Title
Reappropriation of Economic Development Fund (B)
Explanation
At its November 15, 2010 meeting, the CRA heard a presentation from staff about re-appropriating and moving line items in the Economic Development Fund (ED Fund) to isolate the accounting for GTEC operations. Staff also presented the concept for a local Seed Fund program as a recommendation of where to move some of the funds currently appropriated in the ED Fund.
To that end, the CRA voted to request the City Commission to release current appropriations in the ED Fund, and subsequently re-appropriate $75,000 towards the creation of a Seed Fund program. The CRA also directed staff to bring a proposed model for the Seed Fund program to the City Commission in December.
The ED Fund is a multi-year General Government account, set up to fund city-wide economic development initiatives. The fund was initially capitalized with Occupational License revenue and has had periodic injections from the General Fund and GRU, the most recent being in FY05. Over the years, several appropriations have been made in the ED Fund to reflect varying programmatic objectives.
The largest line item in the ED Fund is for GTEC operations (#6660). This item is set up to resemble an Enterprise Fund, with rent revenues offsetting operating expenses. However, since its inception, GTEC has operated with an annual net loss of about $10,000 to $20,000. This deficit has been funded out of the ED Fund and has slowly depleted the ED Fund fund balance. Because of this depletion, ED Fund appropriations are now greater than the available fund balance. As of June 30, 2010, $223,505 was appropriated in the ED Fund, notwithstanding GTEC operations. The fund balance as of June 30, 2010, was $219,707.
Additionally, the City's Budget and Finance Department has recommended that the ED Fund be used only for GTEC accounting, and that funds for other economic development initiatives be moved to separate accounts.
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