copy of a January 7, 1994, memo from <br /> Finance Director Lori Johnson indicates that the EDA had a cash balance at <br /> the end of 1993 of approximately $69,750. This memo, together with the <br /> 1993 Statement of Cash Activity is attached to this memo. The cash balance <br /> of$69,750 was further reduced in 1994 by a $53,000 TIF Grant to the Tescom <br /> • project. EDA Commissioners will note that this grant will be repaid as <br /> Tescom's new facility begins paying taxes. EDA Commissioners will also <br /> recall that the cost of the Ice Arena Feasibility Study was absorbed by the <br /> EDA. This resulted in an out-of-pocket expense of $10,400. If bonds are <br /> issued for this project, the EDA will be reimbursed this expense. If the <br /> project does not move forward, Elk River Youth Hockey has agreed to make <br /> three annual payments. Assuming that the EDA's 1994 budget comes in as <br /> adopted, the EDA will have a cash balance of just over $16,000 (cash balance <br /> on 1/1/94 of $69,750 less $53,000 TIF Grant, less $10,400 feasibility study, <br /> plus reimbursement from Minnesota Housing Finance Agency of $9,950). <br /> Absorbing an additional $8,000 to assist with the City's budget gap will cut <br /> this fund balance in half. <br /> Option 3 Deny Request In light of the tough decisions found in Options 1 <br /> and 2, it may be appropriate for the EDA to deny the City Council's request of <br /> absorbing an additional $8,000 in expenses during 1995. Should the EDA <br /> decide to fund this request out of its cash balance, it no longer has the ability <br /> to fund projects like the Tescom TIF Grant. An agency that is active in <br /> economic development needs an adequate cash balance to undertake projects <br /> like this now and in the future. <br /> • <br />