EDA Agenda 01-28-1992ACENDA
MONTICELLO ECONOMIC DEVELOFi•IENT AUTHORITY
ANNUAL MEETING
Tuesday, January 28, 1992 - 7:00 PM
City Hall
MEMBERS: Chairperson Ron Hoglund, Barb Schwientek, Bob Mosford,
Brad Fyle, Clint Herbst, Harvey Kendall, and Al Larson.
STAFF: Rick Wolfsteller, Jeff O'Neill, and 011ie Koropchak.
1. CALL TO ORDER.
2. CONSIDERATION TO APPROVE THE OCTOBER 29, 1991 EDA MINUTES.
3. CONSIDERATION TO ELECT 1992 EDA OFFICERS.
4. CONSIDERATION TO REVIEW AND ACCEPT THE YEAR-END EDA FINANCIAL
STATEMENTS.
5. CONSIDERATION TO HEAR THE YEAR-END STATUS OF GMEF LOANS.
6. CONSIDERATION TO HEAR STATUS REPORT OF THE AROPLAX CORPORATION
PROJECT AND OTHER INDUSTRIAL PROSPECTS.
7. OTHER BUSINESS.
a) Acknowledgement of receiving the 1991 Economic Activity
Report.
B. ADJOURNMENT.
14
r.
MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, October 29, 1991 - 7:00 PM
City Hall
MEMBERS PRESENT: Chairperson Ron Hoglund (tardy), Bob Mosford,
Clint Herbst, and Harvey Kendall.
MEMBERS ABSENT: Barb Schwientek, Brad Fyle, and Al Larson.
STAFF PRESENT: 011ie Koropchak.
STAFF ABSENT: Rick Wolfsteller and Jeff O'Neill.
1. CALL TO ORDER.
With the tardiness of the Chairperson, Acting Chairperson Bob
Mosford called the EDA meeting to order at 7:00 PM.
2. CONSIDERATION TO APPROVE THE JULY 23, 1991 EDA MINUTES.
Harvey Kendall made a motion to approve the July 23, 1991 EDA
minutes, seconded by Clint Herbst and with no additions or
corrections the minutes were approved as written.
3. CONSIDERATION TO DISCUSS THE MAY 13, 1991 COUNCIL MINUTES.
a) GMEF GUIDELINES - Koropchak pointed out as recorded in
the July EDA minutes that the Council on May 13th had
approved the suggested amendmonts to the GMEF Guidelines.
However, in roferenco to the Council minutes the motion
included a request that the EDA give consideration to
preparing an amendment that would allow the City Council
to conduct a preliminary review of loan applications
prior to final approval by the EDA.
It was the agreement of the EDA that a preliminary review
Of loan application by tho Council would delay the
application process which was intontod to bo simple and
timely. It was suggested to provido Council with general
information of a company and its proposed project upon
the City Staff rocoiving a preliminary GMEF application.
b) UDAG REPAYMENT INCOME APPROPRIATION - Koropchak pointed
out as recorded in the July EDA minutes that the Council
on May 13th had approved a motion authorizing a $90,OOD
(only) commitment of the UDAG repayment income to the
GMEF. Howovor, in roforonco to the Council minutes the
EDA MINUTES
10-29-91
motion authorized the commitment of UDAG repayment income
(total principal and interest of $336,000, the original
request of the EDA) to the GMEF. However, upon review of
the Council tapes the Council minutes were incorrect as
the amount committed was $90,000 as reported to the EDA
in July. It was the feeling of the Council that to
authorize the total amount of the UDAG to the GMEF at
this time would mean the Council gave up the control of
the entire UDAG payback income.
4. CONSIDERATION TO REVIEW LEGAL OPINION ON THE USE OF THE UDAG.
REPAYMENT INCOME.
Koropchak referred to the letter addressed to Mr. weingarden
on October 23, 1991 and indicated no response has been
received of Mr. Weingarden's opinion to the use of the UDAG
funds.
Koropchak proceeded to call the HUD office and in talking to
Mr. Joles with reference to the UDAG Closeout Agreement dated
September, 1985. He stated any miscellaneous revenues spend
after five years past the Closeout Agreement date is subject
only to the CDBG basic eligible activities (570.201) and Law
105. Law 105 refers to any miscellaneous revenue used for a
for-profit business must moot the necessity and appropriation
test. This test is similiar to the TIF "but for" or the GMEF
"gap" financing clause. The miscollanous revenue is not
subject to projects which provide low to moderate income jobs,
housing, etc. No public hearing or separate accountability is
necessary. Mr. Joles indicated his willingness to respond to
an inquiry letter on the above matter which will provide the
City with a letter of documention. Such letter was written as
of October 24 and a copy was included with the EDA agenda
packet.
CONSIDERATION OF AN UPDATE ON THE AROPLAX CORPORATION PROJECT.
Koropchak updated the EDA on the status of the Aroplax project
stating the company is now considering a financial proposal
from the City of Brooklyn Park. Supposedly, the City of
Brooklyn Park will finance the total project as the City is in
need of a plastic injection molding company to compliment a
patented product request. The City of Monticello's financial
package included the write down of the land ($70,000) through
TIP, $30,000 GMEF at 6.5% interest rate over 7 yoara, $381,000
SBA at 9.58 over 20 yoars, and $462,500 Bank at 10.5% over
20/10 years. The company is financially strong and had the
privilege to shop for SBA bank commitments of which three bank
options were available. The City of Monticello has certified
the TIF District, approved the GMEF loan, and the OMNI Board
EDA MINUTES
10-29-91
has approved the SBA loan with the SBA Board yet to make final
approval. The company proposed to construct a 23,000 sq ft
concrete facility on Lot 3, Block 2, Oakwood Industrial Park
and would employ approximately 25 people. The company made a
verbal commitment of Monticello to the EDA and the HRA,
excuted an agreement to the terms of the GMEF loan, informed
their employees of the Monticello move, and advertised for
employment in the local newspaper.
Mr. Pat Pelstring and Koropchak will meet with Mr. Jerry
Schoen on November 5th. Pelstring suggested we ask, "What it
would take to get the company to Monticello?" Koropchak asked
the EDA for their recommendation of further GMEF assistance as
the HRA/City have maximized the use of TIF.
Koropchak stated she prepared a property tax analysis based on
equal building market value, land value prices of $1.75 per
square foot (BP) to $.35 per square foot (Monti), and tax
rates of 115.8859 (BP) to 87.780 (Monti). Based on those
assumptions, annual property taxes in Monticello were $20,000
less than Brooklyn Park.
The EDA agreed that without the knowledge of details to the
competitive financial proposal the addition of any GMEF may
not be of great significance. The EDA viewed the company as
impressive and one which mot the objectives of the IDC, HRA,
and EDA. Therefore, after feeling the company out and as a
last resource it was recommended for Koropchak to ask the
company what it would take for them to commit to a Monticello
location. Koropchak agreed with the EDA but cautioned the EDA
of the GMEF Guideline: Funds are to be used for gap financing
and is not intended to be used a substitute for conventional
lending. The EDA would thereafter consider the company's
additional financial request.
6. CONSIDERATION TO REVIEW THE GMEF REVENUE AND EXPENDITURE,
ACCOUNTS.
Koropchak reviewed tho financial data provided to the EDA
members. Additionally, Koropchak reported that both the
Muller and Tapper's GMEF payments are current. It is the
intent of the Tapper s, Topper's attorney, and Wright County
State Bank to close out the SBA loan the end of October with
debentures to be sold in December.
Koropchak reported that the City Council did amend the GMEF
Guideline, Definition of Public Purpose, Paragraph 3, as
recommended by the City Attorney and EDA at the Council's
,7 August 12th meeting.
EDA MINUTES
10-29-91
Koropchak also noted to the EDA that in the October 23 City
Administrator's Memo to the City Council of the 1992 Proposed
Budget; the EDA's request for Council to commit additional
dollars from the Liquor Funds (if necessary) to maintain a
GMEF appropriation balance of $200,000 was included.
OTHER BUSINESS.
Koropchak informed the EDA of various industrial prospects
which have contacted the City or received through other
referrals.
ADJOURNMENT.
The EDA meeting adjourned at 8:15 PM.
011ie Koropchak, EDA Executive Director
EDA AGENDA
January 28, 1992
3. Consideration to Elect 1992 EDA Officers..
A. Reference and Background.
Inorder to comply with EDA Ordinance Amendment No. 172,
Section 2-3-2: The Authority shall elect a president, vice
president, treasurer, assistant treasurer, and secretary
annually. Our current list of officers are as follows:
President Ron Hoglund
Vice President Barb Schwlentek
Treasurer Rick Wolfateller
Assistant Treasurer Bob Morford
Secretary 011ie Koropchak
Nominations will be made at the meeting, therefore, any EDA
member unable to make the meeting and doesn't wish to be re-
elected or nominated, please contact me.
At the January 13th City Council meeting annual appointments
were approved by the Council. EDA member Harvey Kendall's
term expired as of December 31, 1991 and he agreed to serve
another term of which Council approved. EDA member's
Q— expiration terms stand as follows:
Brad Fyle, Council 12/94
Clint Herbst, Council 12/94
Harvev Kendall 12/96
Al Larson 12/92
Bart, Schwientek 12/93
Bob Moaford 12/94
Ron Hoglund 12/95
The EDA should elect 11192 offleors.
IR
EDA AGENDA
January 28, 1992
4. Consideration to Review and Accept the Year -End EDA Financial
Statements.
A. Reference and Background.
Inorder to comply with EDA Ordinance Amendment No. 172,
Section 2-3-6, A: The Authority shall prepare an annual budget
projecting anticipated expenses and sources of revenue. And
B: The Authority shall prepare an annual report describing its
activities and providing an accurate statement of its
financial condition. Said report shall be submitted to the
City Council by March 1st of each year.
Enclosed or to be provided at the meeting is the proposed
budget and year-end statement.
The EDA will need to review for necessary revision and accept
the statements.
H
MONTICELLO ECONOMIC, DEVELOPMENT AUTHORITY
mw
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
Balance Sheet
December 31, 1991
ASSETS
Cash in Bank $15,818.52
Notes Receivable - Tapper's Inc. 85,338.12
Notes Receivable - Muller Theater 48,848.66
Appropriations Receivables -
Original Liquor Fund 62,000.00
1991 Liquor Fund 48,000.00
1991 UDAG 90,000.00
TOTAL ASSETS
FUND EQUITY
Fund Balance
ReAerved for Participation Loans
(Economic Development)
TOTAL LIA13ILITIES AND FUND EQUITY
$350,005.28
$350,005.20
$350,005.28
MnNTT1;F.r,LO ECONOMIC DEVELOPMENT AUTHORITY
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
Statement of Revenues, Expenditures and Changes in Fund Balance
For the Year Ended December 31, 1991
REVENUES
Appropriations -
1991 Liquor Fund
1991 UDAG
Interest Income - Notes
Interest Income - Investment
Loan Fees
TOTAL. REVENUES
EXPENDITURES
Legal Fees
Service Fees
Int. Expense - Fund Deficit In 1990
TOTAL EXPENDITURES
LExcess of Revenues Over Expenditures
FUND BALANCE - Beginning of Year
FUND BALANCE - End of Year
48,000.00
90,000.00
10,857.64
-0-
-0-
$148,857.64
$ -0-
310.00
275.74
S 585.74
$148,271.90
S7.01.733.38
5350.005.28
MONTIC13LL0 P.00FIUMIC DEVELOPMENT AUTIIt)RITY
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
1992 Cash Flow Projection
BEGINNING CASH BALANCE, January 1992
$ 15,818.52
RECEIPTS
Appropriations, Expected
$150,000.00
Notes Amortization Payments -
Tapper's Inc. ($736.07 Mo.)
8,832.84
Muller Theatre ($418.22 Mo.)
5,018.64
Interest Income - Investment
500.00
loan Fees
2,250.00
TOTAL RECEIPTS
$166,601.48
TOTAL 13EGINNING BALANCE AND RECEIPTS
$1132,420.00
EXPENDITURES
GMEF Loans -
Aroplax Corporation
$ 55,000.00
Others
95,000.00
= ,egal Feeo
3,000.00
Service Fees
460.00
TOTAL EXPENDITURES
$153,480.00
13XPECTED CASH BALANCE, December 1992
$ 28,940.00
I
,.�
1991 EDA ACTIVITY REPORT
MEETING DATE
SUBJECTS
1/29/91
- Accepted 1990 reports.
- Elected EDA officers.
4/23/91
- Reviewed revised 1990 reports.
- Reviewed researched UDAG information.
- Reviewed amended GMEF Guidelines.
6/26/91
- Reviewed GMEF Loan No. 003 application
for Aroplax Project.
- Approved GMEF Loan No. 003 (Aroplax)
for machinery 6 equipment, $30,000.
Terms at 6.5% over 7 years. Subject to
bank commitment and SBA approval. Loan
fee of actual costs or not to exceed
$450.
7/23/91
- Reviewed City Council action of EDA
requests.
- Reviewed guidelines for compatibility
and legal accountability of the UDAG and
GMEF funds.
- Update of the two GMEF loans.
10/29/91
- Reviewed legal opinion on the use of
the UDAG repayment income.
- Updated on the Aroplax projection.
- Reviewed the GMEF revenues and
expenditures accounts.
2/5/92
- EDA officers elected for 1992:
President - Ron Hoglund
Vico Prosidont - Barb Schwientok
Treasurer - Rick Wolfstellor
Assistant Treasurer - Bob Mosford
Secretary - 011ie Roropchak
- Both approved GMEF loans for Tappers,
Inc., and Mullor Theatre aro current as
accounted for in the 1991 year-end
statemonts.
- Duo to the fact the City of Brooklyn
Park submitted a competitive financial
packago to Aroplax, this project has not
materialized, and the loan closings did
not occur. At this time, Mr. Schoen has
ACTIVITY.REP Pago 1
made no selection to his site location.
Mr. Pat Pelstring, BDS Inc., has revised
the City of Monticello's financial
proposal in order to be competitive and
more attractive. The EDA has taken no
action on the following revised
proposal:
ORIGINAL REVISED PROPOSAL
Bank
$462,500
Bank
$300,000
SBA
$381,000
SBA
$300,000
GMEF
$ 30,000
GMEF
$ 55,000
TIF (Equity)
$ 70,000
TIF (Equity)
$ 70,000
Econ Recov Gr
$170,000
CMEF•
} 30,000
TOTAL
$936,000
TOTAL
$925,000
• Central Minnesota Initiative Fund
ACTIVITY.REP Page 2
MONTICELLO ErONOMI VELOPMENT AUTHORITY
GREATER MONTICELL iT;RPRISE FUND (GMEF)
1992 Cash
1 Projection
BEGINNING BALANCE, January 1992
RECEIPTS
Appropriation -
1992 Liquor Fund
Notes Amortization Payments -
Tapper's Inc. ($736.07 Mo.)
Muller Theatre ($418.22 Mo.)
Interest Income - Investment
Loan Fees
TOTAL RECEIPTS
TOTAL BEGINNING BALANCE AND RECEIPTS
EXPENDITURES
GMEF Loans -
Aroplax Corporation
Others
Legal Fees
Service Fees
TOTAL EXPENDITURES
ENDING BALANCE, December 2992
C.
$212,281.02
$150,000.00
8,832.84
5,018.64
500.00
2,250.00
$166,601.48
$378,682.50
$ 55,000.00
95,000.00
3,000.00
400.00
$153.400.00
$225.402.50
MONTICELLO FCONOMT D.V9LOPMENT AUTHORITY
GREATER MONTICELLO ERPRISE FUND (GMEF)
REVENUES
Appropriations
Original Liquor Fund $200,000.00
1991 Liquor Fund 48,000.00
1991 UDAG 90,000.00
Interest Income - Notes
1990 3,697.39
1991 10,857.64
TOTAL REVENUES
EXPENDITURES
GMEF Loans -
Tapper,s Inc.
$ 88.000.00
Muller Theatre
50,000.00
Legal Fees -
1990
1,824.01
1991
-0_
Service Fees -
1990
140.00
1991
310.00
TOTAL EXPENDITURES
ENDING BALANCE, December 1991
$352,555.03
S140.274.01
$212,281.02
EDA AGENDA
o January 28, 1992
5. Consideration to }fear the Year -End Status of GMEF Loans.
A. Reference and Backaround.
Both approved GMEF loans for Tapper's, Inc. and Muller Theater
are current as accounted for in the year-end statements.
According to Mr. Kevin Doty, Wright County State Bank, two of
the three mechanic liens filed against Tapper's, Inc. have
been paid. Funds were put in escrow at Wright Title Company
to cover the costs of the liens and it is roped ti -,at the third
lien will go away. All necessary papers have been submitted
to the OMNI Board with an anticipated SBA closing in February.
Thereafter are the debentures sold.
No action necessary by the EDA.
V..
14
EUA AGENDA
January 28. 1332
6. Consideration to Hear Status Report of the Aroplax Corporation
Proiect and other Industrial Prospects.
A. Reference and Background.
The EDA approved a $30,000 GMEF Loan subject to Bank
commitment and 513A approval for Aroplax Corporation on June
26, 1991. The terms of the loan were for 7 years (M 6 E) at
6.5% interest. Loan fee of actual costs or not to exceed
$450.00.
With the City of Brooklyn nark submitting a competitive
financial package, the Aroplax project has not materialized
and the loan closings did not occur.
At this time, the project looks again alive for Monticello:
however, no formal application process will be reinstated
until Mr. Schoen commits to a Monticello location.
Mr. Pat Pe.lstring of BDS, Lic. restructured the financial
package at a meeting with Mr. Schoen in November. Below is
the original package and the proposed new financial package.
Please note the new propoual request Includes an additional
e $25,000 from the EDA or the GMEF.
Orielnal New Proposal
Bank $4,52,500 Hank $300,000
SBA $361,000 SBA $300,000
G14HF $ 30,000 GML'F $ 55,000
TIF (Equity) $ 70,000 TIF (Equity) $ 70,000
Fcon Recov L'r $170,000
CMIF• 0 30,000
TOTAL $936,000 TOTAL. $92b,000
central Minnesota Init:itive Fund
The CMIF Board in requesting more equity into the project and
it Is the uuUgestion of Mr. Lenny Kiracht, LIDS, Inc., to meet
this requirement through a working capital ]like item of
$-10'()()0.
If Mr. Schoen commits to o Monticello location, the FDA would
meet to consider the requeut for the additional $25,000 GMEF.
No action necessary at thin time. Other prospects will
briefly be mentioned nt the meeting.
'9
lj
February 4, 1992
Mr. Jerry Schoen
Aropin Corporation
2318 Chestnut Avenue West
Minneapolis, MN 53404
RE: FINANCING PROPOSAL; MONTICELLO. MINNESOTA LOCATION
Dear Mt. Schoen:
I have appreciated our contact over the past several months concerning rclocadon of Aroplan
Corporation to Monticello, Minnesota.
Per our discuatioaa, the City Is proposing the following financing structure to meet the needs
cl of Aroplax Corporation:
USES OF FUNDS:
Land Acquisititm $ 70,000
BulldUtS Construcdon' 550,000
Equipment Acquisition 233,000
Soft Costs 30•Q04
TOTAL USES OF FUNDS: i$Z.QQQ
SOUR S ,F 1m5:
Construction:
Land—Tau Tncrement Firmncing
$ 70,000
Bank Financing (20 Years, 9.346)
300,000
SBA 504 Loan (20 Years, 8.5%)
340.449
Subtotal Construction Sources of Funds:
$670,000
Equipment:
Central MN Initiative Fund (10 Years, 6%)
S 30,000
Economic Recovery Grant (10 Years, 6%) 170,000
R Mundcello F Aterprise Fund (10 Years, 696) SS"t)DO
tl, ' Subtotal rAuipmtnt Sources of Funds: 5:35,000
TUTAL SOURCES OF FUND: L=
P
14
These posts represent estimates at this time, and would he adjusted once mon definitive teas
have been determined. Based upon these assumptions, however, it is anticipated that the
monthly and annual debt service associated with this structure would be as follows:
SQ1JRrF
MONTHLY
pIRT e+FRVl('F
ANNUAL
DEBT SERV1f F
Bank
$2,614
$31,368
SBA 504
2,396
28,756
Economic Recovery Grant
1,887
22,648
Central MN Initiative Fund
333
3,997
Monticello Enterprise Fund
6m
7.327
TOTAL PAYMENTS: 57.840
The City of Monticello firmly beifeves in its ability to perform on the financial assistance
programs outlined in this proposal. Although we are in direct contact with the various agencies
mentioned, we do not have the authority at this time to grant final approval for assistance. The
City does agree to assist in the prepamtion of all appropriate applications needed by Afoplax
Corporation to secommodate its relocation in Monticello.
Aroplax Corporation, upon acceptance of this proposal, agrees as follows:
1. To locate and operate in the Oakwood Industrial Park in the City of Monticello.
2. To cooperate with represerttadves of the City and/or its economic development consultant
in providing information in a timely manner necessary to complete applications for
fitnding as outlined in this proposal.
3. Aroplax Corporation agovo that it will not seek altemative location, or financial
assistance for a period of 190 days.
4. Aroplax Corporation agrees that it will reimburic the City for an amount not to exceed
$3,000 for the preparation of loan applications, should Aroplax Corporation withdraw
from the project.
It is my hope that this proposal can form the basis of a project between Aroplax Corporadon and
the City of Monticello. Your consideradon of this proposal is greatly appreciated.
Siam-tly,
We Koropchak
EW110MIo tkietapTcr: Oi:ccWr
Lr
IN
accordance with the principles set forth in paragraph (j)(3)
of this section.
(3) As a general rule, CDBG funds may be used for eligible public
services, to be provided through a primarily religious entity,
where the religious entity enters into an agreement with the
recipient or subrecipient from which the CDBG funds are
derived that, in connection with the provision of such
services:
(4)
(i) it will not discriminate against any employee or
applicant for employment on the basis of religion and
will not limit eMloyment or give preference in
employment to persons on the basis of religion;
(ii) it will not discriminate against any person applying for
such public services on the basis of religion and will
not limit such services or give preference to persons on
the basis of religion;
(iii) it will provide no religious instruction or counseling,
conduct no religious worship or services, engage in no
religious proselytizing, and exert no other religious
influence in the provision of such public services;
(iv) the portion of a facility used to provide the public
services shall contain no religious symbols or
decorations, other than those pen:anently affixed to or
part of the structure.
Where the public services provided under paragraph (j)(3) of
this section are carried out on property owned by the
primrily religious entity, CDBG funds may also be used for
minor repairs to such property which aro directly related to
carrying out the public services whom the cost constitutes
in dollar terms only an incidental portion of the CDOG
expenditure for the public services.
Le. ,., %a S e
Mo
S 570.201 Basic eligible activities.
CDh3G funis may be used for the following activities:
(a) Mquisition. M.quisition in whole or in part by the recipient, or
ottr-r public or private nonprofit entity, by p:simse, long-term
lease, donation, or otherwise, of real prop:rty (incltxling air
rights, water rights, rights-of-way, enscin-nts, and other
interests therein) for any )xihlic pw7.use, subject to the
ldmitation9 of 5 570.207.
C-8
5/69
M
(b) Disposition. Disposition, through sale, lease, donation, or
otherwise, of any real property acquired with CDBG funds or its
retention for public purposes, including reasonable costs of
temporarily managing such property or property acquired under
urban renewal, provided that the proceeds from any such
disposition shall be program income subject to the requirerents
set forth in S 570.504.
(c) Public facilities and 1rprovenents. Acquisition, construction,
reconstruction, rehabilitation or installation of public
facilities and improvements, except as provided in S 570.207(a),
carried out by the recipient or other public or private nonprofit
entities. In undertaking such activities, design features and
improvements which promote energy efficiency may be included.
Such activities may also include the execution of architectural
design features, and similar treatnpnts intended to enhance the
aesthetic quality of facilities and improvements receiving CDBG
assistance, such as decorative pavements, railings, sculptures,
pools of water and fountains, and other corks of art. Facilities
designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the
prohibition of new housing construction described in
S 570.207(b)(3). Such facilities include shelters for the
hare -less; convalescent hams; hospitals; nursing hares; battered
spouse shelters; halfway houses for run -away children, drug
offenders or parolees; group hams for mentally retarded persons
and tanporary housing for disaster victims. In certain cases,
nonprofit entities and subrecipients including those specified in
S 570.204 may acquire title to public facilities. When such
facilities ate owned by nonprofit entities or subrecipients, they
shall be operated so as to be open for use by the general public
during all normal hours of operation. Public facilities and
Improvements eligible for assistance under this paragraph are
subject to the policies in S 570.200(b).
(d) Clearance activities. Clearance, demolition, and removal of
Wildings and inprvvements, including movemr_nt of structures to
other sites. Dmolitlon of MID -assisted housing units may to
undertaken only with the prior approval of 1(UD.
(o) Public services. Provision of public services (including labor,
supplies, a:xl materials) which are directed toward improving the
aaimuiiLy's public services and facilities, .including but not
limitcxl to those concerned with cmploym.nt, trio» prevention,
child Caro, health, drug abuso, education, fair, dousing
counseling, energy conservation, welfaro, or recreational needs.
In order to to eligible for. COW asnista:lco, public services must
meet each of Lir) following criteria:
(I ) A pd-il is service naat N efLher a now service, or a
quantifUdA e h r;reaso in the level of a service alv,e Lhat
C-9 :,/09
which has been provided by or in behalf of the unit of
general local government (through funds raised by such unit,
l or received by such unit from the State in which it is
located) in the twelve calendar months prior to the
submission of the statement. (An exception to this
requirement may be made if HUD determines that the decrease
in the level of a service was the result of events not within
the control of the unit of general local government.)
(2) The amount of CD13G funds used for public services shall not
exceed 15 percent of each grant except as provided in
paragraph (3) below. For entitlement grants under Subpart D,
compliance is based on the amount of CDBG funds obligated for
public service activities in each program year compared to 15
percent of the entitlement grant made for that program year.
(3) A recipient which obligated more CDBG funds for public
services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations (excluding any
assistance received pursuant to Public law 98-8), may
obligate more CDBG funds than 15 percent of its grant for
public services so long as the amount obligated in any
program year does rent exceed the percentage or amount
obligated in Federal fiscal year 1982 or 1983, whichever
method of calculation yields the higher amount.
(f) Interim assistance.
(1) The foIlowing ak:tivities may be undertaken on an interim
basis in areas a;:1-."iLing objectively determinable signs of
physical deterioration where the recipient has determimu_tii
t.hAt immdiate action is necessary to artist tho
deterioration and that pacm-tnent inlfnwenrnLs will b) carried
out as soon as practicable:
(i)
'T'he re)uiring of SLI -"ILS, sidewalks, Forks, playgroumxds,
publicly omuZi utilities, and public buildings; amxl
( i i) iu? oxi ution of sl.,:ial gartuge, Lrash, and debris
serval, including niiighturluti:xd cleanup cant-liigns, LVJL
not. t.lio nxpllar curbsid: Coll( -N --Lion of garMge or wash
in an area.
(2) In omd(Ir Ln al leviat.e clibm-3elly conditioM Lluratening 0W.,
Irli.il iw_ lw�nldl AM satet.y ill an ns wlu�n Llu� chief exoCuLive
of l icer of Olt) IT7ihie1lL d?telnli lY39 LhlL such an aiv)rgf ix:y
comtrtiLion exists and I.Oplilrs inmmliiaLe IvsoluLion, CDOG
ftlmhis rorty Ise 115011 tor:
(i) 'I'In) acL(vit.ics 6I -1 -if 1111 in hu'agrajil (f)(1) of Lhis
sm_r0011, exceln. for Lb! n�Iuir of Iwrks alxl
I+Ia}'tlnnuris;
C-10 5,189
(ii) The clearance of streets, including snow removal and
{ similar activities; and
(iii.) The improvement of private properties.
(3) All activities authorized under paragraph (f)(2) of this
section are limited to the extent necessary to alleviate
emergency conditions.
(g) Pavment of non -Federal share. Payment of the non -Federal share
required in connection with a Federal grant-in-aid program
undertaken as part of CDBG activities, provided, that such payment
shall be limited to activities otherwise eligible and in
compliance with applicable requirements under this subpart.
(h) Urban renewal ccmletion. Payment of the cost of completing an
urban renewal project funded under Title I of the Housing Act of
1949 as amended. Further information regarding the eligibility of
such costs is set forth in S 570.801.
(i) Relocation. Relocation payments and other assistance for
permanently and teirporarily relocated individuals, families,
businesses, nonprofit organizations, and farm operations where
assistance is:
(1) Required under the provisions of S 570.606(x), (b) or (c);
or .
r
(2) Determined by the recipient to be appropriate under the
provisions of S 570.606(d).
N
(j) Joss of rental ircarr_. Payments to housing owners for losses of
rental incano incurred In holding, for taiporary periods, housing
units to he used for tho relocation of I.ndivi.duals and families
displaced by program activities assisted under this part.
(k) Ranwal of architectural 1»rriers. Sfjocial projects directed to
the rcnnval of MILerial and archiLectura.l barriers which restricL
the, mobility and accessibility of elderly or hanxdicarped persons
to publicly cwrx_d and privately cwnrxi buildings, facilities, and
JmQ>rwamenLS.
(1) Privately ownr±d utilities. CDRG funds rniy t.3 used to aaluire,
consLrucL, re:onsLrlrcL, rehabllitaLe, or install Uc dieLrilxrtion
l,i.rr_s and facl.litles of privately owrmd utd.l.lLies, hcluding tho
placing undergrcurxi of: rrw or existing distrilxrtion facilities mxi
1Ines.
C- 11 7/89
M
(m) Construction of housina. CDBG funds may be used for the
construction of Musing assisted under section 17 of the United
States Housing Act of 1937.
§ 570.202 Eligible rehabilitation and preservation activities.
(a) RYcaes of buildings and imarovenvents eligible for rehabilitation
assistance. CDBG funds way be used to finance the rehabilitation
of:
(1) Privately owned buildings and inprovemsnts for residential
purposes;
(2) Low inccrre public housing and other publicly owned
residential buildings and iaprovments;
(3) Publicly or privately owned ccrwercial or industrial
buildings, except that the rehabilitation of such buildings
owned by a private for-profit business is limited to
inprovda-nts to the exterior of the building and the
correction of code violations (further imprvvernents to such
buildings may be undertaken pursuant to S 570.203(b)); and
(4) Manufactured housing when such housing constitutes part of
the conna city's permanent housing stock.
(b) 7yraes of assistance. cDIc funds may be used to finance the
following types of rehabilitation activities, and related costs,
either singly, or in ccenbination, through the use of grants,
loans, loan guarantees, interest supplements, or other means for
buildings and improvements described in paragraph (a) of this
section, except that rehabilitation of cwrercial or industrial
buildings is limited as described in paragraph (a)(3) of this
section.
(1) Assistance to private individuals and entities, including
profit making and nonprofit organizations, to acquire for the
purposo of rehabilitation, and to rehabilitate properties,
for use or resale for residential purposes;
(2) labor, materials, and other costs of rehabilitation of
props mies, including reiaair directed toward an accumulation
of deferred m-iinteronco, replacrnrnr, of principal fixtures
a1Kh cavo»rv±nts of existing strucuires, installation of
security devices, including sm:)ko detectors arxi dead bolt
locks, nrod renovation through alterations, additions to, or
onhnncramnt of existing structures, which may bra wxiertaken
singly, or In ctmbiration;
C-12 5/89
�rOMMP CIO
400
k
MONTICELLO
Office of the Cite Adtt:inistrato,
250 East Broadway
Nionticello, NiN 55362-9245
Phone: (612) 295.2711 MEMO
4lerro:(612) 333-5739
TO: Mayor and City Council
FROM: Rick Wolfsteller, City Adminis at /
DATE: October 23, 1991 J
RE: 1992 Budget
Attached you will find the proposed 1992 municipal budget and the
accompanying worksheets. The preliminary budget is being presented in
a computer-generated format rather than in a booklet form. After final
adoption of the 1992 budget, a bound final copy with additional detail
will be presented to the Council after the first of the year. Although
the worksheots aro cumbersome, they enable the Council to review each
line item that portains to each department and fund for tho City, and it
provides a couple of years of history for better comparison.
Along with the budget worksheets, I've also included some summary
information on the attached shoets that should be of interest. The
summary format 'is intended to give you an overview of general
expenditures and revenues by major categories, and additional detail is
available in the computor-goneratod workshoots.
As you will recall, the City had to adopt a preliminary budget by
September 1 in order to allow the county to prepare estimated tax notices
that will be mailed to all property owners in the next week or so. At
the time the proliminary tax levy was adopted, I had indicated that the
maximum levy the City would have boon allowed to tax next year was
$2,791,263, which would have boon an increase of $38,485 over our 1991
tax levy. This proposed levy increase is approximately 1.46 more than
last yoar, which is very minimal. As was the case in 1991, a portion of
this total levy will be paid by the state of Minnesota in the form of
homestead credit and agricultural credit reimbursements. what this means
is that although our levy as proposed would total $2,791,263, tho state
Is supposed to reimburse the City $232,749 directly, which will result
In only $2,558,554 being taxed to the city residents and commercial
Memo
+e Mayor and Council
October 23, 1991
Page 2
property. Unlike 1991, we are hopeful that the $232,709 will actually
be distributed to the City, whereas last year we also anticipated
homestead and agricultural credit payments of $246,646 but will only
receive $147,370 due to the state deciding to cut aid payments to cities.
This resulted in the City receiving $99,276 less in revenue than we
originally anticipated for 1991.
What will this proposed tax levy mean to city taxpayers? Although the
proposed levy is only 1.48 higher than last year, it appears that our tax
capacity rate (formerly known as the mill rate) will increase from 15.511
to an estimated 16.492. The total market value for property within the
city has actually increased $4,204,400 to $401,810,600, but our resulting
tax capacity has dropped from $16,161,043 to $15,513,574. The primary
reason for this drop in the tax capacity value is due to a change the
state legislative body has made regarding how commercial and industrial
property is valuated. The end result is that commercial and industrial
property for taxes payable next year is valued at 4.758 on the amounts
of market value over $100,000 versus 4.958 last year. Since Monticello
has a high commercial/ industrial value, especially with the NSP power
plant included in the market value, we've actually seen a reduction in
our tax capacity value. So although our market value within the
community continues to rise, the formula for determining the amount of
property taxes a commercial or industrial property pays reduces their
share of the total tax liability, which means some of the burden will be
shifted to other properties, mainly residential. Although our tax levy
is only 1.48 higher, our tax capacity rate will rise approximately 6.3%.
Although most of the $38,485 levy increase is a result of inflationary
adjustments, areas such as the law enforcement contract (up $11,000) and
the garbage and refuse department (up $59,000 primarily due to the
expected increase, in landfill cost because of the composting facility)
have also increased. Salaries for all departments were budgeted at a 58
increase, but it should be noted that no allowances have been made for
adjustments that may be necessary because of our comparable worth study
results. Although it is not anticipated there will be major changes to
our personnel cost, there may be some suggestions by the League of
Minnesota Cities on some personnel reorganization plans that the City may
want to consider implementing. At this point, it is anticipated that any
position adjustments can bo accomplished through surplus funds available.
The capital outlay revolving fund can be the most flexible fund if cuts
are needed.
The proposed budget includes major expenditures out of the capital outlay
fund for the following:
Memo
Mayor and Council
October 23, 1991
Page 3
1. West Bridge Park
restrooms and parking lot
$
60,000
2. The lighting of
two softball fields at the
NSP complex
$
80,000
3. Replacement for
the 1981 Chevrolet truck
$
62,000
4. One -ton truck with
flat bed
$
24,000
5. Continuation of
sidewalk improvement program
$
28,500
6. Additional funds needed for CR 75, CR 118,
and CR 39 traffic signals $ 12,500
The capital expenditures proposed in the capital outlay fund do not leave
us with any unallocated amount for unforeseen expenditures, as the budget
is actually proposing a transfer of $53,600 from the liquor store fund
to accommodate the items proposed above.
In order to get an idea of our fund balances (surpluses) that have
accumulated over the years, please refer to the worksheet provided titled
"Summary of Projected Revenue and Expenditures and Fund Balances." From
this shoet, you will note that all City funds are projected to have a
balance of over $2.8 million at the end of next year without taking into
account our debt service (bond) accounts. These surpluses are not deemed
excessive, as it is a good policy to have available surpluses equivalent
to approximately one year's tax levy. Because of our fund surpluses, we
can include major expenditures such as those proposed in our capital
outlay fund and support these purchases through transfers of surplus
funds if necessary. It also allows us some flexibility for financing
unforeseen expenditures that may ariso throughout the year. Some of the
surplus funds have already been committed by the City for future
expenditures such as the previous Council commitment of $90,000 from the
UDAG fund and $48,000 from the liquor store fund for use by the Economic
Development Authority in establishing a $200,000 balanco in the Greater
Monticello Enterprise Fund revolving loan program. The EDA is also
requesting that the Council for 1992 again commit to additional funding
(if necessary) from liquor store surpluses to maintain the 520.000
revolving loan account. At this time, the GMEF has available $200,OUu.,
and unless loans are committed from this fund, there would not be any
additional transfers necessary. What the EDA is looking for is a
commitment to eontJnue funding the loan program until they aro able to
be self-sufficient.
As an informational note, the proposed tax levy includes $738 that is
A needed by the City to fund the Fire Department's Relief Association
(� benefit program. Previously when the City granted increases to the Fire
Relief Association ponaion program, it was anticipated that state aids
/] Memo
�. Mayor and Council
October 23, 1991
Page 4
and their investment income would be sufficient to fund the program
without municipal support. Because of a recent change in the state aid
formula for the relief association, the City will be required to
contribute $738 in 1992 to maintain their funding level.
Regardless of the adjustments or changes that may be made to the proposed
budget, I believe the Council should not consider lowering the tax levy
from that proposed and should still levy the maximum allowed. The
increase of 1.48 over last year is very minimal, and there may be many
major expenditures coming in future years that the City should start
planning for. In addition, the maximum levy may allow the City to help
recapture the $100,000 we lost in 1991 due to state id cuts. Our
official budget hearing will be held onlNovember 25, 1991 at our regular
Council meeting. A final tax levy will ave to be adopted either on this
date or at a continued public hearing scheduled for December 4. If time
is available at our regular Council meeting October 28, the Council may
want to review the proposed budget and discuss any possible changes you
would like to recommend. If time is not available, a special meeting can
be set for a workshop session to specifically review the budget so that
changes can be made before the final adoption November 25.
J
� Should you have any questions regarding the budget summaries or
worksheets attached, please feel free to contact me with any questions
you may have.
C