IDC Minutes 06-21-2001MINUTES
MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE
Thursday, June 21, 2001 - 7:00 a.m.
City Hall - 505 Walnut Street, Academy Room
MEMBERS PRESENT: Chair Dick Van Allen, Kevin Doty, Mike Benedetto, Mary Barger, Susie
Wojchouski, Barb Schwientek, Ellen Perrault, and Dan Olson.
MEMBERS ABSENT: Vice Chair Tom Lindquist, Don Smith, Bill Tapper, Tom Ollig, and Don
Roberts.
COUNCIL PRESENT: Mayor Roger Belsaas.
STAFF: Jeff O'Neill and Ollie Koropchak.
l . Call to Order.
Chair Van Allen called the IDC meeting to order at 7:00 p.m.
2. Approve the May 17 2001 IDC minutes
Barb Schwientek made a motion to approve the May 17, 2001 IDC minutes. Seconded by Kevin
Doty and with no corrections or additions, the minutes were approved as written.
3. Subcommittee and Other Repo--ts:
A. Marketing -Smith In the absence of Smith, no report was given. Need to set meeting date.
B. Loner-Term Cooperative Land Use Decisions Van Allen
Van Allen stated Benedetto and himself met with O'Neill to collect background information
relative to Council decisions and questions. The il~formation useful to gain a better
understanding prior to moving ahead with discussions with the township. The objective of the
group to develop a better relationship with the township to encourage future planning (20-years
out). Van Allen noted the important of understanding the farmer's position: May be ready to
retire; however, farm important to kids. Maybe threatened by city folks. Need to break down
barriers.
C. Me-nbership -Update or acceptance of a Township Board Member as IDC member Smith
In the absence of Smith, no report. See attached a-mail which was not reported in June.
D. Mayor's Report -Belsaas
Under item 5.
E. Economic Development Report
A written report was submitted with agenda. Koropchak noted in lieu of recent newspaper
articles relative to tax increment financing, information about the use of TLF in Monticello may
be important. The information states of the City of Monticello's total tax capacity, 3.85% is
captured for the purpose of tax increment. A low percentage compared to some metro cities.
Additional information noted the rural community of Wheaton where housing increased due to
the aggressive approach used for industrial development by the EDA. Lastly, an article relative
to industrial site selection noting how ranking of site selection factors vary from the perspective
of the company.. the elected oft-cials, and the economic development professional.
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IDC Minutes - 6/21/01
4. [discuss and decision whether the [DC should meet in July and/or August.
After input from each member present, the decision was to cancel the regular July meeting of the
IDC. Next IDC meeting August 16. 20001.
5. A. Review and discuss action taken by the City Council relative to the acquisition of the
Chadwick property. See attached Council agenda and minutes.
B. What is the Council's follow-up_plan? Is industrial development one of the City Council's
Qoals? Mayor Belsaas reiterated the past negotiations with the plans to swap the Remmele and
part of Chadwick property, negotiations changed as the top soil became greater, the gravel
amount became less, perhaps Chadwick lost a developer for the Remmele, City proceeded in
good faith and installed infrastructure to Chadwick parcel resulting in a change in the land value.
Perhaps, Chadwick has a commercial client for development along the freeway. Has the
Planning Commission looked at the freeway land for commercial rather than industrial? Van
Allen informed members he attended the City Council meeting of May 29 as directed by the IDC
and representing the IDC. He requested the Council give serious consideration to the acquisition
of industrial land and to also set up a task force to resolve the differences between the City's land
use plan and the MOAA land use plans as well as deal with other issues relating to industrial
development. Van Allen emphasized the need for industrial development for the City's tax base
in light of the potential property tax exemption for Excel Energy. How does Monticello compare
to other cities or cities with power plants? How does Monticello compare to other cities based
on tax levy and budgets? O'Neill noted that most cities receive a state aid known as LGA;
however, the City of Monticello receives no LGA because of the power plant. The question was
raised: Why doesn't the City of Monticello market the Remmele parcel?
L. What is the IDC's followu~plan?
In conclusion, the designated group for long range planning will continue to work with the City
and MOAA and the Market Committee will review strategies fdr promoting industrial
development.
6. How does tax increment tinancin~ impact the City taxes?
Van Allen noted he requested this item be on the agenda. Koropchak submitted a handout
utilizing an example of a Monticello business. Based on the market value, tax capacity, and tax
rate, the illustration noted the annual impact to the school, city, and hospital taxing jurisdictions
or the amount of taxes not received by those jurisdictions during the 8 to 9-year life of the
district. Tax increment means the property taxes generated from the new improvements or
structure. Koropchak noted the business is reimbursed a determined amount of tax increment
which is outlined in a Contract. Generally, the reimbursement is to assist with the write-down
of land costs. Lastly, Koropchak outlined how Big Lake uses tax increment. Because they own
the land and the land prices are less, they use the tax increment to reimburse themself for the
land cost and the infrastructure development costs incurred by the City. The land is offered to
the business for $l . Van Allen asked: if a Monticello taxpayer asked, '`why does the City of
Monticello give tax increment to a business who doesn't pay livable wages?" What is the
ans~~er?" Good question. First, the business must meet the "but for" test which means that the
project would not develop solely on p--ivate investment in the reasonable future. Secondly, both
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the tax increment and loan pro~~rams have wage-level criteria. In Monticello, the wage-level
criteria is at least $9.00 per hour without benefits. The businesses receiving tax increment or
loans are pa}~ing wages greater than the criteria. The HRA and E;DA periodically increase their
wa~~e level criteria.
7. Other business.
a) Chamber Lunch, May 21, 1 1:50 a.m., Monticello-Big Lake Hospital, Program: "Introduction
of Queen Candidates".
None.
8. Adjournment.
Barb Schwientek made a motion to adjourn. Kevin Doty seconded the motion. Meeting
adjourned at 8:15 a.m.
Ollie Koropchak, Recorder
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