HRA Minutes 04-05-2000
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HRA Minutes 04/05/00
ANNUAL MEETING MINUTES
MONTICELLO HOUSING AND REDEVELOPMIi:NT AUTHORITY
Wednesday, AprilS, 2000 - 7:00 p.m.
City Hall- 505 Walnut Street - Bridge Room
MEMBERS PRESENT:
Chair Bob Murray, Dan Frie, Brad Barger and Council Liaison
Brian Stumpf
MEMBERS ^BSENT:
Vice Chair Darrin Lahr and Steve Andrews.
OFFICERS PRESENT:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak,
and Recorder Lori Kraemer.
GUESTS:
Steve Dejong, President, Profile Powder Coating
Brad Stevens, Security State Bank, ^lbertville.
1. Call to Order.
Chair Bob Murray called the meeting to order at 7: 15 PM.
2.
Consideration to approve the lIRA minutes of March 1. 2000. and special meeting of
March 14. 2000.
A MOTION WAS MADE BY DAN FRIE AND SECONDED BY BRAD BARGER
TO APPROVE THE MINUTES OF THE REGlJLAR HRA MEETING OF
MARCH 1,2000 AND THE MINUTES OF THE SPECIAL HRA MEETING OF
MARCH 14,2000. Motion carried.
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Consideration of adding agenda items.
None
4.
Consent Agenda.
None
5.
Consideration of items removed from the consent agenda for discussion.
None
6.
Public Hearing - Consideration to approve the Lease ^greement between the l-lRA and
SPS Services. Inc.
Ollie Koropchak, Executive Director, advised the HRA that they were required to hold a
public hearing upon leasing of property with the exception ofresidentialleases. Upon
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the approval of the conditional use pcrmit by the Planning Commission and the City
Council, Attorney Bubul was contacted to prepare the Lease Agreement per the HRA
motion of March I, 2000, and the City Council approval of March 13, 2000.
Scott Rolfe, Skippcrs Pools, contacted Koropchak on April 5,2000, advising that his
insurance company would not supply him with a certificate of insurance, but assuring that
Rolfe had sufficient coverage. Rolfe stated he would continue with trying to get this
certificate, but if he was unable to secure this he may not proceed with the agreement.
The members discussed the possibility of approving the lease, subject to the issuance of
the Certificate oflnsurance.
Chair Murray opened the public hearing, and hearing no response, the public hearing was
closed.
Koropchak attached a copy of the Lease Agreement prepared by Attorney Bubul via the
direction of the I IRA and the City Council, noting a copy was also faxed to Skippcr's and
given to Jeff O'Neill for review and comment.
A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY DAN FRIE
TO APPROVE THE LEASE AGREEMENT BETWEEN THE HRA AND SPS
SERVICES, INC. AS PREPARED AT A LEASE RATE OF $610.80, SUBJECT TO
THE CONDITIONS OF THE CONTRACT REGARDING THE RECEIPT OF
THE CERTIFICATE OF INSURANCE. Motion carried.
7.
Continuation - Consideration of an update relative to the Tax Increment Guarantee within
the Contract for Private Redevelopment between the HRA and Jerald and Mary Schoen
and consideration to take action relative to the deficiency.
Ollie Koropchak, Executive Director, provided the staff report noting that Jerald and
Mary Schoen were unable to attend the meeting. The tax increment deficiency increascd
significantly in years 1998 and 1999 bccause of the following combination: Decreasc in
classification rates, tax rate frozen at time of certification, and minimum increase to
market value. However, if not for the rcduction of classification ratc, the property taxes
would have increased significantly in 1998 and 1999.
Koropchak advised that shc had received a telephone call from ^ttorncy Tebelius shortly
after the last BRA meeting. With further explanation ofTlF, noting the I IRA had mailed
letters annually to the developer relative to the annual deficiency since January 1996, and
that the HRA would consider a payment schedule similar to another district; thc Attorney
appcared to be satisfied. Koropchak did call Paul Schocn on March 29 to inform him of
the I-IRA meeting of April 5 and that this item would appcar on the agenda. He would
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lIRA Minutes 04/05/00
proceed to contact their attorney since he had not heard from him.
According to Steve Bubul the correct decertification date is June 10,2001, ten years from
the date the TI F Plan was approved. This means the last year the HRA will receive tax
increment is for payable 2000. Again, the cumulative amount of the tax increment
deficiency through calendar year 1999 is $12,426.80. It is estimated the tax increment
deficiency in year 2000 will be about $5,000. For consistency with the negotiated ofler
to Bill Tapper, the HRA may suggest payment of $6,213.40 (one-half the $12,426.80)
due and payable in 30 days from the HRA meeting or May 5, 2000, with the remaining
balance 01'$6,213.40 due and payable May 5,2001, and the tax increment deficiency of
year 2000 due and payable May 5, 2002. Payment schedule without interest. Koropchak
did note that HRA member Steve Andrews was consistent with his position stated at the
March meeting. He would not be in favor of the payment schedule without interest. This
was noted when Council Liaison Stumpf inquired why the payment schedule would be
without interest. It is estimated upon decertification, the district will have a shortfall of
between $5,000 to $15,000. Koropchak stated that Steve Schoen was comfortable with
the payment schedule as noted in this report as alternative # 1.
A MOTION WAS MADE BY DAN FRIE AND SECONDED BY BRAD BARGER
TO AUTHORIZE PAYMENT OF THE TAX INCREMENT GUARANTEE
DEFICIENCY THROUGH CALENDAR YEAR 1999 IN THE AMOlJNT OF
$12,426,80 WITHOUT INTERI~ST AS FOLLOWS: :
$6,213.40 Due and payahle May 5, 2000
$6,213.40 Due and payahle May 5, 2001
Calender Year 2000 Due and payable May 5, 2002
Motion carried unanimously,
8. Consideration to approve the Preliminary Development Agreement between the HRA and
Profile Powder Coating, Inc. authorizing the financial and legal consultants to begin
preparation for establishment of I'IF District No. 1-27.
Ollie Koropchak, Executiye Director, provided the report introducing Steve Dejong,
President of Profile Powder Coating and Brad Stevens, Secruity State Bank of
Albertvi lIe.
Brad Stevens provided a description of the building and its location, noting that it is a
wood powder coating company employing 30 to 50 cmployees. He also provided a brcak
down of sources and uscs in Exhibit A. He noted they are requesting TIF to continue
with the project.
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Steve DeJong described the type of milling work that would be done at the new facility.
He noted there would be approximately 16 to 24 unskilled positions and thc remainder of
the positions would be on a higher level.
At the HRA meeting of March 14, the commissioners suggested a range of $100,000 to
$125,000 of TIF pay-as-you-go assistance to Profile Powder Coating based on the wage
and job goals, proposed project, and TIF Cashflow. The Monticello TIF offer does not
includc soil correction or site improvcment costs. The EDA will consider approval of a
$150,000 GMEF loan. DeJong did commit to Monticello on March 29. Commissioners
Barger, Frie, and Murray either toured the existing facility or met with the company
president and lender.
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Charlie Pfeffer has a draft copy of the purchase agreement for the 3.15 acres on the corner
of Chelsea and Fallon Avenue and will begin the platting process as required. At prcsent
the lender has not completed the analysis of the business plan; however, DeJong is aware
upon execution of the Preliminary Development Agreement and payment of the $5,000,
the risk becomes his. However, the lender and his accountant have been a part of the
recruitment process as well as the delegates from the Initiative Fund and State. The
Central Minnesota Initiative Fund and the State are both interested in providing funds.
Lenny Kirscht will prepare the State application on behalf of the City of Monticello.
The TIP Plan and establishment of TIP District No. 1-27 will eome before the HRA for
approval in May. This will be an Economic Distriet for creation of jobs and increase in
tax base for a manufacturing facility. The proposed tax increment assistance is land
write-down $110,250 and Public Utilities (WAC/SAC) $20,575. The Trunk Fecs of
$25,450 are proposed to be forgiven by the City as the 10% Local Match. However, if
the City is successful at reeeiving another State Grant, the HRA ean consider reimbursing
the City for the local match from tax increment. This is an item for negotiation between
the City and the HRA and was agreed upon for the Twin City Die Castings project. The
$130,825 NPV TIf assistance is the pay-as-you-go finance method at an 8% interest rate.
You will note on the TIF CashHow, the net tax increment over the life of the district
totals $194,318 NPV.
Bob Murray questioned the agreement in alternative 1 with the motion naming Profile
Powder Coating, Inc. rather than 1.1 Companies, LLC as stated in more reeent paperwork.
Mr. DeJong advised that the company, 1.1 Companies, LLC was just approved on April 4,
2000. This was so noted.
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l-IRA Minutes 04/05/00
A MOTION WAS MADE BY DAN FRIF.: AND SECONDED BY BRAD BARGER
TO APPROVE TlIF. PRELIMINARY DEVELOPMENT AGREEMENT
BETWEEN THE HRA ANI> .J.J COMPANIES, LLC, AUTHORIZING THE
FINANCIAL AND LEGAL CONSULTANTS TO BEGIN PREPARATION FOR
ESTABLISHMENT OF TIF DISTRICT NO. 1-27. Motion carried unanimously.
9.
Consideration to approve the election of HRA officers for 2000 and approve the
appointment of commissioners to committees.
Ollie Koropchak, Executive Director, advised the liRA members that in accordance with
the lIRA Bylaws, the chair and vice-chair shall be elected at the annual meeting of the
Board of Commissioners from among the Commissioners of the Authority and shall hold
office for one year or until their successors are elected and qualified. The Secretary-
Treasurer shall be appointed at the annual meeting of the Board of Commissioners by the
Commissioners.
At the annual meeting in 1998, the commissioners discussed available time to volunteer
and agreed to rotate the HRA of11cers among the commissioncrs suggesting the Vice-
Chair move up to Chair. So being, the Vice Chair for 1999 was Daffin Lahr and Darrin
has agreed to move up to Chair for 2000.
'fherefore, if the oHice of Chair is to rotate it is the suggestion that Dan Frie be
considered for Vice Chair in 2000. Rick Wolfsteller serves as the Secretary- Treasurcr
and delegates the recording of minutes to Lori Kraemer. Koropchak is employed as the
Executive Director.
COMMITTEES
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The HRA, annually or as need be, appoints a commissioner(s) to various committees.
The only committee with By-Laws is the MCP, the othcrs are establishcd for a specific
rcsearch or purpose. The MCP Bylaws read the various city commissions annually
appoint their representative to thc MCP Board of Directors. Length of term is three
years. Steve Andrews was appointcd a three-year term in February 1998 following Al
Larson's resignation; therefore, Andrews three-year term is up f ebruary 2001.
Current committces and appointees remain as follows:
Stcvc Andrews - MCP
Community Center Small Group - Bob Murray
Marketing - Darrin Lahr/Brad Barger
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OFFICERS
A MOTION WAS MADF. BY BOB MURRAY AND SECONDF.D BY BRAD
BARGER TO APPROVE THE ELECTION OF DARRIN LAHR AS CHAIR AND
DAN FRIE AS VICE CHAIR OF THE HRA FOR THE YEAR 2000, AND
APPROVF. THF. APPOINTMENT OF RICK WOLFSTF.LLER AS SECRETARY-
TREASURER FOR 2000. Motion carried unanimously.
COMMITTEES
A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY BRAD
BARGER TO APPROVE THE APPOINTMF.NT OF THE FOLLOWING
COMMISSIONERS TO THE FOLLOWING COMMITTEES:
Steve Andrews MCP
Bob Murray Community Center Small Group
Darrin Lahr/Brad Bar~er Marketing
Motion carried unanimously.
10.
Consideration to rcview HRA Bvlaws for amendment.
Ollie Koropchak, Executive Director provided a copy of the HRA Bylaw for thc HRA
members review for the annual mccting. There was no recommendation from staH of a
need to amend the Bylaws. The HRA members noted the only update to the Bylaws
should be the change in the address of the City Hall to he 505 Walnut Street, Suite 1.
A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY DAN FRIE
TO CHANGE THE ADDRESS OF THE MONTICELLO CITY HALL TO 505
WALNUT STREET, SlJITE l. Motion carried unanimously.
After further discussion by the liRA members it was recommcnded the members bring
the compensation issue noted in the Bylaws to the next regular meeting of the HRA in
May.
11. Consideration to hcar and accept the 1999 Year-End Financial Reports for the Tax
Increment District Fund and the lIRA General Fund.
Rick W olfstelIer. HRA Trcasurcr, submitted the reports stating that none of the intercst
income has been submitted to thc districts at this point but that he is in the process of
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BRA Agenda - AprilS, 2000
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doing so. Wolfstcllcr provided a print out of the numhcrs for thc members to review. He
advised that there will most likely be some changes to this report whcn it is finished. lie
also stated that this is comparable to the numbers of last year, although there may he a
slightly larger amount of rcvcnuc this ycar.
Koropchak also noted the districts that were decertificd. Last ycar NSP was decertified.
In 2000, thc $19,000 from NSP would go into 11- Window as well as the Martie and
Polycast surplus.
A MOTION WAS MADE BY DAN FRIE ANI) SECONDED BY BRAD BARGER
TO ACCEPT THE 1999 YEAR-END FINANCIAL REPORTS FOR THE TIF
DISTRICT FUN I) AND THE HRA GENERAL FUND, SUBJECT TO THE
SECRETARY-TREASURE'S ADJUSTMENTS. Motion carried unanimously.
Consideration to authorizc cxtending an invitation to Local Lenders to attend the BRA
Mav meeting for discussion relative to Downtown Redevelopment.
Ollie Koropchak, Executive Director, advised that the Marketing Committce hostcd a
I,cndcrs Rreakfast a couple of months ago for thc purposc of marketing the public
financial assistancc programs to thc ncw lenders within the community. At that meeting,
thc community concerns of the old downtown Amoco station surfaced and downtown
redevelopmcnt in gcnCfal and it was suggcsted to invite the lenders to meet with the
HRA. Additionally, at thc March IDe meeting, although, not their purpose, thc Amoco
station came up again.
Koropchak suggestion that the BRA also consider inviting the Council members to a
meeting with the Lenders and perhaps another date othcr than the regular meeting date of
the HRA would be more appropriate. The members agreed to Wednesday, May 3, 2000
at 5 :30 p.m. Brian Stumpf and Koropchak noted they would advise the City Council
mcmbcrs. Koropchak further suggcstcd one of the HRA commissioners volunteer to call
the owner of the Amoco property to discuss acquisition price as she'd heard rumors the
price had decreased from the $250,000. Shc will chcck on potential redevelopment
dollars through the Department of Trade and Economic Dcvelopment.
There was discussion among the members as to the possibility of dcmolishing the Amoco
site and paying for it. At the time the property is sold, Amoco would pay the City back
for the cost of the demolition. Dan Frie volunteered to call the propcrty owner, Paul
Bjorkland. regarding the Amoco site.
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HRA Agenda - April 5,2000
13. Consideration to accept the hourly rate increase reCjuest from the'HRA financial
consultants.
Ollie Koropchak provided a memo from Mark Ruff, Ehlers & Associates, requesting an
hourly fee increase from $105 to $125. From the prospective ofthc HRA Exccutivc
Dircctor, Ehlers & Associates has served the Monticello HRA well and the combination
team of Ehlers and Kennedy & Graven expedites the TIF preparation and the Contract
preparation. Ehlers has been helpful in advising the liRA in matters relative to
prevention of audits by the Officc of thc State Auditors. Their turn around time of phone
messages and request for infcmnation or cashflow is good. Koropchak suggested the
mcmbers come up with a number possibly between the $105 and $] 25.
BOB MURRAY MOVF=D AND DAN FRIF: SECONDED A MOTION
REQUESTING THE EXECUTIVE DIRECTOR RESEARCH OTHER FIRMS
FOR COMPETITIVE PRICES AND SERVICES, TABLING ANY ACTION
UNTIL THE REGULAR BRA MEETING IN MAY. Motion carried unanimously.
14.
Consideration to authorize payment of thc monthly BRA bills.
The invoice from Majirs Advertising & Design was costs associated. with the d.esign and.
printing ofthc 900 brochures "At a Crossroad.s'?" by the MCP. 'fhe HRA approved
contributing $2,367 toward thc estimated costs of $9,317 for design, printing, and mailing
of the brochures. The $2,367 from the 10% Administration account of the Downtown
TIF District No. 1-22.
A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DAN FRIE
TO AUTHORIZE PAYMENT OF THE MONTHLY HRA BILLS. Motion carried
unanimously.
1 5. Consideration of Execllti ve Director's Report.
a)
3 Walnut Street - The two tenants at 3 Walnut Street stopped by to verify that the
HRA had no problems with them getting a third roommate. The third roommate
is Craig Reitan, son of Wright County Private Investigator Gary Reitan. They like
the house and have added a garbage disposal. The house is a thrce bedroom
house. The Lease Agreement states no sub-leasing. I told thcm fine, ifthc
commissioners have other thoughts, please advise.
TIF District 1-9 Tax Increment Deficiency - Attached for your information is a
copy of the check in the amount 01'$9,299.58 from Tapper's Inc. for one-third the
tax increment deficiency as agreed upon between the HRA and Bill 'rapper. The
b)
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HRA Agenda - AprilS, 2000
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deficiency amount was divided equally into three annual payments beginning and
due the 15th of March, 2000. 200 I, and 2002, respectively, withollt interest.
TI F District 1-15 - Copy of check to City of Monticello in amount of $2,426.59
received from Custom Canopy prior to release of the 1999 annual pay-as-you-go
disbursement of$7,426.59 as per the Contract.
Twin City Die Castings - Copy of cover letter attached to documents necessary
for the Industrial Revenue Bond closing with the Minnesota Ag Board on March
30. The Contract for Private Redevelopment will also be recorded. The steel and
panels should arrive April 3/4. The Grant Agreement and Loan Agreement fel[ the
$500,000 CDBG are prepared and executed by the Council. EDA Loan
Agreement also prepared, waiting to hear date of closing.
2000 Minnesota Business Assistance Forms are due April 1. These are the forms
for reporting the status of the wage and job goals within the business subsidy
provision of our contracts. HRA requested copies of the forms.
Brad Johnson - He did call again about TIF assistance for the Locustl7 Street
project proposed by Barry Fluth. Plans have been submitted to the Building
Department. I'm unaware of who the tenants might be.
Ken Barthel - Working on behalf of Veit Companies, Jeff and I've met a couple
times with them relative to conccpt ideas for the previous Farrell Gas site and
perhaps including renovation and expansion of the Liquor Store.
Scminar + Attached is a flier on a seminar "A Sense of Place and Community".
Any I-IRA members interested?
Marketing - 30 brochures mailed March 29 and Industrial Breakfast scheduled for
April 27, 7:30 a.m.
Prospects: Adaboy Mfg, Inc. - Now renting from Morrell. Looking to construct
20,000 sq ft. Metal fabricator for store fixtures, Polaris, etc. Employs 9 people
wages between $9 and $14 excluding benefits. Owners Ken Paumen and Tom
Flodquist.
* H&R Industries, Beecher, IL - Looking for immediate (4 months) lease space of
10,000 sq ft. The company is a plastic manufacturer of temperature control
products and the proposed facility would market the electron industries such as
Hoffman Engineering in Anoka. 12-17 jobs wages between $8.50 and $14
excluding benefits. Referred to and contacted Allied Companies.
* Alliant Techsystems, Inc. - Attached letter, note Ictter based on an atiicle in City
Business Journal.
* Local developer - Looking to purchase land and construct a facility for lease to
proposed tenant.
* Allied Companies - Perhaps construction of Phasc I of a total 180,000 bay-type
rental facility for light industrial and commercial use. East 7 Street.
*Midwest Graphics - Attorney representing this company contacted Koropchak
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HRA Agenda - April 5,2000
stating Midwest Graphics is looking to sell the company to Merrill Corporation of
St. Paul, thus the contract may be assigned once again to someone else.
16.
Consideration of Committee Reports.
a) City Council - Brian Stumpf - Nothing to report.
b) MCP - Steve Andrews - Absent
c) Marketing - Darrin Lahr/Brad Barger - Nothing to report.
d) Community Center - Bob Murray - Revenues running 25% to 30% above what
was expected. A handout was provided for the meeting by Kitty Baltos. Murray
advised that there will be some repair work on pool tile in late June and possibly a
new system for chlorinating the pool will be looked at. Air movement in the pool
area will be lookcd at as well.
17.
Other Business.
Nonc.
18.
Adiournment.
A MOTION W AS MAilE BY DAN FRIE AND SECONDED BY BRAD BARGER
TO ADJOURN THE MEETING AT 9 P.M. Motion carried.
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HRA Vice Chair
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t;I~1R~c~~~cretary
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