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EDA Agenda 08-08-2007AGENDA MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Wednesday, Aagust 8, 2007 - 4:00 p.rn. City Hall - AcadeKny Raom MEMBERS: Chair Bill Demeules, Vice Chair Barb Schwientek, Council members Wayne Mayer and Tom Perrault, and Ron Hoglund. STAFF: Executive Director Ollie Koropchak and Recorder Angela Schumann. 1. Call to Order. 2. Roll Call. 3. Consideration to approve the Apri124, 2007 EDA minutes. 4. Consideration of adding or removing agenda items. 5. Bills and communications. GMEF No. 025 UCC Filing. 6. Executive Director's Report. • 7. Committee Reports. A. EDA/HRA merger. 8. Unfinished business: 9. New Business: A. Consideration to review the preliminary loan application for Washburn Computer Group. B. Consideration to approve or deny approval of GMEF Loan No. 026 for Washburn Computer Group and call for a public hearing if necessary. C. Consideration to review the new city budget form and accept EDA 2008 Preliminary Budget. 10. Adjournment. • • EDA Agenda - Q8/08/07 S. Bills and communications. Invoice far UCC-1 filing on the machinery and equipment far Karlsburger. The invoice arrived after the close-out and reimbursement payment far attorney fees paid by Karlsburger. No action is required; however, you should note sometime the EDA has some cost aver-runs which is fine if the loan fee of $200 or whatever amount approved keeps the EDA whole. ~i Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 41-1225694 June 6, 2007 Invoice # 77327 Monticello EDA Ollie Koropchak 505 Walnut Street Suite 1 Monticelln MN ~"iF4F7 MN325-00019 GMEF Loan T Karlsb er Through April 30, 2007 For Alf Legal Services As Follows: 3/5/2007 SAE Draft UCC-1; update list of equipment Hours 1.00 Amount 100.00 3/6/2007 SAE prepare UCC-1 filing; a-mail M Ingram regarding transcript index 0.10 10.00 3/6/2007 MNI Review UCG-1 filing. 0.40 68.00 3/7/2007 SAE Review transcript index drafted by J Yang 0.20 20.00 3/13/2007 SAE Receive, review and file recorded UCC-1 in transcript 0.10 10.00 Total Services : $ 206.00 For All Disbursements As Follows: 3/5/2007 Minnesota Secretary of State; UCC Filing 20.00 Total Disbursements: $ 20.00 Total Services and Disbursements:$ ®l `~ ~~~ O ~~~ ~ . ~~ G ~ ~ ~~_~'~ 226.00 Kennedy 8~ Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 Tax ID No. 41-1225694 June 6, 2007 Monticello EDA Ollie Karopchak 505 Walnut Street Suite 1 Monticello, MN 55362 Through Aori130.2007 MN325-00019 GMEF Loan T. Karlsburger 226.00 I declare, under penalty of law, that this account, claim or demand is ' stand correct and that mart of it has be~i paid. Signature of ~'laimant Total Current Billing: 22fi.00 • • EDA Agenda - 08/08/07 6. Economic Develo meet Director's Re ort. A. TIF Pay-As-You-Go semi-annual payments to developers were calculated and will be mailed as per the Contract date of August 1 and February 1 of each year. B. Two Economic TIF Districts (No. 1-23 [Allied Properties] and 1-25 [Blue Chip]) were decertified prior to the maximum life duration of the district (early decertification) by the HRA in December 2006 since the debt service was paid-off and the qualified administrative casts were quantified. A request to the Finance Department for issuance of checks to reimburse the County Auditor in the amount of the excess tax increment ($78,602 and $14,682, respectively) of each district was made and have been mailed to the County along with the Confirmation of Decertified TIF District form. Once confirmed by the County, these forms will be submitted to the State Auditor. C. On August 8, the EDA will consider a loan applicatian from Washburn Computer Group associated with the planned 30,000 sq ft. expansion to their building alang Chelsea Road. They were willing to use the payback funds from TCDC (Federal dollars). However and given the application was submitted after they purchased and moved to Monticello, only the jobs created by the expansion can be counted. The benefit of the lower interest rate for the size of the loan doesn't appear to make economical sense to utilize Federal funds due to the added costs to the business associated with meeting the requirements of the Davis Bacon Act. Washburn decided against using Federal dollars, as an alternate, the regular GMEF will be applied. A welcome tour was conducted of the Washburn facility in late June with few in attendance. D. The balloon payment from the MIF-Federal grant/loan to Twin City Die Castings (TCDC) was paid-off by TCDC in June 2007. The balance of those funds available for use by the EDA is approximately $595,000 and the repayment funds aze subject to HUD regulations/guidelines upon the first reuse only. Exhibit A. E. The 2006 Tax Increment Financing District Reports were prepared this year by Paul Mastey, Senior Accountant, with the assistance of the HRA Executive Director. The Ehlers' Quick TIF program was not used this year as the Office of the State Auditor now requests the use of state forms. The reports are due August 1, 2007, to the Office of the State Auditor. The Interchange and Dahlheimer Districts will be adjusted in the 2007 reports pending the documentation of eligible expenditures associated with the $8.5 million Pledge Agreement between the City and HRA and documentation of the infrastructure improvement casts associated with Otter Creek Crossings, respectively. F. In review of the 2007 TIF Parcel Modeler provided by the County, the HRA Executive Director noted the parcels included in the Interchange TIF District were certified incorrectly. A letter has been r1 LJ EDA Agenda - 08/08/07 prepared and mailed to the County Auditor requesting reduction in the number of parcels within this district far payable 2008. G. The HRA closed on the Cedar Street Garden Center the end of June and the tax exempt form was delivered to the Assessor's Office. However and since the property will be occupied through the end of 2007, the tax exemption will nat be effective July 1, 2007. In other words, the HRA will pay taxes in 2008. H. Ehlers & Associates were authorized to certify TIF District No. 1-38 for Walker In-Store after execution of the Purchase and Redevelopment Contract and receipt of the $10,000 earnest money. Per the Contract, the closing and conveyance documents have been prepared and executed by the HRA Vice Chair and Executive Director and occurred on July 31, 2007. The Assessment Agreement was reviewed and executed by the County Assessor. The commitment letter from the lender for construction and permanent financing and TIF "but for" documentation was submitted. Building permit application and plans were submitted to the Cammunity Development Department on July 13. Per the contract, they must begin construction of the minimum improvements within 30 days of closing. I. These are the business retention and expansion visits I made within the last month: Twin City Die Castings: Congratulations to TCDC. In the past year, they received four international awards in designs of zinc and magnesium. Other visits were UMC, Suburban Manufacturing, and Washburn Computer Group. J. The four appointed individuals on the HRA/EDA merger task force met at 5:00 p.m. prior the HRA meeting of August 1. A follow-up Council workshop is posted for August 13 at 6:00 p.m. K. Fiber Optics - At the Council meeting of July 23, the council members unanimously approved to proceed with a referendum ballot to construct, purchase or proceed to acquire a telephone exchange. The referendum must be approved by 65% of those who cast a ballot at the special election on Tuesday, September 18, at the Community Center gymnasium, 7:00 a.m. to 8:00 p.m. L. The Marketing Group rnet with Rusty Fifield, Comp Plan Update consultant; Jeff O'Neill; and Angela Schumann on July 23. The group presented their prepared bio-science/high tech vision/plan and discussed how their vision/plan fits into the Comp Plan. Mr. Fifield presented his input, recommendations, and in-conclusion; he will draft a specific chapter on Economic Development. With the re-zone of the 60+ acres of I-lA property to B-4 along East Chelsea Road, about 50 acres of I- 1 Aland is currently available in Monticello. (See Exhibit A.) Paul Kleinwachter, Jeff O'Neill, and myself met with the Economic Development Director of Eden Prairie. Interestingly, four farmers several years ago had a vision for Eden Prairie which resulted in their • EDA Agenda - 0$/08/07 Comp Plan. The Comp Plan has only been "tweaked a little" over the years. Eden Prairie does not prepare brochures, etc. for marketing land or promoting the city, the city does not offer incentives, and views "aesthetics" as a long term investment. With its location within the metro and quality of life (image, parks, and schools), the community sells itself and has attracted high tech and bio science industries. They have a "Meet & Greet" program in which the Mayor, City Manager, and Economic Development Director meet with businesses. They have visited 180 businesses and he stated "businesses do not like surprises." With the idea to explore the potential of an educational training facility or campus in Manticello, I've talked with the following individuals who have agreed and are interested in exploring this avenue: Jim Johnson, Supt. of Schools; Amy Kach, Local Senator, Barry Kirchoff, MN Small Business Development Center. My plan is to visit the Anoka-Ramsey Community College in Coon Rapids and its Cambridge campus working with our contacts at Anoka-Ramsey who have expressed an interest in Monticello. Mr. Kirchoff is also interested in establishing a Business Development Center office in Manticello. I'm hoping the Mayor, O'Neill, a marketing group member, and industrial leader will join us. This is exploratory to see of interest and what steps need to be taken. M. The Marketing Committee extended its commencement date on the 1-94 billboard to October 1 and it will run for a couple months and then, commencing in February 2008 it'll run for another couple months. The committee is looking to redesign the billboard and is waiting for the outcome of the referendum scheduled fox September 18. N. Minnesota Competes - I attended a seminar in St. Claud on July 25. Here is my brief summary of the round table discussion of approximately 160 people in attendance. How to compete with the China/India and haw to stay competitive in a world of fast changes in technology? 1. Listen and be flexible. 2. Encourage local government to build on individual strengths or uniqueness. 3. State provide funds with limited (no) rules. O. I've been invited for lunch with 30 members of the Cargill family (spanning three generations) and asked to speak on Sunny Fresh's history as a corporate citizen in Monticello. I'm most honored to accept. P. Minnesota Investment Fund (MIF) state dollars -For your information, the wage levels far this program are for each $10 per hour w/o benefits job, $8,000 and far each $12 per hour w/o benefit job, $12,000. However, the sponsor city now retains 20% of the principal and interest payback where previously it was the first $100,000 plus interest. Attached are the HUD required family household income levels and approved Federal minimum wages. See Exhibit B. • EDA Agenda - 08/08/07 Q. The Wright County Economic Development Partnership is hosting their annual golf outing on September S, noon, at the Riverwood National Golf Course in Otsego. Mayor Herbst and Council member Mayer will be guest of the Marketing Committee and Koropchak volunteer at the event. R. There was an interesting, very preliminary inquiry for industrial land last week. The company (data center) is laaking to construct one facility or perhaps relocate and consolidate its multi-facilities into a campus. Land acreage needs range between 10 acres to 100 acres. The search includes the northwest corridor from Plymouth to St. Cloud. Availability of fiber optics was a must. Preliminary plans range from a 3-4 floor office building and tech storage uses. Time frame: data center construction 2008, move 2009. Must be constructed to protect from natural disaster. Do not know job creation or wage levels at this time. Encouraged meeting with the client and talked about the city's fiber optics goal. With the re-zone of the property along Chelsea Road East; currently, the city has approximately 50-acres ofnon-contiguous developable industrial land. S. Standard Iron & Wire Works has purchased the building previously occupied by Maus Foods. They plan to relocate their headquarter office into the facility and subdivide the remaining portion of the building for retail/office. Their lease runs out in November 2008 in the Dundas Road facility. T. Small industrial company lacking for lease space. Company does business associated with energy savings. Lead forwarded. • C~~ P~~~~~~ ~ ~' ~~ ~ ~ ~ ~ n c~ ~~ ` ~~~3.S'~ • ~'TANCE VOUCHER 401524 Monticello DTED MINNESOTA INVESTMENT FUND FINANCIAL REPORT June 30, 2007 GRANT TOTALS -TWIN CITIES DIE CAST federal Payback began in July, 2000 for 7 years ending in June, 2007. Annual principal and interest payback total is $61,176.72. ORIGINAL PAID REMAINING Principal $500,000.00 $500,000.00 $0.00 Interest $95,875.60 $95,875.60 $0 p0 TOTAL $595,$75.60 $595,875,60 $0.00 EXPENDED: $468,266.60 6/2100 $20,859.00 $/9/00 $10,874.40 8/15/00 $500,000.00 GRANT TOTALS - UMC/TOMANN state Payback began in October 2003 for 5 years ending in March 2008. Annual principal payback is $19,280.64. City keeps first $100,000 plus interest. ORIGINAL PAID REMAINING Principal $290,000.00 $42,729.57 $247,270.43 Interest TOTAL $33,439.16 $323 439 16 $29,664.30 $72 393 87 $3,774.86 , . , . $251,045.29 EXPENDED: $92,138.56 4/17/03 $109,377.84 6/26/03 $88,483.6p 9/4/03 $290,000.00 REVENUES Principal Payback -TCDC (fed) $500,000.00 Interest Payback -TCDC (fed) $95,875.60 Principal Payback -UMC (st) $42,729.57 Interest Payback -UMC (st) $29,664.30 Interest Income -Investment: 2000 $119.19 2001 $3,071.00 2002 $5,356.OD 2003 $7,678.00 2004 $9,157.00 2005 $0.00 2006 $34,659.48 TOTAL REVENUES $693,650.66 EXPENDITURES Prof Svc fees -TCDC (fed) $3,173.65 Legal fees -TCDC (fed) $957.65 Transfer to GMEF - 2004 WSI 023 (st) $13,797.86 TOTAL EXPENDITURES $17,929.16 FUND BALANCE FOR MN INV FUND $675, 721.50 MN Invest Fund Report 7 16 07.x1s: 7/16/2007 • Message Ollie Koropchak From: Bubul, Stephen J. [sbubul@Kennedy-Graven.com] Sent: Friday, July 13, 2007 5:18 PM To: Ollie Koropchak Cc: Mark Ruff Subject: RE: Request for info from Ollie Page 1 of 1 '~X N'"v'"'` Ollie: here is the federal minimum wage, which as you may know was recently increased, with the first step up effective July 24. See below for details. I'll assume that Mark can get you the Section 8 income limits for Wright County (he probably has quicker access than I do). Federal Minimum Wage Current Federal Minimum Wage: $5.15 New Federal Minimum Wage: $S.8S -July 24th, 2007 $6. S S -July 24th, 2008 $7.25 -July 24th, 2009 tc~a~n -- ~ g ~ ~ c~ -----Original Message----- From: Ollie Koropchak [mailto:011ie.Koropchak@ci.monticello.mn.us] Sent: Friday, ]uly 13, 2007 3:47 PM To: Mark Ruff; Bubul, Stephen ]. Subject: Request for info from Ollie Do either of you have a copy of the current federal minimum wage and the LMI for Section 8 established by the US Department of HUD. I have a company applying for payback funds from MIF (Federal dollars). I must follow MUD guidelines. Thank. Ollie • 7/16/2007 Apri125, 2007 New Wa~e_Thresholds The 2007 Health and Human Services poverty guidelines have been issued. .Poverty threshold for a family of 4 is $20,650. $20,650/2080 hours = $9.93/hour. $9.93 x 110% = X10.92 per hour. • Federal GrantlLoan Loan Wage $10/hr. $16,000/job Wage $12/hr. $24,000/job r, r Nan Metro Wage $10/hr. _ $8,000/job Wage $12/hr. _ $12,000/job For ivable Loan $4,000/job $5,000/job Metro $13/hr. _ $8,000/job $18/hr. _ $12,000/job U/BCD/OBDPTBusfin/~'orms/2007 wage threshold M w O ~~ a 0 .~ ~. ~° ~-, 0 .~ W U O A .~ .~ a~ 0 ~~ 0 O N aG {~ t V a 0 0 Y E ai ~ ~ ~ ~ L d o ~` N ~ ~ ~ U 7-. Y N ~ ~ L o O CV a ~ Y ~' o ~ ~ 'cv U ~ O w ~ °' o ~ c ~W, ~ ~ ~ ~ 7+ a O f~ U d r c~ a m Q L 7 O a ^ 0 ~~ V 0 .~ ~_ J W O Q 0 N LL !~ ~~ ^~ J V C O N O O ~ p ~ OD r cD ~ a ~ ~ ~ ° ° ° p ~ ~ ~ n c0 o N o ~ d a ~ ~ ~ c ° o ° ~ ~ ~ ~ M u ~ r-- a ~ N ~ ~ ~ ~ c ° ° ° o o d. u ~ ,~ r~ r~ ~ L a ~ ~ , ~ ~ ~ ~ ° ° ~ ~ ~ N ~ ~ n ~ o ~Li N a M N ~ ~ ~. ~ ~, o ~ ~ ~ c~i N ~ a ~ ~ ~ ~ ° N ° a~o_ ~ ~ a ~- ~ 00 ~ ti ~ s o~ o 0 0 c ~ uo7 ~ d d. ~ ~ ~ ~ ~ ~ 0 ~ ~ 3 ~ N c o c~ c,, ~~ E; J ,.,.._~ d ~~ ~ C ~ .J~ ~ o r± CJ ~N,' . O' Ji ~ ~ U 0 ~ ~I = ...~ ~ 0~0 41 o '''' ~ ~ E ~ °'~' ~ J~ O o N ~ ""'~ ~i ~ ~ ~ ~I W', ~'"' J = - W C ~ CtS ~' o, =o, o ~ , as, c.~' ~ ~ C' ~ n ~ ~ a ~~ ~'cE ~~ ~ L~„ - J ~ O ~v 0 0 N n EDA Agenda - 0$/0$/07 9. New Business• A. Consideration to review the relimina loan a lication from Washburn Cam uter Grau . A. Reference and Back round: GMEF Loan Application: See Attachment A. The loan application is made at the request of the company and subject to a new customer contract which would create the need to expand the facility by 30,000 sq ft. In exchange of land with the City associated with the Chelsea Road Improvements, the company agreed to enhance the exterior of the existing building and comply with parking requirements. For those of you who toured the facility the end of June, you noticed the company had invested dollars into the interior prior to its relocation. I have talked to their lender about our program and the need for a letter of finance commitment and credit worthiness, and need for EDA funding. He has na problem. Request is for a real property rehabilitation (expansion or improvements) loan. Project Summary: Washburn Computer Group, sole proprietor, owned by Allen Wentland. See Attachment B. If the amount of the approved Business Subsidy by a local government entity exceeds $100,000, a public hearing is necessary and the Loan Agreement Business Subsidy Agreement must be available for review. The EDA should review the preliminary application for compliance with the EDA-GMEF Business Subsidy Criteria, The commissioners will need to decide on what date constitutes the date of job creation. The company moved to Monticello in January 2007 relocating 57 jobs from St. Louis Park and they plan to add another 10 jobs within two years. See 3:01 and 4:05 of the criteria on job retention. Does the date moved to Monticello or date of the application apply toward new jobs created? • C, EDA Agenda - 08/08/07 ESTIMATED PROJECT COST: Uses Construction $1,300,000 Parking Improvements $ 85 000 Road Imp. Assessment $ 100,000 M&E $ 110,000 Other $ 140,000 TOTAL USES Sources $1,735,000 Construction Lender 1st mortgage $ 848 500 SBA $ 584,000 GMEF $ 275,000 Equity $ 27,500 TOTAL SOURCES $1,735,000 GREATER MONTICELLO ENTERPRISE FUND GUIDELINES PUBLIC PURPOSE CRITERIA: Must comply with four or more of the criteria listed below, criteria #1 being mandatory. Job Goal: 57 full-time new jobs. Recommend 90% = 47 Additional 10 full-time new jobs to the City of Monticello within two Years of the benefit date (loan closing date.) Recommend 90% = 6 Wage Goal: At least 90% of the new jobs must pay a wage of the higher of $9.00 per hour, or at least 160% ($9.36-July 2007) of the federal minimum wage, exclusive of benefits, for individuals over the age of 20 during the term of the assistance. See Attachment C. n \J Annual reports are required until termination date. Failure to meet job and wage goals require partial or full payment of the assistance plus interest. 2 EDA Agenda - 0$/0$/07 2• Estimated increases the community tax base:Annual $32,665 Total Annual $21,133 Local Annual EMV $1,100,000. 3• Factors: To assist a new industrial business to expand their operation. Other factors for consideration but not limited to: Nature of business (computer repair, warehouse), present availability of product ar service (none), potential adverse environmental effect (none), and compatibility to the comprehensive plan, covenants, and zoning policy (yes, I-2 expansion and site improvements to bring into compliance.) 4• Used as a secondary source to supplement conventional financing. The GMEF is a secondary source of financing for real property rehabilitation (expansion or improvements) S• Used as gap financing:Used to encourage growth and creation of jobs in Monticello. 6. Used to assist other funds: Primary conventional lender (Gateway Bank) and SBA for real estate rehabilitation financing. GREATER MONTICELLO ENTERPRISE FUND POLICIES I• BUSINESS ELIGIBILITY Industrial business: yes. Located within city limits: Yes, Zoned I-2. Credit worthy existing business: Letter of Credit Worthiness, Gateway Bank, Mendota Heights, MN. Forthcoming. $10,000 loan per each job created. $10,000 X 6 = $60,000. January 2007 - 47 = $470,000. Or $5,000 per every $20,000 increase in property market valuation, whichever is higher $G0,000, $470,000 or $275,000, respectively. Recommend $275,000 increase in property market valuation. • 3 EDA Agenda - 08/08/07 II. FINANCING METHOD: Companion Direct Loan: All such loans maybe subordinated to the primary lender if requested by the primary lender. The GMEF is leveraged and the lower interest rate of the GMEF lowers the effective interest rate on the entire project. Criteria: The GMEF takes a second position behind the lender/SSA. III. USES OF PROCEEDS: Real property rehabilitation (expansion or improvements) IV. TERMS AND CONDITIONS: Loan Size: Maximum not to exceed 50% of the remaining revolving loan fund balance. Cash balance as of December 2006, EDA-GMEF, $815,355. (50% = $415,355) Not greater than. Recommend $275,000 Leveraging: Minimum 60% private/public non-GMEF Maximum 30% public (GMEF) Minimum 10% equity of EDA loan Gateway Bank (49%) $ 848,500 SBA (34%) $ 5$4,000 GMEF (16%) $ 275,000 Equity (10% GMEF)(2%) $ 27,500 TOTAL (101%) $1,735,000 Loan Term: Real property rehabilitation term not to exceed 30-year amortization. Interest Rate: Fixed interest rate not less than 2 % below Minneapolis prime rate with balloon payment in five year. Prime rate per US Bank of Minneapolis on date of EDA loan approval. Prime rate August 8, 2007 r~ u EDA Agenda - 08/08/07 Loan Fee: Minimum fee of $200 but not to exceed 1.5% of the total loan project. Paid by applicant to the EDA within five working days after City Council approval of GMEF loan. Non-refundable. Loan fee may be incorporated into project costs. EDA retains the right to reduce or waive loan fee or portion of loan fee. Options: Minimum fee of $200 or not to exceed 1.5% of GMEF loan, due and payable not later than September 1, 2007. • • Prepayment Policy: No penalty for prepayment. Deferral of Payments: 1. Approval of the EDA membership by majority vote. 2. Extend the balloon if unable to refinance, verification letter from two lending institutions subject to Board approval. Late Payment Policy: Failure to pay principal or interest when due may result in the loan being immediately called. Interest limitation on guaranteed loan~ot applicable. Assumability of loan: None. Business equity requirements:Subject to type of loan; Board of Directors will determine case by case, analysis under normal lending guidelines. Collateral: Personal and/or corporate guarantees (requires unlimited personal guarantees) as per the GMEF attorney. Nan-performance: An approved GMEF loan shall be null and void if funds are not drawn upon or disbursed within 180 days from date of EDA approval. August 8, 2007 EDA approval -loan becomes null and void February 8, 2008. Non-performance extension: Not applicable. Legal Fees: Responsibility of the GMEF applicant. S r~ LJ EDA Agenda - 08/08/07 B. Recommendation: Recommendation is to review this information prior to the EDA meeting for discussion and potential questions. Allen Wentland or Ken and Karin Curtis will be at the EDA meeting. Consideration to approve or deny GMEF Loan No. 026 and/or call for a public hearing date is the next agenda item. C. Su ortin Data• Preliminary GMEF application and job and wage-level goals. 6 JUL 11 2p07 9:48RM HP LRSERJET 3200 7632952096 p.2 ~~~ v ~ C~~ DEVELOPMENT SERVICES Phone: (7b3) 271-3208 Flcoaomic Devolopmient Diractor F'~; (763) 295.4404 Bmefl: ECONOMIC DEVELOPMENT ATJTHORITY IN AND FOR THE CITY OF MONTICELLO, M~NESOTA C~`MONTIGELLO ENTERPRISE FUND . PRELIMWARY APPLICATION FORM APPLICANT: /JI/ FIRM OR TRADE NAME: SIISIlVFSS ADDRESS: CITY/STATE: ZIP CODE: _ . ~,~ _.G ~~~. TELEPHOrrE:~os~ 7~3 a ~~ 5-D 9Q tsoM~ DATE ESTABLISHED: EMPLOYER ID# '~ I - I IP 5 LJ SOLE PROPRIETOR CORPORATION PARTNERSHIP ~~~Mif~ NAME TITLE OWNERSHIP'/o PROJECT LOCATION; 218 /1 ~Q NEW LOCATION EXISTING BUSINESS TOTAL PROJECT COST ESTIMATE: S ~~ ~~ ~ ~ LGar7 • JUL it 2007 9:48AM HP LRSERJET 32Q0 7632952096 p.3 • GMEF Preliminary Application Foam Page 2 P ~ a,~,~ ~~w k S .o o p ;>:,ali~ A,~~tSSh7 ert tS $ > DD. UOC) EXISTIlVQ BUILDII~'G CONSTRUCTION 1.3Q~1~00 MACHINERY CAPTTAL I l Or Q~..O WORKINQ CAPITAL OTT-ILR ~(~ TOTAL USES: $ ~ ~ _ ~ r ~, ~ 1 ~~_ ecc, PROPOSED BEGINNIl~IG DATE: ESTIMATED ItEOVrs~„ AMOUNT OF LOAN 3 MATURi'TY & TERMS REQUESTED APPLICANT'S EQUTTY LGANPURPOSl3 3D, f7SiOn DATE: u TITLE Td PROJECT ASSETS TO BE HELD HY: OPERATING ENTTT'Y P TICIPATING I.ENDI3R: rn ~~ ALTER EGO ~ .. (Name) (Address) ( antact Parson) C~!) ~q " ~' DU (Telephone #) ~ $ a rtt~ ~Ci htS m N ~, 18' PRESENT !~ OF FT EMPLOYEES ~,_ (Sae Attac>,ed) PROJECTED # OF FT EMPLOYEES (..trim ~ years) ~_ PROJECTED AvERAGI~ wAC>~ PER soUR: ~~°~~~ i 1(1(~~,i V1 C~ em (J i oy ee s ADDITIONAL PROJECT INFORMATION; DATE SIGNED; ~ ~ ~ (J • QM~PPreliminaryappl.~orm Page 1 of 1 ~Ilie Koropchak ~--_ From: Karin Curtis [Karin@washburngrp.com] Sent: Monday, July 23, 2007 9:10 AM 70: Ollie Koropchak Subject: Updated funds I have the number that needs to be added to the proposal. The improvements to the parking Iot as per the contractor is $$5,000. Will you please add this to our proposal? Karin Curtis Washburn Computer Group 763.295.5090 320.420.41$7 Cell • • 7/23/2007 JUL 11 2007 9:48RM HP LRSERJET 3200 7632952096 i ~ashdurn Comr pater ~rou 2~8 C~i.eGrea Roacf~-~tont icelro .~1N ~' 55362 763-z95 5ogv Additional Project Information • `w p . 4 1~ " L'~. ~I Washburn Computer Group moved to 218 Chelsea Rd in Monticello and opened business an January 2, 2007, Washburn Computer Group is a complete repair facility for Paint of Sale (POS) equipment, PC's, laptops, scanners, flat panel monitors, and servers far the commercial and retail industries. We repair complete machines from Honor exterior fixing, to the repair of the components on the circuit board. Currently one of our customers is looking to use our company to warehouse some of their products. We are proposing to expand our building by 30,000 square feet to accommodate these. In order to do this we are looking for same financial assistance. To prepare far the move we started hiring employees from the Monticello area approximately 3 to 6 months prior to the move, so they could be trained and ready for the move. We brought with us S8 ,current employees, and we are planning to hire an additional 1 S to 20 employees after the expansion. For this proposal we are only listing 10 new employees because the project is customer driven and the final proposal of the expansion in not in ow hands to determine the exact need. We know the size of the space needed, but we are unswe of the volume of activity the customer will require. In addition to the proposed expansion we will also be receiving an assessment for the road improvements that are in progress an Chelsea Rd. We were unaware of the proposed assessments when we chose this building, and had we known about the proposed improvements we may have made some different choices about our location. We would like to include this in the financing ofthe expansion to help with the additional financial burden. • JUL 11 20Q7 9:48RM HP LASERJET 3200 7632952086 ~ .5 DEVELOPMENT SERVICES Phony: (76~ Y11.3208 Economic D~elopmanlDirector Fut: (76~) Z95-4404 6ma~: e~. CITY OF MONTICELLO, MINNESOTA JOB AND WA(}E ~ygL _ gJ~~G JOBS Please indicate number of current permanent emplayecs at each level and indicate the corresponding 6anefit level. N_ umber o ~ A 1 Wa ~sy~ Value ~~ i ~.' Fall-time Part-time (Excl. benefits) Less than $7.00 $7.00 to $7.99 j ~ 1 ~ ` ' "~ $B.OD to $9.99 $10.00 tq $11.99 -~~,. $12.D0 to $13.99 i3 ----~ $14.00 bo $15.99 .~ $16,00 bo $17.99 $1$.00 bo $19.99 ~'~ -- $20.00 bo $21.99 $22.00 aad higher 70HSWAG&~X[57TNCl.F[71tM • JUL 11 2007 9:48RM HP I_RSERJET 3200 • 7632952096 DEVELOPMENT SERVICES ~6~a (~s3) 271-~2os Econoaooic Dcvelopmeat Director Faa: (T63) 2934404 1?aneil: ollie.,boraochekfi3ci.mond u ~. c><~ of IKOrrrltcELLO, mnvlvBSOarA ros.~xn wAaE LEVEL vaAl:,s _ rllxw rass Please indicate number of additional employees at each level and indicate the correspanding benefit level. Number of new permanent jabs anticipated tv be areatad oust the i~st twa years of relocation ar expansion. ~ ~ ~@ VIYY,~Q ~~ Ful]-time Part-time (Excl. benefits) ------- Less than $7.00 $7.00 to 57.99 $8.00 to $9.99 $I0.00 to $11.99 $12.00 to $13.99 $14.00 to SiS.99 $1b.00 to $17.99 $18.00 to $19.99 $20.00 to 521.99 $22.00 and higher p.6 a ~o~~~W.t~ ECONOMIC DEVELOPMENT AUT!~IORITY !NAND FOR THE CITY OF MONTICELLO, MINNESOTA Business Subsidy Criteria Public Hearing and Adoption the 31St day of August, 1999 Public Hearing and Adoption of Amendments the 8t" day of November, 2000 Public Hearing and Adoption of Amendments the 2~t" day of April, 2001 Public Hearing and Adoption of Amendments the 13t" day of December, 2005 Pt]RPOSE 1:01 The purpose of this document is to establish the Economic Development Authority's criteria for granting of business subsidies, as defined in Minnesota Statutes 116J.99.3, SLLbdtVlSlOn 3, for private development. This criteria shall be used as a guide in processing and reviewing applications requesting business subsidies. 1:02 The criteria set forth in this document are guidelines only. The Economic Development Authority reserves the right in its discretion to approve business subsidies that vary from the criteria stated herein if the Economic Development Authority determines that the subsidy nevertheless serves a public purpose. The Authority will. file evidence of any deviation from these criteria with the Department of Trade and Economic Development in accordance with Minnesota Statues, Section l I6J.99~, Sub$. Z. 1:03 The Economic Development Authority may amend the business subsidy criteria at any time. Amendments to these criteria arc subject to public hearing requirements pursuant to Mintesota Statutes, Sections 116J.993 through 116J.994. STA"1"lJ`I'ORY L[MITATIONS 2:01 In accordance with the btsiness 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 1 16J.993 through 116J.994. 3. PUBC.,[C POLICY REQl1IREMEN`1" 3:01 All business subsidies must meet a public purpose in additiotl to increasing the tax base. Job retention may only be used as a public purpose in cases where job loss is imminent and demonstrable. Monticello City f-tall, 505 Walnut Street, Suite I, Monticello, M~7 55362-8831 • (7(i3) 295-2711 • Fax: (763) 295-4404 (Jffice nF Public Works, 909 Golf Course Rd., Monticello, MN 55362 • (763) 295-3170 • Fax: (763) 271-3272 MONTICELLO 4. Bi1SINESS SUBSIDY APPRQVAL 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 Qrdinance, 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 1evelopment Authority, the developer shall provide any required market and financial feasibility studies, appraisals, sail boring information provided to private lenders for the project, 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:U5 (Recipients of any business sLibsidy will be required to meet wage and job goals determined by the Economic Development Authority an a case-by-case basis, giving consideration to the nature of the development, the purpose of the subsidy, fatal 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 than those relating to jobs and minimum wages): (1) The proposed st-bsidy must accomplish removal, rehabilitation or redevelopment of "blighted areas" as defined in Minnesota Statues, Section 469.002, Subd.l 1, ar must constitute a cost of correction conditions that allow designation of redevelopment districts under Minnesota Statues, Sections 469.174 to 469.179; or (2) "l~he proposed subsidy must result in improvements to public infrastructure or public facilities, including without limitations, sewers storm sewers, streets, parks, recreational facilities, and other City facilities; or (3) 'rlle proposed subsidy must remove physical impediments to clevelopmcnt of EDA Business Subsidy Criteria land, including without limitation poor soils, bedrock conditions, steep slopes, or similar geotcchnical problems. 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 ENTLRPRISF, FUND PRO,iECT EVALt7ATION 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: r ~ L J DAW N/W012D(PO~ICIES: 1 t1l30/00 EI7A Business Subsidy Criteria GREATER ttiIONTICELLO ENTERPRISE FUND GUIDELINES CITY OF i~IONTICELLO 505 WALNUT STREET, SUITE #1 MONTICELLO, MINNESOTA 553b2 (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 purpase by complying with fotu• or more of the criteria noted in the next section. In all cases, it is mandatory that criteria #I 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 ofpublic purpose, this document is designed to outline the process involved in obtaining GMEF financing. CaEFINITION OF PUBLIC PURPOSE "l'o 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 hour, or at least 160% of the federal minimum wage, exclusive of benefits, for individuals over the age of 20 during tl~e term of the assistance. Annual written reports are required until termination date. Failure to meet the job and wage level goals require partial or hill repayment of the assistance with interest. 2. "fo 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 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 oI`thc proposed business as it relates to the comprehensive plan and existing zoning policies, and the potential for adverse enviranmental elfe-cts of the business, if any. 4. 'fo provide loans to be used as a secondary source of financing that is intended to supplement conventional financing (bank financing). ~. To provide loans in situations in which a funding gap exists. 6. rl'o provide funds for economic development that could be used to assist in v obtaanui~ other funds such as Small Easiness Administration loans, federal and state grants, etc. DAWNM/ORD/POLICIES 1°/3°/Oq ~ EDA Business Subsidy Criteria C, THE GREATER MONTICELLO ENTERPRISES REVOLVING L()AN FUND POLICIES I~ 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 jab created, or $5,000 per every $20,000 increase in property market valuation, or $5,000 per every $20,000 increase in personal property ~ISed for business purposes, whichever is higher. • U II. FINANCING METHOD * COMPANION 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.) III. I1SE OF PROCEEDS * Real property acquisition and development * Real property rehabilitation (expansion or improvements) * Machinery and equipment IV. TERMS AND CONDITIONS * LOAN S1LE - Minimum of $5,000 and maximum not to exceed 50% oI`the remaining revaluing loan fund balance; for example, if the remaining revolving loan filed balance is $50,000, the maximum loan issuance is $25,000. * LEVERAGING - Minimum 60% private/public non-GME F I/"Iaxlmum i0% public (GHEE) Nlinimum 10`% equity EDA loan DAWNNVORDipOLIGIE5. 1 pl3p/pp 5 v EDA Business Subsidy Criteria * LOAN TERM - Persona( property term not to exceed life of equipment (generally ~-7 years). Real estate property maximum of ~-year maturity amortized up to 30 years. Balloon payment at 5 years. * INTERF,ST 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 the total loan project.* Fees are to be documented and no duplication of fees between the lending institution and the RLF. Laan fee may be incotparated into project cost. EDA retains the right to reduce or waive Laan 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. * * * PREPAYMENT' POLICY - DEFERRAL OF PAYMENTS - I . LA"1 E PAYMENT POLICY No penalty for prepayment. Approval ofthe EDA membership by majority vote. 2. Extend the 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 immediately called. In addition to any other amounts due on any loan, and without waiving any right of the Economic Development Authority tinder 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 calendar days of the date on which it is due. Furthertnore, interest will continue to accttitc 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, C: * INTERES"T LIMC`CATCON C>N GUARANTEED LOANS- * ASS[.1MAI3ILITY SAW N/WOR~IPOLICIES 10130!00 Subject to security and/or reviewal by EDA. 6 EDA Business Subsidy Criteria C: OF LOAN - None. * BUSINESS EQ[11TY REQUIREMENTS M Subject to type of loan; Board of Directors will determine case by case, analysis under normal lending guidelines. * COLLATERAL - * 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 (reeluires unlimited personal guarantees). * NUN-PERFORMANCE - An approved GMEF loan shall be null and void if finds are not drawn. upon or disbursed within 180 days from date of EDA approval. • A written request is received 30 days prior to expiration of the ] 80-day non-performance date. 2. Approval of the EDA membership by majority vote. * LEGAL FEE _ Responsibility of the GMEF applicant. * NON-PERFORMANCE EXTENSION - The 180-day non-performance date can be extended up to an additional 120 days. The Greater Monticello Enterprise Fttnd is operated as an equal opportunity pt•ogram. All applicants shall have equal access to GMEF fields regardless of race, sex, age, marital status, or other personal characteristics. V. ADDITIONAL CRITERIA FOR LOANS ORIGINATING 'T'HROUGH SMALL.. CITIES ECONOMIC DEVT~;LOPMENT SET-ASIDE GRANT FUNDS * Compliance with lederal labor standards laws, including: ~I„he Davis-L3acon Act, which requires that workers receive no less than the prevailin~~ wages being paid far similar work in the locality when the contract, financed in whole or part with federal fiends, exceeds $2,000; DAWNNVORD~POLICIES 10/30/dp 7 • ~ ED~1 Business Subsidy Criteria '1'h~: Contract Work Hours and Safety Standards Act, which requires that workers receive overtime compensation at a rate of 1-1/2 times 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 Human 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 by LMI persons, defined as a member of a family having an income less than or equal to the Section $low-income limit established. by the U.S. Department of I-lousing and Urban Development (l-IUD). * Compliance with requirements of the National Environmental Policy Act (NEPA) of • 1969, as amended, and preparation. of an Environmental Review Record. Compliance with Section 104(d) of the federal Housing and Community Development Act of 19'4, as amended, which requires that any reduction in LMI dwelling units in the community must be offset by the creation of similar affordable units and relocation assistance to displaced L,MI 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. "berms and conditions far federal money: - Interest Rate: 0% with halloos payment in three years or fixed rate not less than ~% below Minneapolis prime rate with balloon payment in five years. - All other terms and conditions are as outlined in The Greater Monticello Enterprises Revolving Loan Fund Policies, Section 1V, above. LJ DAWN/WORD/POLICIES: 1 °!3°/60 EDA Business Subsidy Criteria . ORGANIZATION The Greater Monticello Enterprise Fund is administered by the City of Monticello Economic Development Authority (EDA), which is aseven-member board consisting of two Council members and tive appointed members. EDA members are appointed by the Mayor and conFrmed 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 Greater Monticello Enterprise Fund. PARTICIPATING LENDING INSTITUTION S .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. 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 APPLICATION/ADMINISTRATIVE PROCEDURES The EDA desires to make the GMEF loan 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 a loan are as follows: City Staft` Duties: The Economic Development Director, working in conjunction with the Assistant City Administrator, shall carry ottt GMEF operating procedures as approved by the F,DA and Council.. Staff is responsible for assisting businesses in the loan application process and will work closely with applicants in developing the necessary information. A lieation Process: Applicant shall complete a preliminary loan application. Staff will review application for consistency with the policies set Forth in the Greater Monticello Fund Guidelines. Staff consideration of the preliminary loan application should. take approximately one week. Staff ~vi(1 ask applicant to contact a lending institution regarding financing needs anal indicate to applicant that further action by the EDA on the potential loan will require indication of support from a lending institution. ?. If applicant gains initial support from lending institution and if the prclitlainary Ioan application is approved, 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 next regularly scheduled meeting of the EDA. DA W N/W OR D/POLIO I Es: 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 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 thereinto 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 tlae EDA to approve a Loan if it is determined by Council that such loan was issued in violation of GMEF guidelines. '1. 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 cotatrol 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. 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 B of the ordinance establishing tlae Monticello EDA). REPORTING Staff shall submit quarterly summaries and/or annual report detailing the status oftlae Monticello Enterprise Fund. FUND GUIDELINES MODIFICATION 1. At a minimum, the I~:DA shall review the Fund Guidelines on an annual basis, No changes to the GNIIF guidelines shall be instituted without prior approval of tlae City Cotuacil. DAWN/WORp/POLICIES: 1 p/30/00 1 • ~ Ir'DA Business Subsidy Criteria LOAN ADMINISTRATION I ~ City staff shall service City loan, shall monitor City position with regard to the loan, and shall assure City compliance with intercreditor agreement. ?~ All loan documents shall include an intercreditor agreement which must include the following: A• Definition of loan default, agreements regarding notification of defar~lt. B. AgreEments beriveen lending institution and City regarding reproduction of pertinent information regarding the loan. 3• All loan documentation shall include agreements between borrower and (enders regarding release of privacy regarding the status of the loan. • DAWN/WARD/POLICIES: 14/30/00 ~ ~ 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 Pro ert Ac uisition and Im rovement 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 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. EDA Agenda - 0$/0$/07 9. New Business: B. Consideration to a rove or den GMEF No. 026 determine business subsid amount for Washburn Com uter Grou .and if a livable call fora ublic hearin . A. Reference and Back round: The EDA is asked to consider approval or denial a request for GMEF real property rehabilitation loan. Should the loan amount exceed $100,000, the EDA must call for a public hearing date of Tuesday, August 21, 2007. I've notified the lender (Gateway Bank) of the need for a letter of creditworthiness, commitment of construction/permanent financing, and need for EDA funds. First, the EDA needs to determine if this GMEF loan application from Washburn Computer Group will encourage economic development. Secondly, the EDA must determine if the preliminary real property rehabilitation loan application complies with the EDA Business Subsidy Criteria -GMEF Guidelines. Lastly, the EDA must determine the amount, terms, and fee of the loan for approval. The company was interested in utilizing the federal dollars payback from the Twin City Die Cast MIF Loan; however and given, the job application form for low to moderate income households is only for new applicants (jobs) combined with wage level of $10 , the maximum amount of $96, ODO (6 x $16, D00) at the lower interest rate/term does not off-set the extra costs incurred by the company to comply with the David Bacon Act and other regulations. The company was also interested in utilizing the MIF state dollars; however and given the wage level of $10 per hour, the maximum amount of the loan would be $48, 000 (6 x $8, 000). The payback retained by the City of Monticello would be $9, 600 in principal plus interest (20% of principal and interest payback.) I would not recommend the City of Monticello apply for aonce-a year state grant for a retaining payback as estimated. For these reasons, I recommended the EDA commissioners consider the option of the job creation date as January 2007. The City Council will consider ratification of the EDA's action for compliance of the EDA- GMEF Business Subsidy Criteria on August 27, 2007, following the EDA public hearing of August 21, 2007. If approved, the GMEF will be disbursed at a date yet to be determined. • EDA Agenda - Q8/08/07 • B. Alternative Action: 1. A. A motion to approve GMEF Loan No. 026 far Washburn Computer Group in the amount of $ with team and conditions as recommended at the meeting. Collateral, guarantees, and other condition requirements to be determined and prepared by the GMEF attorney. The GMEF loan approval subject to Public Hearing on Business Subsidy, lender commitment, credit worthiness letter, building plan approval, and Council ratification of EDA action. B. Should the amaunt of GMEF No. 026 exceed $100,000, the EDA hereby calls for a public hearing on August 21, 4:00 p.m., City Hall for the proposed business subsidy to Washburn Computer Group. 2. A motion to deny GMEF Loan No. 026 for Washburn Computer Group. 3. A motion to table any action. C. Recammendation: Recommendation is for Alternative No. 1 A. The amount of the loan and terms to be determined by the EDA in compliance with the Guidelines. The amount of the loan can be determined by number of jobs, value of jobs or property, or fund balance. As noted early, the question for the EDA is what date to consider for creation of jobs? January 2007 or application date July 11. Recommendation were suggested under agenda item 8. Should the amount be $100,000 or exceed $100,000, please call for the public hearing Alternative No. 1B. It should be understood the disbursement of the EDA dollars will only take place if the company is successful at attaining their new customer resulting in the need for expansion. This loan is not for the sole purpose of improvements to existing facility. D. Su ortin Data• None. • _ . EDA Agenda - 08/08/07 9.C Consideration to review the new ci bud et worksheets and acre t the 2008 EDA Preliminary„ Budget. A. Reference and„background: The City Finance Department revised the budget worksheets for staff members to complete for their individual departments. I believe the new worksheets were designed based on suggestions in accordance of the general accepted accounting principles (GAAF), the Governmental Accounting Standards Board (GASB), and as a guide for long term planning of the city. The EDA worksheets were completed by the Executive Director and returned to Paula Mastey, Senior Accountant, prior to the deadline date of July 18. The preliminary budget requests are based on proposed economic development plans which in the past were a part of the Economic Development General Fund and not under the EDA. For your information, the Finance Department is aware of the commissioners motion to apply the final, remaining $100,000 Liquor Store balance toward the 2008 budget. B. Alternative Action: 1. A motion to accept the 200$ Preliminary Budget Worksheets for the EDA. 2. A motion to not accept the 2008 Preliminary Budget Worksheets for the EDA. A motion of other. 4. No motion required. C. Recommendation. I encourage your comments and questions. Given the EDA did not met prior to the July 18 deadline, no discussions were exchanged among the commissioners relative to possible economic development objectives. Combine this with. the unknown of a potential merger between the EDA/H1tA, no recommendation is given. D. 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