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EDA Agenda 04-29-1997AGENDA MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Tuesday, Apri129, 1997 - 7:00 p.m. City Hall MEMBERS: President Ron Hoglund, Vice President Barb Schwientek, Assistant Treasurer Ken Maus, Clint Herbst, Roger Carlson, Bill Demeules, and Darrin Lahr. STAFF: EDA Treasurer Rick Wolfsteller and Secretary/Executive Director Ollie Koropchak. GUESTS: Rusty Fifield, Ehlers & Associates, Inc. Tom Lindquist/Carol Vogel, First National Bank Kevin Doty, Marquette Bank. 1. CALL TO ORDER. 2. CONSIDERATION TO APPROVE THE FEBRUARY 11, 1997 EDA MINUTES. 3. CONSIDERATION TO REVIEW CITY 1997 PRIORITIZATION LIST. 4. CONSIDERATION TO DISCUSS FUNDING OPTIONS FOR REVITALIZATION OF THE DOWNTOWN AREA (RETAIL/COMMERCIAL LOAN PROGRAM). Presentation by Rusty Fifield. 5. OTHER BUSINESS. 6. ADJOURNMENT. MINUTES MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Tuesday, February 11, 1997 - 7:00 p.m. City Hall MEMBERS PRESENT: President Ron Hoglund, Assistant Treasurer Ken Maus, Clint Herbst, and Roger Carlson. MEMBERS ABSENT: Vice President Barb Schwientek, Bill Demeules, and Al Larson. STAFF PRESENT: Executive Director Ollie Koropchak. STAFF ABSENT: Treasurer Rick Wolfsteller. 1. CALL TO ORDER. President Hoglund called the EDA meeting to order at 7:00 p.m. 2. CONSIDERATION TO APPROVE THE OCTOBER 24, 1996 EDA NIlNUTES. Ken Maus made a motion to approve the October 24, 1996 EDA minutes. Seconded by Clint Herbst and with no corrections or additions, the minutes were approved as written. • 3. CONSIDERATION TO ELECT 1997 EDA OFFICERS. Ken Maus made a motion accepting the letter of resignation from EDA Commissioner Al Larson. Clint Herbst seconded the motion and with no fiu-ther discussion, the motion was passed unanimously. Ken Maus made a motion to elect Ron Hoglund, President; Barb Schwientek, Vice President; Rick Wolfsteller, Treasurer; Ken Maus, Assistant Treasurer; and Ollie Koropchak, Secretary of the EDA for 1997. Clint Herbst seconded the motion. Further discussion requested the Housing and Redevelopment Authority (HRA) recommend a commissioner of the HRA to the City Council for appointment to the EDA. This as a replacement for the EDA seat vacated by Al Larson. With no further discussion, the motion passed unanimously. 4. CONSIDERATION TO REVIEW AND ACCEPT THE YEAR-END EDA FINANCIAL STATEMENTS~.ACTIVITY REPORT~.AND PROPOSED 1997 BUDGET. With Wolfsteller being absent, Koropchak reviewed the year-end EDA financial statements with commissioners. The December 31, 1996 Fund Balance of the Statement • EDA NIINUTES FEBRUARY 11, 1997 of Revenues, Expenditures, and Changes was $942,170.58. The increase in revenue was predominantly due to disbursements from the Liquor Fund Appropriation and the UDAG Cash Balance Funds for the approved $70,000 SELUEMED loan and $100,000 Tapper loan, respectively. The December 31, 1996 GMEF Balance Sheet recorded aCash-In- Bank balance of $275,328.17. The 1997 Cash Flow Projections were based on historical EDA data and projected an expected cash balance of $331,289.01 on December 31, 1997. Koropchak noted under Expenditures, the Notes Payable -Liquor Fund Reimbursement of $25,000. This projected reimbursement was based on the August 6, 1996 EDA minutes: The commissioners approved a motion for the EDA to pay back the City the amount disbursed from the Liquor Fund ($383,000). This the original intent of the EDA and as an act of good faith. The annual payback in an amount not-to-exceed $50,000, provided the year- end GMEF non-committed balance is greater than $250,000. Payback subject to annual review and approval by the EDA. EDA members discussed authorizing the proposed $25,000 payback for year-end 1996 as per the 1997 Cash Flow Projections. Commissioners felt perhaps a better use of the $25,000 would be to raise the maximum GMEF loan amount from $100,000 to $125,000 or perhaps create an independent loan fund for commerciaUretail businesses to support the implementation of the Monticello Downtown/Riverfront Plan under study. EDA members recommended the description of the line item for Notes Payable -Liquor Fund Reimbursement be changed to read Notes Payable -Liquor Fund with an asterisk. The asterisk noting the EDA will review for authorization to reimburse the $25,000 at the October 1997 EDA meeting. The EDA members reviewed the year-end activity report. Ken Maus made a motion to accept the Statement of Revenue, Expenditures, and Changes in the Fund Balance, the Balance Sheet, and the Activity Report for year-end December 31, 1996, and the 1997 Cash Flow Projection. Acceptance of the 1997 Cash Flow Projection was subject to the recommended changes stated above. Roger Carlson seconded the motion and with no fiu~ther discussion, the motion passed unanimously. The end-year reports to be submitted to the City Council on February 24, 1997, for compliance of the EDA Ordinance. 5. CONSIDERATION TO REVIEW YEAR-END FUND BALANCES OF THE GMEF, UDAG, AND ERG FUNDS. Koropchak reported all paybacks of local and state loans are current. The year-end cash balance for the three sources of funds available to the EDA are GMEF, $275, 328.17; UDAG, $68,896.12; and SCERG-Aroplax, $129,483.04 for a total of $473,707.33. Additionally, Koropchak noted the last date of payback to the city from the SCERG is January, 1997. The annual UDAG payback is $27,971.40 and ends January 2000. This being an informational item, no action was taken by the EDA. 2 EDA MINUTES FEBRUARY 11, 1997 6. CONSIDERATION TO REVIEW THE GMEF GUIDELINES FOR POTENTIAL AMENDING. Commissioners briefly discussed the GMEF fee criteria ofnot-to-exceed 1.5% of the loan or minimum fee of $200. According to local banks, the lender's fee is running about 1.0% of the loan. Commissioners agreed the GMEF fee criteria did allow flexibility since the EDA retains the right to reduce or waive the loan fee or portion of the loan fee. Previously, the EDA has maximi?ed the 1.5% fee. Ken Maus made a motion to review the loan size criteria at a future meeting. Clint Herbst seconded the motion and with no further discussion, the motion passed unanimously. 7. ('ONSIDERATION TO REVIEW THE DRAFT COPY OF THE 1997 ECONOMIC DEVELOPMENT PRIORITIZATION WORKSHEET FOR INPUT. EDA members received a copy of the prioritization worksheet and a copy of the City of Big Lake Revolving Loan Fund Guidelines. Commissioners recognized the higher failure rate of retail/commercial businesses which therefore poses a greater risk for payback of loans. The EDA agreed to explore for establishment a commerciaUretail revolving loan program for real property rehabilitation and the potential to develop policy guidelines which would encourage owners to meet Standard Building Codes and the American Disability Act Codes and increase the City's tax base. The EDA did not mention an interest to develop a loan program for facade improvements. The second interest of the EDA was to explore for establishment a Redevelopment Loan/Grant. Example: $100,000 improvement costs, $25,000 grant. To encourage commerciaUretail redevelopment. 8. OTHER BUSINESS. None. 9. ADJOURNMENT. The EDA meeting adjourned at 8:~0 p.m. Ollie Koropchak, Executive Director z MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY GREATER MONTICELLO ENTERPRISE FUND (GMEF) 1997 Cash Flow Projection BEGINNING CASH BALANCE, January 1997 $275,328.17 RECEIPTS Appropriations, Expected - SCERG $100,000.00 Notes Amortization Payments - Tapper Inc. ($736.07 Mo.) 8-97 $ 5,888.56 Notes Receivable $ 70,989.14 Muller Theatre -0- SMM, Inc. ($316.32 Mo.) 11-97 $ 3,479.52 Notes Receivable $ 41,350.00 Aroplax Corp. ($1,241.73 Mo.) 12-99 $ 14,900.76 Custom Canopy, Inc. ($269.03 Mo.) 6-98 $ 3,228.36 Standard Iron ($795.49 Mo.) 7-01 $ 9,545.90 Vector Tool ($380.18 Mo.) 11-00 $ 4,562.16 Tapper's II ($760.36 Mo.) 4-Ol $ 9,124.32 SELUEMED ($1,031.01 Mo.) 9-03 $ 12,372.12 nterest Income - Investment $ 5,000.00 ~an Fees $ 600.00 Miscellaneous S 1,000.00 TOTAL RECEIPTS $282,040.84 TOTAL BEGINNING BALANCE AND RECEIPTS $557,369.01 EXPENDITURES GMEF Loans T.J. Martin, Inc $ 50,000.00 Kleer-Flo $ 70,000.00 Other $ 80,000.00 Notes Payable - Liquor Fund* $ 25,000.00 Legal Fees $ 1,000.00 Service Fees S 80.00 TOTAL EXPENDITURES 5226,080.00 EXPECTED CASH BALANCE, December 1997 $331,289.01 * Review for authorization to reimburse October 1997 EDA AGENDA APRIL 29, 1997 3. Consideration to review City 1997 Prioritization List. A. Reference and Background: Prior to the EDA discussing the next agenda item, I felt it important to bring you up to speed on the prioritization list under preparation by the city council and star Enclosed is a copy of the prioritization project list as ranked by the HRA and EDA members which was forwarded to City Administration for intergration into a master list. The master list is comprised of the project lists from all city commissions and staff. In March, the City Council ranked the master list. "Establish a commerciaUretail loan" ranked number 24 and "store front redesign/revolving loan fund" ranked number 35 out of a possible 121 projects. The list has nQ been finalized as the council will have an opportunity to review their original ranking after a second meeting was held to clarify project descriptions. It is the intent of the Mayor to schedule a counciUcommission meeting for additional input prior to finalizing the list. No day-to-day projects or work load appear on the master list. Staff has developed an independent mandatory list or "to get done" project list. Within the last month, three downtown business owners and one potential leasee have contacted the Office of Economic Development regarding the availability of financial assistance. All parties are interested in upgrading the interior and/or exterior of their building. This does not include Domino's Pizza which approached the HRA and MCP earlier. This an introduction to item 4. • • 1997 PRIORITIZATION WORKSHEET OFFICE OF ECONOMIC DEVELOPMENT THE HRA PRIORITIZED THE WORKSHEET ON FEBRUARY 19,1997 SCALE: 1 TO 10. ONE BEING THE TOP PRIORITY • 1. Develop apro-active marketing program for industrial development including marketing Monticello's financing programs. 2. Finalize -Lake Tool, Prairie West, and Fay-Mar projects. 3. Establish a reserve fund for development or acquisition of industrial land. 4. Re-assess local TIF Policies. 5. Explore other redevelopment activities such as Cohen's building, mall, and hotel. 6. Develop a program and guidelines for a loan to encourage significant home remodeling. 7. Develop a program and guidelines for a volunteer acquisition program for single residential homes. 8. Develop a marketing program which markets Monticello's housing programs. 9. Explore the potential relocation of JM Oil, Riverside Oil, and Ferrellgas. 10. Explore the potential purchase of BN ROW in core city area (Refine rules for using 5th ST ROW) EDA RANKING FEBRUARY 11,1997 RANKED TWO ITEMS ONLY EDA Explore to establish commercial /retail revolving loan program for real property rehabilitation. Develop policy guidelines which encourage owners to meet Standard Budding Codes and the American Disability Act Codes to increase the tax base. EDA Explore to establish a Redevelopment Loan/Grant. Example: $100,000 improvement costs, $25,000 grant. To encourage commerciaUretail redevelopment. • • • HRA/EDA Potential to merge commissions Compare commission powers with local goals BELQW DID NOT MAKE THE TOP TEN RANI{ING BUT ARE TO REMAIN ON LIST. HRA Establish TIF Redevelopment District for Completed redevelopment of the downtown/riverfront study area CITY PROJECT Potential assistance in relocation of of businesses in the Chelsea/Highway 25 Realignment area HRA Prepare TIF Maps for GIS. Completed EDA Create file system. HRA/EDA I/2 time support staff for office of economic development Building Finalize the preparation of building permit and site review process for commerciaUindustrial development ADM Finalize the commerciaUindustrial method for payment of the Storm Sewer Trunk Fee EDA Develop a home page for site location on Internet and a-mail accessibility. EDA Develop a system to calculate development fees for industrial prospects. "Ready for Business" Planning Rename Business Campus to Industrial Campus and consideration of a reduction of the 30% green space requirement. HRA Develop a cost accounting system for TIF Districts EDA Develop a cost accounting system for GMEF Loans February 24, 1997 By Economic Development Director • February 7, 1997 Mayor William Fair City of Monticello P.O. Box 1147 Monticello, MN 55362 Dear Mayor Fair: After careful thought and consideration, I submit this letter of resignation as commissioner of the Housing and Redevelopment Authority (HRA) and the Economic Development Authority (EDA). I have served as a commissioner of the HRA since February, 1987, and have served as its Chairperson since January, 1989. I have been a commissioner of the EDA since April, 1990. During the last interview process for the vacated HRA seat, the HRA received four resumes from outstanding residents willing to serve and 'interested in the growth and planning of the City of Monticello. I've committed ten-years to community service and with the excellent and younger candidates willing to serve, I believe its the right time to step-down. I've enjoyed being a public servant and I'm proud of the projects accomplished by the HRA and EDA. , The HRA endorsed and provided financial assistance to the following projects: Mississippi Shores, a 49-unit senior housing project; Broadway Square, removal of blight to encourage redevelopment; River Mills, removal of gravel pit to encourage development; Prairie West, removal of blight to encourage redevelopment; and nine industrial development projects to increase the tax and job base of the City of Monticello. Additionally, the HRA funded the Downtown and. Riverfront Revitalization Plan under study by the Hoisington Koegler Group, Inc. The EDA has provided gap-financing to industrial businesses through the approval of nine loans for a total disbursement of $610,500. Mayor Fair February 7, 1997 Page 2 Again, I'm proud to have been a part of the growth of Monticello. This letter of resignation is effective immediately allowing the HRA the opportunity to select my replacement from one of the three remaining candidates intereviewed by the HRA on February 5, 1997. Many thanks to the City Council and residents of Monticello for the opportunity to serve as a commissioner. Sincerely, l~:Y Al L' son cc: City Council members HRA Commissioners EDA Chairperson Ron Hoglund and Commissioners / MCP Chairperson Bob Bowen and Boardmembers • •