EDA Minutes 11-28-1995
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, November 28, 1995 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Ron Hoghmd, Vice Chairperson Barb Schwientek,
Assistant Treasurer Harvey Kendall, Clint Herbst, Tom
Perrault, Al Larson, and Bill Demeules.
STAFF PRESENT:
Ollie Koropchak, Executive Director
Jeff O'Neill
STAFF ABSENT:
Rick Wolfsteller, EDA Treasurer
GUESTS:
Bill and Barb Tapper.
1. CALL TO ORDER.
Chairperson Hoglund called the EDA meeting to order at 7:00 p.m.
2.
CONSIDERATION TO APPROVE THE SEPTEMBER 13,1995 BOA MINUTES.
EDA members reviewed the September minutes at the meeting. Barb Schwientek
then made a motion to approve the September 13, 1995 EDA minutes. Clint Herbst
seconded the motion and with no additions or corrections, the minutes were
approved as written.
3.
CONSIDERATION TO REVIEW FOR APPROVAL THE PRELIMINARY GMEF
APPLICATION FROM APPLICANT, TAPPERS. INC.
Bill Tapper informed commission members that the 1 X,OOO sq ft expansion included
a mezzanine with a lunchroom and laboratories, as well, as the production area.
Expansion materials will be block or span-certe. Currently, the company is leasing
space from Jay Morrell. Fifteen new jobs will be created at an average wage of
$8.30 per hour.
Koropchak reviewed the Tapper loan application request with the GMEF Guidelines
and the analysis prepared by Public Resource Group, Inc. Additionally, a letter of
intent to fmance the project was submitted by Marquette Bank. Mr. Endres
indicated, "Although no bank approval or commitment has been received from
headquarters, approval is presumed." Koropchak noted the Marquette Bank's
appraisal of the real estate and machinery & equipment. The total appraised value
indicated a collateral shortfall of approximatley $53,000. Mr. Tapper felt the
appraisal was very, very conservative since the original appraisal was $1.5 million.
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EDA MINUTES
NOVEMBER 28,1995
EDA members agreed with Mr. Tapper and viewed the loan request as a defmite
compliance of the "gap financing" requirement. Additiona11y, EDA members felt in
the real world if the loans were declared in-default, the GMEF 5th or 6th positions
were irrelevant.
Mr. Tapper indicated, he intends to meet the 7-year balloon obligation of GMEF
Loan No. 001 which is due August 13, 1997.
As of November 27, 1995, the annual GMEF Appropriation balance according to
disbursement records is $150,000 and according to approval records is $100,000. In
either case, the EOA felt the loan disbursement would occur in 1996 for compliance
of the GMEF Guideline. It was recommended, the approved $100,000 be
transferred from the UOAG account.
4.
CONSIDERATION TO APPROVE OR DISAPPROVE GMEF LOAN NO. 011
FOR TAPPERS. INe.
The EDA found the Tapper (Genereux Fine Wood Products, Inc.) expansion project
to encourage economic development and that the GMEF application complied with
the GMEF public purpose criteria and policies. Barb Schwientek made a motion to
approve GMEF Loan No. all in the amount of $100,000 for Tapper's, Inc. This a
real estate/equipment loan with a 6.75 % fixed interest rate amortized over 20 years,
ballooned in five years. Loan fee was set at not-to-exceed $1,500 and the GMEF
legal fees the responsibility of the applicant. GMEF Loan Nos. 001 and 010 will be
in fifth and sixth position, respectively, behind the two SBA 504 loans of third and
fourth position and the two bank loans of first and second positions. Collateral,
guarantees, and other condition requirements to be determined and prepared by the
GMEF attorney. The GMEF Loan approval is subject to SBA and Bank
commitment and approval. GMEF Loan No. 011 becomes null and void, May 28,
1996. Harvey Kendall seconded the motion and with no further discussion, the
motion passed unanimously. The Council will consider ratification of the EDA's
approval on September 25, 1995.
5.
CONSIDERATION TO DISCUSS THE POTENTIAL OF CONSOLIDATING THE
EDA AND THE HRA FOR A RECOMMENOA nON TO CITY COUNCIL.
EDA members discussed the potential consolidation of the HRA and the EDA.
Koropchak gave a background of the subject matter's origination and the IDC's
request for the joint meeting of September 27. Jeff O'Neill summarized the the pros
and cons of consolidation. Consolidation may be more efficient, would eliminate
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EDA MINUTES
NOVEMBER 28, 1995
redundancy for funding approval, most cities have either an HRA or an EDA, and
the powers of an EDA and an HRA are very simiIiar.
The makeup of an EOA has the option of a 3, 5, or 7-member commISSIOn with
representation from the City Council and the Statute does not contain a residency
requirement. An HRA has a 5-member commission and the Statute does contain a
residency requirement. The makeup of the commissions attracted the most
discussion. A consolidation to an EDA may provide a stronger linkage to the City
Council; however, a consolidation to an HRA would provide a checks and balance
system.
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EDA members discussed the residency criteria for EDA members as adopted by the
City Council. They felt until an ample number of candidates with qualifications
applied for EDA or HRA commission seats, the EDA residency criteria should be
eliminated. Other discussion: EDA agendas are well-prepared with adequate
information for decision making which drives time-efficient meetings. Additionally,
EDA meetings occur only about four times a year; therefore, EOA membership is
not overly demanding or time consuming. Although the IDC may be a banch of the
Chamber of Commerce, the role of the IDC to make industrial related suggestions
or recommendations is important to the community and complements the objectives
of the HRA and the EDA. Consolidation of the EDA and the HRA does not
reduce the workload of the Executive Director.
Al Larson made a motion recommending the EDA and the HRA not consolidate and
the existing two-commission organizational structure continue, therebye, maintaining
both a linkage to the Council and a checks and balance system. Additionally, the
motion rec'ommends the EDA residency requirement be eliminated until such time
an ample number of candidates apply for EDA commission seats. Non-resident
commissioners shall have a vested interest in the community. Harvey Kendall
seconded the motion and with no further discussion, the motion passed unanimously.
Yeas: Larson, Kendall, Hoglund, Schwientek, Herbst, Perrault, and Demeules.
Nays: None.
6. OTHER BUSINESS:
a) Vector Tool Update: GMEF Loan No. 010 for $50,000 closed on November
21, 1995, and the monies were disbursed from the Liquor Fund. Koropchak
contacted Mary Barger for a response to the EDA' s question of September
13 relating to the Days Receivables and Payables' extension of approximately
20 days between June 1994 and 1995. Barger said Vector Tool had offered
its major customer a 3 % discount/net 10 days in 1994 and this was changed
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EDA MINUTES
NOVEMBER 28, 1995
to a 1 % discount/net 30 days in 1995. This also accounts for the change in
Payables.
b) H - Window Update - Accepted the written update.
c) Other - None.
7. ADJOURNMENT.
Barb Schwientek made a motion to adjourn the BDA meeting. Seconded by Bill
Demeules and with no further business, the BDA meeting adjourned at 8:30 p.m.
a~ \<cJ\~~
Ollie Koropchak, Executive Director
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