Loading...
EDA Agenda 04-24-2001 . ANNUAL MEETING AGENDA MONTICELLO I<:CONOMIC DEVELOPMENT AUTHORITY Tuesday, April 24,2001 - 7:00 p.m. City Hall - Academy Room MEMBERS: Chair Bill Demeulcs. Vice Chair Barb Schwientek. Assist Treasurcr Ken Maus. Clint I IerbsL Roger Carlson. Ron Hoglund, and Darrin Lahr. STAFF: Treasurer Rick Wolfsteller. Executive Dircctor Ollie Koropchak. Recorder Lori Kreamer. 1. Call to Order. 2. Consideration to approve the March 15,2001 EDA minutes. 3. Consideration of adding or removing agenda items. 4. Public I Iearing - Consideration to amend the Business Subsidy Criteria for the Economic Development Authority of the City of Monticello. 5. . 6. 7. Consideration to e\ect 200 I EDA officers. Consideration to review and accept the year-end FDA Financial Statements, Activity Report, and proposed 2001 Budget. Consideration to review year-end balances of the GMEF, DMRF. UDAG. and ERG Funds. 8. A. Consideration to discuss for approval the continued funding of the DMRF and to review the DMRF Guidelines for possible amendments. B. Consideration to discuss for approval authorizing the replacement of the Liquor Funds. 9. Consideration to review GMEf No. 014 relative to late paynlent policy f(x action to call loan. 10. Consideration to discuss the advantages and disadvantages of merging the EDA and the HRA. II. Executive Director's Report. 12. Other Business. 13. Adjournment. . . . . EDA Agenda - 3/15/01 MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Thursday, March 15, 200t - 7:00 p.m. City Hall - Academy Room M em bel'S Present: Chair Bill Demeules, Vice Chair Barh Schwientek, Roger Carlson. and Darrin Lahr Absent: Ken Maus, Ron Hoglund and Clint Herbst Staff: Executive Director Ollie Koropchak and Recorder Lori Kraemer Guests: Pam Campbell, DAT Chair 1 . Call to Order. Chair Bill Demeules called the meeting to order at 7:00 p.m. 2. Consideration to approve the November 8. 2000 FDA minutes and the January 30, 2001 FDA summarv of discussion. A MOTION WAS MADE BY DARRIN LAIIR AND SECONDED BY ROGER CARLSON TO APPROVE TIlE MINUTeS OF THE NOVEMBER 8. 2000 FDA MEETING. Motion carried unanimously. A MOTION WAS MADE BY ROGER CARLSON AND SECONDED BY BIL,!, DEMEULES TO APPROVE TI[E SUMMARY OF THE DISCUSSION HELD AT THE JANUARY 30. 2001 EDA MEET[NG. Motion carried unanimously. 3. Consideration of adding or rcmovinf,!, ag,enda itenls. Koropchak added a discussion regarding expanding the target area fiJr the downtO\vn revitalization plan. 4. Consideration to review for discussion the prelilninarv GMEF application for Inte!!rated Recycling Technologies, Inc. Steve Budd. Applicant Ollie Koropehak, Executive Direction, provided a copy of the GMEF Loan Application from Steve Budd requesting an $80.000 real estate loan, and provided a summary of the proposed project. -1- . . . ED^ Agenda - 3/15/0 I Koropchak provided a brief description of the company. noting that Steve Budd is President and In owner of the company. The liRA approved the preliminary concept for $40.000 of 111" pay-as-you-go assistance flJr land write-down and the City Council gave their approval at their March 12th meeting. The company proposes to purchase 2 acres of [-I property along Fallon ^ venue to the immediate north of Pipeline Supply. The 10.000 sq ft steel structure with some brick will consist of production and office space. Proposed contractor is Tricon. Inc. Construction to begin soon as possible. The company requires no outdoor storage. The company plans to create 5 new jobs for the City of Monticello within two years. Koropchak also provided a list of uses and sources and the fund guidelines. and asked the members to review the application for compliance with the EDA-GMEF Business Subsidy Criteria. The FDA melnbers discussed this project noting their approval. No action was necessary. The members inquired about the late payment policy now in place and asked if this was standard, or maybe needs to be changed to alTect all future loans. 5. Consideration to review GMEf No. 014 relative to late payments for action to call loan. Koropchak provided the background hom the January agenda and the discussion at that lneeting. Koropchak advised that she had since sent a letter to T..T. Martin regarding their late payment status and that she then received payment. She also noted that this item had been tabled from the January meeting because of the lack of quorum, however the members did discuss the potential to amend the GMEF Guidelines to include a penalty fee which would apply to future approved loans. Koropchak was requested to inquire with the local lenders as to the amount and type of penalty fees. Koropehak contacted several banks regarding their penalties for late fees and found that one bank had a flat rate of $1 00 at 15 days plus accrued interest, and another bank had a flat rate of $25 after 10 days. Their was discussion that possibly when a loan is getting toward 60 days past due, the EDA should take sonle type of action. It was also stated that a late fee penalty could not be added on existing loans, but if they were to call a loan it could be added as part of the renegotiated terms. Kornpchak explained that the GMEF Guidelines read: L^TE PA YMENT POLICY: Failure to pay principal and interest \vhen due may result in the loan being immediately called. Events of dct~llllt under the Loan ^greelnent: (a) j~li]ure to pay when due any principal or interest on the Loan. ') -......- . . . EDA Agcnda - 3/15/01 A MOTION WAS MADE BY BARB SCI [W[I.:NTEK AND SECONDED BY DARRIN LAI [R 1'0 AMEND TIlE GMEF (!lJlIWLlNES '1'0 ADD LATE PAYMENT PENALfY FEE OF $250 AFTER PAST DUE AT 30 DAYS PLUS ACCRl)ED [NTEREST. LANC,UAGli DRAFTI':!) BY 1'1 [E EDA ATTORNEY. Motion carried unani mously. 6. Consideration to approve or denv GMEF No. 018 for Integrated Rccyclinl'.lechnolol'.ies. Inc. After review and discussion of the preliminary application from Integrated Recycling Technologies. Inc. (IRTI). the EDA was asked to consider approval or denial of the request for a $80.000 GMEF loan. Koropchak noted that she had spoken with the lender who informed her that the bank finds the company to be sound, although the bank also informed that they had not received sufficient inf(ml13tion relative to the project to make a commitment flJr funding.. Koropchak advised that first. the EDA must determine if this CiMI.:F loan application li'om IRTI will encourage economic development; second, they must determine if the proposed construction real estate project application complies with the EDA Business Subsidy Criteria - GMEF Guidelines. and lastly, the EDA must determine the amount and terms of the loan for approval. Thc City Council will consider ratification of the EDA.s action for compliance ofthc I':DA-GMI':F Business Subsidy Criteria on March 26. 2001. If approved. the GMEF will be disbursed at the closing date yet to be determined. It is recommended the approved dollars be disbursed from the GMEF funds. The UDAG and Aroplax State Grant should he closed out. A MOT[ON WAS MADI,: BY ROGER CARLSON AND SECONDED BY BARB SCI [W[ENTEK TO APPROVE GMI':F LOAN NO. 018 FOR INTL':CIRATED RECYC[JNG TFCIINOI.OG[ES. [NC.. AN "S.. CORPORATION, [N TI[E AMOUNT OF $72,500 WITH A FIXED INTr~RFST RATE OF 6.5%. LOAN FEL~ APPLlCAT[ON OF $200, AND AMORTIZA nON NOT TO FXCEED 30 YEARS, WITI [ A BAI.[ .OON [N 5 YEARS. COI J .A"rI':RAL GUARANTEES. AND OTIIl':R COND[T[ON RI':QUIRFMI':NTS TO BE DETERMINED AND PRFPARED BY TI [E GMEF ATTORNEY. THE GMEF LOAN APPROV At SUBJECT TO LLNDER COMMITMENTS, VERIFICATION OF COMPANY F[NANCIAL CREDIT ABILITY, AND COUNCIL RAT[FICAT[ON CW EDA ACTION. EXECUT[VE DIRECTOR TO NOTIFY APPLICANT OF Tilt: AM1':NDMI.:NT TO THE EDA GUIDL':L1NI':S REGARDING LATE FEE PENALTY. Motion carried unanimously. ~ -")- . . . ED^ ^genda - 3/15/0 I 7. Consideration to review tl.)r approval/disarmroval the second DMRF application li)r 113 West Broadway. Koropchak advised the members of previous discussion regarding this iten1 which was tabled from the January 30 meeting because of the lack of quorum. Mr. Heaton was present at the January Ineeting and informed those FDA members present of the high cost to remove paint, repair brick and repaint; remove paint and repair brick; or re-briek. lie also mentioned it was his understanding the awning was approved for funding with the first application. Koropchak also provided copies of DA T minutes. Aller the approvals by OAr and H)A, Heaton elected not to move forward with the brick t~lCade options and proceeded with a front l~lCade treatlnent of stucco retaining the cornice and installing a canvas awning. Prior to applying the stucco, Mr. I-Icaton informed the Building Official and FDA Office of his change in plans and the OAT Chair was notified. Mr. I !caton inquired if the awning would qualify tl.H' funding, he was advised to re-apply with the knowledge of no promises. The awning was included with the three (brick ElCade) plans and bids approved by the DAT and EDA. On January 2, 2001 DAT was requested to review the design of the awning associated with the second funding application. OAT did not accept the application as the request came after the installation of the awning. It was the Office of the EDA that suggested Mr. Heaton submit a new application lor funding. It appears that the first approved OAT plans include awnings with either of the brick t~lCade options. In review of the approval for the design and funding ofDMRF No. 107, it appears Mr. Johnson received approval Ii..w design and funding tl.)r the awning on the MCP office at the time the stucco was applied. The OAT review noted stucco would not be recommended if this were a restoration but for rehabilitation purposes it is just line. Ilowever. Mr. Johnson was never reilnbursed because he did not complete the cornice treatment as approved. Mr. I Ieaton stopped by the Onice of the EDJ\ on October 17 or November 1, 2000 relative to his change in plans. OAT and Bob Claybaugh were both notified for input and to encourage the brick Llcade as well as city staff. The building permit tl.)!' the stucco was issued October 23,2000, and the permit for the awning \vas Inailed December 21, 2000. The DMRF application is dated December 27, 2000. It is unclear as to the commencement or completion date of the installation of the awning. Certainly every en<.wt was made by the city stall and DAT to encourage a brick facade treatment. Pam Campbell, DAT Chair. advised that the other two options approved by DAT were less expensive, but Ilcaton chose to do something that he knew' ()A T would not approve. -4- FDA Agenda - 3/15/0 I . Pam also advised that there is an appeals process and it was stated that the applicant can take that action vvhich goes directly to the Planning Commission. It was clarified that DAT approves a whole plan versus just pieces of a plan, and also OAT/FDA would not approve something after it was already done, stating it may set a bad precedence. Roger Carlson stated that the applicant may have known that the stucco wasn't going to be approved, and therefore re-applied for just the awnings. Again it was stated that it was the titl1ing of the application, which was after the fact. Panl also noted that a DA T member had previously asked whether DAT should have asked a different question, that being "did the awning meet the design standards'?", and she stated it probably would have. Campbell stated she asked if DAT wanted to review this again and they stated they did not. Darrin Lahr stated that possibly there was verbage that DA T could use in their "application" stating that it has to be followed in full or it would not be funded. Further discussion stated that the applicant could argue that the awnings were always a part of the plan and therefore he should be reimbursed. . Although it is very important for the EDA to endorse the OAT design findings, it is also important that the design approvals be consistent. everyone worked very hard to encourage this project as a prime example for downtown revitalization and was let down with the stucco facade; however, the second application is for funding of the awning only. similar to another application. Whether OArs request to review the application came after completion of the installation of the awning is unclear to the Or/ice of the EDA. Koropchak noted it was her lack of responsibility for not having Mr. Heaton fill out the application or give him an application on October 17. The issue is not the timing but "does the awningmect the Design Guidelines?". A MOTION WAS MADE BY BARB SCHWIENTECK AND SECONDED BY DARRIN LAHR TO DENY APPROVAL OF DMRF FOR 113 WEST BROADWAY. AND THAT TIIL.: APPLICANT BE INFORMED OF THE APPEALS PROCESS. Motion carried 3 to I with Roger Carlson voting in opposition. R. Executive Director's Report. Koropchak advised that she had talked with Ryan Companies who was gathering infornlation regarding communities located on 1-94; also statcd he was interestcd in the proposed Chmhvick property i r acquired by thc City. . Redwing Foods - offer not accepted by II-Windows. Adviscd of the IDC meeting held earlier that day and Carlson added that regarding the -5- . . . 9. EDA Agenda - 3/15/0 I Chadwick property. it had been a long negotiation process and an oner has been made so it is moving /l.lr\vard. Other Business. a) Annual meeting of the EDA - Tuesday. April 24,2001. b) Koropchak added a discussion regarding expanding the target area for the downtown revitalization plan, noting that someone had contacted her requesting extending the downtown revital ization boundarics as this person owns property outside of the area, and was looking to restore for commercial LIse. Koropchak advised that it would not fit as the zoning is R-2. so the point is mute as far as expanding the boundaries. Koropchak stated the mernbers might want to discuss proceeding with the downtown revitalization fund progranL want to consider extending boundaries of the targeted areas, advising that these questions would be asked at the annual meeting. Carlson requested maps be provided fl.)r that meeting showing the boundaries. 10. Adjournment. A MOTION WAS MADE BY BILL DEMEULES AND SECONDED BY BARB SCIIWIENTEK TO ADJOURN THE MEETING AT 8: 15 PM. Motion carried. Recorder -6- . . . EDA Agenda - 4/24/01 4. Public HeariU1! - Consideration to amend the Business Subsidv Criteria for the Economic Development Authoritv of the City of Monticello. A. Reference and background: At the March 15.2001 meeting. the EDA cOlnmissioners approved arnending the GMLF Guidelines and authorized stalf to direct the EDA Attorney to draft language fl.)r amendment of the GMI,:F Guidelines to include a Late Fee Policy of $250 plus accrued interest. Upon reading the EDA Business Subsidy Criteria, it was noted a public hearing is required. Drafted amendment to the EDA Business Subsidy Criteria, Page 6, GMEF Guidelines, IV. TERMS AND CONDITIONS: LATE FEE POLICY: In addition to any other amounts due on any loan, and without waiving any other right of the Economic Development Authority under any applicable documents, a late fee of $250 will be imposed on any borrower for any payment not received in full by the Authority within 30 calender days of the date on which it is due. Furthermore, interest will continue to accrue on any amount due until the date on which it is paid to the Authority, and all such interest will be due and payable at the same time as the amount on which it has accrued. Public Hearing Please open the public hearing for comments. As noted a public hearing notice appeared in the local newspaper April 12 and 19, 2001, pursuant to Minnesota Statutes, Sections 116.1.993 through 116.1.994. Alter hearing comments, please close the public hearing and move forward to alternative actions. The amendment will be f()rwarded to the Council on May 14, 2001 for approval as the guidelines state no changes to the guidelines shall be instituted without prior approval of the Council. Lastly, please review the LDA Business Subsidy Criteria as the GMEF Guidelines state the EDA shall review the guidelines on an annual basis. B. Alternative Actions: 1. A motion to approve amending the EDA Business Subsidy Criteria as outlined above recommending Counci I consideration on May 14. 2001. EDA Agenda - 4/24/0 I . 2. A motion to deny approval to amend the EDA Business Subsidy Criteria as outlined above. 3. A motion to table any action. C. Recommendation: Recommendation is alternative no. I. D. Supporting Data: Copy of existing EDA Business Subsidy Criteria and public hearing notice. . . ! MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA Business Subsidy Criteria Public Hcaring and Adoption the 31" day of August, 1999 Public Hearing and Adoption of Amendments the grh day of November, 2000 1. PURPOSE 1 :01 The purpose of this document is to establish the Economic Development Authority's criteria for granting of business subsidies. as defined in Minnesota Statutes 1161.993. Subdivision 3, fl1f private development. This criteria shall be used as a guide in processing and reviewing applications requesting business subsidies. . 1 :02 The criteria set forth in this document are guidelines only. The Economic Development Authority reserves the right in its discretion to approve business subsidies that vary from the criteria stated herein if the Economic Development Authority determines that the subsidy nevertheless serves a public purpose. The Authority ,,,-ill file evidence of any deviation from these criteria with the Department of Trade and Economic Development in accordance with Minnesota Statues. Section 1161.994. Subd. Z. I :03 The Economic Development Authority may amend the business subsidy criteria at any time. Amendments to these criteria are subject to public hearing requirements pursuant to Minnesota Statutes. Sections 1161.993 through 1161.994. , STATUTORY LIMITATIONS 2:01 In accordance with the business Subsidy Criteria. Business Subsidy requests must comply with applicable State Statutes. The Economic Development Authority ability to grant business subsidies is governed by the limitations established in Minnesota Statutes 116.1.993 through 1161.994. 3. PUBLIC POLICY REQUIREMENT 3:01 All business subsidies must meet a public purpose in addition to increasing the tax hase. Joh retention may only be used as a public purpose in cases where job loss is imminent and demonstrable. . 4A Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831 . (763) 295-2711. Fax: (763) 295-4404 Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3170. Fax: (763) 271-3272 . EDA Business Subsidy Criteria 4. BUSINESS SUBSIDY APPROVAL CRITERIA 4:01 All new projects approved by the Economic Development Authority should meet the following minimum approval criteria. However. it should not be presumed that a project meeting these criteria will automatically be approved. Meeting these criteria creates no contractual right on the part of any potential developer or the Economic Development Authority. 4:02 The project must be in accord with the Comprehensive Plan and Zoning Ordinance, or required changes to the plan and ordinances must be under active consideration by the City at the time of approval. 4:03 Prior to approval of a business subsidies financing plan and when deemed appropriate by the Economic Development Authority. the developer shall provide any required market and iinancial feasibility studies. appraisals, soil boring information provided to private lenders for the projecL and other information or data as requested. 4:04 A recipient of a business subsidy must make a commitment to continue operations at the site where the subsidy is used for at least five years after the benefit date. . 4:05 (Recipients of any business subsidy will be required to meet wage and job goals determined by the Economic Developmcnt Authority on a case-by~case basis, giving consideration to the nature of the developmenL the purpose of the subsidy, local economic conditions. and situational circumstances.) The Economic Development Authority may determine after a public hearing that job creation or retention is not a goal of the subsidy. In those cases, the recipient must instead meet at least one of the following minimum requirements (in addition to all other criteria in this document other thcl/1 those relating to jobs and minimum wages): (1) The proposed subsidy must accomplish removal. rehabilitation or redevelopment of "blighted areas" as defined in Minnesota Statues. Section 469.002, Subd.1 L or must constitute a cost of correction conditions that allow designation of redevelopment districts under Minnesota Statues, Sections 469.174 to 469.179; or (2) The proposed subsidy must result in improvements to public infastructure or public facilities. including without limitations. sewers storm sewers. streets. parks, recreational facilities. and other City facilities: or . (3) The proposed subsidy must remove physical impediments to development of land, including without limitation poor soils. bedrock conditions. steep slopes. or similar geotechnical problems. DAWNNVORD/POLlCIES 10/30/00 2 . . . EDA Business Subsidy Criteria 4:06 For any business subsidy that doe.s not meet the requirements of Section 4:05, the recipient must create or retain jobs as determined by the Economic Development Authority. as must meet the minimum wage thresholds, described in Section 5:03, Greater Monticello Enterprise Fund Guidelines, l.(b) (whether or not the source of the subsidy is tax increment financing). 5. GREATER MONTICELLO ENTERPRISE FUND PROJECT EVALUATION CRITERIA 5:01 The Economic Development Authority will utilize the Greater Monticello Enterprise fund to support the community's long-term economic goals. 5 :02 Each Greater Monticello Enterprise Fund subsidy will be analyzed and evaluated by the Economic Development authority. Each project shall be measured against the general criteria in Sections 1 through 4 and the specific criteria in this Section 5 applicable to the Greater Monticello Enterprise Fund subsidies. 5:03 Following are the evaluation criteria that will be used by the Economic Development Authority: DAWNIWORD/POLlCIES 10/30/00 3 EDA Business Subsidy Criteria GREATER MONTICELLO ENTERPRISE FUND GUIDELINES . CITY OF MONTICELLO 505 WALNUT STREET, SUITE #1 MONTICELLO, MINNESOTA 55362 (763) 271-3208 INTRODUCTION The purpose of the Greater Monticello Enterprise Fund (GMEF) is to encourage economic development by supplementing conventional financing sources available to existing and new businesses. Through this program administered by the Economic Development Authority and participating lending institution(s), loans are made to businesses to help them meet a portion of their financing needs. All loans must serve a public purpose by complying with four or more of the criteria noted in the next section. In all cases, it is mandatory that criteria # 1 be satisfied, which requires the creation of new jobs. It is the responsibility of the EDA to assure that loans meet the public purpose standard and comply with all other GMEF policies as defined in this document. Along with establishing the definition of public purpose, this document is designed to outline the process involved in obtaining GMEF financing. DEFINITION OF PUBLIC PURPOSE 1. To provide loans for credit worthy businesses that create new jobs. . (a) One job is equivalent to a total of 37.5 hours per week. (b) At least 90% of the jobs created must pay a wage of the higher of $9.00 per hOUL or at least 160% of the federal minimum wage. exclusive of benefits, for individuals over the age of 20 during the term of the assistance. Annual written reports are required until termination date. Failure to meet the job and wage level goals require partial or full repayment of the assistance with interest. 2. To provide loans for credit \vorthy businesses that would increase the community tax base. 3. To assist new or existing industrial or commercial businesses to improve or expand their operations. Considerations for loans shall take into account factors including. but not limited to, the nature and extent of the business. the product or service involved, the present availability of the product or service within the city of Monticello, the compatibility of the proposed business as it relates to the comprehensive plan and existing zoning policies. and the potential for adverse environmental dTects of the business, ifany. 4. To provide loans to be used as a secondary source of financing that is intended to supplement conventional financing (bank financing). . 5. To provide loans in situations in which a funding gap exists. 6. To provide funds for economic development that could be used to assist in obtaining other funds such as Small Business Administration loans, federal and state grants, etc. DAWNIWORD/POLlCIES 10/30/00 4 . . . I. EDA Business Subsidy Criteria THE GREATER MONTICELLO ENTERPRISES REVOLVING LOAN FUND POLICIES BUSINESS ELIGIBILITY * * * * * Industrial businesses Non-competitive commercial businesses which enhance the community Businesses located within the city of Monticello Credit worthy existing businesses Non-credit worthy start-up businesses with worthy feasibility studies (Deny all historical non-credit worthy businesses) $10,000 loan per each job created, or $5,000 per every $20,000 increase in property market valuation, or $5,000 per every $20,000 increase in personal property used for business purposes, whichever is higher. * II. FINANCING METHOD * COMP ANION DIRECT LOAN ~ Example: Equity 20%, RLF 30%, and bank 50%. (All such loans may be subordinated to the primary lender(s) if requested by the primary lender(s). The RLF loan is leveraged and the lower interest rate of the RLF lowers the effective interest rate on the entire project.) * PARTICIPATION LOAN - RLF buys a portion of the loan (the RLF is not in a subordinate position, no collateral is required by the RLF, and the loan provides a lower interest rate). * GUARANTEE LOANS - RLF guarantees a portion of the bank loan. (Personal and real estate guarantees handled separately.) Ill. USE OF PROCEEDS * Real property acquisition and development Real property rehabilitation (expansion or improvements) Machinery and equipment * * IV. TERMS AND CONDITIONS * LOAN SIZE - Minimum of $5,000 and maximum not to exceed 50% of the remaining revolving loan fund balance: fl)r example, if the remaininl! revolvinu: loan fund balance is $50,000, the maximum .... .... loan issuance is $25,000. * LEVERAGING ~ Minimum 60% private/public non-GMEF Maximum 30% public (GMEF) DAWNIWORD/POLlCIES 10/30/00 5 EDA Business Subsidy Criteria . Minimum 10% equity EDA loan * LOAN TERM - Personal property term not to exceed life of equipment (generally 5-7 years). Real estate property maximum of 5-year maturity amortized up to 30 years. Balloon payment at 5 years. * INTEREST RATE - Fixed rate not less than 2% below Minneapolis prime rate. Prime rate per National Bank of Minneapolis on date of EDA loan approval. * LOAN FEE - Minimum fee of $200 but not to exceed 1.5% of thc 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 project cost. EDA retains the right to reduce or waive loan fee or portion of loan fee. *Fee to be paid by applicant to the EDA within 5 working days after City Council approval of GMEF loan. Nonrefundable. * PREP A YMENT . POLICY - No penalty for prepayment. * DEFERRAL OF PA YMENTS- 1. Approval of the EDA membership by majority vote. 2. Extend the balloon if unable to refinancc. verification letter from two lending institutions subject to Board approval. * LA TE PAYMENT Failure to pay principal or interest when due may POLICY result in the loan being immediately called. :,/- J: Y\-'?~ * INTEREST LIMITATION ON GUARANTEED LOANS- Subject to security and/or reviewal by EDA. * ASSUMABILITY OF LOAN - None. * BUSINESS EQUITY . REQUIREMENTS - Subject to type of loan: Board of Directors will determine case by case. analysis under normallcnding guidelines. DAWNNVORD/POLlCIES 10/30/00 6 . . . * COLLATERAL- * NON-PERFORMANCE - * NON-PERFORMANCE EXTENSION - * LEGAL FEE - EDA Business Subsidy Criteria * * Liens on real property in project (mortgage deed). Liens on real property in business (mortgage deed). Liens on real property held personally (subject to Board of Directors - homestead exempt). Machinery and equipment liens (except equipment exempt from bankruptcy). Personal and/or corporate guarantees (requires unlimited personal guarantees). * * * An approved GMEF loan shall be null and void if funds are not drawn upon or disbursed within ISO days from date of EDA approval. The ISO-day non-performance date can be extended up to an additional 120 days. 1. A written request is received 30 days prior to expiration of the ISO-day non-performance date. 2. Approval of the EDA membership by majority vote. Responsibility of the GMEF applicant. The Greater Monticello Enterprise Fund is operated as an equal opportunity program. All applicants shall have equal access to GMEF funds regardless of race, sex. age, marital status. or other personal characteristics. DAWNIWORD/POLlCIES 10/30/00 7 . . . EDA Business Subsidy Criteria ORGANIZA TION The Greater Monticello Enterprise Fund is administered by the City of Monticello Economic Development Authority (EDA), which is a seven-member board consisting of two Council members and five appointed members. EDA members are appointed by the Mayor and confirmed by the City Council. Formal meetings are held on a quarterly basis. Please sce the by-laws of the EDA for morc information on the structure of the organization that administers the Greater Monticello Enterprise Fund. PARTICIPATING LENDING INSTITUTION(S) 1. Participating lending institutions(s) shall be determined by the GMEF applicant. 2. Participating lending institution(s) shall cooperate with the EDA and assist in carrying out the policies of the GMEF as approved by the City Council. 3. Participating lending institution(s) shall analyze the formal application and indicate to the EDA the level at which the lending institution will participate in the finance package. LOAN APPLICA TIONI ADMINISTRATIVE PROCEDURES The EDA desires to make the GMEF loan application process as simple as possible. However. certain procedures must be tl)lIowed prior to EDA consideration of a loan request. Intlmnation regarding the program and procedures for obtaining a loan are as follows: Citv StatT Duties: The Economic Development Director. working in conjunction with the Assistant City Administrator. shall carry out GMEF operating procedures as approved by the EDA and Council. StafT is responsible for assisting businesses in the loan application process and will work closely with applicants in developing the necessary information. Application Process: 1. Applicant shall complete a preliminary loan application. Staff will review application tl)r consistency with the policies set forth in the Greater Monticello Fund Guidelines. Staff consideration of the preliminary loan application should take approximately one week. StatT will ask applicant to contact a lending institution regarding tinancing needs and indicate to applicant that further action by the EDA on the potential loan will require indication of support from a lending institution. 2. Ifapplicant gains initial support from lending institution and if the preliminary loan application is approved. applicant is then asked to complete a formal application. If the preliminary loan application is not approved by staft~ the applicant may request that the EDA consider approval of the preliminary application at the next regularly scheduled meeting of the EDA. DAWNiWORD/POLlCIES 10/30/00 8 . . . EDA Business Subsidy Criteria .., .J. If the preliminary loan application is approved, applicant shall complete a formal application. Formal application shall include a business plan which will include its management structure, market analysis, and financial statement. Like documentation necessary for obtaining the bank loan associated with the proposal is acceptable. Attached with each formal application is a written release of information executed by the loan applicant. 4. City staff will meet with applicant and other participating lender(s) to refine the plan for financing the proposed enterprise. 5. City staff shall analyze the formal application and financial statements contained therein to determine if the proposed business and finance plan is viable. Staff may, at its discretion, accept the findings of a banking institution regarding applicant credit and financial viability of the project. After analysis is complete, City stafT shall submit a written recommendation to the EDA. A decision regarding the application shall be made by the EDA within 60 days of the submittal of a completed formal application. 6. The EDA shall have authority to approve or deny loans; however. within 21 days of EDA approvaL the City Council may reverse a decision by the EDA to approve a loan if it is determined by Council that such loan was issued in violation of GMEF guidelines. 7. Prior to issuance of an approved loan, the City Attorney shall review and/or prepare all contracts, legal documents, and intercreditor agreements. After such review is complete. the City shall issue said loan. ORIGINAL REVOLVING LOAN FUNDING "LETTER OF CREDIT" FROM MONTICELLO CITY COUNCIL - $200.000 SOURCE - City Liquor Store Fund City shall transfer needed loan amount from existing accounts at such time that individual loans are approved. Revenue created through this program shall be under the control of the EDA and shall not be transferred to City funds unless the City Council determines that reserves generated are not necessary for the successful operation of the Authority. Ifsuch is the case. such funds must be transferred to the debt service funds of the City to be used solely to reduce tax levies fl1r bonded indebtedness of the City (see Section 5 B of the ordinance establ ishing the Monticello EDA). REPORTING 1. Staff shall submit quarterly summaries and/or annual repol1 detailing the status of the Monticello Enterprise Fund. FUND GUIDELINES MODIFICATION 1. At a minimum, the EDA shall review the Fund Guidelines on an annual basis. No changes to the GMEF guidelines shall be instituted without prior approval of the City Council. OAWNiWORO/POLlCIES 10/30/00 9 . . . EDA Business Subsidy Criteria LOAN ADMINISTRATION 1. City staff shall service City loan, shall monitor City position with regard to the loan, and shall assure City compliance with intercreditor agreement. 2. All loan documents shall include an intercreditor agreement which must include the following: A. Definition of loan default, agreements regarding notification of default. B. Agreements between lending institution and City regarding reproduction of pertinent information regarding the loan. 3. All loan documentation shall include agreements between borrower and lenders regarding release of privacy regarding the status of the loan. DAWNIWORD/POLlCIES 10/30/00 10 . . . Under the GMEF Guidelines use of proceeds for real property acquisition and development, real property rehabilitation (expansion or improvements) and machinery and equipment. The following commentary is intended to assist developers with those costs typically considered eligible: Real Propertv Acquisition and Improvement Costs Land Acquisition Building Permit Fees Building materials Construction labor Landscaping Grading Curbing/Parking Lot Engineer/Design Inspection Fees Architect Fees Soil borings Appraisal Fees Legal Fees Environmental Study Recording Fees Title Insurance Machinerv and Equipment Costs Personal property used as an integral part of the manufacturing or commercial business, with a useful life of at least three years. Acquisition costs would include freight and sales taxes paid. As a general rule, office equipment would not qualify. YO :v -0.05 :s2 '-- <ll '" 0 >- ct g ~ .~ .Q..::.: >-..~ 5"'tJ l[; t: 6o~~",,:i:; '550 <1) ij).:c: 0:::0 c ~ E "," ,g ...... <ll <ll 0 C ~ ~o 5 1;; .2 ,,~ %.s ~ a ; o E .- .- - ~Q)$::E~i! -5a,"'tJ<ll~e 's: -<: ~ <1) '-- tl.O >-oo..c.Vlc '1? ~Ci..'U cuo l:'::~EC- ::> <ll j:: ,1;1 <1) <1) I:: 0.. 5j ~ If <1) (i) <1) ..0"'19 ::gOVl ..c...... . ._"'tJ ~ 1;; <1) <1) 'C '" C ~ l[;'Vj .!::! .B -,., " , at i ~ a~!~~!f ~.. ~.I;; agJ22 5.1;; o i!: W '" {jj "tJ a..!! i 011= ....j:~,;::J ~ oo...ca ._W"tJ FwJ2~,gg2~8 ~=T"" ~ 3: >01: "'-5 __g_....o8011::J o ON 0 ~~...~ U) iI:.~....:-'l:~I;:::::'5 w.!!l!t:: '~.g.Ql 011 ~ iI:"tJ,g Q~c;~~ ~ ~i!~~'~ F ..c: il:Qlil:cIlSO"E g'5= i;'~ lll2 11I- 1;:09 "E "'"tJ '" 0 "'"tJ 1;:2: 1-",7ii<.O:2"tJ2..c:GlSl'5 .z Q Gl"'lll';n"tJ g l',l.o a. III e Gl_ iii W III GlW'- Ql== 0 >0'" OIl',! >1ll ='!i >oE.o :3.5 ",J! ~ w- ~Gl"tJ"'>III-~ 0"'S eg!IIIJ!.-lijO 0..c:O IIIGl'" c..c:F 4:1- III~ lII'I;:.!!la 0 0 ~ zQlI- 3l 01... Qll!!..._ I: mOCD(I)Q)t::",,"", ~.I: I;: '" al=::J a.&0 _~owg:oBGial-'" (!) .a.E'=.2::il iI:=.!!l2 10 5 <d g'3l'OE g::~ Wo-"''EE~",1ll0W ffi~Q ~~ ~ -g~-g~ I.s:::_O 8 010 Ill- III" (/.).210 C'" ."Elllilj _ 3: 0> "tJ'1;: a. g"iij 5l (/.) ~ W - c~ (1):;:::0..11I g 2 .Q ~ 6,'iij = Sl E ~ ~ '" I-~:E.!: 5~ E 8 </j-@C\i ~:;:::~~0_:g0r;:~T"" 5 :1:'- ;;g.!: caz Sll 't: ~O~Oallll ... Q. F~U)o.:; ~ 5. ; -'- ""r;: 3=Cb Gia..':"~G)~cnQ) ~ ..0 e! ~ - == Q) ::--'$ ,<J> s;;, Ql 0 a.'v .0 "E' Ul ;:lij-g-;€2 QI "tJ.;;: ~ ~ t-= 5 iii g ':1: = ~L!i '" C 'r;: f? e!:a"tJ l!F Qj ~ al,2 ... ~ Gl oll! (1)-= 0 OCij iElII:5>ol;::"EIll", "'.~ "tJIllGi~!!!og::l =8: ~-.:r"-S_fU~:c.!! 0'" ,O.....OOIll.!;::J...:: a.~ ... Gl 5 e"O W -"l~ a.U') O~:;:::~.E.c <Ill- <IlzSl.!!!liloSl5 -g:;i ~:e.!!l lii:01;: .!!! g fia... as "~CfJo~(I)(I) en E l!!"tJ !!! III oW . ~ ,_ ... Gl a. 0 U Gl = ~ ~ s g.=Q)~ G)..c m slJ: '!:a:~~ c:-s-=:: 0 _ III ",::l"tJ Gl- .ca.c>oc . en'" , .s:::1;:~Slg!~:5~ -'=- ca~" "':;:::r::-e 0 ~'iI: -= I;: K.!!!o"tJ a. o .!!lGlGlIIII;:COIllGl ~-o Ol~alca51..;O= ~(]) Q)Q)O-Cb.......- i?~ CL>QlC...~Qjl!! ?- c: (I) <( 0 EGl 5}U') iI: (I) :.:\.<]) .s:::..c:(I)_"'<O>O= '::' ,g = i;i -5 .5 lij iii a.ll! 'ii <J> ~~'O 8.5ti53'O ~ca -U') a.0 -011 ~..c -cr-S as '- c: ~ 0 ~o ,~;tlB K.I:..c: ~ "S< ~~ :~~~~~ ! g- 0)' (() a.:= .5> a.!!!;S Gl= CL Gl ~!!!'O _.s::: :g:: 15~Sl ~~ :-=III~ p1;: iGi(l) "'::J U a.= WO _Gl .sU lij=iii --0-= o~ a_as _ mll)lI) ii M.~E S"E .~~ 0 ~E III g'U') Gl E &..!.~~= :i li,g~ E E.2 i- ..... 00. CD c: ~~Oce;S 'j: "tJ .~.E a.'j: (l)lijo~2... ..c:1;:cJ2"tJJ2 =::JGi-e!l!! o 0 a.~.5cn . Sl u e:o C"c "tJ '" Gl Q.::J Gl'-!!! .c.s::: (/.)"'E'" o--g~Gl"tJlll o..s a;S 16 ca <( (1) Ql:1:5=Sls.c ="tJ."c:.!!!o= B~:;g!aYJU:1: Ul -; a.'o (I) Gl EIII t ... C) A.,r- of: -- 15 - eE. .... -g - 8 Cd"tJ ~. Ill"'" ::J ~ e .1: ~ ';, ~ Cd ; 'i~i.ii ".91 5.g B~ &.'iij'.~ .,iCllcoe:J:!!! ~o _ ~... >oa..2:-= it::! 161-$:2wo"E ~~~ [:sc=n.g~m! it I- !: 09 g'S (/.) a; 5 Q. cJZI-~ !e"<::.E gJo>:;:::-O w4:o:z::ol-' Gl m:l2 Gl...; Ie: :z::1-::liiCl,,,o.s:::>.ECO ca ZI&. -'" 0 lilT"" 0> .... Ow a:w._.Q!&2::J..-r;:c 'E :::i::liio~z e:iSil5I1l..c:':"<:: ~ lDD.>-I&.~ g 5.....:~ g>.e m Jot:o::lii 8 '" lij- e Gl.s::: . D. iil 0 ~ I&. W "tJ:J: 2'=:iS GI '" ~>~ o!!!Q~e"',g!.s i: w w=..c:u cO> caii E'" 0 wcl-J""-= !!!o>~... a. 20a:o~ S!!.~~ ECiJ III!!! 090' 1-_00"-;:; _- caT""'- a. QI!!! o::liil&. 0z.!!!iiiB';;;i a. ~o zOc WO -OlC-1ll 0>011 Oz~ ;;:: g: E.E.Q g-i;' 0'- .... (!) E ciiiiU"tJ E --'5 Oz >-.-.....ni<])III ~o w_ lD~ ...(/.)(I);;g c~ W ..2:- - ..0 0 8 W CL,gSl~~J2l!! W... W~~III::1",Gl Ill-- I:;:::.- GlE'!:: a. ~.s:::""" (/.) 5 ~.~(/.)~al = g,g w:eQ.~.!!!oen .~e~ 2'5 ~.QSl Ql ~ g'.g:2~ I- _-(1)=-.,.... o~~B EB.E'CO~~ z.u..-:;:::._-= 3: ""9 (l)g a~ r;:<l:.EIIl 'i: .s::: "'" 0 (I) ., Q. ...C\I~...E 0; 5. CD .~ ~ ...E >< l!!liiCii" dl ~~~ . 0I"'r-.. 0 (I) 5}"<t 0.: 0.: 0> CLCL::::' . _ 0> _ ...-!Gl<OO liilijUl..J::J.....M- 011 C Glo.: CM"':"gT"" _"!=' ~~~~,,~~C\I /t*~~~?; ;:;0-0"'0 .,:'QJ _ '- c: 0 ..s:::.?: 0 n:I..... ';r= ~E ~ ~ e ~ ~.~ ~)(1\1~- .... Q,i _ C'" s:- .:.,.'= ~ aJ ~ .,~ .~ *;V.~ 5. ~gtii~~ ~ .~ajw K!::Q)bl)C ':::G.1 o.r; t'g- .,~tt-:B ~ :~:: Q,I [l ~ c: .;::l '0 u.....:a 5"~ Iii = ~5::~ C:t:~"" ~.2 g,,~ ~~~~ ,~::,-Ct1 clnCLIcl1 : 5~ ~ _"f....l~ ~:c~g. 5~~~ .'c._o- I"a E~gg u.E,uu ~- ....... --- CCI .. ...c:e a:: ....... '" - ::E ~ CCI >- .:E: == .~ g'~ -~ ~ E 'ti (5 t/'}_ora':'tii 0..[:.5 ~ ~~-g~~0::::5wS! 1-~tt1I,/')C"t"\ViWQ.l :; c.~.~ o-g o~ ~:"E.c~rnE2 Imra5c58~ UIIu'1:!:,",,~.;:::::.viVl ",:2 i.!! == -; ~ ~ .!~QJ~~g}~~ ;! iI:!~~ ",'S oJ .ig1:~ci;-e-= ., c: ~v;.~ u'I ~ ,,; ~oc II'IC"'OO 00'- 0I:l Q.I n::I QJ r::: ",32.5""0 ....-e.'tj ._"_ ...."'C- - Q ~.B~;'.s ~ .t~, ..::-'! :",:. i '-=11 II: i ~ I '~f... I. ~ ~ 11if ~ ILl :.11 I " ,~' 1 ~: 'i .: ! cD 0) c:: Q).co cD E 5"0=-5 g> Q)~~Q)co co E ~ CI) iij Q) -5 E)W Q) E ~ _ E co co ~ .m F -g E ~ UJ:t::::o co g, Eco Q)3 Q) Cii Q) .s:::. '1::: 0 ~.g ~ ,~ 8.. 1:: '0.. 0 0' as 0 ~~r a: >-' o "tJ =QI 3:= giii '~.E E 01101. Q,Gl'" Q.::J~g %(/.)~iO o ~...- Zr;:::JCd 3::!J2.9 OSlO1lai I-.I:~,g Olll '5 ..J~o"", ..J-oC\l"", ~l!ltai FCL<l:~ ~'ffi~c ::lii=:gg t.cU:C z:!::c~ oil: 0-0 F g'IIIW oo"tJo wlij~U') f6f?a.:2~ z:il:Eiiill! _._0_0 o 2: ~lij . '" ~o:J:~ O::J- a..!::J CLU)'iij:Eca ~ .,_.{/'J ~ Q) = 15 o - - G) (,)0 ~... 'C C 00) :i:2 ....0 00) >art:. ... .- o '" '" i~ ]j~ il Sf;. \.J:::':'~ 0>=(/.)0..... 1a==:C-$. ::iE ~ 01- 0 tIS I g. Q) .s ui lO'$: ~ S .2:-.c Q) "0 , .c ..... "_0:;: O'0'ca-t'Cl U .2 en - ,C ;.c: c.. -:u ~ ,.... Q) ,9 I- ..Q) ~ .c 0 -.2 ::en' 0 -1-== -'(I) ..... _ u.i "0 Iii 5 ~fr' Q) o .s fa ~ ~ :>-'" ~ o tIS .- '.c ii? C\l E ~ -:E Q) itlS 0 _ ..... 0 >-.c i:.C; '. . co $ ..... Q) -."t% Q) = ~ '0 Ci1 - ,~ .Q is. "0 E g ..t! IE <( g> c 'x ..... C\l '0 ._ Q) 0 C (f) ~ :;;..c_.....o · ca(/.)(/.)a.o"- "0 .2 tIS a. 't:\i c - Q) tIS Q) i. - o Q) Q) 0 I.(f) ~ .0 .c ~ CIS;(O = - - Q) ,,.... .......s: c .$ - : - 4 c'>O a..,ClS'. "2 'E Q) = . c ,'" n ~ 1Il_ ;:" . ~ ::z: - - ...... A....... ........ ::z::E z: ...... .... c:I: ::c ::::::>> '..:- z:: ::c ::z: c.=>> c:I: - a.:: :c :r:!; ~ Ea..;. CC ,...... c: ->~ ./-:.' . . . EDA Agenda - 4/24/01 5. Consideration to Elect 2001 EDA Officers. A. Reference and Backqround. In order to comply with EDA Ordinance Amendment No. 172, Section 2-3-2: The Authority shall annually elect a president, vice president, treasurer, assistant treasurer, and secretary. The current list of officers are: President vice President Treasurer Assistant Treasurer Secretary Bill Demeules Barb Schwientek Rick Wolfsteller Ken Maus Ollie Koropchak Nominations will be made at the meeting; therefore, any EDA member unable to attend the meeting and doesn't wish to be re- elected or nominated, please contact me. In order to comply with EDA Ordinance Amendment No. 172, Section 2~3-1: Creation: (C) Thereafter the initial appointment, all commissioners shall be appointed for six-year terms, except that any person appointed to fill a vacancy occurring prior to the expiration of the term which his/her predecessor has been appointed shall be appointed only for the remainder of such term. 2001 EDA membership and 6-year term: Ron Hoglund Clint Herbst, Council Ken Maus Darrin Lahr Barb Schwientek Bill Demeules Roger Carlson, Council 12-2001 12-2002 12-2002 12-2003 12-2004 12-2005 12-2006 B. Alternative Action: 1. Motion to nominate and elect the following . . . . Chair, . . . . Vice Chair, . . . . .. Treasurer, . . . . . . . . . Assistant Treasurer, and. . . . . . . . . . . . Secretary as 2001 EDA officers. Page 1. EDA Agenda - 4/24/01 . 2. A motion to table election of 2001 EDA officers. c. Recommendation: No recommendation is given. D. Supportinq Data: Excerpts from the City Ordinance - EDA terms . . Page 2 . . . CHAPTER 3 ECONOMIC DEVELOPMENT AUTHORITY SECTION: 2-3-1: 2-3-2: 2-3-3: 2-3-4: 2-3-5: 2-3-6: 2-3-7: Creation Officers and Meetings Staff Functions, Powers, and Duties Limitations of Power Budget and Annual Report Modification AN ORDINANCE OF THE CITY OF MONTICELLO, WRIGHT COUNTY, MINNESOTA, PROVIDING FOR THE CREATION OF AN ECONOMIC DEVELOPMENT AUTHORITY. WHEREAS, the City Council for the City of Monticello (hereinafter referred to as the "City") has the authority to establish an Economic Development Authority (hereinafter referred to as the "Authority") pursuant to Sections 469.090 to 469.108, inclusive, as amended, (the "Act") of the Minnesota Statutes; and WHEREAS, all due process requirements for the establishment of the Authority, including the public hearing, have been met; and WHEREAS, based on all information present, the City Council hereby finds that the establishment of an Economic Development Authority is in the best interest of the City. NOW, THEREFORE, THE COMMON COUNCIL FOR THE CITY OF MONTICELLO DO ORDAIN that an Economic Development Authority to be known as "the City of Monticello Economic Development Authority" is hereby established pursuant to Sections 469.090 to 469.108 inclusive, as amended, of the Minnesota Statutes, which Authority shall operate according to this ordinance enacted pursuant to the charter of the City on the following terms and conditions which shall be adopted as the bylaws of the EDA. 2-3-1 : CREATION: (A) The Economic Development Authority shall be composed of 7 members to be appointed by the Mayor and confirmed by the City Council. (B) Two ofthe members shall be members of the City Council. The terms of office of the two members of the City Council shall coincide with his/her remaining term of office as a member of the City Council. MONTICELLO CITY ORDINANCE TITLE II/Chpt 3/Page 1 .5A (----- (C) The remaining five (5) members shall be initially appointed for terms other than the terms being served by a member of the City Council. Those initially appointed, including Council members serving on the EDA, shall serve for terms of one, two, three, four, and five years respectively and two members for six years. If the two Council members appointed to the EDA have Council terms that coincide, then their terms of service on the EDA shall also coincide. Thereafter, all commissioners shall be appointed for six-year terms, except that any person appointed to fill a vacancy occurring prior to the expiration of the tenn which his/her predecessor has been appointed shall be appointed only for the remainder of such term. Upon the expiration of his /her term of office, the member shall continue to serve until his/her successor is appointed. . (D) All members shall serve at the pleasure of the City Council. Vacancies shall be filled by appointment by the Mayor with the confirmation ofthe City Council. (E) The City Council shall make available to the Authority such appropriations as it deems fit for salaries, fees, and expenses necessary in the conduct of its work. The Authority shall have authority to expend all budgeted sums so appropriated and recommend the expenditures of other sums made available for its use from grants, gifts, and other sources for the purposes and activities authorized by this resolution. (F) . A commissioner may be removed by the City Council ~r inefficiency, neglect of duty, or misconduct in office. A commissioner shall be removed only after a hearing. A copy of the charges must be given to the commissioner at least 10 days before the hearing. The commissioner must be given an opportunity to be heard in person or by the counsel at the hearing. When written charges have been submitted against the commissioner, the City Council may temporarily suspend the commissioner. If the City Council finds that those charges have not been substantiated, the commissioner shall be immediately reinstated. If a commissioner is removed, a record of the proceedings- together with the charges and findings shall be filed in the office of the City Administrator. 2-3-2: OFFICERS AND MEETINGS: (A) The Authority shall elect a president, vice president, treasurer, assistant treasurer, and secretary annually. A member must not serve as president and vice president at the same time. The other offices may be held by the same member. The other offices of the secretary and assistant treasurer need not be held by a member. . (B) The Authority shall adopt rules and procedures not inconsistent with the provisions of the ordinance or as provided in Minnesota Statutes, Section 469.096, and as may be necessary for the proper execution and conduct of the business. The Authority shall adopt bylaws and rules to govern its procedures and for the transaction of its business and shall keep a record of attendance at its meetings and/or resolutions, transactions, findings, and determinations showing the vote of each member on each question requiring a vote, or if absent or abstaining from voting, indicating such fact. The records of the Authority shall be a public record, except for those items classified by law as non-public data. TITLE II/Chpt 3/Page 2 MONTICELLO CITY ORDINANCE . EDA Agenda - 4/24/01 6. Consideration to review and ~lccept the Year-End EDA Financial Statements, Activitv Report, and 200 I Proposed Budcet. A. Reference and Background: In order to company with EDA Ordinance Amendment No. 172. Section 2-3-6: The Authority shall prepare an annual budget projecting anticipated expenses and sources of revenue. And B: The Authority shall prepare an annual report describing its activities and providing an accurate statement of its financial condition. Said report shall be submitted to the City Council by March] of each year. Enclosed are the year-end statements. proposed budget. and activity report. The EDA will need to review and discuss prior to consideration of the fl..lllowing alternative action. B. l. . ! " ., . 4. C. . AlternMive Action: A motion to accept the year-end financial staternent and report for subrnission to the City Council on May 14.2001. A motion to accept thc year-end financial staternents and report subject to nmned revisions prior to submission to the City Council. A motion to not accept the year-end financial statements and report. ^ motion to table any action. Recommendation: I f the FDA commissioners make a finding that the statements and report are so correct. recommendation is alternative no. 1. The EDA financial report arc consistent with City year-end reports. D. Supportin1! Data: ('opies of financial statements and report. . MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY MONTICELLO GREATER MONTICELLO ENTERPRISE FUND (GMEF) Statement of Revenues, Expenditures, and Changes in Fund Balance For the Year Ended December 31, 2000 REVENUES Appl-opriations .. 2000 UDAG Interest Income - Notes Interest Income - Investment GMEF Interest Income - Investment UDAG Interest Income - Investment SCREG Loan Fees LJegal Fees Miscellaneous TOTAL REVENUES EXPENDITURES GMEF Loans - TCDC (UDAG) (GMEF) GMEF Legal Fees . Professional Fees DMRF Legal Fees Professional Fees Service Fees Miscellaneous Other Int. Adjustment - Notes TOTAL EXPENDITURES Excess of Revenues Over Expenditures FUND BALANCE - Beginning of Year FUND BALANCE - End of Year . $ 43,652.79 $ 33,160.42 $ 30,114.27 $ 13,128.25 $ 20,192.05 $ -0- $ 750.00 $ -0- $ 140,997.78 $ 43,652.79 $ 56,347.21 $ 1,872.65 $ 93.75 $ 200.00 $ 2,050.50 $ - 0- $ -0- $ 0 $ 104,216.90 $ 36,780.88 $1, 335,842.08 $1, 372,622.96 &A . MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY MONTICELLO GREATER MONTICELLO ENTERPRISE FUND (GMEF) Balance Sheet December 31, 2000 ASSETS Cash in Bank Notes Receivable - Tapper, Inc. Notes Receivable - Muller Theatre Notes Receivable - SMM, Inc. Notes Receivable - Aroplax Corp. Notes Receivable - Custom Canopy, Inc. Notes Receivable - Standard Iron Notes Receivable - Vector Tool Notes Receivable - Tapper, Inc. Notes Receivable - SELUEMED Notes Receivable - T J Martin Notes Receivable - Mainline Distribution Notes Receivable - Aroplax Corp II Notes Receivable - TCDC .APpropriations Receivables - 2000 UDAG TOTAL ASSETS FUND EQUITY Fund Balance Reserved for Participation Loans (Economic Development) TOTAL LIABILITIES AND FUND EQUITY . $773,649.81 $ ..0- $ -0- $ -0- $ -0- $ -0- $ 30,592.25 $ 42,721.12 $ 87,287.70 $ 31,185.61 $ 76,152.03 $ 95,819.80 $ 97,405.47 $ 94,182.89 $ 43,652.79 $1. 372,622.96 $1. 372,622.96 $1. 372,622.96 (p(1 . MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY GREATER MONTICELLO ENTERPRISE FUND (GMEF) 2001 CASH FLOW PROJECTION BEGINNING CASH BALANCE, January 2001 RECEIPTS Appropriations, Expected - GMEF Notes Amortization Payments - Tapper Inc. Muller Theatre SMM, Inc. Aroplax Corp. Notes Receivable Custom Canopy, Inc. Standard Iron ($795.49 Mo.) 7-04 Vector Tool ($509.98 Mo.) 11-03 Tapper's II ($760.36 Mo.) 4-01 SELUEMED ($1,031.01 Mo.) 9-03 T.J. Martin ($1,716.12 Mo.) 3-05 . Mainline Distrib. ($702.08 Mo.) 6-04 Aroplax Corp. II ($730.93 Mo.) 12-04 TCDC ($1,457.29 Mo.) 7-07 IRTI (Est. $700 Mo.) 7-06 VisiCom ($115.78 Mo.) 5-04 Interest Income - Investment (est.) Legal Fees Loan Fees Other Miscellaneous TOTAL RECEIPTS TOTAL BEGINNING BALANCE AND RECEIPTS EXPENDITURES GMEF Loans - IRTI GMEF Other DMRF Grants Loans (VisiCom) Loans Other Legal Miscellaneous . TOTAL EXPENDITURES EXPECTED CASH BALANCE, December 2001 $ -0- -0- -0- -0- -0- -0- -0- $ 9,545.88 $ 6,119.76 $ 3,041.44 $ 86,201.11 $ 12,372.12 $ 20,593.44 $ 8,424.96 $ 8,771.16 $ 17,487.48 $ 4,200.00 $ 926.24 $ 30,000.00 $ 301.75 $ 400.00 S 1.000.00 $ 72,500.00 $127,500.00 $ 25,000.00 $ 10,644.00 $ 9,356.00 $ 1,000.00 S 1.000.00 $ 773,649.81 $ 209.385.34 $ 983,035.15 $ 247.000.00 $ 736,035.15 (oR . . . 2000 ECONOMIC DEVELOPMENT AUTHORITY ACTIVITY REPORT MEETING DAn.: SUBJECTS Annual Meeting February 22. 2000 Claybaugh design concepts targeted f(Jr three businesses: I leaton, Preferred Title; IIamoncL former Cornpanion Pet" s building: and Anderson, Ilmner Senior Center. I.:DA Otlicers elected for 2000: President Bill Dcmeules Vice President l1arb Sehwientek Treasurer Rick WolCsteller Assistant Treasurer Ken Maus Secretary Ollie Koropchak Accepted FDA 1999 Y car-End Financial Statements and Aetivity Report. All existing GMFF loan paybacks are current. No need to amend GMEF Guidelines. Supported marketing the CiMEF Loan Size as a maximum amount of $200,000. Anlended DMRi'" Guidelines enlarging the target area to include all of Block 34 and all of l3lock 53. Tabled any action relati ve to increase of the matching j~lcade grant until after the architect meets with the three property owners. April 25,2000 Suggested DA T complete design concepts from architect for Masonic I,odge also. Keep in touch with Grassl. Approved extending the Non-performance date from March 28,2000 to September 28,2000 for GMEF Loan No. 017 'I'DCD. Approved preliminary GMEF application f(Jr Profile Powder Coating. Inc. in the amount of $150.000. {YO . . . August 29. 2000 Approved DMRF No. 110 for up to 500;;) of the rehahilitation costs, not to exceed $11.000. for /i'ont ftlcade and signage at 113 West Broadway (Heaton). Approved DMRF No. 111 in the amount of $2.500 fc)!" front l~lcade and signage improvClnents. in amount of $2.375 tClr the rear l~lcade improvements. in the mnount of $1.625 for the west side f~lcade improvements. in the amount of $2.500 for the east side facade improvements. in the amount of up to $500 fl.lr fee reimbursement, and in the amount of $1 0.644 fl.)!" a rehahilitation loan at 212 West Broadway (Hamond) with interest rate of 5.5%. amortization schedule of 10 years with halloon payment in 3 years. Approved amending the EDA Business Subsidy Criteria to increase the wage threshold to at least $9.00 per hour. exclusive of benefits. November 8. 2000 Approved extending the balloon payment date from December 1.2000. to December 1.2003. Itlr GMEF No. 010 (Blue Chip Development Company) at a fixed interest rate of7.5%. Public Hearing and reafTirmed the motion to amend the EDA Criteria to increase the wage threshold to at least $9.00 per hour, exclusive of benefits. Approved that the DMRf No. 111 rehabilitation loan remain in second position behind the lender and the non~ performance date was extended from May 29. 2001 to August 29. 200 I. ') . . . EDA Agenda - 4/24/01 7. Consideration to review vear-end balances of the GMEF. DMRF, lJDAG. Minnesota Investment Fund and SCERG Funds. A. Reference and Hackl!rnund: All GMEF loan payhack payments are current as accounted for in the 2000 year-end statements. The balloon date for UMEF No. 010 (Blue Chip) was extended from Decelnher 1,2000 to Decem her 1,2003. We anticipate to collect the halloon paYlnent li'om the Tapper II real estate loan of $100.000 in April 18,2001. The Integrated Recycling Technology. Inc. $72,500 real estate loan was approved hy the EDA in 200 I and anticipated to close spring/surnmer. No DMRF grants were disbursed in 2000. However, two grants were approved for the Hamond and Heaton properties in 2000. DMRF expenses included Claybaugh Preservation Architecture and EDA Attorney. Principal and interest payback will commence May 200 I on the $10,644 DMRF Hamond loan. The $100,000 EDA dishursement for the TCDe loan was frOln the U DACi fund account and I.:DA-GMI~F account. The $500.000 State Grant to the City for TOeD closed in 2000. This is monies from Federal dollars, the City will retain the entire $500,000 principal and interest of 40;;) amortized over seven years. The EDA is the adlninistrative hody of the funds. However, because this is Federal dollars the payhack dollars can not recycle into the EDA-CiMEF account. And forever, each new loan by the City fronl these Federal dollars must meet Federal regulations and accountahility such as 'low to moderate in johs. Davis-Bacon Rules, etc. You will note the total dollars availahle to the EDA lor GMEf and DMRF progranls less the commitnlents is $68\'005.81 as of April 24, 2001. No action necessary by the EDA. . . . MONTICELLO ECONOMIC DEVEI,OPMENT AUTI-IORITY DOWNTOWN MONTICELLO REVITALIZA TION FUND December 31, 2000 Fund Balancc. Dcccmbcr 3]. ] 997 Revenues Appropriations TOTAL REVENUES Expenditures DMRF 10], Kathy Froslie. 2-6-98 8-31-98 DMRF ] 02. Stevc Johnson DMRF 103. Kathy Froslie. 2-6-98 DMRF 104, Rich Cline. 10-11-98 11-24-98 DMRF 105, AI Loch, 11-6-98 DMRF 106. Dan Olson. 7-27-98 DMRF 107. Stcve Johnson DMRF 108. Bruce Hammond 6-11-99 DMRF ] 09, Dorothy Topel 7-12-99 DMRF 110. IIcaton 5-29-01 DMRF II]. I-Iamond 8-29-01 ($9.500) Loan 410-01 ($10.644,5.5%.5-04) Clayhaugh 3-00 4-00 Legal (Loan document) TOTAL EXPENDITURES Fund Balance, Dccembcr 31, 2000 $199.000.00 o $199.000.00 $2.500.00 $2.500.00 $ 500.00 $2.394.13 $ ]SO.12 $2.610.00 $6.814.13 $5.4]1.80 $2'()] 1.74 $ 810.50 $1,240.00 $ 200.00 $ 27.172.42 $171.827.5S '1A . SOURCES OF FUNDS January I, 2001 GMEF Cash Balance $601,822.23 DMRF Cash Balance $171,827.58 TOT AIJ $773,649.81 LESS APPROVALS IRTI Hamond Loan Hamond Grant $ 72,500.00 $ 10,644.00 $ 9,500.00 BALANCE $681,005.81 State $500,000 Grant 4% interest rate amortized over 10 years ballooned in 7 years commencing July 2000. This remains as City Funds for industrial development. . . 16 . GREATER MONTICELLO ENTERPRISE FUND (GMEF) LOAN STATUS December 31, 2000 Economic Development Authority (EDA) was created in 1989 APPROVED LOANS Tapper/Genereux (1990) $88,000.00 Muller/Monti Theatre (1990) $50,000.00 Barger/Suburban #004 (1992) $50,000.00 Schoen/Aroplax #005 (1992) $85,000.00 Birkeland/Custom Canopy #006 (1993) $42,500.00 Demeules/Standard Iron #007 (1993) $75,000.00 Blue Chip DevNector Tool #010 (1995) $50,000.00 Tapper's #011 (1996) $100,000.00 Standard Iron/Seluemed #013 (1996) $70,000.00 T J Martin #014 (1998) $87,500.00 Mainline Distr #015 (1999) $100,000.00 Aroplax #016 (1999) $100,000.00 TC Die Cast #017 (2000) $100,000.00 TOTAL APPROVED LOANS $998,000.00 LOAN DISBURSEMENTS (transferred to GMEFI Liquor Fund: 1991 to Tapper $73,000.00 1992 to Suburban $50,000.00 . 1992 to Aroplax $65,000.00 1994 to Standard Iron $75,000.00 1995 to Vector Tool $50,000.00 1996 to Standard Iron $70,000.00 Total Liquor Fund $383,000.00 UDAG Fund 1991 to Tapper $15,000.00 1991 to Muller $50,000.00 1992 to Aroplax $20,000.00 1993 to Custom Canopy $42,500.00 1996 to Tapper's $100,000.00 1999 to Aroplax (016) $100,000.00 1999 (2000) to Mainline $39,546.38 2000 to TC Die Cast $56,781.04 Total UDAG Fund $423,827.42 SCERG Fund: 1998 to T J Martin $87,500.00 1999 to Mainline $60,453.62 2000 to TC Die Cast $23,198.02 Total SCERG Fund $171,151.64 GMEF (revolving funds) . 2000 to TC Die Cast $20,020.94 Total GMEF Fund $20,020.94 TOTAL LOAN DISBURSEMENTS $998,000.00 GMEFxls 04/19/2001 f1G . . . URBAN DEVELOPMENT ACTION GRANT (UDAG) FINANCIAL REPORT December 31, 2000 GRANT TOTALS - FSI Payback began in January, 1988 for 12 years ending in January, 2000 Annual principal and interest payback total is $27,971.40. Principal Interest TOTAL ORIGINAL $256,957.71 $78,700.35 $335,658.06 PAID $256,957.71 $77,315.88 $334,273.59 REMAINING $0.00 $1,384.47 $1,384.47 _________._______,___________'___1_____1___1_____1___1-,--- REVENUES Principal Payback - FSI Interest Payback - FSI Interest Income - Investment: 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 $256,957.71 $77,315.88 $6,342.02 $8,593.59 $8,436.32 $5,227.10 $3,75677 $12,297.72 $9,775.19 $9,007.60 $12,989.27 $13,128.25 $423,827.42 TOTAL REVENUES EXPENDITURES 1991 Transfer to GMEF (Tapper & Muller) 1992 Transfer to GMEF (Aroplax) 1993 Transfer to GMEF (Custom Canopy) 1996 Transfer to GMEF (Tapper) 1999 Transfer to GMEF (Aroplax) 1999 (2000) Transfer to GMEF (Mainline) 2000 Transfer to GMEF (TC Die Cast) TOTAL EXPENDITURES $65,000.00 $20,000.00 $42,500.00 $100,000.00 $100,000.00 $39,546.38 $56,781.04 $423,827.42 FUND BALANCE FOR URBAN DEVELOPMENT ACTION GRANT $0.00 UDAGxls: 04/19/2001 '10 . . . SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG) FINANCIAL REPORT December 31, 2000 GRANTTOTALS-AROPLAX Payback began in December, 1992 for 7 years ending in November, 1999. Annual principal and interest payback total is $29,801.40- First $100,000 principal payback ends January, 1997. Principal Interest TOTAL ORIGINAL $170,000.00 $37,96992 $207,969.92 PAID $175,615.55 $24,018.99 $199,634.54 REMAINING ($5,615.55) $13,950,93 $8,335.38 Principal Interest TOTAL Jan. 1997 $170,000.00 $29,634.75 $199,634.75 GMEF $100,000.00 $24,018.99 $124,018.99 Grant must be expended by December 31, 1994, up to $170,000_ EXPENDED: $116,556_75 $16,996.18 $12,356.59 $4,021.10 $15,132_50 $4,936_88 $170,000,00 1993 1993 1993 1/18/94 4/13/94 7/20/94 STATE $70,000.00 $5,615.76 $75,615.76 --~-----~-----~---------------~---------~---------~--------- GRANTTOTALS~STANDARDIRON Payback began in July, 1994 for 7 years ending in June, 2001_ Annual principal and interest payback total is $33,306.12, Grant must be expended by December 31, 1994, up to $250,000. EXPENDED: $250,000_00 8/18/94 ---~-,---~-,---;_'___I__-.-----,-------~--_._--__'___I-----. SCERGxls 04/19/2001 1S . . . SMALL CITIES ECONOMIC RECOVERY GRANT (SCERG) Page 2 REVENUES Principal Payback - Aroplax Interest Payback - Aroplax Loan Payback - Standard Iron Grant Administrative Fee - S.1. Refund 97/98 fee to Wright County Interest Income - Investment: 1993 1994 1995 1996 1997 1998 1999 2000 $175,615.55 $24,018.99 $216,129.78 $5,705.00 ($2,000.00) $1,061.92 $1,256.00 $5,475.97 $7,381.27 $8,77056 $9,741.95 $10,450.10 TOTAL REVENUES $463,607.09 EXPENDITURES Payback to State - Aroplax Reimbursement to Wright Co - S.1. Transfer to GMEF - 1. J. Martin Transfer to GMEF - Mainline Dist Transfer to GMEF - TC Die Cast TOTAL EXPENDITURES $75,626.64 $215,319.78 $87,500.00 $60,453.62 $23,198.02 $462,098.06 FUND BALANCE FOR SMALL CITIES GRANT $1,509.03 SCERG.xls: 04/19/2001 . . . CENTRAL MINNESOTA INITIATIVE FUND (CMIF) FINANCIAL REPORT December 31, 2000 GRANTTOTALS-STANDARDIRON Payback began in July, 1994 for 7 years ending in June, 2001. Annual principal and interest payback total is $13,322.52. EXPENDED: $100,000.00 $100,000.00 1994 ---'-~_____I_,_,___--------------------__'___I_____-_.--~ REVENUES Loan Payback (incl grant fee) - Standard Iron $86,596.38 TOTAL REVENUES $86,596.38 EXPENDITURES Reimbursement to Wright County - S.1. Transfer to GMEF TOTAL EXPENDITURES $85,816.38 $0.00 $85,816.38 FUND BALANCE FOR CENT MN INITIATIVE FUND $780.00 i-f . . . MINNESOTA INVESTMENT FUND FINANCIAL REPORT December 31, 2000 GRANT TOTALS - TWIN CITIES DIE CAST Payback began in July, 2000 for 7 years ending in June, 2007. Annual principal and interest payback total is $61,176.72. Principal Interest TOTAL EXPENDED: REVENUES Principal Payback - TCDC Interest Payback-TCDC Interest Income - Investment: 2000 TOTAL REVENUES EXPENDITURES Prof Svc fees - TCDC TOTAL EXPENDITURES ORIGINAL $500,000.00 $95,747.11 $595,747.11 $468,266.60 $20,859.00 $10,874.40 $500,000.00 PAID $17,153.40 $8,270.23 $25,423.63 REMAINING $482,846.60 $87,476.88 $570,323.48 6/2/00 8/9/00 8/15/00 $17,153.40 $8,270.23 $25,423.63 $3,306.55 FUND BALANCE FOR MN INV FUND MN INV.xls: 04/19/2001 $3,306.55 $22,117.08 -1 G . . . SA. EDA Agenda - 4//24/01 Consideration to discuss for allllroval the continucd funding of the DMRF and to revicw thc DMRF Guidelines for Ilossible amendments. A. Reference and hackground: On an annual basis. the ED^ compares the over-all dol1ars available to assist industry and downtown businesses with the goals or objectives ol"the programs. You will note the DMRF balance is about $150.000 aner deducting committed dollars. The DMRF program began in 1997 and in fi)ur years the EDA disbursed money for 7 improvement projects. Also. note the EDA Cash in Bank may start to delete as the lJ D^G and SCREG money is used up. subject to payment of balloon payments. and willingness to increase the amount of the GMEF Loan in order to keep competitive. Questions to ask: I. Is there a better use fl.)r these dollars? Use fl.)!" revitalization and new construction t~1cade improvements. 2. Would increasing the target area help? 3. Would the dollars be better served for industrial use or to C01l1J11cncC rcplaCCtllcnt of the Liquor Fund? (Next item) 4. Would a larger grant amount per side increase interest? 5. Would a DMRF marketing campaign help? 6. Other ideas'? Secondly. please review the attached DMRF Guidelines for possible amending. B. Alternative Actions: I. A motion to extend the use 01" the approximate $150J)()0 for the DMRF program for one year. 7 A motion to extend and reduce the amount to program for one year. fl.Jr the DMRF 3. ^ motion to deny use of dollars for the DMRF program. 4. A motion to table any action. C. Recommendation: Recommendation is alternative no. 2 reducing the amount to $50.000 fiJr 2001 to encourage usage by indicating a potential abandonrnent of the program. Interest has been expressed by Grace Peterson and the Chamber office. . . . EllA Agenda - 4//24/01 ICthc EDA sccs thc need to amend the DMRF Ciuidclincs to cnlargc the target area and expand on it's use. then thc rccornmcndation is alternative no. 1. D. Supporting Data: I)MRF Guiclelines. 7 . DOWNTOWN MONTICELLO REVITALIZATION FUND GUIDELINES CITY OF MONTICELLO 505 WALNUT STREET, SUITE 1 MONTICELLO, MN 55362 (763) 271-3208 PURPOSE The Monticello Downtown and Riverfront Plan provides a guide for development in the downtown area. As part of its efforts to implement the Plan, the Monticello Economic Development Authority (EDA) offers financial assistance and incentives to property owners through a program known as the Downtown Monticello Revitalization Fund (DMRF). The DMRF seeks to promote the revitalization of downtown Monticello by: * Enhancing storefronts and facades in accordance with the design guidelines in the Plan. * Encouraging the rehabilitation of building interiors to bring them into compliance with local codes and ordinances. . * Encouraging building rehabilitation to provide space suitable for the proposed use. * Providing funding to close the "gap" between financing needed to undertake the project and the amount raised by equity and private loans. * Providing economic incentives to locate businesses in the Downtown. These guidelines describe the funding parameters and eligibility criteria for programs offered by the EDA. Meeting the eligibility criteria does not entitle an applicant to funding. The distribution offunds is the sole decision of the EDA. TARGET AREA These financial incentives and assistance will be available for existing buildings within the planning area described in the Downtown and Riverfront Plan. Preference will be given to property located in Blocks 34,35,36,51, 52, and 53, Original Plat, City of Monticello. . 1 SA . . . DMRF GUIDELINES FACADE GRANTS The EDA may provide matching grants in the following amounts: * Up to $2,500 for eligible improvements to the front facade and signage. * Up to $2,500 for eligible improvements to promote improvements to the rear sections of the buildings. * Up to $2,500 for eligible improvements to the side facade (if applicable). To be eligible for grant funds, projects must meet the following criteria: * Improvements must comply with applicable design guidelines and all codes and ordinances including building permits and inspections. * The grant will match private investment up to the stated limit. * Grant funds will be provided after completion of the improvements. * Applicants will provide the EDA with documentation of the actual cost of the improvements. Meeting the eligibility criteria does not entitle an applicant to funding. The distribution of grant funds is the sole decision ofthe EDA REHABILITATION LOAN The EDA may provide loans for the rehabilitation of existing buildings. The maximum loan amount is the lesser of25% of total cost of improvements or $20,000. To be eligible for rehabilitation loans, projects must meet the following criteria: * Improvements must comply with applicable design guidelines and all codes and ordinances including building permits and guidelines. * Applicants must provide proof of financing for costs not funded by the grant. * Loan amortization schedule not exceed ten (10) years, balloon payment in five (5) years. 2 . . . DMRF GUIDELINES * The interest rate on the loan will be two percent (2%) below the Prime Rate. The EDA may reduce the interest rate to encourage the reuse of a currently vacant building, the retention of an existing business, or the creation of a new business. * The rehabilitation loan will be in a subordinated position to the lender. FEE REIMBURSEMENT The EDA may grant reimbursement of City fees associated with undertaking improvement and revitalization projects in the downtown area. The amount of the reimbursement will be the equivalent often percent (10%) of the total cost of the improvements up to a maximum of$500. Fees eligible for reimbursement include building permits, other city inspections, and land use ordinances. To be eligible for fee reimbursement, projects must meet the following criteria: * Projects must comply with applicable design guidelines and all codes and ordinances including building permits and inspections. * Reimbursement will be made after completion of the improvements. * Reimbursement will be based on documentation of actual improvement costs and fees paid. MAXIMUM FINANCIAL ASSISTANCE The maximum amount of financial assistance available to each rehabilitation property is an amount not to exceed $25,000. NON-PERFORMANCE Approved Dl\1R.F shall be null and void iffunds are not drawn or disbursed within 270 days from date of ED A approval. ORGANIZATION The Downtown Monticello Revitalization Fund is administered by the City of Monticello Economic Development Authority (EDA), which is a seven-member board consisting of two Council members and five appointed members. EDA members are appointed by the Mayor and confirmed by the City Council. Formal meetings are held on a quarterly basis. Please see the by-laws of the EDA for more information on the structure of the organization that administers the Downtown Monticello Revitalization Fund (Dl\1R.F). 3 . . . DMRF GUIDELINES P ARTICIP ATING LENDING INSTITUTION 1. Participating lending institution shall be determined by the DMRF applicant. 2. Participating lending institution shall cooperate with the EDA and assist in carrying out the policies of the DMRF as approved by the City CounciL 3. Participating lending institution shall analyze the funding application and indicate to the EDA the level at which the lending institution will participate in the finance package. LOAN APPLICATION/ADMINISTRATIVE PROCEDURES The EDA desires to make the DMRF application process as simple as possible. However, certain procedures must be followed prior to EDA consideration of a loan request. Information regarding the program and procedures for obtaining funding is as follows: City Staff Duties: The Economic Development Director, working in conjunction with the Assistant City Administrator, shall carry out DMRF operating procedures as approved by the EDA and CounciL Staff is responsible for assisting an applicant in the application process and will work with the applicant in development of the necessary information. Application Process: 1. The applicant will meet with city staff to obtain information about the DMRF, discuss the proposed project, and obtain a funding application form and a copy of Section 3, 4, and 5 of the Design Guidelines of the Downtown and Riverfront Plan within the Monticello Comprehensive Plan. Staffwill direct the applicant to contact the Design Advisory Team as a resource for suggestions and review of improvements which comply with the design guidelines, codes, and ordinances of the Downtown and Riverfront Plan within the Monticello Comprehensive Plan. Staffwill request the applicant contact a lending institution regarding financing needs and indicate to applicant that further action by the EDA on the potential loan will require indication of support from a lending institution. 2. The applicant shall complete a DMRF application. Staff will review the application for consistency with the policies set forth in the Downtown Monticello Revitalization Fund Guidelines. 4 . . . DMRF GUIDELINES 3. City staff will accept the findings of a lending institution regarding applicant credit and financial viability of the project. EDA approval will require a letter of support from the lending institution. Upon receipt of the letter of support, City staff shall submit a written recommendation to the EDA and a decision regarding the application shall be made by the EDA within 14 days of submittal of the letter of support from the lending institution. 4. The EDA shall have authority to approve or deny the financial assistance of the Downtown Monticello Revitalization Fund. 5. The EDA shall not disburse approved DMRF without a written acknowledgment from the Design Advisory Team that construction of the improvements are complete and comply with applicable design guidelines and all codes and ordinances. 6. The EDA shall not disburse approved DMRF (grants and reimbursement) without certified documentation of the actual costs of the improvements and completion of the improvements. 7. The EDA shall not disburse the approved DMRF (loan) without proof of financing for costs not funded by the grant and execution of the loan closing documents. ORIGINAL FUNDING SOURCE - Economic Development Authority, Greater Monticello Enterprise Fund AMOUNT - $200,000 (For Year Ending December 31, 1999). The EDA shall disburse approved DMRF dollars from the payback ofGMEF Liquor Fund dollars at such time the approved DMRF is disbursed. REPORTING Staff shall submit quarterly summaries and/or an annual report detailing the status of the DMRF. FUND GUIDELINE MODIFICATION At a minimum, the EDA shall review the Fund Guidelines on an annual basis. No changes to the DMRF guidelines shall be instituted without prior approval of the City Council. 5 . . . Dl\.1RF GUIDELINES LOAN ADMINISTRATION 1. City staff shall service and monitor all loans. matching grants. and fee reimbursements. 2. All loan documents shall include at a minimum. a note and mortgage. DMRF Guidelines 7/97 DMRF Guidelines amended 2/98 DMRF Guidelines amended 5/98 DMRF Guidelines amended 3/99 DMRF Guidelines amended 2/00 6 . . . 8B. EllA Agenda - 4/24/01 Consideration to discuss for approval authorizin1! the replacement of the Liquor Funds. A. Reference and back1!round: Within the March IS. 200 I agenda pack was a copy of an exccrpt of the Council minutes of Novembcr 16.2000. The Council minutes indicated a discussion by Council as it applies to the EDA funds. [t was suggested to the EDA Director that perhaps the EDA should initiate discussion whether to start paying back the Liquor Funds. Below is an excerpt from the EDA Business Subsidy Criteria. Ori!..'.inal Revolvin!..'. Loan Fundinl!. "City shall transfer needed loan amount from existing accounts at such time that indi vidual loans are approved. Revenue created through this program shall be under the control of the EDA and shall not be transferred to City funds unless the City Council detennines that reserves generated arc not necessary for the successful operation of the Authority. If such is the case. such funds must be transferred to the debt service funds of the City to be used solely to reduce tax levies for bonded indebtedness of the City (see Section 513 of the ordinance establishing the Monticello EDA)." Based on the year-end financials. the cash in bank is $773,649.S I. This arnount less the approved 10ansJrunds leaves a current balance of $681 ,005.S I. The UDAG-FSl and SCREG-Aroplax dollars have been recycled into the CiMEF. The amount of Liquor Funds expended by the EDA over the years equals $383.000 The Minnesota Investment Fund- TCDC of $500.000 is meant for industrial use: however. the recycled dollars will not be intermingled with the GMI':F. Principal and interest payback in 2000 was about $25,000. Questions to ask: 1. What amount if any was reserved for the DMRF? 2. Ilow many and in what li'equency are the CiMEF balloon payments due to the EDA? 3. Can these funds be used for industrial park developrnent'? 4. Is it better to wait and let the Council make its findings'? 5. In the future. will approved loan amounts be greater than $100,000 in order to stay competitive with the market? EDA Agenda - 4/24/01 . B. Alternative Action: I. A rnotion to authori/'e commencing repayment of the Liquor Funds in an annual amount of .. ._____ f{)r use solely to reduce tax levies t{)r bonded indehtedness of the City. 7 A motion to authorize repayrnent of the Liquor Funds in the amount of for use solely to reduce tax levies for honded indehtedness of the City and thereafter the EDA will review on an annLlal basis. 3. A motion of no interest to commence repayment of the Liquor Funds. 4. A motion to table any action. C. Recommendation: Copy of Council minutes. If the EDA is inclined to repay the Liquor Funds. the recommendation to alternative no. 2. D. Supporting Data: . Please refer to supporting data "Sources of Funds'. under item 7. . 2 Counci I Minutes - I 1/16/00 . future of the group. The Council decided to leave the $15.000 budgeted and reviev,' funding again next year. Rick Wolfsteller suggested that $90.000 in the capital outlay rund h)r funding the acquisition of industrial park land could be used as a possible source of funding for some of the items discussed. There was discussion on the amount of funds that HRA had and whether any of those could be used. Roger Carlson indicated that based on preliminary information. it may be possible that a proposal would come up where the HRA would need all their funding sources to support the development and Roger Carlson didn't feel the city should be looking at using the l-IRA funds. Rick Wolfsteller cautioned the Council on the reserve funds. He stated the perception is that there is money in the reserve fund. However. a good portion of the money is committed for specific uses and the balance of the reserve fund is needed to fund operations until the city receives state aid and tax settlements in July. Clint Herbst suggested that the EDA money since it is designated for revolving fund loans is unallocated and should be considered. It was also pointed out that initially transfers from the liquor store were ,made to the EDA and the EDA could be paying some of the transfer back. The Council tabled further discussion of the budget to consider the assessment policy. . City Engineer, Bret Weiss presented information which outlined the city's current assessment policies and summarized assessment policies used by other communities. Clint Herbst stated his position that any new construction should be fully assessed but any replacement of existing bituminous or curb and gutter should be funded through general taxes. The City Engineer submitted in map form a street inventory which designated the ages of the streets \vithin the city. There is approximately 39.90 miles of city streets and 15.96 miles of these streets are 20 years or older. Streets that are 20 years or older are at the end of their design life and would need to be reconstructed within the near future. Bret Weiss provided examples of street design and costs. If the City is going to fund street maintenance through the ad valorem taxes an estimate of the cost for the replacement and maintenance of the streets would have to be determined. In initial estimates. the City Engineer projected that to reconstruct existing streets with curb and gutter would be approximately $7.5 I 6.800. To reconstruct streets that currently do not have curb and gutter would be $3. 177.050. This would be a total of $ I 0,693.850 for reconstruction. In addition overlay and sealcoat costs for streets would be an additional $1,000,000+. If the city was going to embark on a program where the reconstruction \vork for just the core streets would be spread out over seven years. based on the engineer' s preliminary estimates. the city would have to generate approximately $ I ,300,000 each year in taxes to cover the cost of the work.. Rick Wolfsteller presented some information that showed \\"hat the impact \vould be on a residence with a market value of $115,000 and a business \vith a market yalue of $ 100.000 if the city would leyy [or the streets. In the past the city has normally bonded for street improvements and assessed back the cost to the benefitting property owners. If the city would go to a tax levy. they may not be able to bond for these improvements since bond regulations require that 20% of the cost to be assessed. l[the city cannot . -. .J Co c) . . . EDA Agenda - 4/24/01 9. Consideration to review GMEF No. 014 relative to late payments for action to call loan. ^- Rcfcrence and backe:round: This agenda item was tabled from the January 30 meeting because or the lack or quorum. The members did discuss the potential to alnend the (JMEF (Juidelines to include a penalty fee which would apply to future approved loans. Koropchak was requested to inquire with the local lenders as to the mnount and type of penalty fees. However. a late penalty fee would not apply to GMEF No. 014. TIlE FOLLOWING BACKGROUND APPEARED IN TI-IE JANUARY AGENDA As you recalL GMEF Loan No. 014 with T. J. Martin (1.ake TooL Inc.) has been a topic of discussion at previous EDA meetings. The loan payments consistently appear to be late. Letters dating November 2000 and August 2, 1999 and numerous telephone calls relative to late payments have been made. The company eventually pays but not on a timely basis. EDA loans have no penalty f(H late payments. You will notice on the attached record. the October 1 and November I. 2000 payments were paid on November 2L 2001. The December L 2001 payment was paid on January 19. 2001 leaving the January L 2001 payment unpaid with the February 1. 2001 payment due within days. Pleasc note the most recent payment schedule. Although T. J. Martin made a payment on February 28, they still remain delinquent for the payments due February 1 and March I. Upon a notice that the EDA was going to consider calling the loan l:lt the EDA March 15 meeting, the February I and March 1 payments were hl:md delivered on March 15. Again you will note the April 1 payment is past due. It is my understanding that T J Martin has a new lender since the closing of the I!:DA loan. I placed a telephone call to the new lender as my previous c: was mailed to the wrong lender. The February. 1998. 7-year loan amount was $87.500. 6.5% interest rate. Interest payments commenced the first day of the second month f()l1owing the Loan Closing date and principal payments commenced on the first day of the twenty-fifth month ilnmediately f(Jllowing the Loan Closing date. Monthly principal and interest payments arc $1.716.12 with last payment due April 1.2004. Remaining principal balance is $72.220.84. The GMFF (Juidelines read: LATt~ PAYMENT POLICY: Failure to pay principal and interest when due may result in the loan being immediately called. Events ofdcf~lult under the Loan Agreement: (a) failure to pay when due any principal or interest on the I_oan. . EDA Agenda - 4/24/01 This appears on the agenda for two reasons: Notice to EDA member and consideration of action. Below arc some alternative f()I' the EDA to consider. B. Alternative Action. 1. A motion directing starr to dralt a letter stating late payment due within _ days. if paYlnent not received the EDA authorizes sta1r to contact legal consultant to begin proceedings to call for loan. 2. A motion directing starr to contact legal consultant to hegin proceedings to call fl)r loan. 3. ^ n1otion to continue notifying the borrower of late paynlents duc. 4. ^ motion to table any action. C. Recommendation. Recommendation is alternative no. 1 and 2. . D. SUf}f}ortin1! Data: Loan payment record. . '! ( 1226. - 86273.64 2 05 01 00 467.32 1248.80 85024.84 3 06 01 00 475.90v 1240.22 83784.62 4 07 01 00 453.83'/ 1262.29 82522.33 5 08 01 00 461.90/ 1254.22 81268.11 6 09 01 00. 454.88 v' 1261.2 80006.87 7 10 01 00 433.37 v 1282.75 78724.12 YEA: i~2g~Ogg 4~iUF ....1mHJu_-liiiH~ --~- !B?t~~(--~-- 3.Y~'~~:__m_ '~I~::---~:--~~-;~t~gf::--~~f-~::@}S- i;~~: ~gv ~~~~~: ~~ _ 3/ltolo t -g~to ;>::------- -r 1.2--' -. --03761/151-----..-m--.. 371....91-7 _ -.----.)j~~(:?I-. -~~;ci~~,~~.~4~ ----~~-..---_- -:_-:=-:'~.."_~-.~.~:.... -.-......~..~-_:_.:.-~:=._..:.lr--~~: ::.:~~~ffgt:~ ... - :----._ -- . --., ,~.~~.:.~}.~= -- -...---~.-i~~}~. ~,~--_. --~:-:,_ ~~~j~~" ~L 15 06/01/01 389.44 1326.68 68250.25 .-----~--.------T6----'---- --'077'01/C51 .-- '-'J69-~-b9-- ....--..--1346- :4"3 - 66903-> g-:r-- ___.n.________~__~__, _ ..... 17---'--'08701lo1' ----.,--''''"'..yl;,fAs----.nm--- - . T34I .-is-if ..- --------65-56.2-:"18 ., -,--,.--, --"'-rEf .'---09/01'/01.-- .---.-.-. 366.97" '.-. .. 1349-~T5-- 642IT~ 03 ..__,__._'~__..m._._._...___m.. 19 - --"To/OT16r - "".. ---..j47'~ l3~r 136EL30 - 6"2844'--73 -----...---~--..----~-.--.-. 2()" -----YIlci176i-----.'-----35i-:76'.'.- 1364:36' 61480~]--7 '.-.~'"-"._-------.- ----..--"^'-. "'1r--~'- -IT;nr701.---u-'-..----333~02- .^^-^....... .1.383.10' ^_.. '-6669-7-:27 . -~- - YEAR:---2061- -.p-..--4538:-68-----.e--~i6.o54-:-76-'-- 60097.27 .._____==_.:-=::~:-~__"_ __ . n_.....__.... --i2 61/01/02'.---.-33'6':3-8- . i379'~ 74- 58;717.53' 2:3' -02761702'" .-~'-----.J28-:.6K._. ------------.1"3'87-:'46"--- 57330.07 24 03/oi/02'-- ....":2"89:84- 1426. 28-55903~ 79 -..~'--'-..--..- 25 -o4j6i/c5^2" 312.91 ---"140T.21- 54500.58 26 0510il02 295.21 1420.9i 53079.67 .n_ "27.--- --56/01/02'1.91':10-" ''''''''-'''-'-^1419':'02-----51660 :05 28 07/01/02 279.133 1436.29 -- 50224.36 . ....- -29------ '''08T01762 ,-- - -'..-.-'-2--8r-:T2...-------i21j'Er.--5o--~-- 48789:36" 3ij --09/01762"2)3:08 14<1:3.04 47346.32 31 10/6i/02256-.4.6 1459.66 45886.66 32 11/01/02 256.84 1459.28 44427.38 33 12!b.l/b2 240.65 1475.47- 42951.91' YEAR 2002 3f!4S:6tfTli45.36 . 42951. 91 34 01/01/b3 240.411475.71. 414,76:20- 35 02/oi/03 2_32~15.. 1483.97 39992.23 '36 .. . 03/01/03'---2U2"~Tg--:""...-'-_...-rs~gi1-"--. "''''3'8lf78':''29--- 3 704/o1./032Ts,TT-------- _ - i5ITIT~7S------J697T.54-"' 38 05/01/63 200.30 1515.82 35461': 72 39 06/bi/bj 198.491.517:63 33944.09 40 07/01/03 183.86 1532.26 32411.83 41 08/01/03 181.42 1.534.70 30877.13 42 09/01/03 172.83 1543.29 29333.84 43 10/01/03 158.89 1557.23 2777~,61 44 11/oi/63 155.47 1560.65 26215.96 45 12/01/03 142.mY 1574:i2 24641.84 YEAR 2003 2283.37 18310.07 24641.84 46 01/01/04 137.93 157~.19 23063.65 47 02/01/04 129.09 1587.03 21476.62 48 03/01/04 112.45 1603.6') 19872.9-5 49 04/01/04 111.. 23 1604 .f19:W268. 06 ...-" il'1 l(" · l J-- . II ~ fv\.ar-h'Y'- G fvl E" F tt 0/ '-I (Lt~. ') 02-18-1998 "i<--k AtJDR'1'I2'ATION SCHEDUlE ** 08:29:36 (Actual/360 ) Page 1 ~~~= _ ~ _! - - _ ~== _ -. _! -...t1li:3~~~9_-~. - JE~L~Si~- _! -. - - ~~=~:= - -- 60 I 03/01/00 I 6.500%! $87500.00 I $87500,00 Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831 . (763) 295-2711 . Fax: (763) 295-4404 Office of Public Works, 909 Golf Course Rd_, Monticello, MN 55362 . (763) 295-3170 . Fax: (763) 271-3272 qA ~'1 04/01/98 663.54" 0 . 00 87500.00 IofSlq, 1f:J3113 L2 05/01/98 473.96" 0.00 87500.00 _ ~__Oill1L2L-- 489.7.6V ~~~- C---- "/""if- ~3' 1L~- ,~~l/;~ -1t'~~ -- ----Q.,.Q~---~.fs~g------- __. . v,~ql?d~___--_.W2112L----.---~ ..____-_iL.-illL-- ~, /2l~"'fQ..'1J.JL .Q2Loill!L __489.76" _' 0.00 87500.00- --------.f6 0;U.-~.l- ..1QL01/9~ __~7~v ~ _8750Q.,()!L__ 10 () ~ 1fd-3;) 'I b.~. 111Q1.L;J.!L- 489.76 ,./" 0 .00 87500. 00 ~-- _ 1/ 30 (" 9 12 01 98 473.96 v 0.00 87500.00 YEAR -- 1998 4518 . 42~--b .00 - --87500.00 ____=g3 i.nJfi---.J. '1M.<t:.JJL- ,Q1JQ1L92. __389. 7o.L, 0 .00 87500.00 _...___ ___ .---.I---7cr-..--.----,----...---...---..{... A_l______ o2LolL99 . ..489. 76V 0.00 87500.00 -;-" ___0Ij'?t-CZ1--------1t~.~ ....._. _.;t~__. __~Q.iLQ112i"~. ~.~:.-=-~-- ~~~~~1~~'. . 0 .00 87500.00 ~.___ _ __ __ _,_m X, __' Q4Lo1L99 489 .76 0 .00 87500 ,00 _+Jfil'ii -~9~fft-~~J::----=!!~- H~ ~~i~H~ _ _ _ fj",SL'l'1 _?J 'J '1: 17' oN.:2i} 29_--:- --_4 B:9::-g? 0 . 00 87500 . 00 ---=.-!J1,i/i.'J{3.-__1.tf: -.-i~ - -~%j~-i~~- -. --tiH',;;:c - ~:~~ ~~~~~:~~ ~*)fI}i~iF-=~~E~lzgV(g}~ =:::-=~E~ ~: ~~ ~~~~~: ~~ YEAR 1999 5766.52 0.00 87500.00 ~/,{^~ qn~..Q1L011Q9- _'_~v"-----' 0.00 87500.00 _;I 'fh;J,,/'7~k- ~ -= .- %~7~~~L=::-i~H~~ .. 8'jSO~: ~~ 8750~: ~~ YEAR 2000 1437.68 87500.00 0.00 ~I ~ / . 02-ll:l-1.;J;JO ( Actual/360 ) .. .....::J~ - ~~~-!-~---~~~---~j!~~~~~71<~~-~~~~~--~---~~~-- 24 \ 02/18/98 \ 6.500% \ $87500.00 \ $87500.00 ---------------------------------------------------------------- . payment Arrount $ Final ~~!:-~~~0-- 87958.16 ~O':>Q. t \..t . r; 0/0 ?. ~ \ <<6" -q ~ . .............--~"._'- . . . 10. EDA Agenda - 4/24/01 Considenltion to discuss the advanta2es and disadvantaees of mer2ine the EDA and the H I{'A. A. I{.cfc,'enee and hacJ,,;ground: At the January 30. 200 I EDA meeting. the Executive Director's report indicated the Economic Development Goals f()r 2001 included the City of Monticello to explore combining the powers of the HRA and EDA. The commissioners were asked at that time to give some thought about the idea for discussion at the annuallneeting. Advantal!,es Simplicity (one stop fi)r developer.) Improves communication with Council assLllning 1.1)A would prevail. One less meeting fl.)r staff. EDA expand powers for development. Hopefully improves attendance. This is open for discussion. Disadvantages l,ess public participation. HRA has power to levy. Reduces checks and balances as was original reason. TIF more complex.