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EDA Minutes 04-23-1991C_ MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Tuesday, April 23, 1991 - 7:00 PM City Hall MEMBERS PRESENT: Chairperson Ron Hoglund, Barb Schwientek, Bob Mosford, Brad Pyle, Clint Herbst, and Al Larson. MEMBERS ABSENT: Harvey Kendall. STAFF PRESENT: 011ie Koropchak. 1. CALL TO ORDER. Chairperson Hoglund called the EDA meeting to order at 7:00 PM. 2. CONSIDERATION TO APPROVE THE JANUARY 29, 1991 EDA ANNUAL MEETING MINUTES. C Barb Schwientek made a motion to approve the January 29, 1991 EDA Annual meeting minutes, seconded by Bob Mosford and without comment or corrections the minutes were approved and filed as written. 3. CONSIDERATION TO REVIEW THE REVISED 1990 EDA FINANCIAL STATEMENTS. a) Accountability of Remaining Committed $62,000 GMEF Balance - In the revised Balance Sheet, the EDA's assets consist of cash in bank, notes receivable for Tapper's and Mueller Theatre, and the $62,000 appropriations receivable from the Liquor Fund. Fund equity means the reserved funds for participation loans and includes the liabilities. Additionally, the members received a copy of the EDA statement of revenues and expenditures. The Cash Flow Projection was based on the assumption of an additional committed $100,000 appropriation. The EDA recognized the statement to be a projection and a projection only. b) Consideration of the Bank to Reduce the GMEF Bank Service Fee - Koropchak reported that Mr. Wolfsteller in his discussions with Wright County State Bank was able to reduce the GMEF Bank service fee from $20.00 to $10.00 per month. C) Financial Report Consistent to Accounting Procedures - With the revised EDA Financial Statements being consistent with accounting procedures, Barb Schwientek made a motion approving the 1990 EDA Balance Sheet and Revenues and Expenditures Statement and recommending the Financial and Activity Report be submitted to the City Council thereby meeting the GMEF Guideline: Staff shall submit quarterly summaries and/or annual report detailing the status of the GMEF. The motion was seconded by Brad Fyle and without further discussion the motion passed unanimously. 4. CONSIDERATION TO REVIEW THE RESEARCHED UDAG INFORMATION. Koropchak reported that in August 1983, the City Council authorized the submission of a UDAG application for Fulfillment Systems, Inc. (FSI), with UDAG approval in 1984. In accordance with the UDAG agreement between the City and the Department of Housing and Urban Development (HUD) Grant No. B- 83 -AB -27-0203, EXHIBIT A, any repayments received after completion of the UDAG funded recipient activities shall be deemed miscellaneous reveneues and shall be spent for activities eligible under Title I of the Housing and Community Development Act of 1974, as amended, and shall not be governed by Part 570. The agreement between the City and the developer states the same as above with the addition "unless otherwise provided in the close-out agreement between City and HUD." The EDA members were given a summary of the Title I basic eligible activtles, special economic development activities, and ineligible activities. Also provided was a summary of the January 1990 U.S. HUD Report, An Analysis of the Income Cities Earn from UDAG Projects. Principal and interest paid by FSI as of April 12, 1991, is $90,907.05, Koropchak informed the EDA. The debt service payments are received monthly for a yearly total of $27,971.40. The debt service was amortized over 12 years with final payment due December 1999. The EDA recommended that the City Attorney verify the UDAG and GMEF Guidelines for compatibility (real property versus real/ personal property) and legal accountability (creation of low to moderate income jobs) of funds. After discussion by the EDA members, Bob Mosford made a motion that the EDA request the City Council to consider authorizing the commitment of UDAG repayment income to the City's revolving loan fund. The initial commitment would increase the present appropriation fund by approxmiately $90,000 and thereafter for eight years an annual appropriation of $27,000. Clint Herbst seconded the motion which passed unanimously without further discussion. Reasons for the EDA request were to create more stability in the dollar amount of the GMEF balance, to reduce and minimize the EDA request for liquor store fund dollars, to assure the availability of future dollars for economic development due to unpredictable legislation actions such as the reduction in the amount of available tax increment project dollars caused by the Tax Increment or RACA Penalty and other new restrictions placed on the use of TIF; also, other state and regional financial programs are dwindling, and UDAG repayment income would provide the community with a continued, long-term reuse or investment of dollars. Additionally, the EDA'a request is supported by an 1991 IDC Work Plan Activity. The EDA then recalled their annual meeting discussions to establish an annual appropriation of $200,000 for the GMEF and to become self-funded. With an annual appropriation of $200,000 this would mean a yearly beginning maximum lending capability of $100,000. The EDA felt that without a pre - Council authorization of additional transfer funds, the GMEF available funds become like a path down a blind alley, meaning the City or the EDA Executive Director has no substantial amount of funds to market. The annual appropriation would also allow increased policing of the city budget by the City Staff and Council in addition to establishing the EDA's goal. Bob Mosford made a motion that the EDA request thi City Council to consider authorizing a commitment to a 1991 appropriation of $200,000 for the GMEF based on the reAsons stated above. The motion was seconded by Clint Herbst and further discussion was a clarification: With the assumption theCouncil commits the UDAG repayment income of $90,000 for GMEF appropriations, the requested appropriation funds would be $48,000 (commitment 'from Liquor Fund) to meet the EDA's goal of a $200,000 annual GMEF appropriation. Without the UDAG repayment income commitment, the requested appropriation funds would be $138,000 (commitment from Liquor Fund) to meet the EDA's goal of a $200,000 annual GMEF appropriation. It is the full intent of the EDA to become self-supporting. The motion passed unanimously. The EDA will again review their funding needs and determine a request, if any, for the City's 1992 Fall Budget session. 5. CONSIDERATION TO REVIEW AMENDED GMEF GUIDELINES FOR SECOND RECOMMENDATION TO THE CITY COUNCIL. The EDA members reviewed all past EDA and Council agendas and minutes pertaining to the approval of the Muller Theatre expansion and the recommended GMEF Guidelines as submitted for amendment to the City Council on November 13, 1990. The EDA members were unclear as to why the Council's motion to amend the GMEF Guidelines died, and the EDA saw no acknowledgement that the entire reccommended amendments were considered. The EDA was also unclear of Council's reaction because no specific reasons or requests were given for Council's disagreement to the EDA's recommendation regarding non-competitive commercial funding. The EDA again reconsidered the previously recommended guidelines and their previous decision to fund the Muller project and reaffirmed that the decisions were both sound and good for the community. CBob Mosford made a motion to resubmit the recommended GNEF Guidelines for amendment to the City Council and to submit the recommended EDA Bylaws for amendment: EDA meeting time amended from 7:00 AM to 7:00 PM. The motion was seconded by Barb Schwientek and without further discussion passed unanimously. The EDA meeting time is recommended for amendment to accommodate the convenience of members and the public. It was suggested that Roropchak provide the Council with the same supporting data as provided to the EDA, this to provide the total picture of the FDA's and Council's past activities and the EDA's rational for the recommended CMEF amendments. 6. CONSIDERATION TO HEAR OF POTENTIAL GMEF APPLICATIONS., a) The Aroplax Corporation request for GMEF is $30,000, Machinery and Equipment. The total financial package will include SBA, GMEF, and TIP. The participating lending institution request is Norwost Bank Camden. Formal GMEF is expected in May. b) Dennis Pomerleau - Having received the preliminary GMEF application for Burrax Diversified Inc., the request is for $15,000, Machinery and Equipment. The company manufactures water vending machines. The owner plans to C purchase the existing inventory from previous Chemtool, Inc. of which has been his employer for the past seven years. Mr. Pomerleau will meet with a local lending institution later this week. 7. OTHER BUSINESS. None. 8. ADJOURNMENT. The EDA meeting adjourned at 9:00 PM by a consensus of its members. 011ie Roropchak, EDA Executive Director C