EDA Minutes 06-15-1994
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, June 15, 1994 - 7;00 p.m.
City Hall
MEMBERS PRESENT;
Chairperson Ron Hoglund, Vice^-Chair
Schwientek, Assistant-Treasurer Bob
(tardy), and Clint Herbst.
Barbara
Mosford
MEMBERS ABSENT:
Patty Olsen, Al Larson, and Harvey Kendall.
STAFF PRESENT;
EDA Treasurer Rick Wolfsteller and Executive
Director Ollie Koropchak.
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Chairperson Hoglund called the EDA meeting to order at 7:25
p.m.
2. CONSIDERATION TO A~1?RqYE TffE:__}ANUARY 26. )~?4g[)AMJNlJTES.
Barb Schwientek made a motion to approve the January 26. 1994
EDA minutes. Wi th no correct ions or addi t ions, the mot ion
carried,
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CONSIDERATION TO REVIEW THE ER 31 1993 EDA BALANCE
SHEET AND TO DEFINE THE MEANING OF APPROPRIAT ON SOURCES AND
GMEF BALANCE FOR CLARIFICATION.
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EDA members agreed appropriation means monies earmarked or
available for use of GtvlEF loans. The 1993 Ci ty Budget
appropriated $200 I 000 from the Liquor Fund for use of the
GMEF; however, other funds like the UDAG and SCERG are also
avai lable for use by the GME:F'. The EDA uses as a gul.de an
appropriation of $200,000, this the beginning GMEF yearly
appropriation balance.
Treasurer Mosford reported the discrepency of the $75,000
under the Appropriations Receivable of the Balance Sheet
should correct itself in the year'''end reports of 1994 a:::" it
relates to loan approval date and expendi ture date. It
appears the annual 1993 appropriation is $275,000. Upon the
reques t of the EDA, the 1994 City Budget shows an
appropriation of $100,000; however, it may appear on the 1994
EDA Balance Sheet as $25,000 to correct the discrepency.
4. CONSIDERATION TO REVIEW GMEF GUIDELINES FOR AMENDMENT; LOAN
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TERM.N9N:-:-1?F:J3,f9.FtMAN9F:,r:,QAN FEE, AND ..._GMEF LEGAL FEE.
Bob Mosford made a motion
property term from 5-7 years
to deny amending the perGonal
to 5-10 years because the EDA
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EDA MINUTES
JUNE 15, 1994
felt the SCERG and CMIF could accommodate the GMEF Guidelines
and 5~10 years might exceed the life of the equipment. Clint
Herbst seconded the motion and with no further discussion, the
motion passed unanimously. LOAN TERM: The personal property
term not to exceed life of equipment (generally 5-7 years.)
Barb Schwientek made a motion to amend the approved loan
disbursement time from within 120 days to within 180 days to
accommodate the time necessary for design, delivery, and 30-'
day trial period prior to acceptance of the new equipment.
Bob Mosford seconded the motion and without further
discussion, the motion passed unanimously. NON-PERFORMANCE:
An approved GMEF loan shall be null and void if funds are not
drwan upon or disbursed wi thin 180 days from date of EDA
approval.
Bob Mosford made a motion to deny amending the loan fee
because the EDA felt lending institution charge a fee and the
current fee guideline does allow for flexibility. Barb
Schwientek seconded the motion and with no further discussion,
the motion passed unanimously. LOAN FEE: Minimum fee of $200
but not to exceed 1.5% of the total loan project. Fees are to
be documented and no duplication of fees between the lending
institution and the RLF. Loan fee may be incorporated into
the project cost. EDA retains the right to reduce or waive
loan fee or portions of loan fee.
Bob Mos ford made a mot ion to amend the m,1EF Guide 1 ine to
incorporate a legal fee provision. LEGAL FEE; Responsibility
of the GMEF applicant. This amendment is to clarify the issue
upfront with applicants. Barb Schwientek seconded the motion
and with no further discussion, the motion passed unanimously.
5. CONSIDERATION OF AN UPDATE ON THE MULLER THEATRE -- GMEF LOAN
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NO. 002 PREPAYMENT AND STANDARD IRON GMEF
The EDA accepted the written agenda report.
6. CONSIDERATION TO REVIEW THE PRELIMINARY AND FINAL GMEF
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~..:p.? [,..1 9 A'I'JQN......fRQM ..r,I'..tI.~__...ArRI:.J_9_AN1'.~............'I'tI~_II=.~~INQQ~..99.M.I?ANX........
The EDA reviewed the preliminary and final application from
the H-Window for compliance of the GMEF Guidelines.
EDA members inquired of the discrepency in the percentage of
ownership as listed the preliminary application and the
executive summary. With Mr. Lemme unable to attend the EDA
meeting, Koropchak was to clarify this discrepancy.
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EDA MINUTES
JUNE 15, 1994
Mr. Mosford reviewed the company's financial statements and
noted the company over a long term had a loss of $973,000, the
Norewegian parent company had capitalized over $3 million of
equity, and sales increased in 1993 to $3.5 million from $2.8
million in 1994. With the availability of funding from the
parent company, Mr. Mosford questioned whether this was gap
financing.
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CONSIDERATION TO APPROVE OR DISAPPROVE GMEF LOAN NO. 008 THE
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H-WINDOW COMPANY.
Based on a positive clarification of the ownership
discrepency, Barb Schwientek made a motion to approve GMEF
Loan No. 008 for the H-Window. The $50,000 loan for equipment
at 5.25% fixed interest rate amortized over seven years. The
GMEF loan fee of $750 payable at time of GMEF disbursement;
the legal fees the responsibility of the applicant; the loan
becomes null and void if not disbursed by December 15, 1994;
the loan will share a first position with the SCREG or will be
in second position on the equipment; the loan is subject to
approval of the $250,000 SCERG; the loan disbursed from the
UDAG fund; and the collateral, guarantees, and other condition
requirements to be determined and prepared by the City
Attorney. Clint Herbst seconded the motion and with no
further discussion, the motion passed ;3-1. Yeas: Barb
Schwientek, Clint Herbst, and Ron Hoglund. Nays: Bob
Mosford.
The EDA approved the loan because they determined it complied
with the GMEF Guidelines, new jobs were being created for the
community, and to promote the expansion of an existing
business. Al though the H"Window had been financed by the
Norwegian parent company, members determined a financial gap
was established when the SeERG was reduced from $400,000 to
$250,000 and the CMIF Board denied approval of the $100,000
loan because of foreign-ownership.
Mr. Mosford voted against the motion because he did not feel
a gap existed in the financing.
8.
PROSPECT UPDATES:
The EOA accepted the wr i tten information relating to the
proposed financial packages for Fay-Mar and Royal Engineering.
9. OTHER BUSINESS.
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None.
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EDA r1INUTES
JUNE 15, 1994
10. ADJOURNr1ENT.
The EDA meeting adjourned at 8:50 p.m.
O~~d\
tive Director
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