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ity of <br /> <br />Item 4.1. <br /> <br />MEMORANDUM <br /> <br />River <br /> <br /> DATE: <br /> <br /> SUBJECT: <br /> <br />Mayor & City Council <br /> <br />Paul T. Steinman, Director of Economic <br />Development <br /> <br />March 23, 1998 <br /> <br />Development Account Guidelines <br /> <br />Issue <br /> <br />At a meeting on February 2, 1998, the City Council discussed a draft copy of <br />proposed Development Account Guidelines. Staff incorporated comments <br />from that discussion into the attached Guidelines and will be recommending <br />approval of such Guidelines by the City Council at this meeting. <br /> <br />Background <br /> <br />A Development Account is a significant and necessary financing source for <br />various economic development projects. Development requires a great deal of <br />"working capital" to facilitate projects and programs undertaken in this <br />department. It also takes a significant amount of time before the EDA can <br />recoup dollars which are invested into a project. For example, to pre-fund a <br />tax increment deal means that in some cases the EDA will not recoup its <br />dollars for an approximately 9 to 25 year period. This makes it necessary to <br />have an even greater supply of working capital dollars in an account for <br />development activities. <br /> <br />The purpose of the Development Account Guidelines are to help the EDA and <br />Council guide the use of the Development Account in a manner which <br />supports the growth of industry and employment in the City of Elk River. <br />The Development Account Guidelines outline various possible uses for <br />Development Account dollars and also various methods of capitalization of <br />the Development Account. The primary purpose of the Guidelines is to <br />assure the City Council that the Development Account is only used for <br />development purposes which meet the test of job growth and increasing the <br />city's tax base. <br /> <br />A final signifiCant issue for the Council to address is the manner of control of <br />the Development Account. It is agreed that the most appropriate manner of <br />final control of the Development Account is through the City Council. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />