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EDA Minutes 01-23-1996MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY ANNUAL MEETING Tuesday. January 23, 1996 - 7:00 p.m. City Hall MEMBERS PRESENT: Chairperson Ron Hoglund, Vice Chair Barb Schwientek, Tom Perrault, AI Larson, and Bill Demeules. MEMBERS ABSENT: Harvey Kendall and Clint Herbst. STAFF PRESENT: Treasurer Rick Wolfsteller and Executive Director 011ie Koropchak. I. CALL TO ORDER, Chairperson Hoglund called the EDA Annual Meeting to order at 7:15 p.m. 2. CONSIDERATION TO APPROVE THE NOVEMBER 28. 1995 EDA MINUTES. AI Larson made a motion to approve the November 28. 1995 EDA minutes. Barb Schwientek seconded the motion and with no corrections or additions, the minutes were approved as written. C 3. CONSIDERATION TO ELECT 1996 EDA OFFICERS. GDA members were informed of the January Council meeting wherein Councilmembers waived the residency requirement for Commissioner Hoglund and re -appointed Hoglund for a five-year term on the EDA. In order to comply with EUA Ordinance Amendment No. 172. Section 2-3-2: Annual Election of Officers: Chairperson Hoglund called for nomination from the floor. Barb Schwientek made a motion nominating the 1995 EDA officers for re- election. Nomination for election as follows: President Ron Hoglund Vice President Barb Schwientek Treasurer Rick Wolfsteller Assistant -Treasurer Harvey Kendall Secretary 011ie Koropchak Al Larson seconded the motion and with no other nominations or further discussion, nominations ceased. The motion electing 1996 EDA Officers passed 5-0. Page I EDA MINUTES JANUARY 23, 1996 Koropchak reviewed the Statement of Revenues, Expenditures and Changes in Fund Balance for the year ended December 31, 1995, noting the $50,000 revenue transferred from the Liquor Fund. This transfer for disbursement of GMEF Loan No. 010 (Vector Tool.) Approved GM EF Loan No. 009 (H -Window) was withdrawn and approved GMEF Loan No. 011 (Tapper's) was not disbursed in 1995. Other revenues included interest income of $16,956.88 (Notes), $2,900.00 (Investment Estimate), and a minus $474.05 (investment Previous Years Adjustment.) The $750 revenue was the loan fee collected from Vector Tool and the miscellaneous revenue of $1,275 was the annual administration and service fees collected from the Wright County/Standard Iron and CMIF/Standard Iron loans. Expenditures included legal fees of $1,257.(X)to Attorney Weingarden for services render in preparation of the loan documents for GMEF No. 008 and the SCERG. The Professional Fee of $I 12.50 to Public Resource Group, Inc. for naming the Vector Tool amortization schedule and the Service Fee of $60,00 to Marquette Bank for servicing GMEF No. 001 (Tapper's.) Total revenues over total expenditures was $69,978.33for a end -of - year balance of $729.853.94. Next the EDA reviewed the Balance Sheet of December 31, 1995, starting at the Fund Equity of $729,853.94 and the Total Assets of $729,853.94. Included in the Total Assets were Appropriations Receivables of $2(X).000, Notes Receivable in the amount of the remaining principal of each GMEF loan, and Cash -in -Bank of $202,495.31. The proposed 1996 budget or 1996 Cash Flow Projection was reviewed. Beginning with a Cash Balance of S202,495.31. Receipts included Appropriations of $200,000, Loan Paybacks (principal and interest), and Interest Income (Investment), Loan Fees, and Miscellaneous for a Total Beginning Balance and Receipts of $454,161.17. Expenditures included loan disbursements of $200,(1(X) and Legal and Service Fees for Total Expenditures of $201,150.00. Expected Cash Balance, December 31, 1996 is $253,011.17. Lastly, the EDA reviewed the Annual Activity Report. The EDA recommended the Executive Director draft a letter of explanation to the H -Window Company relating to the $1,257.00legal fee from Attorney Weingarden and requesting payment. The letter noting the GMEF Guidelines, Provision IV., Page 2 EDA MINUTES �. JANUARY 23, 1996 Non -Performance and GMEF Legal Fees, the responsibility of the GMEF applicant. Additionally, the EDA recommended that future amortization schedules be printed internally to avoid unnecessary expenditures. Al Larson made a motion to accept the 1995 Year -End EUA Financial Statements and Activity Report. and the 1996 Proposed Budget. Tom Perrault seconded the motion and with no further discussion. the motion passed 5-0. For compliance of the GMEF Guidelines, the EDA year-end reports will be submitted to the City Council for acceptance on February 12. 1996. 5. CONSIDERATION TO REVIEW YEAR-END FUND BALANrFc_ or 'jjg GMEF_ UDAG. AND ERG FUNDS. Koropchak informed EDA members that all GMEF loan paybacks are current as. well as, the UDAG and SCERG loan paybacks. With the withdrawal of GMEF Loan No. (8)9 and the SCERG by the H -Window and the disbursal of approved GMEF Loan No. 011 (rapper's) in 1996. the year-end GMEF Appropriation Balance is $150.000. Koropchak summarized the EDA available sources of funds: GMEF. $202,495.31: UDAG, $132,047.00:and SCREG-Aroplax. $94.205.67for a subtotal of $428.747.98. With the addition of the 1996 Liquor Fund Appropriation of $Irul (ultl, the Intal available sources of funds is $528.757.98. It was noted that the approved $100,000 loan for Tapper would be transferred from the UDAG Fund. The EDA acknowledged review of the year-end fund balances of the GMEF. UDAG, and ERG Funds. 6. CONSIDERATION TO REVIEW FOR APPROVAL THE PRELIMINARY GMEF LOAN APPLICATION FROM STANDARD IRON & WIRE WORKS. INC_ Koropchak recommended the EDA members review the preliminary GMEF Loan application from Standard Iron & Wire Works, Inc for approval. Recommendation is to table approval of the final (formal) application until selection of a lender and submittal of current company financials for analysis. Bill Demeules refrained from all discussions of the preliminary loan request. The request is for an equipment loan of $70,000, amortized over five years. The $70.000 would apply toward the purchase of a laser cutting machine. An application has been submitted to the CMIF req testing a $60,000 equipment loan. Currently. Page 3 EDA MINUTES JANUARY 23, 1996 the company is seeking a lender from a field of prospects including First Bank, Norwest, and First National of Sauk Centre. With the proposed purchase of a laser cutting machine, press brake, and horizontal machine center, the company projects the hiring of 14 new employees at an average wage of $10.30 not including benefits. Koropchak noted no increase of property tax is anticipated as no building expansion is planned, increase of taxes is not a mandatory requirement of the GMEF Guidelines. Secondly. Koropchak noted the need to request a shared -second position with the CMIF or accept a third position behind the CMIF. Lastly, Koropchak noted the company is a major industrial employer, has an excellent working relationship with the City, and the 1993 $75,OOOGMEF. $50,OOOCMIF. and $250,OOOState loan paybacks are all current. EDA members, with the exception of Demeules, agreed to the approval of the preliminary GMEF application. Based on the face -value character of the company, Al Larson made a motion to approve GMEF Loan No. 012 for Standard Iron. The $70,000 equipment loan at a 6.5% fixed interest rate amortized over seven years. Loan fee not -to -exceed S1,050, GMEF legal fees the responsibility of the applicant, prefer shared -second position with the CMIF but will accept a third position if necessary. Collateral, guarantees. and other condition requirements to be determined and prepared by the GMEF Attorney. GMEF Loan No. 012 becomes null and void July 23. 1996. The loan is subject to lender and CMIF commitment and approval. Approved Loan No. 012 to be disbursed from the Liquor Appropriation Fund. Tom Perrault seconded the motion. Discussions noted the approved $100.000 GMEF Loan No. Oil borrowed $50,000 from the 1996 Appropriation leaving a GMEF Balance of $150.000, Upon disbursal of Loan No. 012. the remaining GMEF balance will be $80,000. With no further discussions, the motion passed. Yeas: Al Larson, Tom Perrault, Barb Schwientek, and Ron Hoglund. Nays: None, Abstention: Bill Demeules. Absent: Harvey Kendall and Clint Herbst. The City Council will consider ratification of the EDA's approval of GMEF Loan No. 012 for Standard Iron on February 12, 1996, OTHER BUSINESS. a) Update of GMEF Loan No. 009 (H -Window) - The EDA acknowledged receipt of the letter from the 11 -Window Company withdrawing its interest to pursue funding from the approved SCREG and GMEF. b) Update of GMEF Loan No. 011 (Z'apper's) - Steams County National Bank is the lender, not Marquette Bank as originally thought. No building or site pans have been received by the City for review and approval. c) Other - None. Page 4 EDA MINUTES JANUARY 23, 1996 8. ADJOU NMENT. Al Larson made a motion to adjourn the EDA meeting. Tom Perrault seconded the motion and with no further business, the EDA meeting adjourned at 8:05 p.m. 011ie Koropchak, Executive Director G V ` Page 5