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EDA Agenda 11-29-2005 . . . AGENDA MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Tuesday, November 29, 2005 - 4:00 p.m City Hall - Academy Room MEMBERS: President Bill Demeules, Vice President Barb Schwientek, Council Members Wayne Mayer and Tom Perrault, Ron Hoglund, Darrin Lahr, and Susie Wojchouski. STAFF: Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, Recorder Angela Schumann. I. Call to Order. 2. Consideration to approve the October 25, 2005 EDA minutes. 3. Consideration of adding or removing agenda items. 4. Consideration to review and discuss proposed modifications to the GMEF Guidelines to accommodate re-use of Federal dollars. 5. Consideration to call t()f a public hearing date t()r modification of the EDA Business Subsidy Criteria. 6. Consideration to ratify the Mortgage Subordination Agreement between the SBA, EDA, and Tapper Holdings LLC. 7. Executive Director's Report. 8. Other Business. 9. Adjournment. . . . MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Tuesday, October 25, 2005 - 4:00 p.m. City Hall - Academy Room MEMBERS PRESENT: Prcsident Bill Demeules, Vicc President Barb Schwicntck, Council Membcrs Wayne Mayer and Tom Perrault, Darrin Lahr, and Susie Wojchouski. MEMBERS ABSENT: Ron Hoglund. STAFF PRESENT: Treasurer Rick Wolfsteller and Executivc Director Ollie Koropchak. GUEST: Bruce Hamond, VisiCom. 1. Call to Order. Prcsident Demeules called the EDA mceting to order at 4:05 p.m. declaring a quorum. 2. Consideration to armrove the Apri126, 2005 and the August 9. 2005 EDA minutes. Barb Schwientek made a motion to approve the April 26, 2005 EDA minutes. Seconded by DmTin Lahr and with no corrections or additions, the minutes were approved as written. Darrin Lahr made a motion to approve the August 9, 2005 EDA minutes. With a correction to the .\pelling of'his name, Wayne Mayer then seconded the motion. The minutes were approved with nofitrther corrections or additions. 3. Consideration of adding or rcmoving agenda items. Nonc. 4. Consideration of a prcscntation and proposal for VisiCom. Inc.DMRF Loan No. 111. Koropchak informed the EDA that DMRF Loan No. 111 was the only loan approved and disbursed by the EDA as a downtown revital ization loan. Thc $10,644 loan was approved for VisiCom on August 29,2000, and disbursed April 10,2001, for rehabilitation of the building at 212 West Broadway. The extcndcd principal and intcrest balloon paymcnt is due November 1,2005, in the amount of $5,275.00. Mr. Hamond requested to mcct with the EDA to givc an update on the improvcments completed and future plans, and to offer two proposals for payment of the loan. 1 . . . EDA Minutes - 10/25/05 Mr. Hamond informed members he purchased the vacant lot next to 212 West Broadway from Barry fluth. His investment into the exterior and interior improvements of the 212 property was approximately $30,000 including the EDA loan of $1 0,000. All Fitness Matters has a Jive-year lease. He plans to complete the improvements to the 2nd floor in 2006. With the low cost purchase, maintained local ownership, and increased rental rates in Monticello, this allows him to cash tlow the property. He plans to start lease-tenants for the commercial 15t floor of the vacant lot this falL The type of tenants would complement Fitness Matters mcaning independent health related business owners (not dental oflice.) He hopes to offer an attractive lease program. He continued by presenting two options for the principal and interest payment: 1. Forgive the remaining balance because of his past investment and planned future investment in downtown Monticello. Or 2. Pay-oJT the remaining balance with American Express. This is not an option as the City only accepts Visa and Master Card. Demeulcs stated it is not in thc realm of the EDA to forgive loans for credit-worthy businesses. TheEDA asked ifhe was looking to extend the balloon payment date. Hamond replied he was more intcrested in putting more money into the downtown and suggested stop payment in two months with no interest. EDA members agreed given thc fact TIF will not apply to a vacant parcel and the DMRF program was deleted, the FDA should look into a new program ror downtown. Darrin Lahr made a motion to call the loan, principal and interest due November 1"1 in the amount ol$5,275.00, due am/payable within 60 days of November 1,2005. Wayne Mayer seconded the Inotion and with no further discussion, the motion carried. The FDA deferred the balloon payment to foster a downtown business and keeps theftnal loan payment clean. 5. Consideration to discuss and to authorize payback of the EDA Fund. At the April annual meeting, the commissioners requested to discuss payback of the BDA Funds at their October meeting. Language from the Ordinance and EDA Business Subsidy Criteria governing thc original funds from the City was presented to the commissioners. The total amount transferred to the EDA was $383,000. Koropchak noted of the $383,000, the EDA returncd $147,000 and spent $143,890.66 on the DMRF, a designated matching grant program for downtown revitalization. The remaining outstanding balance for consideration to authorize payback to the City is $92, I 09.34; however, the EDA is under no obligation to return the funds. The previous paybacks were authorized as a means ofthe EDA showing good faith effort and becoming self-sustained. The cashflow projcctions ending December 2005 were estimated at $627,850.72 which includcd disbursement of the Tapper loan in the amount of $200,000. The majority of the EDA funds came from statc and federal grants to the city which are tied to economic development (job and wage creation and industrial development) plus interest and 2 . . . EDA Minutes - 10/25/05 interest income ovcr the years. Additionally, Koropchak indicated there is an additional $600,000 lfom the UMC and TCDC loan paybacks available to the EDA as a future source of funding. Koropchak noted that the $92,000+ outstandi ng balance of the original Liquor Funds is the only remaining non-restrictive funds or funding source available for future downtown revitalization. The EDA deleted the DMRF program some years ago after awarding 10 matching facade grants and one loan. The program terminated due to a laek of interest and therealler the EDA worked very hard to cncourage revitalization of the Block 35 parking lot and rear facade improvements. Perrault's original question was: If the dollars are not being used, why not return the money to the taxpayers? Members agreed given TIF use must meet the substandard redevelopment test, there appears to be little incentive to encourage downtown revitalization. Membcrs asked: Wherc would the application of the non-restrictive funds result in the greatest benefit for the community? All agreed: Not for use as a matching facade grant but to encourage redevelopment of the downtown. Lahr suggested perhaps the best use is to preserve funds for a downtown parking lot, as shortage of parking always comes up at thc HRA when considering downtown redevelopment. ,')'usie W(?ichouski made a motion to table any actionfhr authorization to payback any remaining Uquor Store Fund dollars. Seconded by Wayne Mayer and with nofurther discussion, the motion carried. 6. Consideration to discuss incentive for use of Federal grant dollars. Koropehak informed members she was looking for input into the idea of oJTering the Federal grant dollars at a lower interest rate than the GMEF Guidelines in order to encourage use of the restrictive dollars. These dollars must be used for purpose to establish or maintain a revolving loan fund. The recycled dollars must be used by applicants willing to comply with HUD criteria: Fifty-one percent of the jobs creatcd must be held by low to modern income persons and Davis-Bacon Act, etc. Upon pay-oJT of the $500,000 Federal grant to the City to Twin City Die Castings, the principal and interest payback should total about $595,747. Final payback date is June 2007, of which, approximately one-half has been paid back to date. Koropchak thought this could serve as ffilOther funding tool for the new industrial park. An applicant could be otTered a choice of the GMEF or Federal dollars. The lowcrinterest rate as a trade-oJl for greater requirements. Koropchak indicated she had placed a call to the State representative to check out further restrictions but had not heard back. One commissioners agreed stating there is an added cost to the applicant when the Davis- Bacon Act is applicable. The commissioners discussed various interest rate ranges, deferred interest, and balloon paymcnt dates. The commissioners agreed with the principal idea, '"' -) . . . EDA Minutes -10/25/05 encouraged development of criteria as another cnhancement for the industrial park, and suggested use of funds in the 11-A Zone only. This to discourage application by less desirable users. Koropchak noted the job information form and the CDBG - IHJD objectives and the employee certification form to be filled out by each employee hired by thc applicant. The income levels arc gross wages per family size. Each new employee must complete thc form as a certification of complying with HUD objections. The intent is to hire low to modern income persons and provide training to increase their skills and wage levels. Darrin Lahr made a motion to research establishment and preparation (~lcriteriafhr re- use qf'the Federal dollars from the TCDC loan. Suggested terms: 0% interest rate with balloon payment in three years or up to 3% below prime rate with balloon payment in .live years. Motion included callingfhr a special EDA meeting in November and.fIJrther research with the State representative and FDA Attorney. Barb S'chwientek seconded the motion and with no further discussion, the motion carried. Tuesday, November 29,2005,4:00 p.m. was earmarked as thc date of the special meeting. 7. Executive Director's Report. Some one noted Barry Fluth had purchased the Opal Stokes' house as potential additional parking for Landmark Square Plaza. Tapper's Holding Company - The lender informed Koropchak the construction project cost increased by $80,000. The permanent financing and EDA loan may close on Friday, October 28. EDA still needs copy of the executed Lease Agreement between Tapper's and Strategic. 8. Other Business. None. 9. Adiournment. Harh Schwientek made a motion to adjourn the EDA meeting. Tom Perrault seconded the motion and with no/iJrther business, the EDA meeting m{journed at 5:50 p.m. OUic Koropchak, Rccorder/Executive Director 4 . EDA Agenda - 11/29/05 Consideration to review and discuss proposed modifications to the GMEF Guidelines to accommodate re-use of Federal dollars. 4. A. Reference and back2found. At the last EDA meeting, the commissioners made a motion to research establishment and preparation of criteria for re-use of the Federal dollars from the TCDC loan. Of the estimated $595,747 principal and interest payback and halloon payment date ofJune 2007, approximately $300,000 has been received. The motion included the suggested terms of 0% interest rate with balloon payment in three years or up to 3% below prime rate with balloon payment in five years. The suggested terms are a means to encourage use of the restrictive funds and as anothcr tool f(Jf marketing the Monticello Business Center. . In conversation with Carol Pressley-Olson, the City Council needs to pass a rcsolution requesting designation of a local EDA to be a Local Development Organization (LDO). The resolution is then send to DEED for approval, and DEED sends written approval if guidelines met. The City transfers the federal funds to the LDO. On the first re-use of the funds, the LDO has to comply with the federal regulations. On the next re-use, the federal requirements do not apply. The LDO does not have to report to DEED. 'T'he LDO policies and procedures are submitted to DEED along with the resolution. DEED encourages the LDO to use funds for similar activities but without federal requirements. Within the resolution it states: If the City retains the funds and their repayment, the funds retain the federal designation and guidelines, forever. The Council should also recognize the City gives up control over the funds and Cffimot recall the funds ii'om the LDO. In conversation with EDA Attorney Bubul, it is his recommcndation to modify the existing GMEF Guidelines to include the terms suggested by the EDA for use of Federal dollars and according to Federal regulations. Remember, modifications to the GMEF Guidelines must be approved by the Council. "rhe GMEF Guidelines are within the EDA Business Subsidy Criteria and to modify the Critieria, the EDA must hold a public hearing (next agenda item.) The modified, recommended guidelincs arc attached and will be reviewcd at the meeting. If the EDA agrees with the modifications, it is the recommendation the Council consider approval of the GMEF Guidelines and the Resolution Requesting Designation at the December 12, 2005, Council meeting. Example of low to moderate income: 51 % of jobs must be made available to or held by LMI persons. If criteria states $10,000 f()r each job and it is estimated the EDA will have $600,000 . . EDA Agenda - 11/29/05 from the TCDC paybaek, an applieant must create or retain at least 60 jobs and at least 51 % or in this example, 31 jobs must he available or held by I,MI. B. Alternative Action: 1. A motion recommending the City Council consider for approval the modification to the GMEF Guidelines and approval of the Resolution Requesting Designation at the December 12, 2005 meeting. 2. A motion of no interest to modify the GMEF Guidelines or to request designation as Local Development Organization. 3. A motion to table any action. C. Recommendation: . The City Administrator and Executive Director recommend Alternative No.1. Special Condition within the Grant Agreement between the City and DEED: Principal and interest payment from the loan to Twin City Die Casting'l Company must be used to establish and maintain a revolving loan fund. The City must retain financial control and decision making authority regarding the use qfthe repaymentsfrom the loan. The revolving loan fimd policies and procedures must be consistent with the Community Development Block Grant Program rules and regulations tofurther economic development in the community thereby creating or retaining permanent positions. Fifty-one percent of'the positions created or retained must be held by or made available to low to moderate income persons as defined by the Section 8 Income Guidelines. D. Supportinl! Data: Copy of proposed modifications to the GMEF Guidelines, copy of resolution for Council, and ini()fmation from DEED. . 2 . . . cs. n Q..- S -'L u--\- t t oY\..- \j , ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA Business Subsidy Criteria Public Hearing and Adoption the 31 st day of August, 1999 Public Hearing and Adoption of Amendments the 8th day of November, 2000 Public Hearing and Adoption of Amendments the 24th day of April, 2001 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 116J.993, Subdivision 3, for 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 ncvertheless serves a public purpose. The Authority wi1l1ile evidence of any deviation from these criteria with the Dcpartment of Trade and Economic Development in accordance with Minnesota Statues, Section 116J.994, Subd. Z. 1 :03 The Economic Development Authority may amend the business subsidy criteria at any time. Amendments to these criteria are subject to public hearing requircments pursuant to Minnesota Statutes, Sections 116.1.993 through 116J.994. 2. STATUTORY LIMITATIONS 2:01 In accordance with the business Subsidy Criteria, Busincss 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 116J.994. 3. PUBLIC POLICY REQUIREMENT 3:0 I All business subsidies must meet a public purpose in addition to increasing the tax base. Job retention may only be used as a public purpose in cascs where job loss is imminent and demonstrablc. 1 . 4. 4:01 4:02 4:03 4:04 . 4:05 . EDA Business Subsidy Criteria BUSINESS SUBSIDY APPROVAL CRITERIA 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. 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. 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 financial feasibility studies, appraisals, soil boring information provided to private lenders for the project, and other information or data as requested. 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. (Recipients of any business subsidy will be required to meet wage and job goals determined by the Economic Development Authority on a case-by-case basis, giving consideration to the nature of the development, 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 ofthe 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 than 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.l1, 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 infrastructure or public facilities, including without limitations, sewers storm sewers, streets, parks, recreational faci I ities, 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. DAWNIWORD/POLlCIES; 10/30/00 2 . . . EDA Business Subsidy Criteria 4:06 For any business subsidy that does 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: 3 DAWNIWORD/POLlCIES: 10/30100 EDA Business Subsidy Criteria GREA TER MONTICELLO ENTERPRISE FUND GUIDELINES . CITY OF MONTICELLO 505 WALNUT STREET, SUITE #1 MONTICELLO, MINNESOTA 55362 (763) 271-3208 INTRODUCTION The purpose of the Grcatcr Monticello Entcrprise Fund (GMEF) is to encourage economic dcvclopment by supplcmenting conventional financing sources available to existing and new businesses. Through this program administered by the Economic Devclopment Authority and participating lending institution(s), loans are madc to businesses to help them meet a portion oftheir financing needs. All loans must serve a public purpose by complying with four or more ofthe criteria noted in the next section. In all cases, it is mandatory that criteria #1 be satisfied, which requires the creation of ncw 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 eredit worthy businesscs that create ncw jobs. . (a) One job is cquivalent to a total of 37.5 hours per week. (b) At least 90% of the jobs created must pay a wage of the higher 01'$9.00 per hour, or at least 1600;;) of the federal minimum wage, exclusive of benefits, for individuals over the age of 20 during the term of the assist,mce. Annual written reports arc 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 worthy businesses that would increase the community tax base. " -, . To assist new or existing industrial or commercial businesses to improve or expand their operations. Considerations flJr 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 effects of the business, ifany. 4. To provide loans to be used as a secondary source of financing that is intended to supplemcnt 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. 4 DAWNIWORD/POLlCIES: 10/30/00 . . . I. EOA 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 pcr 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 e1Tective 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 bcmk loan. (Personal and real estate guarantees handled separately.) III. USE OF PROCEEDS * Real property acquisition and development Real property rehabi I itation (expansion or improvements) Machinery and equipment * * IV. TERMS AND CONDITIONS * Minimum 01'$5,000 and maximum not to exceed 50% of the remaining revolving loan fund balance; for example, if the remaining revolving loan fund balance is $50,000, the maximum loan issuance is $25,000. LOAN SIlE - * Minimum 60% private/public non-GMEF Maximum 30% public (GMEF) Minimum 10lYo equity EDA loan [,EVERAGING - DAWNIWORD/POLlCIES 10/30/00 5 . . . * LOAN 'fERM - EDA Business Subsidy Criteria Personal property term not to exceed life of equi pment (generally 5-7 years). Real estate property maximum of 5-year maturity amortized up to 30 years. Balloon payment at 5 years. INTEREST RATE - Fixcd rate not less than 2(% bclow Minneapolis primc rate. Prime rate per National Bank of Minneapolis on datc of EDA loan approval. * LOAN FEE - Minimum fee 01'$200 but not to exceed 1.5% of the total loan project. * Fees are to be documented and no duplication of fees between the lending institution and the RLF. Loan fee may be incorporated into project cost. EDA retains the right to reduce or waive loan fee or portion of loan fee. * * PREPA YMENT POLICY - * DEFERRAL OF PAYMENTS -1. * LATE PAYMENT POLICY * INTEREST LIMIT A nON ON GUARANTEED LOANS- * ASSUMARILlTY DAWNIWORD/POLlCIES: 10/30/00 *Fee to be paid by applicant to the EDA within 5 working days after City Council approval ofGMEF loan. Nonrefundable. No penalty for prepayment. Approval of the EDA mcmbership by majority vote. 2. Extend thc balloon if unable to refinance, verification letter from two lending institutions subject to Board approval. Failure to pay principal or interest when due may result in the loan being immediatcly called. In addition to any other amounts due on any loan, and without waiving any right of the Economic Development Authority under any applicable documents, a latc fee of $250 will be imposed on any borrowcr for any payment not rceeivcd in full by the Authority within 30 ealcndar days of the date on which it is due. Furthermore, interest will continue to aecruc 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 thc amount on which it has accrued. Subject to security and/or reviewal by EDA. 6 EDA Business Subsidy Criteria . OF LOAN- None. * BUSINESS EQUITY REQUIREMENTS - Subject to type of loan; Board of Directors will determine case by case, analysis under normal lending guidelines. * 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 Dircctors - homestead exempt). Machinery and equipment liens (except equipment excmpt from bankruptcy). Personal and/or corporate guarantees (requires unlimited personal guarantees). * COLLATERAl, - * * * * * NON-PERFORMANCE - An approved GMEF loan shall be null and void if funds are not drawn upon or disbursed within 180 days from datc of EDA approval. . * NON-PERFORMANCE EXTENSION - The 1 gO-day non-performance date can he extended up to an additional 120 days. 1. A written request is received 30 days prior to expiration of the I80-day non-performance date. 2. Approval of the EDA membership by majority vote. * LEGAL FEE - 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 othcr pcrsonal characteristics. 0) ADDITIONAL CRITERIA FOR LOANS ORIGINATING THROUGH SMALL CITIES ECONOMIC DEVELOPMENT SET-ASIDE GRANT FUNDS * Compliance with federal labor standards laws, including: . The Davis-Bacon Act, which requires that workcrs receive no less than the prevailing wages being paid for similar work in the locality when the contract, financed in whole or part with federal funds, exceeds $2,000; 7 OAWNIWORO/POLlCIES 10/30/00 . . . EDA Business Subsidy Criteria The Contract Work Hours and Safety Standards Act, which requires that workers receive overtime compensation at a rate of 1-1/2 ti mes their regular wage after they have worked 40 hours in one week; The Copeland "Anti-Kickback" Act, which requires that workers be paid at least once a week without any deductions or rebates except permissible deductions which include taxes, deductions the worker authorizes and those required by court processes. * Compliance with federal fair housing and civil/human rights laws and with the Minnesota Iluman Rights law, which forbids discrimination in credit, employment, housing, public accommodations, public service and education on the basis of race, color, creed, religion, national origin, sex, marital status, disability, sexual orientation, public assistance or familial status. * Compliance with the Low and Moderate Income (LMI) Benefit National Objective, which, in the economic development context, has as its goal the creation and retention of jobs, of which a minimum of 51 % must be held hy LMI persons, defined as a member of a family having an income less than or equal to the Section 8 low-income limit established by the U.S. Department of I lousing and Urban Development (HUD). * Compliance with requirements of the National Environmental Policy Act (NEP A) of 1969, as amended, and preparation of an Environmental Review Record. * Compliance with Section I04(d) of the federal Housing and Community Development Act of 1974, as amended, which requires that any reduction in LMI dwelling units in the community must be onset by the creation of similar affordable units and relocation assistance to displaced LMI families; and with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, which mandates procedures to ensure fair and equitable treatment for persons displaced by projects designed for the public good. * Terms and conditions f(Jr federal money: _ Interest Rate: Oo;() with balloon payment in three years or fixed rate not less than 3(% below Minneapolis prime rate with balloon payment in five years. - All other terms and conditions are as outlined in The Greater Monticello Enterprises Revolving l,oan Fund Policies, Section IV, above. DAWNIWORD/POLlCIE8: 10/30/00 8 . . . 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 flve appointed members. EDA members arc appointed by the Mayor and confirmed by the City Council. Formal meetings are held on a quarterly basis. Please see the by-laws ofthe EDA for more information on the structure of the organization that administers the Greater Monticello Enterprise Fund. PARTICIPATING LENDING INSTITUrION(S) 1. Participating lending institutions(s) shall be detcrmined by the GMEF applicant. 2. Participating lending institution(s) shall cooperate with thc EDA and assist in carrying out the policies ofthe GMEf as approved by the City Council. 3. Participating lending institution(s) shall analyze thc formal application and indicate to thc EDA the level at which the Icnding institution wi II participate in thc finance packagc. LOAN APPLICATION/ADMINISTRATIVE PROCEDURES The EDA dcsircs to make the GMEF loan application proccss as simple as possible. Howevcr, ccrtain procedures must be followed prior to EDA consideration of a loan request. Information regarding thc program and procedures for obtaining a loan are as follows: City Staff Duties: The Economic Development Dircctor, working in conjunction with the Assistant City Administrator, shall carry out GMEF opcrating procedures as approved by thc EDA and Council. Stail is responsiblc for assisting businesses in the loan application proccss and will work closely with applicants in developing the necessary information. Application Proccss: 1. Applicant shall complete a preliminary loan application. StaiTwill rcview application for consistcncy with the policies set forth in the Greater Monticcllo Fund Guidelines. Stair consideration of the preliminary loan application should take approximately one week. Staff will ask applicant to contact a Icnding institution regarding financing needs and indicate to applicant that further action by the EDA on thc potential loan will require indication of support from a Icnding institution. 2. If applicant gains initial support from lending institution and if the preliminary loan application is approvcd, applicant is then asked to complete a formal application. If the preliminary loan application is not approved by staff, the applicant may request that the EDA consider approval of the preliminary application at the ncxt regularly scheduled meeting of the EDA. 9 DAWNIWORD/POLlCIES: 10/30/00 EDA Business Subsidy Criteria . 3. 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 stalf 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 staff 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 l.iquor 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 ofthe 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. 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 5 I3 of the ordinance establishing the Monticello EDA). REPORTING 1. Staff shall submit quarterly summaries and/or annual report 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. 10 DAWN/WORD/POLICIES 10/30/00 . . . EDA Business Subsidy Criteria I DAN AOMINISTRA nON 1. City staff shall service City loan, shall monitor City position with regard to the loan, and shall assure City compliance with intercreditor agrecment. 2. All loan documcnts shall include an intercreditor agreement which must include the following: A. Definition of loan default, agrecments rcgarding notification of default. B. Agreemcnts 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 rclcase of pri vacy regarding the status of the loan. 11 DAWN/WORD/POLICIES: 10/30/00 . 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 Property Acquisition and Improvement Costs land Acquisition Engineer/Design Inspection Fees Architect Fees Soil borings Appraisal Fees legal Fees Environmental Study Recording Fees Title Insurance Building Permit Fees Building materials Construction labor landscaping Grading Curbing/Parking lot Machinery 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. . . . . RESOLUTION NO. RESOLlJTION OF CITY OF MONTICELLO REQUESTING DESIGNATION OF THE MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AS A LOCAL DEVELOPMENT ORGANIZATION WHEREAS, The City of Monticello (the" funds; and, ") would like to better utilize the Small Cities federal WHEREAS, if the City of Monticello retains thee funds and their repayment, the funds retain the federal designation and guidelines forever; and, WHEREAS, the City of Monticello by resolution, can request from the Minnesota Department of Employment and Economic Development (MNDEED), authorization to transfer Small Cities Development Program Economic Development Set-Aside funds to a Local Development Organization (LDO); and WHEREAS, The Monticello Economic Development Authority is interested in being designated as an LDO and is a non-profit organization serving the community and economic development needs of a nOI1- entitlement area; and WHEREAS, The Monticello Economic Development Authority has adopted procedures and guidelines for the use of the federal funds, the repayment of the federal funds pi us al1yi nterest accrued, earned or pai d thereon. NOW THEREFORE, BE ITRESOLVED by the City of Monticello that the City hereby requests approval from MNDEED to designate the Monticello Economic Development Authority as a Local Development Organization (LDO), serving the community and economic development needs of the City and, therefore authorize them to receive the repayments from the SCDP Set-Aside Loan to , and/or (a portion of the federal SCDP funds in the existing H..evolving Loan Fund). leER TIFY THAT the above Resolution was adopted by the City Council of the City of Monticello on this day of 2005. SIGNED: WITNESSED: Name/Title Name/Title . MNDEEO/Business Finance Office Small Cities Set Aside Funds Program Income/Revolving Loan Fund 7/12/02 Program Income: The total of all SCDP repayments received by a Grantee in a program year. Program year is defined as September 30 - October 1, which follows the federal calendar. IUhe program income is $25,000 pcr program ycar (principal and interest or repayment from a housing or commercial rehab activity) or less it can be considered miscellaneous income and the Grantee may use the funds as if they were from their own general fund. Of course we would encourage them to use it for community and economic development activities but none of the federal prognun requircments apply. Revolving Loan Fund: SCDP program income funds are sheltered for cconomic devclopment activities if a Grantee receives more than $25,000 per program year. All repayments (principal and interest, ineluding the first $25,000) are to be placed in a revolving loan funcl by the Grantee and federal regulations apply on the reuse. Local Development Organization: a non-profit organization carrying out the community and economic development activities of a community that is eligible under the State SCDP federal regulations to receive federal funds from a Grantee for purposes stated. . Two processes for transfer of SCDP funds to a Local Development Organization: -Grantee applies for a federal grant for a business. Grantee's council passes a resolution requesting approval to designate a local, non-profit organization (EDA, HRA, etc.) as a Local Development Organization (LOa). City sends request to OTED for approval. OTED sends written approval. Grant awarded. Grant agreement includes statement that LDO will make loan to business. Grantee requests payment from DTED based on invoices from LDO and business. Grantee gives funds to LDO. LOa writes check to business. Repayments come back to LDO and into LOa account. The federal requirements have been met on the first loan to business so LDO docs not have to comply with federal requirements on the reuse. We ask for policies and procedurcs and encourage them to use funds for similar activities but without federal requirements attachcd. No report comes to DTED. Because the LOa is a quasi-government agency they will bc reporting to city council on all their activities. * -Grantee has a fedcntl revolving loan fund. The city council passes a resolution requesting designation of a local EDA,HI<A, etc. to be an LOO. Sends request to DTEO for approval. DTEO scnds written approval if guidelines met. Grantee transfers speci tIed amount of federal funds to I jJO. On the fIrst re-use of the funds, the LOO has to comply with the federal regulations. On the next re-use, the federal requirements do not apply. Grantee's LDO does not have to report to DTED. We ask LDO for policies and procedures and encouragc them to use funds for similar activities but without federal requirements attached. . . Page 2 When a Grantee reccived authorization to designate an organization as an LOa and transfers federal Cunds to the LDO, the Grantee cannot recall the funds and they cannot instruct the LOO on how to use the funds. The reality is that thc EDA or I-IRA do work with the city to set up goals for the year and therefore are involved with ensuring the funcls are used for community and economic development activities in the City. ATTACHMENTS: Sample Resolution for City Council Sample Agrcement between City and LDO for: administration of new project funded by OTED. Sample Request to MNOTEO FOR LDO Designation Sample Approval Letter from MNOEED Guicle to National Objectives and Eligible Activities for State COBG Funds; Page 2-68, Categories of Eligible Activities. 24 CFR 570.489 (e)(2)(ii) . Reviscd 2/10/03 Revised 3/6/03 Revised 7/17/03 . . . . EDA Agenda - 11/29/05 5. Consideration to call for a public hearinl! date for modification of the EDA Business Subsidv Criteria. A. Reference and backl!round: Given the EDA agreed with the proposed modifications to theEDA Business Subsidy Criteria in the prior agenda item and is recommending the City Council approve the Guidelines and LDO resolution, the EDA simply must select and call for a public hearing date for modification of the Criteria. Remember, a public hearing noticc is difference than a public meeting notice. I would suggest the EDA meet soon after the Council meeting of December 12 i[the EDA so wishes to have this marketable by the first of the year. I would think the EDA would prefer the Council approve the resolution and guidelines prior to the EDA holding a public hearing to modify the Business Subsidy Criteria. Thereafter, the City resolution and the new policies will mailed to DEED (Carol Pressley-Olson) for approval.. A suggested date is Tuesday, December 13,2005. B. Alternative Action: 1. A motion to call for a public hearing date of modification of the EDA Business Subsidy Criteria. for 2. No action required. C. Recommendation: Recommendation is alternative no. 1. D. Supportinl! Data: None. . . . NOTICE OF PUBLIC HEARING ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO COUNTY OF WRIGHT STATE OF MINNESOTA NOTICE IS HEREBY GIVEN that the Economic Development Authority in and for the City of Monticello, Minnesota, will hold a public hearing on Tuesday, December 13,2005, at approximately 4:00 p.m., at the City flail, 505 Walnut Street, Academy Room, Monticello, Minnesota, relating amending the Business Subsidy Criteria pursuant to Minnesota Statutes, Sections 116J993 through 116.1.994. The proposed amendment to the criteria to be adopted is available for inspection at City Hall. All interested persons may appear at thc hcaring and prcsent their vicws orally or in writing. BY ORDER OF THE ECONOMIC DEVELOPMENT AUTHORITY Ollie Koropchak, Executive Dircctor (Publish Dccember 1 and 8, 2005) FDAM iI::MJ/lJUSSIDi\I\ID, I'HN 1205. WI'Ll . . . EDA Agenda - 11/29/05 6. Consideration to ratify the Mort~al:e Subordination A!!:reement between the SBA. EDA. and Tapper's Holdin!!:s LLC. A. Reference and back!!:round: The Stearns Bank, Central Minnesota Initiative Fund and the EDA loans closed on November 1, 2005 at the offiee of Preferred Title, Monticello and theEDA disbursed its $200,000. The EDA legal fees were reimbursed by the applicant. The SBA was not ready to close on November 1 as you recall there was this on and off again decision with Tappers. SBA is now ready to close as Nadene Kruize, Business Developmcnt Officer, Minnesota Business Finance Offiee, St. Cloud, stopped by my of1ice of the 21 sl of Novcmber for signatures on the Mortgage Subordination Agreement. Prcsident Dcmcules and myself executed the Agreemcnt on November 22, 2005, and thcrcfor the EDA is asked to ratify the Mortgagc Subordination Agreement. A house keeping item. B. Alternative Action: 1. A motion to ratify thc M0l1gage Subordination Agrccmcnt between the SBA, EDA, and Tapper's Holdings LLC. 2. A motion to not ratify the Mortgage Subordination Agrecment between the SBA, EDA, and Tapper's Holdings LLC. 3. A motion to table any action. C. Recommendation: Recommendation is alternative no. I as this is a housekeeping item. D. Supportine Data: Copy of the Agreement. 1 . MORTGAGE SUBORDINATION AGREEMENT . THIS MORTGAGE SUBORDINATION AGREEMENT (the "Agreement"), dated the _ day of November, 2005, by MINNESOTA BUSINESS FINANCE CORPORATION, a non- profit corporation under the laws of the State of Minnesota, whose address is 616 Roosevelt Road, Suite 200, St. Cloud, MN 56301, whose interest is to be assigned to the United States Small Business Administration, an agency ofthe United States of America, created under 15 U.S.C. 9631 ("SBA"), and ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA, a public body corporate and politic, whose address is 505 Walnut Street, Suite I, Monticello, MN 55362 ("EDA") and TAPPER'S HOLDINGS, LLC, a limited liability company, under the laws of the State of Minnesota, whose address is 212 Chelsea Road, Monticello, MN 55362 ("Borrower"). RECITALS The parties declare and recite: A. Minnesota Business Finance Corporation has made SBA Loan No. 883288-4000 ("SBA Loan") to the Borrower in the original amount of Nine Hundred Eighty-Four Thousand and 00/100 Dollars ($984,000.00), which indebtedness is evidenced by a Promissory Note dated the 21 st day of November, 2005. The SBA Loan is secured by a Mortgage dated the 21 st day of November, 2005, recorded the _ day of , 2005, as Document No. ,in the office ofthe Wright County Recorder, Minnesota, which was assigned to the SBA by Assignment dated the 21 st day of November, 2005, recorded the _ day of , 2005, as Document No. , in the office of the Wright County Recorder, Minnesota ("SBA Mortgage"), B. The EDA has made a loan to the Borrower in the original amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00) ("EDA Loan") secured by a Mortgage dated the 1 Sl day of November, 2005, recorded the _ day of , 2005, as Document . No. ,in the office of Wright County Recorder ("EDA Mortgage"). C. The Borrower has requested the EDA to subordinate the priority of the EDA . Mortgage to the SBA Mortgage. D. The EDA is willing to subordinate the EDA Mortgage to the SBA Mortgage upon the terms and conditions contained in this Agreement. E. The Borrower hereby certifies that it is the fee owner of the property, which is more particularly described as follows: Lots 11 and 12, Block 2, Oakwood Industrial Park, according to the plat on file and of record in the office of the County of Wright, State of Minnesota, said property is located in the City of Monticello ("Property"), which is subject to the lien of the SBA Mortgage and the EDA Mortgage. . NOW, THEREFORE, in consideration of the facts set forth in the above recitals which the parties agree are true and corrcct, which recitals are incorporated herein by this reference and in consideration of the mutual agreements and obligations contained herein and other good and valuable consideration, the reccipt and sufficiency of which is hercby acknowledged, the parties agree to be bound as follows: 1. Subordination. Regardless of any priority otherwise available to the EDA Mortgage, the lien of the EDA Mortgage upon the Property is hereby subordinated to the lien of the SBA Mortgage on the Property to the full extent of the declining principal balance on the EDA Loan, including interest which shall accrue on the principal balance. 2. Acknowledgment of Subordination. The EDA acknowledges that it hereby waives, relinquishes and subordinates the priority and superiority ofthe lien or charge ofthe EDA Mortgage to the lien or charge of the SBA Mortgage. 3. Retained Rights. Except as expressly provided herein, this Agreement shall not operate or be construed to alter the priority of the SBA Mortgage with regard to any legal or equitable interest in the Property. Borrower and the EDA shall hold SBA harmless from any impairment of its lien (with regard to any third party) which is occasioned by this subordination. 4. Notice of Default Under the EDA Loan. If a default occurs under the EDA Loan, EDA Mortgage or any document evidencing the EDA Loan to the Borrower, then the EDA shall give Minnesota Business Finance Corporation, 616 Roosevelt Road, Suite 200, St. Cloud, MN 56301 and the SBA, 210C Butler Square, 100 North Sixth Street, Minneapolis, MN 55403, written notice of default. The BDA shall further provide notice to SBA of any default under the terms ofthe EDA . Loan which remains uncured for sixty (60) days. 2 . . . 5. Enforceability. All understandings, agreements, representations and warranties contained herein are solely for the benefit of Minnesota Business Finance Corporation, the SBA and the EDA and their respective successors and assign and no other party, including, without limitation, the Borrower. 6. Federal Law. This Agreement will be interpreted and enforced under federal law, including SBA regulations. The parties may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens and other purposes. By using such procedures, the SBA does not waive any federal immunity from state or local control, penalty, tax or liability. The EDA and Borrower may not claim or assert against the SBA any local or state law to deny any obligation, defeat any claim ofthe SBA or preempt federal law. Any arbitration clauses shall not be enforceable against the SBA. 7. Right to Payments. This Agreement shall in no way effect the obligation or right of the Borrower to payor the right of any of the parties hereto to receive payments. 8. Miscellaneous Provisions. A. This Agreement shall remain in full force and effect regardless of whether any party in the future seeks to assume, amend, terminate or refoffil, by litigation or otherwise, their respective agreement with the Borrower. B. The filling in of any and all blanks contained in this Agreement, after execution, shall not be deemed an alteration hereof, and the EDA and Borrower hereby authorize the SBA, as their attorney in fact to fill in such blank spaces and to record this Subordination Agreement. C. The priority or parity of the rights and claims of the SBA and the EDA as general creditors of the Borrower shall not be affected or impaired by this Agreement. D. This Agreement contains the whole agreement between the parties hereto as to the mortgage loans, and the priority thereof, herein described, and there are no agreements, written or oral, outside or separate from this Agreement, and all prior negotiations, if any, are merged into this Agreement. E. This Agreement shall inure to the benefit and be binding upon the legal representatives, heirs, devisees, successors and assigns of the parties. F. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties have hereto set their hands effective the day and year first above written. 3 . . . SBA MINNESOTA BUSINESS FINANCE CORPORATION By Its BORROWER TAPPER'S HOLDTh!7 .~,,,r By STATE OF MINNESOTA ) ) ss. COUNTY OF ) EDA ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO BY~~$fik7/~ Its <<l'\,P. c. .: ~~ T BY;;:~.\~~~,~~O(' The foregoing was acknowledged before me this day of November, 2005, by , the 0 fMinnesota Business Finance Corporation, a non-profit corporation under the laws ofthe State of Minnesota, on behalf of the corporation. Notary Public 4 . . . STATE OF MINNESOTA COUNTY OFVJ",\q\A-\ ) ) ss. ) The foregoing was acknowledged ,before me this d:>.,....,~ day of November, 2005, by \p,\\\O,v"" \- ,)J{Y\ew\Q<C" the ?i"es\<\~VI\- ,and O\\.\~ Y.ov,o Dc\"\o\L. ,the 'lxe.cv-\-, v~ D\..ec~~c'- of the Economic Development Authority in and for the City of Monticello, a public body corporate and politic, on behalf of the authority. \) C\L.U'T""{\ f'I\. '--"~ -S ":~~--~ \ Notary Public DAWN M. GROSSINGER NOTARY PUBLIC - MINNESOTA My Commission Expires Jan. 31,2010 ST ATE OF MINNESOTA) ) ss. COUNTY OF ) The foregoing was acknowledged before me this _ day of November, 2005, by William R. Tapper, the Chief Manager of Tapper's Holdings, LLC, a limited liability company under the laws ofthe State of Minnesota, on behalf of the company. Notary Public THIS INSTRUMENT WAS DRAFTED BY: WHEN RECORDED RETURN TO: David T. Shay - #208164 Shay Law Office, Ltd. 5 . . . EDA Agenda - 11/29/05 7. Executive Director's Report. a) Visicom DMRF Loan No. III - Copy of follow-up lctter to Bruce and Cindy Hamond. b) Copy of EDA Bills. c) Potential EDA applicant - [ visited a company in New Ilope with the real estate agent who has completed the EDA Preliminary Application. The company is looking to purchase the Clow Stamping building. A purchase agreement is on the table and under negotiation between the seller/buyer and a proposed lender is in the process of completing a credit analysis and before bank review board. Should those two pieces come together, I suggest the EDA consider a loan for real estate acquisition or machinery/equipment. Should I heard something more definite, this may bc an add~on item. Ideally, Clow would like to sell the 30,000 sq ft facility and lease~back 12,000 sq ft. The prospective buyer wants to use the entire building. d) Dahlheimer land closing - I'm hopeful we can close on this land transaction by the 30th of November. The HRA Attorney is working hard to clear the title. c) Potential buyer - This food processing company looked at the site options today: They preliminarily selected two site options to further research. 20,000 sq ft building. 1) Sunny Fresh Foods - Hats off to the stakeholders as they were awarded the 2005 Malcolm Baldrige Award for the second time. first in 1999. Attcnded a celebration November 22. g) A VR relocation site continues to be under negotiations. h) IDC requested to add to future agenda: BRE survey and 1-94 transportation corridor. i) EOA membership - The six-year term of Bill Oemeules expires December 2005. ['11 need to check with the Mayor and Council members as it had been discussed to annually advertise for applicants. j) Visit scheduled with a business in Albertville on November 30 at 10:30 a.m. k) Fiber optic task force - meetings scheduled for November 29, 1 :00 p.m. and December 1,4:30 p.m. RfP draft going before Council, December 12. 1) Marketing Committee - We will participate in the Industrial Real Estate Summit on December 7, from 8:00 to noon at the Bloomington Sheraton. Includes seat on panel, name and logo on all ads and marketing materials, half-page article and half-page 4-color ad in special insert, table-top exhibit, name and logo on signage at event, list of conference attendees, and 5 free passes to event. Will meet on December 2 at St. Thomas to prepare for panel discussion. m) Met with Don Tomann, UMC, on November 15 about interruption of telephone and electric service along Chelsea Road East. That day the phones were down (md previous weeks electrical. r called Suburban, TCDC, and Tapper (two facilities) and all have experienced the same. It appears this may result from the construction of the interchange, City Engineer Bruce Westly to address this at Wednesday interchange meetings. n) Attended Wright County Economic Development Partnership Board meeting on November 15, in Maple Lake. 0) Article and photos of Bondhus Corporation and Aroplax Corporation will appear in the City Newsletter out this week. Manufacturing Directory was given to Kathy so labels can be made to mail local manufacturers a copy. I made up a list of questions for consistency and plan to go alphabetically. November I, 2005 -- MONTlCELW VisiCom, Inc. Bruce and Cindy Hamond P.O. Box 488 Monticello, MN 55362 Re: DMRF Loan No. 111 Balloon Payment Dear Bruce and Cindy: Thank you for attending the Monticello Economic Development Authority (EDA) meeting of October 25, 2005, and giving the commissioners an update of your West Broadway ilnprovements and future plans. . Secondly, the EDA heard your two proposals for the balloon payment due on November I. 2005. for DMRF Loan No. III. Although the EDA commends YisiCom for their investment and interest in downtown Monticello, the commissioners noted it was not within the realm ofthe EDA to forgive loans of credit-worthy businesses. However, they agreed to research new program options to foster downtown redevelopment The EDA made the following motion relative to DM RF Loan No. 111: A motion to call the loan, principal and interest due Novemher }\1 in the amount (~1$5,275,OO, payment due and payable within 60 days of November 1, 2005. Again, thank YOLl for your investment and interest in downtown Monticello. Should you have further questions, please give me a call at 763-271-320&. Sincerely, MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Ollie Koropchak Executive Director Attachment c: DMRF Loan No. I ] I File . Monticello City Hall, 505 Walnut Street, Suile 1, Monticello, MN 55362-RR31 . (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 . . . CITY OF MONTICELLO AMORTIZATION SCHEDULE VISICOM, INC PRINCIPAL AMOUNT OF DEBT: INTERST RATE: TERM: CLOSE DATE: $ 10,644.00 5.50% 10 yr. Amort. With 3 year balloon 4/10/2001 BALANCE DUE M AS OF 10/25/2005: BALANCE DUE. AS OF 11/01/2005: ~ c:YL. ~: $ $ 5,270.92 C~-;O'O-~ ,,-Ui I \..-.) .. \ "" \ '0. ~ ~~. \, ~o c\\0V't;2 ?'OG\.o Amori Schedule for Ollie xis . . . PAYMENT NUMBER MONTH INTERST ACCRUED: CITY OF MONTICELLO AMORTIZATION SCHEDULE PRINCIPAL PAYMENT VISICOM, INC INTEREST ACCRUED TOTAL MONTHLY PAYMENT $22.92 $ $22.92 $ .. . ..---.------------ l22:92$--- ._...._."'.__________...n__._.... "'_n__.____.'... $22.92 $ $22.92 $ $22.92 $ $22.92 $ $22.92 $ $22.92 $ '$22.92 $ $22.92 $ 38 39 40. 41 42 43 44 45 46 47 48 12/1/20.0.4 $ - -...., ,~-----"---_._--,,.,"'''''. 1/1/20.0.5 $ 2/1/20.0.5 $ ..._._____n_.__.._"._ 3/1/20.0.5 $ .._.._____.,.~.._.....,,_. _. n....._.._._.___...._._"."... 4/1/20.0.5 $ u_....____.__.""..._..._._..u n_."'._____.."'..._...__._.. .__."". 5/1/20.0.5 $ ----.-..-- ,,,. 6/1/20.0.5 $ -.-.--.---......-----..... 7/1/20.0.5 $ 8/1/20.0.5 $ 9/1/20.0.5 $ 10./1/20.0.5 $ 10./25/20.0.5 49 11/1/20.0.5 MONTH END PRINCIPAL BALANCE $ . --...-----.------.. . -..-------..-----.- $ $ $ $ $ $ $ $ $ $ $18.84 Balance Due 10/25/05: $ $22.92 Balance Due 11/01/05: $ ~., o.Oq:.QQ.. 5.0.0.0..00 ,,_____.._..n_.'" ... 5,0.0.0..00 5,0.0.0..00 5,0.0.0..00 5,0.0.0..00 5,0.0.0..00 5,0.0.0..00 5,0.0.0..00 5.0.0.0..00 5,0.0.0..00 5,270.92 5,275.00 Amort SChedule for Ollie. xis CITY OF MONTICELLO AMORTIZATION SCHEDULE . VISICOM, INC PRINCIPAL AMOUNT OF DEBT: INTERST RATE: TERM: CLOSE DATE: $ 10,644.00 5.50% 10 r. Amort. With 3 ear balloon 4/10/2001 . MONTH END PAYMENT PRINCIPAL INTEREST TOTAL MONTHLY PRINCIPAL NUMBER MONTH PAYMENT PAYMENT PAYMENT BALANCE 1 5/1/2001 $ 81.63 $34.15 $ 115.78 $ 10.,562.37 . __.___......"".___...__.._______...__.._ on~... ..__.._..___._____.____._....._...._... . ...__________._._.. . u.. .-......-...........-...... .._____~_____n_6/y~qO_1__$__________~_~J6 _______ $?G.O~_~___u______ 11!5.78___~n_ 1.Q.49~?1__ 3 7/1/20.0.1 $ 67.67 $48.11 $ 115.78 $ 10,428.94 . ----...--....----.-.."'. .-..... , . ---.----.-..-.. -.. .. .. ..-.----.---.--.... . ....--.-..-.-..-... -- -........--.-.-----... ... ..-...- 4 8/1/20.0.1 $ 66.39 $49.39 $ 115.78 $ 10.,362.55 5 9/1 /2o.o.1n$--------66.70 -------$49-.-08.--r---------- 115.78 $.. ---n-----n-1Ci,295.85 ------------ (3 - 1011 /2001 r-- 68.-59----------- $4 '7'.19$----- - - .----1-15:78---r-------------- 16;22-7'.26-- -- -- -= ~:_-:---~] _ _ _ _t111{20G 1 _ ~ ____ . -- -6~~1~=-=:~=__=J~_$)i~_~:J=:_--n-------~_:5:1~?8-:::_$--------16~ -1--59'-92-- 8 12/1/2001 $ 69.21 $46.57 $ 115.78 $ 10.,0.90.71 9 ..1/172o.o.2--$------nnn67:99..----$47~79 .$--n-----115:78- $ 10.,022.72 10. 2/1/20.0.2 $ 68.31 $47.47 $ 115.78 $ 9,954.41 .... ...-.---.-----. ".- 11 3/1/20.0.2 $ 73.20 $42.58 $ 115.78 $ 9,881.21 12 4/1/2002 $ 68.98 $46.80. $ 115.78 $ 9.812.23 n ..._ .__.....___ ......_ 13 5/1/20.0.2 $ 70..81 $44.97 $ 115.78 $ 9,741,42 14 6/1/20.0.2 $ 69.64 $46.14 $ 115.78 $ 9,671.78 15 7/1/20.0.2 $ 71.45 $44.33 $ 115.78 $ 9,600.33 16 8/1/200.2 $ 70..31 $45.47 $ 115.78 $ 9.530.02 17 9/1/20.0.2 $ 70.64 $45.14 $ 115.78 $ 9,459.38 18 10./1/20.0.2 $ 72.42 $43.36 $ 115.78 $ 9,386.96 19 11/1/20.0.2 $ 71.32 $44.46 $ 115.78 $ 9,31564 20. 12/1/20.02 $ 73.0.8 $42.70. $ 115.78 $ 9,242.56 21 1/1/20.0.3 $ 72.0.1 $43.77 $ 115.78 $ 9,170.55 -.. . - . -,,- 22 2/1/20.03 $ 72.35 $43.43 $ 115.78 $ 9,0.98.20 _.____...______._.."'__... u_ ..... ._."'.. ... __...._.__.._.._._. ._.. ___~_____n_ 3/1/20.03 $ 76.86 $38.92 $____1_15.78 $ 9,021:.?3:_ _ _________ _}_4.______~Ly?gQ3_ $ .. .__::::tl]:~_=:=:--=~~::)4-?-.73---:(- ,_____________ 115J_IL___~____~.~4~:~~_ ___________ 2~_____~~~o.03 $_______74. 77._____ ~41 .01 ___ $______________ . 1.1. 5. 7~__~. _'__n _______8-'~!~~!5~_ 26 6/1/20.03 $ 73.75 $42.03 $ 115.78 $ 8,799.77 - --------2-"7--- -7/1 /200.3 $ '.-75.4~---------$4o.~$--. ,..-------------1-15.-78---1--. .----8~724.32- --. ...--~-:..::-~:~---~_-~;~;~~i~I~_:~~_--~:_I~:~"=:-:=-~::_-~:-~~1...~-:~---~~~:---....-.:~--jlBI~:I~==-=:-.----:~~~~;-~~- ____________~q___1Q{Y2oq3 $ --_J~:~?_____________-$3~:~tL.._t_ .:-________115.78__$ 8,498.57 31 11/1/20.0.3 $ 75.53 -$40.25 $ 115.78 $ 8,423.04 32 12l1-i2063-.-$-.-----.-77-~-~1'7 . --$38~61----'.$ ---...--...-.-...-..- 1-.1.5~i8'-'. $ 8,345.87 --.-----.---..-33--.----.17172604 $ . ---~"i€f-25-... . -'--"-$39.53."--. $ 115.78 $ 8,269.62 -.---.-.-----..--.....-.-...--........--..--.-..--.... .-.--..... -...-. ... _________~4_______?D/2GO~_~__ .... ... 7?~1_ $39.17 $ 115.78 $ 8.193.01 35 3/1/20.04 $ --79.48 $36.30. $ 115.78 $ 8.113.53 -----------36-------4/1/2004nl 77.35 . $38.43-$ 115.78 $ 8,036.18 37 5/1/iooLr-$--- 1,963.17 _------$36-.-831 2,00.0..0.0. $ 6,0.73.01 11)1/200.4 $ 1,073.01----$T67".04m$ 1,240..05 $ 5.0.00.00. . Amort Schedule for Ollie_xis . Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 Tax ID No. 41-1225694 November 14, 2005 Monticello EDA Ollie Koropchak 505 Walnut Street Suite 1 Monticello, MN 55362 Throuah Seotember 30. 2005 MN325-00018 Tappers (Strategic Equipment) Loan 82.50 Total Current Billing: 82.50 . I declare, under penalty of law, that this account. claim or demand is just and correct andth~~~Jr Signature of Cia ant ,,-\0 00 c-O 'v ' v~ -.J o' c;y? 7 .....0 ,\.9 ~ ,,\..- 6 ,- . . Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 41-1225694 November 14, 2005 Invoice # 68657 Monticello EDA Ollie Koropchak 505 Walnut Street Suite 1 Monticello, MN 55362 MN325-00018 Tappers (Strategic Equipment) Loan Through September 30,2005 For All hegal Services As Follows: 2Q~ ~0Lg/2/2005 SJB Phone with O. Koropchak re: late fee, enforcement of - same Hours 0.20 Amount 36.00 (..>m;g~ lo I.rV 9/9/2005 .{)-;'-J JAE E-mail correspondence from Ollie Koropchak; Revise Loan 0.30 Agreement and Mortgage and send to Ollie. 46.50 Total Services: $ 82.50 Total Services and Disbursements: $ 82.50 .