EDA Minutes 09-05-2006
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MEETING MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Tuesday, September 5, 2006 - 4:00 p.m.
City Hall - Academy Room
MEMBERS PRESENT:
Chair Bill Demeules, Vice Chair Barb Schwientek, Tom Perrault, Ron
Hoglund, Wayne Mayer, Darrin Lahr, and Susie Wojchouski.
MEMBERS ABSENT:
None
STAFF:
Executive Director Ollie Koropchak, Recorder Angela Schumann.
GUEST:
Mike Maher, Karlsburger Foods
1. Call to Order.
Chairman Demeules called the meeting to order at 4:00 PM.
The Chairman requested that the EDA move directly to item 8 to discuss the loan application for
Karlsburger Foods, due to the presence of company president Mike Maher.
2.
RollCall.
All EDA Commissioners present.
3.
Consideration to approve the November 29. 2005 and April 25th. 2006 EDA minutes.
The minutes of the November 29, 2005 meeting will be presented at an upcoming meeting.
MOTION BY COMMISSIONER WOJCHOUSKI TO TABLE ACTION ON THE MINUTES
OF THE NOVEMBER 29th, 2005 EDA MEETING TO TUESDAY, SEPTEMBER 19th, 2006.
MOTION SECONDED BY COMMISSIONER PERRAULT. MOTION CARRIED
UNANIMOUSLY.
Perrault noted that the second vote relating to item number five on page 2 of the April minutes was
not included in the minutes. Schumann stated that the motion had been carried.
Demeules noted a spelling correction on his name on the bottom of page I of the minutes
MOTION BY COMMISSIONER SCHWIENTEK TO APPROVE THE MINUTES OF APRIL
25th, 2006 AS AMENDED.
MOTION SECONDED BY COMMISSIONER PERRAULT. MOTION CARRIED
UNANIMOUSLY.
4.
Bills and Communications.
NONE.
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EDA Minutes - 09/05/06
5.
Executive Director's Report.
Koropchak reported that she had received an inquiry on relocation to the City's industrial
park from an outstate aluminum and glass manufacturer. She will be providing them with
information.
Koropchak stated that TJ Martin had paid off their loan. And that the OWJ balloon
payment is due.
6. Committee Reports
Mayer reported that the feasibility study had come back. The task force would be
meeting to review the report on the 6th and would present a formal recommendation to the
City Council on September 25th..
7. Unfinished Business
A. Consideration to review the revised EDA Fund Balances.
Koropchak reported that she had worked with the Finance department on
reconciling EDA financial statements dating back to the EDA's inception. In
working through the reconciliation, there was an approximately $180,000
adjustment that needed to be made to the cash balance report, She noted that the
revised reports were included in the EDA packet for reference.
Mayer inquired when the last reimbursement payment had been made to the liquor
store and what the EDA's reasoning was in paying back the funding. The
Commissioners indicated that the last payment had been made about 2 years prior.
Demeules stated that the EDA had sought to pay back the funding to become a
self-sufficient organization. Hoglund noted that at the time the EDA was
founded, there was no discussion on paying the funding back. Mayer stated that
if the funding can be better utilized in aiding businesses, then it should stay in the
EDA's fund balance.
8. New Business
A. Consideration to review the preliminary GMEF Loan application from
Karlsburger Foods, Inc.
Koropchak reviewed information regarding the loan application from Karlsburger
Foods. Karlsburger is constructing a 20,000 square foot building in the City's
industrial park and is anticipating approximately $315,250 in equipment and
machinery costs. Koropchak noted that the EDA has three options for choice of
loan amount. However, any amount over $100,000 requires a public hearing.
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EDA Minutes - 09/05/06
Koropchak stated that the uses and sources statements provided did not seem to
balance. Maher stated that it may have been due to the inclusion of the line of
credit use. Koropchak stated that based on the EDA's guidelines for machine and
equipment loans, 60% of the funding must be from the lender, with 30% from the
EDA. As such, the maximum loan for machine and equipment that the EDA
could approve would be $95,000. However, if the EDA chooses to look at the
building projects as a whole, versus just the estimated costs of machinery, the
30% amount allowable is greater. Koropchak stated that Karlsburger expects to
employ approximately 20 people within the next 2 years. Maher stated that he
believes the number to be 22. Mayer inquired about what would occur if the
company did not employ the stated amount by the end of the two years.
Koropchak stated that Karlsburger would need to make up that pro-rated share of
the loan, according to the business subsidy agreement.
Koropchak reported that the prime rate as of September 5th, 2006, per US Bank is
8.25%.
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Koropchak also noted that the company is expected to contribute $31,000 in tax
base, with approximately $21,000 staying within Monticello. Koropchak stated
that she had received a letter from Karlsburger's lender regarding credit in good
standing and a copy of Articles oflncorporation.
Demeules inquired as to the amount Karlsburger was seeking. Maher stated that
they would ask for the maximum amount.
Koropchak stated that pending the method the EDA chooses to use, the EDA
could loan anywhere between $95,000 for a calculation based on machinery and
equipment; $200,000 if the calculation were based on jobs, or $339,000 based on
EDA cash balance.
Wojchouski noted that essentially, the EDA has three different methods available
for determining a loan amount. Demueles noted that the loan would support the
economic development goals for the EDA and the park.
Schwientek stated that she supports the $200,000 amount calculated by job
creation.
B. Consideration to approve or deny GMEF No. 025 (determine business
subsidy amount) for Karlsburger Foods, Inc., and if applicable, call for a
public hearing.
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MOTION BY COMMISSIONER SCHWIENTEK TO APPROVE GMEF LOAN
NO. 025 FOR KARLS BURGER FOODS, INC. IN THE AMOUNT OF
$200,000, WITH TERM OF 7 YEARS, INTERST RATE OF 6.25% AND A
LOAN FEE OF $200. COLLATERLA, GUARANTEES AND OTHER
CONDITON REQUIREMENTS TO BE DETERMINED AND PREPARED BY
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EDA Minutes - 09/05/06
THE GMEF ATTORNEY. THE GMEF LOAN APPROVAL IS SUBJECT TO
PUBLIC HEARING ON BUSINESS SUBSIDY, LENDER LINE OF CREDIT
AND COUNCIL RATIFICAITON OF EDA ACTION.
MOTION SECONDED BY COMMISSIONER HOGLUND. MOTION
CARRIED UNANIMOUSLY.
MOTION BY COMMISSION WOJCHOUSKI TO CALL FOR A PUBLIC
HEARING ON SEPTEMBER 19TII, 2006 AT 4:00 PM FOR THE PROPOSED
BUSINESS SUBSIDY TO KARLS BURGER FOODS, INC.
MOTION SECONDED BY COMMISSIONER PERRAULT. MOTION
CARRIED UNANIMOUSLY.
9. Adiournment.
MOTION BY COMMISSIONER LAHR TO ADJOURN.
MOTION SECONDED BY COMMISSIONER MAYER. MOTION CARRIED
UNANIMOUSLY.