EDA Agenda 03-30-1993AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, March 30, 1993 - 7:00 p.m.
City Hall
MEMBERS: Chairperson Ron Hoglund, Vice Chairperson Barb
Schwientek, Assistant Treasurer Bob Mosford, Clint
Herbst, Patty Olsen, Harvey Kendall, and Al Larson.
STAFF: Treasurer Rick Wolfsteller, Jeff O'Neill, and 011ie
Koropchak.
GUEST: Jim Beyl, Custom Canopy.
I. CALL TO ORDER.
2. CONSIDERATION TO APPROVE THE JANUARY 27, 1993 EDA MINUTES.
3. CONSIDERATION TO REVIEW A PRELIMINARY AND FORMAL GMEF
APPLICATION FOR STEPHEN P. AND JOAN M. BIRKELAND, JR. (CUSTOM
CANOPY).
4. CONSIDERATION TO APPROVE OR DISAPPROVE GMEF LOAN NO. 006 FOR
STEPHEN P, AND JOAN M. BIRKELAND, JR. (CUSTOM CANOPY).
5. CONSIDERATION TO REVIEW THE STATUS OF THE UDAG AND STATE
ECONOMIC RECOVERY GRANT ACCOUNTS,
6. CONSIDERATION OF PROSPECT UPDATES.
71 OTHER BUSINESS.
8. ADJOURNMENT.
MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
ANNUAL MEETING
Wednesday, January 27, 1993 - 7:00 p.m.
City Hall
MEMBERS PRESENT: Chairperson Ron Hoglund, Bob Mosford, Clint
Herbst, Patty Olsen, Harvey Kendall, and Al
Larson.
MEMBERS ABSENT: Barb Schwientek.
STAFF PRESENT: 011ie Koropchak.
STAFF ABSENT: Rick Wolfsteller and Jeff O'Neill.
1. CALL TO ORDER.
Chairperson Hoglund called the EDA meeting to order at 7:00
p.m.
2. CONSIDERATION TO APPROVE THE OCTOBER 28, 1992 EDA MINUTES.
Harvey Kendall made a motion to approve the October 28, 1992
EDA minutes. Seconded by Clint Herbst and with no additions
or corrections the minutes were approved as written.
3. CONSIDERATION TO ELECT 1993 EUA OFFICERS.
Al Larson made a motion nominating Ron Hoglund as President,
Barb Schwientek as Vice President, Rick Wolfateller as
Treasurer, Bob Mosford as Assistant Treasurer, and 011ie
Koropchak as Secretary of the EDA for 1993. Seconded by Clint
Herbst, nominations ceased, and the motion passed unanimously
electing said 1993 EDA officers.
4. CONSIDERATION TO REVIEW AND ACCEPT THE YEAR-END EDA FINANCIAL
STATEMENTS AND ACTIVITY REPORT.
To comply with EDA Ordinance Amendment No. 172, Section 2-3-6.
Assist Treasurer Mosford reviewed the GMEF financial
statements with members stating the prepared statements were
based on his and Koropchak's assumptions. City ledgers posted
no transfers and Mr. Wolfsteller was unavailable to confirm
asoumed transfers or to qualify cash in bank of $32,822.33.
The Balance Sheet assets of cash in bank, notes receivable,
and appropriations receivable totaled $497.604.08.
Liabilities and fund equity totaled $497,604.08.
The Statement of Revenues, Expenditures, and Changes in Fund
Balance revenues of appropriations, interest income (notes and
inveotment), and loan fees totaled 9148,788.04. The $696.78
EDA MINUTES
JANUARY 27, 1993
Interest income - investment is actually interest income
earned in 1991 but credited in 1992. Expenditures of legal
fees, services fees, and interest adjustment (notes) totaled
$1,189.24. Therefore, with a beginning year Fund Balance of
$350,005.28, the 1992 year end Fund Balance is $497,604.08.
Mr. Mosford indicated the $210 service fees were to Marquette
Bank for the Tapper and Muller loans and that the SMM and
Aroplax loans were being handled internally by the City. The
$1.74 interest adjustment - notes is the assumed difference
between the city ledger and Marquette's daily computed loan
Interest. The EDA recommended the City Administrator obtain
an annual certification of interest income - notes from
Marquette Bank and thereafter adjust the city ledger to
coincide.
The 1993 Cash Flow Projection is the GMEF's annual budget and
was prepared based on assumptions. With a beginning cash
balance of $32,822.33, receipts projected were appropriations
of $200,000, amortized note payments, interest income -
Investment, and loan fees for a total of $236,248.08.
Expenditures projected were three disbursed loans of $200,000,
legal fees, and service fees for a total of $203,315.00.
Expected cash balance, December 1993 is $65,755.41.
The EDA discussed the potentiality of the Liquor Fund source
running dry and recognized the need to better scrutinize a
development project's "gap" and merit. Additionally, the EDA
discussed other GMEF sources of revenue ouch as anticipated
UDAG and Economic Recovery Grant paybacks, and the purpose of
the GMEF balloon payments and the scheduled call dates.
Koropchak reviewed with EDA members the 1993 EDA Activity
Report. Harvey Kendall made a motion accepting the Year -End
EDA Financial Statements and Activity Report. Al Larson
seconded the motion and with no further discussion the motion
passed unanimously. Said statements and activity report to be
submitted to the City Council prior to March 1, 1993.
CONSIDERATION TO REAR T11F YEAR-END STATUS OF GMEF LOANS.
Koropchak informed the EDA that all four GMEF loan paybacko
are current; however, noted that the Muller loan payment
varies from month-to-month. The EDA suggested to check this
out with the bank and if the trend continues the EDA may need
to consider the establishment of a late penalty period and
fee. Bob Mosford made a motion accepting the year-end status
report of the GMEF loans. Seconded by Harvey Kendall and with
no further discussion the motion passed unanimously.
CPage 2
EDA MINUTES
JANUARY 27, 1993
OTHER BUSINESS:
a) Potential GMEF applicants - Koropchak reviewed the
enclosed Wilson Tool project sheet with EDA members.
Chairperson Hoglund and Mr. Kendall summarized the
company as clean and well-managed with the need to expand
because of a new product line. Two financial package
options will be submitted to the company this Friday.
The EDA suggested not utilizing the available $400,000
REA interest-free loan as an initial fund source but only
as a final incentive source. The total project cost is
estimated at $2,155,000. Option A would include bank,
SBA, GMEF of $100,000, State Grant, CMIF, TIF of
$155,000, and equity of $65,000. Option B would include
bank, GMEF of $100,000, TIF of $155,000, and equity of
$400,000. The EDA supported the use of $100,000 GMEF
because the company appears high quality in -nature and
because of the project size and number of jobs to be
created. If the REA loan was utilized if was recommended
that the loan be directly between the sponsor applicant
(Bridge Water Telephone Company) and the business as an
Interest-free loan rather than between the sponsor
applicant and the EDA, who in turn could loan the monies
to the business at a low-interest rate of 1 or 2%.
Two other GMEF applications expected this year are from
All -Temp Distribution who is proposing to construct a
50,000 sq ft refrigerated warehouse and employ 20. And
Custom Canopy who is proposing to construct a 9,300 sq ft
office/production facility and employ 13-16. Circuit
Technology, Inc. and the Irish Company have also inquired
about local financial incentives.
The EDA briefly discussed the HRA's decision to eliminate
other financial packaging from the contract between the
HRA and Business Development Services, Inc. The EDA
supported the HRA'o decision based on the fact that a
company is informed upfront of their responsibility to
pay the other financial packaging application fees. The
HRA will continue to subsidize the TIP application fee.
b) Acknowledgement of receiving the 1993 Economic
Development Work Plan - Members were informed that the
IDC will maintain tradition and market to industrial
prospects only and the Chamber will assist
commercial/retail proopecto. Harvey Kendall made a
motion acknowledging receipt of the 1993 Economic
Development Work Plan. Seconded by Al Laroon and with no
further discussion the motion passed unanimously.
Pago 3
EDA MINUTES
JANUARY 27. 1993
c Other - Koropchak provided EDA members with a copy of
eligible costs under the GMEF real property
acquisition/improvements and machinery/equipment policy
as prepared by Mr. Mosford.
7. ADJOURNMENT.
The EDA meeting adjourned at 8:45 p.m.
011ie Koropchak, EDA -Executive Director
Page 4
EDA AGENDA
MARCH 30, 1993
Consideration to review a oreliminary and formal GMEF
application for Stephen P. and Joan M. Birkeland, Jr. (Custom
Canopy).
Mr. Jim Beyl, marketing manager for Custom Canopy will be
present at the EDA meeting. Mr. Beyl represents applicants,
Stephen P. and Joan M. Birkeland, Jr., who are on vacation.
Reference and Background:
GMEF LOAN APPLICATION REQUEST:
$100,000 at 2% below prime with five year balloon.
PROJECT SUMMARY:
Custom Canopy, a Minnesota sole -proprietorship, was founded In
1983 by Stephen P. Birkeland, Jr. The company designs,
manufactures, and installs quality canopies. The company's
structural engineers design individual canopies to meet all
structural loading and local building code requirements. They
offer a wide range of fascia and trim materials, finishes, and
colors that meet or exceed the highest standards of the
Cindustry. Their standard deck panels are of a gauge
galvanized steel with a baked enamel finish. Their market
area currently is the upper Midwest. Some of their major
customs are Pump & Meter, Holiday Station, and others being
Cenex, SuperAmerica, etc.
Currently, Custom Canopy leases production space in
Albertville and office space in Rogers. The proposed
office/manufacturing facility will allow the company to
conduct business under one roof thereby Increasing the
company's efficiency and professional image. The relocation
to Monticello will be within a closer proximity to the owner's
Buffalo residents and enable a closer commute for many of the
company's current work force.
The property will be in the name of Stephen P. and Joan M.
Birkeland, Jr., husband and wife, and will be leased to Custom
Canopy. A Purchase Agreement for Lot 8, Block 2, Oakwood
Industrial Park, was executed between the buyers and sellers,
Oakwood Industrial Partnership, on March 12, 1993. The Bank
of Elk River has given preliminary approval of a first
mortgage real estate loan for up to 70% of the appraised value
of Custom Canopy's building and land. Project general
contractor is C. 1. Construction, Inc., Elbow Lako, Minnesota.
CPreliminary building plane were reviewed by Monticello City
Pago 1
EDA AGENDA
MARCH 30, 1993
Staff in January. It is anticipated that final building and
site plans will be submitted to the City for approval the week
of March 29.
The annual $5,000 pay-as-you-go TIF assistance will be
confirmed through the execution of a Redevelopment Agreement
between the HRA and the Birkeland's.
The Birkeland's will construct a 9,320 sq ft metal facility,
Including 1,320 sq ft of office space and 8,000 sq ft of
production/storage space. The back of the facility will be
designed for future expansion. All materials, supplies, and
equipment will be stored inside the new facility.
Construction anticipated to begin May 1, 1993 with completion
In October.
Existng full-time employment is 13 with projections of another
three full-time within two years. Starting wage is $6.00 per
hour.
The uses and sources of funds for this project were estimated
as follows:
i
Original Uoeo of Funds
Land $ 77,000
Construction $290,000
Working Capital $100,000
TOTAL. USES $067,000
Uoes of Funds
Land S 63,600
Construction $313,675
TOTAL USES $377,075
Sourceo of Funds
Bank (up to 70% of appraised $235,000
value, anticipated $235,000)
GMEF $ 42,500
Equity $ 26,575
GAP either bank or equity $ 73,000
(Preliminary appraisal $440,000)
TOTAL SOURCES $377,075
i
Page 2
EDA AGENDA
MARCH 30, 1993
The pay-as-you-go TIF assistance is not accepted by lending
institutions as equity; however, the amount may be considered
in the cashflow of the company's projections.
This project will be structured as a participation between the
Bank of Elk River and the GMEF. The Birkeland's will document
their expenses associated with construction of the facility
and "draw-down" funds from the Bank of Elk River. The GMEF
will be secured by real estate, guarantees, and an assignment
of the lease.
GREATER MONTICELLO ENTERPRISE FUND (GMEF) GUIDELINES
PUBLIC PURPOSE CRITERIA: Must comply with four or more of the
criteria listed below, criteria 01
being mandatory.
1. Creates new jobs: 13 immediate new (37.5 hpw) jobs, 3
additional (37.5 hpw) jobs within
two years.
2. Increases the community tax base: Estimated Market
Value of $273,118 or
estimated Tax
Capacity of $10,990.
3. Factors: Will assist an existing industrial business to
expand and relocate their operations. The
business and proposed project is compatible
with the comprehensive plan and existing
zoning policies. The company's product is not
available within the city and no potential
adverse environmental effects are anticipated.
4. Used as a secondary source of supplement conventional
financing: The Hank of Elk River gave preliminary
approval to finance a real estate
mortgage of up to 70% of the appraised
value for Custom Canopy building and
land.
5. Used as gap financing: The bank's preliminary approval
was for up to 70% of the
appraised value with an
anticipated loan amount of
3235,000. Since the
preliminary appraisal came in
at $440,000, the $73,000 gap
Page 3
EDA AGENDA
MARCH 30,
1993
will either be financed by the
bank or through equity.
Additionally, the business will
finance their working capital
needs.
6.
Used to assist other funds: No Federal, State or
Regional Funds are being
sought.
GREATER MONTICELLO ENTERPRISE FUND POLICIES,
I.
BUSINESS ELIGIBILITY:
Industrial business: Yes.
Located within city limits: Yes, Toned I-2.
Credit worthy existing business: Yes, letter from
Bank of Elk River.
$10,000 loan per each job created or $5,000 per every
$20,000 in property market valuation, whichever highest:
_
$160,000 or $68,500, respectively.
Recommend: $42,500 GMEF approval.
II.
FINANCING METHOD:
Companion Direct Loan: Such loan may be subordinated
to the primary lender(s) if
requested by the primary
lender(s). The GMEF loan will
be the second real estate
mortgage.
11I. USE OF PROCEEDS:
Real property development.
IV. TERMS AND CONDITIONS:
Loan Size: Maximum not to exceed 50% of the
remaining GMEF balance. Balance 7-21-92,
$85.000. Maximum loan size. $42,500.
Page 4
EDA AGENDA
` MARCH 30, 199'1
Leveraging: Minimum 60% private/public non-GMEF.
Maximum 30% GMEF. Minimum 10% equity of
GMEF loan.
Bank $235,000 (62.3%)
GMEF S 42,500 (11.3%)
Equity $ 26,575 ( 7.0%) (62.5% GMEF)
GAP S 73,000 (19.4%)
Loan Term: Real estate property maximum of 5 -year
maturity amortized up to 30 years.
Balloon payment at 5 years.
Recommend: Amortize over 20 years,
balloon in five years.
Interest Rate: Fixed rate not less than 2% below
Minneapolis prime rate.
Recommend: 4.5% interest rate.
Loan Fee: Minimum fee of $200 but not to exceed
1.5% of total loan project. $42,500 X
.015 - $637.5O.
Recommend: $600.
Prepayment Policy: No penalty for prepayment.
Deferral of Payment: 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
Hoard approval.
Interest Limitation on Guaranteed Loans:
Subject to security and/or reviewal by EDA.
Assumabillty of Loan: None.
Business Equity Requirements: Subject to type of loan
as determined by the RDA.
Collateral: Mortgage deeds, accurlties, and/or
guarantees as per the GMEF attorney.
Page 5
EDA AGENDA
MARCH 30, 1993
Non-performance: The approved GMEF loan shall be null
and void if funds are not drawn upon
or disbursed with 120 days from date
of EDA approval.
Recommend: Approved GMEF shall
be null and void on
July 30, 1993.
GMEF legal fees: Responsibility of the GMEF
applicant.
B.
Recommendation:
Recommendation is to review the enclosed information prior to
the EDA meeting for discussion and potential questions of Mr.
Jim Beyl. Consideration to approve GMEF is the next agenda
Item.
C.
Supportino Data:
1.
Copy of the preliminary GMEF application from Mr. Stephen
Birkeland, Jr.
�- 2.
Copy of the purchase agreement for Lot 6, Block 2,
Oakwood Industrial Park.
3.
Copy of site location.
4.
Copy of preliminary financial approval from Bank of Elk
River.
5.
Copy of the executed Release of Information form.
Supporting Data On -hand:
1.
Personal resumes; summary of company sales, costa, and
profits; business plan.
2.
Copy of the General Contractors contract.
3.
Copy of Company and Personal Financial Statements as
prepared by a CPA.
4.
Final build.tng and lnndocaping plans (no drainage plans).
5.
Executed TIB Preliminary Agreement between the HRA and
the dovelopers and 85,000 check.
6.
The Private Development Contrsct under proparation by
Holmes & Graven (Must be exocuted by or prior to April
12, 1993).
7.
Final approval of TIF Plan for District No. 1-15
scheduled for April 12.
0.
Verbal preliminary appraisal of 3440,000 for land and
building (Pat Dwyer, Bank of Elk River, 3-23-93).
Page 6
C:
GREATER MONT'CELLO ENTERPRISE
250 EAST BROADWAY
MONTICELLO, MINNESOTA
PRELIMINARY APPLICATION FOR LOAN
APPLICANT: '�� \iQ -7j�,C \CSM Ac
FIRM OR TRADE NAME: ),5-4.nM' ('nnrv)t
BUSINESS ADDRESS: '013 ',�pt ;Q,7S IS fes( IY)n) `C ti7`/
(4 b Street) (C1Cl State) 1p COCK)
TELEPHONE: BUSINESS ((011 OPP-RH7R HOME vAd) U.Sa-�5 {A
DATE ESTABLISHED:_&L�,p(j �CiN EMPLOYER I.D. $: yI -
X SOLE PROPRIETOR CORPORATION _ PARTNERSHIP
TT MANAGEME"IT
NAME _r TITLE OWNERSHIP 8
IDI ? rv— t, ,
PROJECT LOCATION:
NEW BUSINESS EXISTING BUSINESS
TOTAL PROJECT COST ESTIMATE: $ 0 3(.-7, Ooa
PROPOSED USES:
LAND s 7 !, o o 0
EXISTING BUILDING
CONSTRUCTION 7°1u.00c.3
MACHINERY CAPITAL -
WORRING CAPITAL /Od. 00 0
OTHER
TOTAL USES 5%--70000
PROPOSED BEGINNING DATE: A ;�
ESTIMATED COMPLETION DATE:
REQUEST: , .
AMOUNT of LCAN #/oa , 600
MATURITY S TERMS yN. 'ec I.— ()r ..01
REQUESTED Cvf).- 6.211uoti
APPLICANT'S
EQUITY # /32, coo
LOAN PURPOSE Pew �. t cl , „} A . —
Lac yfia"
TITLE TO
PROJECT ASSETS TO BE HELD BY: _ OPERATING ENTITY ALTER EGO
PARTICIPATING LENDER.'JL,�jyy f k F1k ',QC( 00
11 '� 1 Namel ACCMS)
t�) �67��` Coli) 4�1• loom
Wntacc Berson) (Telepnone !)
PRESENT ! OF EMPLOYEES: PROJEC:M 1 OF EMPLOYEES 16
ADDITIONAL PROJECT INFORMATION:
APPLICANT SICNATL'RE: • LJ� DATE SIGNED:
STANDARD ;u "
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March 15, 1993
Ms. 011ie Koropchak
City of Monticello
PO Box 1147
Monticello, MN 55362
RE: Stephen P. Birkeland, Jr., dba Custom Canopy
Dear 011ie:
This bank has done business with Custom Canopy since April 1985.
Custom Canopy is a valued deposit and loan customer.
Over the past eight years we have extended credit many times for
equipment and accounts receivable. All loans have been paid as
agreed. My records show Custom Canopy's checking account had a
medium five figure balance during the past twelve months with
no overdrafts.
This bank has given preliminary approval of a first mortgage real
estate loan for up to 70% of the appraised valuo of Custom
Canopy's building and land. We anticipate this loan to bo about
$235,000. The dollar amount of our approval 1s contingent on the
appraisal.
If you or your committee have any questions, please contact me at
441-1000.
S ilpPeo1Y.
Patrick H. Dwyer
Senior Vice President
250 Ease Broadway
Monticello, MN 55362-9245 AUTHORIZATION RELEASING INFORMATION
Phone: (612) 295-2711
Merro: (612) 333-5739 Q
Name of Financial Institution
(O 2.�,()
Street
f k e{ //Al1 5Y.3-36
City State Zip
I hereby authorize any person to furnish to the Monticello Economic
Development Authority, 250 East Broadway, PO Box 1147, Monticello,
Minnesota 55362, any and all financial records, reports,
statements, or other doc ent tion or information in their
possession regarding: (AVUw (Mk637a/
Developer's name(s) d
Pn Z7<-- Aqt e,s PSN ST371
Dovelopor's address
Upon presentation of this authorization or an exact copy thereof,
you are directed to permit the personal review, copying, or
photostating of such records, information, and evidence and provide
same to the Monticello Economic Development Authority,
I, the undersigned, acknowledge the said above information may
become public.
This authorization shall be valid
the entire term of the loan.
Dated: % .. try s'— 9 -� eCJt!
]�L
Nu Ch izad Signature
Ono copy for each principal of a
partnership or corporation as
well as the entity itself.
EDA AGENDA
MARCH 10, 1993
Consideration to anorove or disapprove GMEF Loan No. 006 for
Stephen P. and Joan M. Birkeland. Jr. (Custom CanODV).
A. Reference and Backaround:
Following discussion of the preliminary and formal GMEF
application for Stephen P. and Joan M. Birkeland, Jr. dba
Custom Canopy; the EDA is asked to consider approval or
disapproval of the recommended $42,500 GMEF Loan. The
applicant requested terms of 2% below prime with a balloon
payment in five years.
First, the EDA needs to determine If the GMEF loan application
from the Birkeland's will encourage economic development, and
that the proposed Custom Canopy project and application
complies with the GMEF public purpose criteria and policies.
Secondly, with the assumption the project application complies
with the public purpose criteria and policies, the EDA must
determine the amounts of the loan, Interest rate and terms,
service and legal fees, and required equity. Additionally,
the EDA must determine necessary collateral or any other
conditions.
B. Alternative Actions:
I A motion to approve GMEF Loan No. 006 for Stephen P. and
Joan M. Birkeland, Jr., dba Custom Canopy. Loan amount
and terms as recommended: $42,500 for real property
development at 4.3% Interest rate amortized over 20 years
with balloon payment In five yeara,
2. A motion to approve GMEF Loan No. 006 for Stephen P. and
Joan M. Birkeland, Jr., dba Custom Canopy. Loan amount
and t-!rms as determined by the EDA.
3. A motion to disapprove GMEF L.oan No. 006 for Stephen P.
and Joan m. Birkeland, Jr, , dba Custom Canopy.
C. Staff Recommendation:
Aonumlng the EDA determined that the proposed project complies
with the GMEF public purpose criteria and policies, staff
supports Alternative No. 1. Additionally, the EDA must
determine service/legal fees and equity/collateral
requirements, and any other conditions, and direct the City
Page I
EDA AGENDA
MARCH 30, 1993
Attorney to prepare necessary closing documents. Motion
should be subject to final project funding approval, City
ordinance and zoning compliance, and Private Development
Contract execution.
SUDDortin❑ Data:
Copy of the GMEF Approval Form.
Copy of the EDA Checklist.
Page 2
f APPROVAL OF
GREATER MONTICELLO ENTERPRISE FUNDS
BY
ECONOMIC DEVELPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
Preliminary Loan Application Approval
Loan terms negotiated and agreed upon
betweeen the developer, the lending
institution, and the EDA Executive Director
Formal Loan Application and Financial
Statements analyzed by the lending
institution,
Building and Site Plan Preliminary and/or
Final Review.
Building Permit approval or construction
commitment.
2-19-93 with loan amount modifica
ion.
3-1-93
BANK OF ELK RIVER
PRELIMINARY REVIEW IN JANUARY '93
PORTION OF FINAL PLANS SUBMITTED
3-24-93.
Loan documents reviewed and/or prepared
by the City Attorney.
ECONOMIC DEVELOPMENT AUTHORITY APPROVAL OR DISAPPROVAL:
LOAN NUMBER CHEF LOAN NO. 006 LOAN APPROVED
BORROWER STEPHEN P. AND JOAN M. BIRKELAND, JR., dba CUSTOM CANOPY
ADDRESS 12903 MAIN STREET, SUITE 203 LOAN DISAPPROVED
LOAN AMOUNT ROGERS, MN 55374
RATE DATE MARCH 30, 1993
TERMS
FEE
A motion was made by EDA Commissioner to
(approve - disapprove) Greater Monticello Enterprise Funds in the
amount of dollars
and cents to developer
this day of Seconded
by EDA Commissioner
YEAS: NAYS:
GMEF disbursed 19 _ by Check No.
EDA Treasurer
CITY COUNCIL MAY REVERSE AN EDA LOAN DECISION WITHIN TWENTY-ONE
�" DAYS OF EDA APPROVAL. APRIL 12, 1993
GMEF Approval
Page 2
ACCEPTANCE OF TERMS
I (We) hereby accept the terms stated above as approved by the
Economic Development Authority in and for the City of Monticello.
DATED
C
STEPHEN P. BIRKELAND. JR.
JOAN M. BIRKELAND
GMEF FORMAL APPLICATION
MONTICELLO EDA CHECKLIST FOR CC— C5—z�
1-,� AU Preliminary GHEF Loan Application.
Formal GMEF Loan Application -- Business Information:
oAi History and Description of business.�v�+6 )
Resumes of principals and senior management.
Financial Information:
�ys.J Personal If
statements -- all principals with
u 20 percent ownership or more and/or guarantors.
Busineis financial statements current within 60 days --
operatng statement and balance sheet.
Aging of existing accounts receivable and payables.
Schedule of existing debt.
Operating projections for two years. C6-4)
Project Information:
�nl,2i Purchase Agreement.
1 �e�,j Cost estimates with supporting documentation.
Project Appraisal.
"–� Collateral Listings.
Business benefit analysis -- job creation/efficiency,
etc.
Lander commitment lettere or commitment agreement between
lending institution and the EDA.
Prior to Loan Closing:
Certificate of Good Standing (verifies existence).
Corporation Resolution (who is authorized to borrow).
Articles of Incorporation/By Laws (listing of do's and don't).
Pieitious Name Statement.
( Equity deposti verification.
l Applicable permits and/or licanson.
Lease Agreements
Monticello EDA Checklist for
Page 2
UCC I Filings: State ME) Date of Filings continuations
UCC II Filings: County (Fixtures)
Evidence of insurance -- life and property.
Preliminary title report.
Certification of current status on employment
compensation, workman's compensation, and state
and federal tax withholdings.
Partnership Agreement.
�y Personal Guaranty(s)
Authorization Releasing Information.
Loan Agreement.
Subordination Agreement.
The EDA reserves the right to request additional information if so
determined.
OPTIONAL REQUIREMENTS
Business Information:
i. Business and marketing plan.
tj
Franchise Agreement,
Financial Information:
Month -by -month cash flow.
Source of equity capital.
Personal/business federal and state tax returns.
Proforma balance sheet.
Project Information:
City, state, fedeal review by
Plans and specifications -- city site plan review.
EDA AGENDA
MARCH 30, 1999
Consideration to review the status of the UDAG and State
Economic Recovery Grant Accounts.
Reference and Backaround:
Due to concerns raised by the EDA and City Council regarding
future funding sources for the GMEF, I prepared a financial
summary of the UDAG and State Economic Recovery Grant
Accounts. with the additional above information, the 1993
GMEF Projections may vary from those accepted in January.
Additionally, with the cash -in -bank, projected loan paybacks,
and appropriations I'm not clear to what sources to consider
for the GMEF balance. You may note for GMEF Loan No. 006
approval, I used $85,000 the remaining balance as of 7-21-92.
This information was reviewed by the IDC in March and Is
Intended to provide the EDA with a clearer and bigger picture
for future funding. The information will be reviewed at the
EDA meeting.
Page i
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
REMAINING
Principal $256,957.71
$ 98,953.68
$156,004.03
Interest $ 78,699.09
$ 43,234.27
$ 35,464.82
TOTAL $335,656,80
$142,187.95
$193,468.85
REVENUFS
Principal Payback
$ 98,953.68
Interest Payback
$ 43,234.27
Interest Income - Investment
1990
$ 3,562.62
1991
$ 8,593.59
1992
S 8,436.32
TOTAL REVENUES
$162,780.48
EXPENDITURES
1991 Transfer to GMEF
$ 65,000.00
1992 Transfer to GMEF
S 20.000.00
TOTAL EXPENDITURES
$ 65,000.00
FUND BALANCE FOR ECONOMIC DEVELOPMENT
$ 77,780.48
January 31, 1993
ti STATE ECONOMIC RECOVERY GRANT
March
17, 1993
PAYBACK BEGAN IN 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.
ORIGINAL
PAID
REMAINING
Principal $170,000.00
S 5,327.90
$164,672.10
Interest $ 37,969.92
2,122.45
S 35.847.47
TOTAL $207,969.92
$ 7,450.35
$200,519.57
APRIL 30, 1997
GMEF
STATE
Principal $170,000.00
$ 99,400.23
$ 70,599.77
Interest S 37.969.92
S 31.803.44
S 6,166.48
TOTAL $207,969.92
$131.203.67
$ 76,766.25
REVENUES
Principal
$ 5,327.90
Interest
$ 2,122.45
Interest Income - Investment
S 0
TOTAL REVENUES
$ 7.450.35
EXPENDITURES
Transfer to GMEF
S 0
TOTAL EXPENDITURES
$ 0
FUND BALANCE FOR GMEF, Marcli 17, 1993 $ 7,450.35
GMEF LOANS
March 17, 1993
Economic Development Authority (EDA) was created in 1989
APPROVED LOANS
Tapper (1990)
$ 88,000.00
Muller (1990)
$ 50,000.00
SMM (1992)
$ 50,000.00
Aroplax (1992)
S 85,000.00
TOTAL APPROVED LOANS
$273,000.00
LOAN DISBURSEMENTS
Liquor Fund
1991 to GMEF
S 73,000.00
1992 to GMEF
X115,000.00
Total Liquor Fund
$168,000.00
UDAG
1991 to GMEF
$ 65,000.00
1992 to GMEF
$ 20,000.00
Total UDAG
$ 85,000.00
TOTAL LOAN DISBURSEMENTS $273,000.00
1993 GMEF PROJF.CTiONS
(No Interest Income - Investment)
GMEF CASH BALANCE, January
31, 1993
$ 32,822.33
UDAG CASH BALANCE, January
31, 1993
$ 77,780.48
STATE ERG CASH BALANCE, March
17, 1993
S 7,450.35
GMEF BALANCE, January 31,
1993
$118,053.16
LOAN DISBURSEMENTS AND REQUESTS
Custom Canopy, April 1993
$ 42,500.00
GMEF BALANCE
$ 75,553.16
Liquor Fund Appropriation
Request
$125,000.00
GMEF BALANCE
$200,553.16
Wilson Tool, July 1993
$100,000.00
GMEF BALANCE
$100,553.16
Liquor Fund Appropriation
Request
$ 60,000.00
GMEF BALANCE
$160,553.16
All -Temp, July 1993
S 80,000.00
$222,500.00
$185,000.00
GMEF BALANCE
$ 80,553.16
PROJECTED PAYBACK
,,._JDAG, January 31, 1994
$ 27,971.40
STATE ERG, January 31, 1994
$ 24,834.50
GMEF, January 31, 1994
Tapper
S 8,832.64
Muller
$ 5,018.64
SMM
$ 3,795.84
Aroplax
P 14,900.76
$ 32,548.08
32,548.08
TOTAL PROJECTED PAYBACK
$ 85,353.98
GMEF BALANCE, January 31,
1994
$165,907.14
C
Council Agenda - 3/8/93
7. Consideration of reviewing vear-end liauor 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 5.85 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
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 of $605,417 has
been transferred to date for the public works building expansion project, and
$115,000 fins been utilized for the revolving loan fund loans to Aruplax and
part of Suburban Manufacturing' s loan. After nto account these
transfers, the liquor fund still has approximat $280,000 i funds available.
Part of the $280,000 surplus has been earmarke nal revolving loan
funds wtaling $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.
Council Agenda - 3/8/93
developers as part of the assessment roll. While the City does not normally
have $550,000 laying around in a checking account, after reviewing our
investment schedule, I feel I could arrange to have funds available to pay this
improvement project cost if the Council decides to go with alternative #1.
Under option N1, the City would establish a fair interest rate, and the
developers would save the cost of selling a bond.
None.
SUPPORTING DATA: