Despite adverse economic conditions brought on by COVID-19, preliminary Northfield Economic Development Authority budget options indicate cuts might not be needed next year.

Northfield Economic Development Coordinator Nate Carlson presented the options to the EDA during a July 23 meeting, after the city’s Finance Department recommended the authority present options it was considering. Doing so is seen as a proactive approach during an uncertain time.

Option No. 1 includes no consideration of the pandemic and features a 3.8% budget increase. The second option includes no change in the budget, and the third, considered the worst-case scenario, assumes pandemic constraints in calculating a 3.7% budget decrease. The Finance Department is reportedly proposing the EDA maintain the first option until feedback is provided by the City Council.

The 2020 EDA general operating budget includes $207,891 in revenue and in expenditures.

Further budget conversations and potential EDA action are scheduled for August. Any changes to its budget will be made before September. The Northfield City Council will not approve the final EDA budget until December.

During discussions of the first option, Carlson said he considers that calculation to include the prediction that 2021 will be a better economic year, noting the increase is similar to the 4% budget growth the EDA has seen over the last couple years. He proposes no changes be made next year for personnel services, an area covering the economic development coordinator, community development coordinator and community development specialist positions.

Responding to a question on whether funding from the Coronavirus Aid, Relief and Economic Security Act (CARES) received through November would impact the EDA budget, Community Development Director Mitzi Baker said no conclusion has been made on that possibility, noting she has shared EDA and Housing and Redevelopment Authority expenses for businesses and renters.

Existing commitments

A 3.8% increase would enable $15,000 to be included for the EDA’s e-commerce pilot program, an initiative helping businesses transition to the online format as COVID-19 continues. If no budget increase takes place, $5,000 will be cut from the program but other reductions would be avoided for the EDA’s facade improvement program or Socioeconomic Committee.

Currently, the EDA has $20,000 budgeted over three years for downtown facade improvements. The program is seen as a way to reinvest in downtown to ensure the area maintains its historic character and keeps enticing visitors to the community. The program has a 1-to-1 matching ratio with the recipient and is seen as a way to motivate adjoining downtown building owners to spruce up their storefronts. Recently, the EDA granted $10,000 for a $30,000 reinvestment project at 302 Division St.

The EDA has a contract with the Northfield Enterprise Center at $50,000 per year through 2022 and another agreement through this year with Riverwalk Market Fair for $7,000 per year in addition to $3,000 if certain incentives are met. Recently, the Riverwalk Market Fair announced it would not seek funding for this year’s market fair season as it shifts to an online-only format. The future of the contract is uncertain.

The EDA has approved microgrants for more than two years. Such funding, which can sometimes be used for leasehold improvements, gap financing and working capital, is designed to strengthen emerging businesses and position them for future growth by helping them to develop their technical, management, or marketing capabilities. The maximum grant award is $5,000.

If the 2021 budget decreases from 2020’s, in addition to the $5,000 cut to the e-commerce pilot program, reductions would also be made to the EDA’s microgrant programming. A 3.7% budget decrease would reduce the current $20,000 allocation in half.

An additional $15,000 is slated for EDA Socioeconomic Committee work next year.

Reach Associate Editor Sam Wilmes at 507-645-1115. © Copyright 2020 APG Media of Southern Minnesota. All rights reserved.

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