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IDC Agenda 03-18-1993• AGENDA MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, March 18, 1993 - 7:00 a.m. City Hall MEMBERS: Chairperson John McVay, Vice Chairperson Kevin Doty, Treasurer Ron Hoglund, Shelley Johnson, Don Smith, Lowell Schrupp, Arve Grimsmo, Jay Morrell, Harvey Kendall, Ken Maus, Dennis Taylor, Dave Peterson, Linda Mielke, Tom Lindquist, Steven Lemme, Merrilyn Seefeldt, Cyndie Johnson, Mary Micke, and Dr. Glenn Nemec. STAFF: Rick Wolfsteller, Jeff O'Neill, and Ollie Koropchak. 1. CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE FEBRUARY 18, 1993 IDC MINUTES. 3. CONSIDERATION TO HEAR AND ACCEPT THE IDC FINANCIAL REPORT. 4. CONSIDERATION OF PROSPECT UPDATES: a) Custom Canopy b} All-Temp Distribution c) Wilson Tool International d) Mike Langer e) Jim Thompson f) Kevin Kloeppner g) Perf-form Products, Inc. BRE UPDATES: a) Membership Contact Updates b) BRE Breakfast, Thursday, April 22. c) Volunteers for April 7 Site Visit. 5. CONSIDERATION TO REVIEW IDC ORGANIZATIONAL LENGTH OF MEMBERSHIP TERMS. 6. CONSIDERATION TO REVIEW THE GMEF YEAR-END FINANCIAL REPORTS AND THE UDAG AND ERG ACCOUNT BALANCES. 7. OTHER BUSINESS: a) Monticello Chamber After Hours, today, 4:30 - 6:30 p.m., Monte Club. b) Minnesota Business Property Taxpayers "Day at the Capitol", March 25, 7:30 a.m. - 1:30 p.m. c) City Permit Fees. 8. ADJOURNMENT. . MINUTES MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE Thursday, February 18, 1993 - 7:00 a.m. City Hall MEMBERS PRESENT: Chairperson Shelley Johnson, Vice Chairperson Don Smith, Treasurer Ron Hoglund, Arve Grimsmo, Ken Maus, Dennis Taylor, John McVay, Dave Peterson, Kevin Doty, Steven Lemme, Cyndie Johnson, Mary Micke, and Dr. Glenn Nemec. MEMBERS ABSENT: Lowell Schrupp, Jay Morrell, Harvey Kendall, Linda Mielke, Tom Lindquist, and Merrilyn Seefeldt. STAFF PRESENT: Ollie Koropchak. STAFF ABSENT: Rick Wolfsteller and Jeff O'Neill. 1. CALL TO ORDER. Chairperson Johnson called the IDC meeting to order at 7:00 a.m. • 2. CONSIDERATION TO ELECT 1993 IDC OFFICERS: CHAIR, VICE-CHAIR,_ AND TREASURER. Chairperson Johnson opened the floor for nominations of IDC officers. Don Smith informed members that he and Mr. Johnson previously discussed Mr. Johnson's desire to stepdown as IDC Chairperson and the need for the IDC to move forward. Based on those previous discussions, Mr. Smith then nominated John McVay as IDC Chairperson, Kevin Doty as IDC Vice Chairperson, and Ron Hoglund as IDC Treasurer. With no other nominations from the floor, Chairperson Johnson ceased nominations and by membership consensus the nominated individuals were elected as 1993 IDC officers. IDC members expressed their appreciation and thankfulness to Mr. Johnson for his years of excellent service and leadership. 3. CONSIDERATION TO APPROVE THE JANUARY 21, 1993 IDC MINUTES. Mary Micke made a motion to approve the January 21, 1993 IDC minutes. Seconded by Kevin Doty and with no additions or corrections, the minutes were approved as written. 4. CONSIDERATION TO HEAR AND ACCEPT THE IDC FINANCIAL REPORT. Since the January balance of $18,022.42, Treasurer Hoglund • reported interest of $43.47 and disbursements of $15,634.14, City of Monticello; $13.80, BRE Genereux Tour; and $25.25, Prospect Visit (Harvey Kendall mileage. Current IDC balance IDC MINUTES FEBRUARY 18, 1993 is $2,392.70. John McVay made a motion to accept the February IDC Financial report. Seconded by Arve Grimsmo and with no further discussion, the report was accepted as given. With the noted IDC balance, Koropchak proposed requesting the City Administrator transfer the City's 1993 budgetary contribution to the IDC. 5. CONSIDERATION OF PROSPECT UPDATES: a) Custom Canopy - Koropchak reported having received the executed TIF Preliminary Agreement, $5,000 check, and GMEF Preliminary Application request of $100,000 from Custom Canopy. The estimated development cost is $467,000 and will create 13-16 jobs. Prior to authorization to establish a TIF District, the existing facility will be visited, a copy of land purchase agreement and bank commitment will be secured. The financial package will consist of TIF pay-as-you-go, GMEF, bank, and equity sources. The company is considering Lot 6, Block 2, Oakwood Industrial Park or property in the Monticello Commerce Center. Koropchak informed IDC members that city staff is • scheduled to meet this afternoon with Mr. Charlie Pfeffer, his planner, and Dennis Taylor. The presentation will consist of preliminary concept plans for development of the Monticello Commerce Center area. Thereafter, the intent is to invite Mr. Pfeffer to the March IDC meeting. Based upon the GMEF $100,000 request, Don Smith referenced Mayor Maus' comment that "the GMEF was created for emergency/gap financing and the Liquor Fund source may run dry" and requested a report of the GMEF accounts . b) Wilson Tool International - Mr. Kendall, Mr. Hoglund, and Koropchak visited Wilson Tool in White Bear Lake on January 26. The company manufacturers tool and die press punches, appears to be well-management, and is a quality company similiar to Remmele Engineering. Two financial options were offered in the submitted $2,155,000 packaging proposal. Upon the direction of the EDA, a $400,000 interest-free REA loan was not part of the package. Tam Emery visited industrial sites in Monticello, Saturday, January 30, as expressed through the enclosed letter. Monticello remains in the running as Mr. Emery was impressed with our location. Faribault and Owatonna are other Minnesota communities being researched. Wilson Tool reports a delay of two to three weeks before site selection consideration. In response to Mr. Doty's question of the potential use of Industrial Page 2 • IDC MINUTES FEBRUARY 18, 1993 Revenue Bonds, Koropchak reported she had inquired of the same question to BDS. As per BDS, Industrial Revenue Bonds were not part of the financial package because of the current lack of sellability. The IDC suggested utilizing the REA program to further encourage Wilson Tool. c) All-Temp Distribution - A meeting has been scheduled for February 23 with the Hoglund Family, the City Engineer, Mr. Holman, BDS, and city staff to discuss potential development of the Hoglund Property. Mr. Holman's proposed 50,000 sq ft refrigerated facility requires the need for rail now and in the future. Lunch has been scheduled for 12:30 p.m. at the River Inn and Koropchak asked for volunteers to join. Don Smith, Shelley Johnson, and John McVay responded. d) Perf-form Products, Inc. - This Big Lake company proposed to construct a 6,000 sq ft facility at a cost of $140,000 in Elk River. Due to an unwilling seller, the company owner has expressed an interest in the City's small lots along Dundas Road. Koropchak informed IDC members that Council would be considering a new agreement between the City and The H-Window regarding the six city-owned lots. . Originally in 1990, a First-Right-of-Refusal was placed on Lots 1, 2, and 3. And in 1991, a resolution was adopted holding Lots 1, 2, 3, 4, 5, and 6 for The H- Window. This expired December 1992. The proposed agreement extends the holding of the three-westernly lots and places a first-right-of-refusal on the three- easternly lots through May, 1993; thereafter, a decision by the H-Window or Norwegian Board of Directors will assist in determining the June 1 land holding or purchase option agreement. Council or city staff will also need to determine a purchase price for the property. Mr. Lemme approved of the proposed agreement and informed the IDC that the Norwegian Board of Directors look at the broad picture and their long-term needs. Although, the company owns 10 acres at their present site they wish to prevent becoming landlocked. Plans are for a one million dollar expansion late fall/early spring along with the announcement of a new product line. The company remains interested in Monticello and highlights its excellent work force as a leading determinant. The IDC extended an offer to assist with the Norwegian Board of Directors visit in May. Mr. Lemme appreciated the IDC offer. e) Circuit Technology, Inc. - Koropchak reported she followed through on the expressed Seefeldt interest to • Page 3 IDC MINUTES FEBRUARY 18, 1993 lease space to Circuit Technology. However, the two parties have not met nor has arrangements for a meeting been made. f) Recreational Parts and Equipment - Upon the HRA's decision to assist the company through the TIF pay-as- you-go financial method based on tax increments generated by the warehouse only, Koropchak telephoned the company in Maryland. The officials plan a Minnesota visit in the near future. g) Commercial Greenhouse - Koropchak reported Mr. O'Neill was to set up a meeting with township or county officials regarding this development and others-of-liking as outlined in the Economic Work Plan. John McVay informed the IDC of the company's interest in properties near Prairie Acres (south of Monticello) and in Becker. BRE UPDATE: a) Genereux Tour Feedback - Members who toured the facility viewed the operation as very impressive and noted Mr. Tapper's enthusiasm of his business. b) BRE Breakfast - The BRE Breakfast date has been confirmed for April 22 at the Riverwood Conference Center starting at 7:30 a.m. Koropchak noted the letter mailed to twenty-seven industrial businesses referencing the upcoming breakfast date. The BRE Committee will plan and host the breakfast. Mr. McVay offered to inquiry of NSP's interest to co-sponsor the breakfast. 6. CONSIDERATION TO REVIEW COMMITTEE VOLUNTEER LIST AND A BRIEF BRE VTSTT ORIENTATION. Koropchak presented IDC members with a copy of the 1993 IDC Committees and BRE Program listings as prepared from the returned volunteer sheets. Members were assigned according to their request and were asked to review the list for accuracy. Team BRE groups are responsible far coodinating their respective visits or contacts. Next, Koropchak presented members a copy of the BRE objectives and suggested tasks, and highlighted the first task: Invite and/or accompany your assigned business representative to the BRE Breakfast on April 22 and to encourage the sharing of something about the business or business representative. Don Smith, a leader and strong supporter of the BRE program, encouraged members to make two-three contacts during the year. Adding, a developed BRE relationship enhances the creditability for our committee and the City of Monticello. Page 4 IDC MINUTES FEBRUARY 18, 1993 7. CONSIDERATION OF STAR RECERTIFICATION DATES: a) Koropchak noted the 1992 Activity Report enclosed with the agenda and commended the IDC on their accomplishments. Required Star Recertification materials were mailed on Friday, February 12, to meet the 16th deadline. b) Koropchak noted the 1993 Community Profile is currently being updated and will be submitted Friday, February 19, to meet the MTED deadline for annual publication. c) Koropchak noted the enclosed letter establishing April 7, 3:00 p.m. as Star Recertification Site Visit date for the City of Monticello. IDC members will be solicited at the next meeting far participation in the site visit. 8. OTHER BUSINESS. a) Consideration to review proposed City Permit Fees - Koropchak presented IDC members with a copy of the City Permit Fees to be reviewed by the City Council on Monday night. Dr. Nemec questioned the rationale of a $10,000 deposit for landscaping when the Hart Clinic's total landscaping costs were approximately $4,500. Due to the short notice, members were encouraged to contact city staff or elected officials regarding permit fee comments or questions. b) Consideration to review proposed City/H-Window Land Option Agreement - Covered under agenda item number 5d. c) Chamber General Membership Meeting, 11:50 a.m., American Legion. Program is discussion of Chamber meeting's when and how to. Cyndie Johnson briefed members on a proposed bill regarding industrial-transportation packaging. 9. ADJOURNMENT. The IDC meeting adjourned at 8:25 a.m. ~,(~,~~ Ollie Koropchak, IDC Ex~utive Director • Page 5 r INDUSTRIAL DEVELOPMENT COMMITTEE LENGTH OF MEMBERSHIP TERM: Members shall serve for three year terms on a three year rotating basis so that approximately one- third of the membership expires each year. Individuals wishing to continue serving on the committee may so indicate prior to the expiration of their term. Any member wishing to relinquish his/her position on the IDC may do so by submitting a letter of resignation. TERM December 1993 December 1994 December 1995 MEMBER Linda Mielke Merrlyn Seefeldt Dave Peterson Arve Grimsmo Ron Hoglund Kevin Doty Steven Lemme Dennis Taylor Jay Morrell Shelley Johnson Ken Maus Tom Lindquist John McVay Harvey Kendall Lowell Schrupp Don Smith • MONTIGLLLO ECONOMIC DEVELOPMENT AUTHORITY GREATER MONTICELLO ENTERPRISE FUND (GMEF) Balance Sheet December 31, 1992 ASSETS Cash in Bank Notes Receivable - Tapper's Inc. Notes Receivable - Muller Theater Notes Receivable - SMM, Inc. Notes Receivable - Aroplax Corp. Appropriations Receivables - 1991 UDAG 1992 UDAG 1992 Liquor Fund TOTAL ASSETS FUND EQUITY .Fund Balance Reserved for Participation Loans (Economic Development) TOTAL LIABILITIES AND FUND EQUITY $ 32,822.33 83,257.09 47,685.62 49,871.18 83,967.86 65,000.00 20,000.00 115,000.00 $497,604.08 $497,604.08 $497,604.08 • • MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY GREATER MONTICELLO ENTERPRISE FUND (GMEF) Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended December 31, 1992 REVENUES Appropriations - 1992 Liquor Fund 1992 UDAG Interest Income - Notes Interest Income - Investment Loan Fees TOTAL REVENUES EXPENDITURES Legal Fees Service Fees Int. Adjustment - Notes TOTAL EXPENDITURES • Excess of Reven~zes Over Expenditures FUND BALANCE - Beginning of Year FUND BALANCE - End of Year $115,000.00 20,000.00 11,006.26 696.78 2,085.00 $148,788.04 $ 977.50 210.OC 1.74 $ 1,189.24 $147,598.80 $350,005.28 $497,604.08 • • MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY GREATER MONTICELLO ENTERPRISE FUND (GMEF) 1993 Cash Flow Projection BEGTNNING CASH BALANCE, January 1993 RECEIPTS Appropriations, Expected $200,000.00 Notes Amortization Payments - Tapper's Inc. ($736.07 Mo.) 8,832.84 Muller Theatre {$418.22 Mo.) 5,018.64 SMM, Inc. ($316.32 Mo.) 3,795.84 Aroplax Corp. {$1,241.73 Mo.) 14,900.76 Interest Income - Investment 700.00 Loan Fees 3,000.00 TOTAL RECEIPTS TOTAL BEGINNING BALANCE AND RECEIPTS EXPENDITURES •GMEF Loans - Custom Canopy All-Temp Distribut Wilson Tool Intern Legal Fees Service Fees TOTAL EXPENDITURES $ 35,000.00 ion 75,000.00 ational 90,000.00 3,000.00 315.00 EXPECTED CASH BALANCE, December 1993 $ 32,822.33 $236,248.08 $269,0?0.41 $203,315.00 $ 65,755.41 • GMEF LOANS March 1?, 1993 Economic Development Authority (EDA) was created in 1989. USES Tapper (1990) Muller (1990) SMM (1992) Aroplax (1992) TOTAL USES $ 88,000.00 $ 50,000.00 $ 50,000.00 $ 85,000.00 $2?3,000.00 SOURCES Liquor Fund 1991 to GMEF 1992 to GMEF Total Liquor Fund $ 73,000.00 $115,000.00 $188,000.00 UDAG 1991 to GMEF 1992 to GMEF Total UDAG • TOTAL SOURCES $ 65,000.00 ~ 20,000.00 $ 85,000.00 $273,000.00 C: • • UDAG FINANCIAL REPORT March 17, 1993 PAYBACK BEGAN IN JANUARY 1988 FOR 12 YEARS ENDING IN JANUARY 2000. ANNUAL PRINCIPAL AND INTEREST PAYBACK TOTAL IS $27,971.40. ORIGINAL PAID $ 98,953.68 ~ 43234.27 $142,187.95 REMAINING $158,004.03 4L 35, 464.82 $193,468.85 Principal Interest TOTAL $256,957.71 $ 78 X699 . 09 $335,656,80 REVENUES Principal Payback Interest Payback Interest Income - Investment 1990 1991 1992 TOTAL REVENUES $ 98,953.68 $ 43,234.27 $ 3,562.62 $ 8,593.59 $ 8436.32 $162,780.48 EXPENDITURES 1991 Transfer to GMEF $ 65,000.00 1992 Transfer to GMEF ~S 20000.00 TOTAL EXPENDITURES $ 85,000.00 FUND BALANCE FOR ECONOMIC DEVELOPMENT January 31, 1993 $ 77,780.48 • LJ STATE ECONOMIC RECOVERY GRANT March 17, 1993 PAYBACK BEGAN TN DECEMBER 1992 FOR 7 YEARS ENDING IN NOVEMBER 1999. ANNUAL PRINCIPAL AND INTEREST PAYBACK TOTAL IS $29,801.40. FIRST $100,000 PRINCIPAL PAYBACK ENDS APRIL 1997. PAID Principal Interest TOTAL $170,000.00 $ 37,969.92 $207,969.92 $ 5,327.90 S 2.122.45 APRIL 30~ 1997 Principal Interest TOTAL $170,000.00 $ 37,969.92 $207,969.92 Principal Interest Interest Income - Investment TOTAL REVENUES EXPENDITURES Transfer to GMEF TOTAL EXPENDITURES $ 7,450.35 GMEF $ 99,400.23 S 31.803.44 $131,203.67 $ 5,327.90 $ 2,122.45 ~ 0 $ 7,450.35 $ 0 $ 0 FUND BALANCE FOR GMEF, March 17, 1993 REMAINING $164,672.10 S 35.847.47 $200,519.57 STATE $ 70,599.77 $ 6,166.48 $ 76,766.25 $ 7,450.35 LJ 1993 GMEF PROJECTIONS (No Interest Income - Investmennt) GMEF CASH BALANCE, January 31, 1993 UDAG CASH BALANCE, January 31, 1993 STATE ERG CASH BALANCE, March 17, 1993 GMEF BALANCE, January 31, 1993 LOAN DISBURSEMENTS AND TRANSFERS Custom Canopy, April 1993 $ 42,500.00 GMEF BALANCE Transfer from Liquor Fund Appropriation GMEF BALANCE Wilson Tool, July 1993 $100,000.00 GMEF BALANCE Transfer from Liquor Fund Appropriation GMEF BALANCE All-Temp, July 1993 ~ 80,000.00 $222,500.00 GMEF BALANCE PROJECTED PAYBACK ~3DAG, January 31, 1994 STATE ERG, January 31, 1994 GMEF, January 31, 1994 Tapper $ 8,832.84 Muller $ 5,018.64 SMM $ 3,795.84 Aroplax $ 14,900.76 $ 32,548.08 TOTAL PROJECTED PAYBACK GMEF BALANCE, January 31, 1994 $125,ooa.ooo $ 60,000.00 $185,000.00 $ 27,971.40 $ 24,834.50 $ 32,548.08 $ 85,353.98 $ 32,822.33 $ 77,780.48 ~ 7450.35 $118,053.16 $ 75,553.16 $200,553.16 $100,553.16 $160,553.16 $ 80,553.16 $165,907.14 • GMEF LOANS GMEi LOAN N0. 001 - TAPPERS BALLOONED IN 7 YEARS. ($736.07) 8-13-90 $ 2,944.28 91 8,832.84 92 8,832.84 93 8,832.84 94 8,832.84 95 8,832.84 96 8,832.84 97 5,888.56 BALLOON PAYMENT 70,989.14 PAYBACK $132,819.02 $88,000 8~ AMORTIZED 20 YEARS GMEF LOAN N0. 002 - MULLER THEATRE $50,000 8ro AMORTIZED 20 YEARS BALLOONED IN 5 YEARS. ($418.22) 12-1-90 $ 418.22 91 5,018.64 • 92 5,018.64 93 5,018.64 94 5,018.64 95 4,600.42 BALLOON PAYMENT 43,762.79 PAYBAC:{ $ 68,855.99 GMEF LOAN N0. 003 - NULL AND VOID GMEF LOAN N0. 004 - BARGERS $50,000 4.59b AMORTIZED 20 YEARS BALLOONED IN 5 YEARS. ($316.32) 12-1-92 $ 316.32 93 3,795.84 94 3,?95.84 95 3,795.84 96 3,795.84 9? 3,479.52 BALLOON PAYMENT 41,350.00 PAYBACK $ 60,329.20 • GMEc LOAN N0. 005 - SCHOENS $85,000 6o AMORTIZED ? YEARS ($1,241.73) 12-1-92 $ 1,241.73 93 14,900.76 94 14,900.76 95 14,900.76 96 14,900.76 97 14,900.76 98 14,900.76 99 13,338.57 PAYBACK $103,984.86 11-24-92 PREPARED BY OLLIE KOROPCHAK GMEFLOAN.ACC • Council Agenda - 3/8/93 7. Consideration of reviewing year-end liquor store financial reports. (R.W.) A. REFERENCE AND BACKGROUND: Enclosed you will find the year-end liquor store financial report outlining revenues and expenditures for the year, along with net income. The report compares revenues and expenditures with the previous year, 1991. Joe Hartman, along with myself, will be at the Council meeting to answer any questions you may have concerning this report. To briefly summarize, sales for the year were up approximately 5.8% over last year to $1,494,000. The cost of goods sold also increased 6%, but our gross profit still, dollar-wise, was up $16,395 over 1991. Although the gross profit did increase, so did expenses by $24,300, resulting in an operating income of $143,758, which was approximately $8,000 less than last year. When reviewing the gross profit percentages, overall gross profit percentages of 23.2% is in line with our expectations, although we are investigating the wine gross profit, as it appeared a little low. Overall operating income i percentage at 9.62% of sales is slightly under what we had hoped for in the 10% range. As you will also note, the report indicates that $720,417 was transferred from the liquor fund during the year. An amount o has been transferred to date for the public works building expansion project, and has been utilized for the revolving loan fund loans to Aroplax and part of Suburban Manufacturing's loan. After taking into account these transfers, the liquor fund still has approximately . Part of the $280,000 surplus has been earmarked for additional revolving loan funds totaling $115,000, and there will also be additional transfers necessary when the public works building is finalized. No specific action is needed by the Council other than review of the year-end report as presented. • 13 • 1993 INDUSTRIAL EMPLOYMENT COMPANY 1993 1992 SUR BRE NSP NUCLEAR PLANT 340 330 +10 SUNNY FRESH FOODS 175 180 -5 FSI 125 165** -40 BONDHUS 91 90 +1 FINGERHUT 84 ?7** +? REMMELE ENGINEERING 60 60 - NSP TRAINING CENTER 43 +43 GENEREUX FINE WOOD PRODUCTS 40 23 +17 ELECTRO INDUSTRIES 38 35** +3 M & P TRANSPORTS 35 38** -3 • THE H-WINDOW 32 30 +2 ABK, INC 32 45 -13 AROPLAX CORPORATION 25 JONES MANUFACTURING 25 20 +5 HOGLUND BUS COMPANY 25* 25 - DAHLHEIMER DISTRIBUTION 24* 24 - SUBURBAN MACHINE & MFG 22 BRIDGE WATER TELEPHONE 22* 22 - LINTER CORPORATION 21 +21 RAINBOW ENTERPRISES 12 12 - AUTOMATIC GARAGE DOOR 11* 11 - NSP SERVICE CENTER 11 11 - TIRE SERVICE EQUP MFG 8* 8 - • CLOW STAMPING 6* 6 - • LAKE TOOL, INC AME READY-MIX HOGLUND TRANSPORTATION SMA ELEVATOR CONSTRUCTION TOTALS NET NEW JOBS 50 NET BRE JOBS 48 TOTAL NET JOBS 98 * 1992 SURVEY ** 1991 SURVEY r 1 3 2* 2 1,312 1,214 +48