EDA Agenda 04-09-2008
AGENDA -ANNUAL MEETING
CITY OF MONTICEL- LO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, Apri19, 2008 - 6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners: President Bill Demeules, Vice President Dan Frie, Treasurer Bill Tapper, Bill
Fair, Bob Viering, and Council members Clint Herbst and Wayne Mayer.
Staff: EDA Executive Director Ollie Koropchak, Secretary Angela Schumann, and Assistant Treasurer
Tom Kelly.
1. Call to Order.
2. Roll Call.
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3. Reading and approval of the March 12, 2008 City of Monticello EDA Workshop and Meeting
Minutes.
4. Approval of the EDA bills and communication.
5. Report of the Executive Director.
6. Report of committees: Marketing and fiber optics.
• 7. Unfmished Business.
A. Consideration to approve the revised January 2008 Kennedy & Graven (EDA General
Matters) Invoice.
B. Consideration to hear subcommittee report on supplement gap funding program options to
encourage purchase of unoccupied single-family homes and to authorize further direction.
8. New Business:
A. Consideration to call for a public hearing date to amend the Business Subsidy Criteria of
the City of Monticello Economic Development Authority.
B. Consideration to review and accept 2007 Annual TIF/General Fund Report.
C. Consideration to review and accept 2007 GMEF Financial Statements, Activity Report,
and proposed 2008 Budget.
D. Consideration to review year-end balances of other sources of revenue.
E. Consideration to review revenues and expenditures associated with development of Otter
Creek Crossings (Monticello Business Center.)
F. Consideration to establish and approve a deposit and fee range for the Preliminary
Development Agreements.
9. Adjournment.
•
MINUTES
• WORKSHOP
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, March 12a', 2008
1. Call to Order.
Chairman Demueles called the meeting to order at 4:05 PM.
2. Roll Call.
Commissioners Dan Frie, Bill Tapper, Bob Viering, Clint Herbst, Wayne Mayer,
Bill Fair and Chairman Bill DeMeules present.
3. New Business.
a. Consideration to review and discuss combined HRA and EDA
Business Subsidy Criteria for possible amendment and to recommend
calling for a public hearing date at the regular EDA meeting at 6:00
p.m.
Koropchak reviewed the documents, discussing the items that were related
to the transfer from HRA to EDA.
• Herbst stated that is seems as if there are some redundancies within the
criteria documents. Koropchak responded that there are initial intent and
purpose statements, and then there is a specific section related to TIF,
which is why some of the information appears twice.
Koropchak stated that there are some other things the EDA may want to
question in terms of process. She noted that she had spoken with Ehlers,
specifically on the requirements for use of TIF, which currently require
public purpose and increasing tax base. She noted job retention as an
increasingly important priority. However, for TIF purposes, that goal may
only be used in certain circumstances. Koropchak noted that given the
current economic situation, the EDA may want to lobby policymakers to
address job retention more adequately. Citing some proposed industrial
expansion projects, Koropchak stated that she would like to see businesses
stay and grow in the community. However, this particular policy is
governed by statute, not local regulation.
Herbst noted that because it is regulated by statute, all cities are on the
same level playing field, as all cities are dealing with the current economic
situation.
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Demeules commented that if a business is looking to complete a major
expansion, Monticello can't offer subsidies, whereas if they moved, they .
could qualify for a new TIF program. Koropchak noted that not many
cities have a revolving loan program. Koropchak stated that the GMEF
funds are available, but EDA attorney Steve Bubul had indicated that the
funds were most likely not available for job retention purposes.
Herbst inquired if when trying to attract a business, the City looks at their
past to see if they are continuously moving to get TIF. Koropchak
responded that contracts do have a default for certain period requiring
them to stay. She noted that monitoring their history in communities is a
good thing to be aware of.
Viering asked how section 4.03 of the subsidy criteria is met. The section
references to financial fesibility. Demeules replied that the applicant
supplies bank information. Koropchak agreed stating that in the past, the
EDA has required a letter from the lender regarding credit worthiness and
a statement that the project couldn't move forward without public
assistance. She also noted that for some projects, the EDA asks for a pro
forma. Those items become part of the documentation for the district.
Viering inquired if wage requirements listed within the criteria are fixed.
Koropchak reported that they go up every year based on federal wages.
Mayer referenced that perhaps the EDA should consider including a
percentage versus dollar amount, so that the criteria does not have to be
amended. Koropchak stated that could be changed.
The Commissioners noted a number of minor editorial changes to the
document.
Tapper asked if Koropchak is requesting approval of the document.
Koropchak stated that she would like the EDA to review the criteria for
their knowledge and possible amendment. Tapper asked if based on
Koropchak's experience, there maybe items that need to be adjusted.
Koropchak replied there was nothing specific, but she wanted the EDA to
be familiar and feel comfortable with the criteria. Koropchak stated that if
a company is interested in these programs, the EDA would be referring to
these guidelines.
Koropchak cited the criteria for community involvement. She explained
that the HRA had wanted businesses that provided community investment.
Mayer stated that perhaps some of the items should be refined to provide
some quantification. Viering commented that the EDA may want to
consider that the document doesn't state how many criteria a business
needs to meet.
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. Fair stated the purpose isn't about meeting each criteria point by point, but
rather for the EDA to use these points as a guideline to determine whether
the project meets what the EDA desires for the community. Frie agreed,
stating that the criteria aren't intended to be a checklist, but a guideline for
the types of projects to be considered.
Mayer suggested that the community involvement criteria may create
more confusion as a highly desirable business may not currently have
local ties. Mayer asked if the criteria had been used to deny a request.
Herbst noted that in the past, the criteria related to the community's size
and interests. Fair explained this has to do with the subsidy given by the
City. He stated that these criteria suggest that the EDA is looking for
applicants who also want to be involved in the City.
It was clarified that this item came from HRA guidelines. Koropchak
noted that the HRA has always inquired about whether employees would
locate here.
Frie noted that most companies are comfortable with some kind of interest
in what their level of involvement in organizations and the community
will be. He noted that in cases where the HRA may have been asked to
consider a business representing a similar industry already in Monticello,
knowing their level of involvement was important. Herbst stated that he
agreed it is appropriate to ask, but that the EDA shouldn't necessarily
require it.
Viering suggested that the EDA consider changing the language of the
document to state clearly what is required versus what will be considered.
Frie commented that the items listed are also a means to provide an
explanation of why the program was voted for. Fair noted that all
businesses were compared equally to this criteria.
Tapper stated he thinks level of community involvement is a good
question to be asked of new businesses, but the EDA needs to be clear that
it is not mandatory.
Tapper recommended that perhaps these items should be referred to as an
evaluation checklist, rather than required criteria.
Viering agreed, stating that there are however, certain items that are
required -the "but for" test, for example. Koropchak stated that the TIF
laws clearly define what the applicant is required to meet. The criteria
being discussed were created only as a tool for reference.
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Fair noted that although some applicants may meet the statutory
requirements, some couldn't meet any of the objectives of the City. These
items provided another basis, other than just the state's minimum
numbers.
Tapper recommended that the statement in 5.03 of the proposed EDA
Business Subsidy Criteria should read "Following are the guidelines
recommended by the EDA that would enhance your application when
reviewed". Fair stated that using the word "shall" in the statement would
imply that the same set of items will be reviewed for all applicants.
Viering recommended removing the word "all" in items J and I of section
5.03.
MOTION BY COMMISSIONER FRIE TO REMOVE THE WORD
"ALL" FROM ITEMS E, I AND J.
MOTION SECONDED BY COMMISSIONER HERBST. MOTION
CARRIED, 7-0.
MOTION BY COMMISSIONER TAPPER TO AMEND SECTION 5.03
TO READ "THE EDA SHALL USE THE FOLLOWING GUIDELINES
WHEN EVALUATING A TIF REQUEST." MOTION SECONDED BY
COMMISSIONER FRIE.
In discussion, Mayer asked if that wording will imply that those will be
the only guidelines that are used. Frie noted they are required to meet the
State statutes as well. Herbst commented that the EDA will want to keep
some flexibility in evaluating the request.
MOTION CARRIED, 6-1, WITH COMMISSIONER MAYER IN
OPPOSITION.
Moving to item 6 in the document, Koropchak clarified that the term
"public participation" means what the business would like in subsidy.
Koropchak referenced. the item indicating that a Council review of concept
would occur. Koropchak stated that in the past, the review was more of an
informational update to the Council rather than a formal review.
Koropchak noted that with Council present in this EDA, this may not be
an issue. Herbst noted that in some cases for confidentiality purposes, it
may be that applicants do not want their project noted publicly until they
are ready to proceed.
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Demeules asked if the EDA should develop a fee schedule sheet. Rather
than amending the document, just reference the fee schedule. Herbst
agreed.
Mayer asked if fees for EDA programs are on the City's fee schedule.
Koropchak replied that they are not. Mayer suggested implementing an
annual EDA fee schedule. Herbst noted that by doing so, it could be
reviewed annually.
Fair noted that most of these items are related to the procedure, he agreed
that the numbers should be removed from the section.
Viering asked if the amounts listed in item 6 are fees or deposits.
Koropchak stated that they are fees. BV suggested that the item clearly
state that there will be "non-refundable fee per approved fee schedule".
Fair suggested that perhaps the best course of action is to get a completely
revised document for review and then vote on the whole document.
Koropchak referenced that each project is evaluated against each one of
the points. Fair asked if this is the City's own fund, does it need to follow
the wage levels. Koropchak confirmed.
Tapper commented that the dollar amounts also be taken out of item C in
section 5.03. Koropchak stated that she would put in the accurate
percentage level.
Demueles referenced the Greater Monticello Enterprise Fund Guidelines.
It was noted again that to be consistent, item 7 of the subsidy criteria
should read "Guidelines", rather than "Criteria".
Koropchak stated that when a project is presented for review, she provides
the EDA with information on how the application fits based on these
items. Koropchak noted that only one commercial loan has ever been
authorized, and that was the Monticello Theater.
O'Neill stated that the intent was that GMEF loans should be for new
businesses not competing with existing industries. Herbst noted that will
be harder to meet that as the City grows. Viering questioned the "non-
competitive". Mayer questioned any program that wouldn't allow
consideration of benefit to all new businesses.
Koropchak noted that the standards are very detailed. Fair asked for more
research on the "non-competitive" bullet. Fair also noted that part of the
point of this program at the time of its inception was to protect the small
C:
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business owner, particularly in the downtown. He noted that things have
changed since that time. •
O'Neill recommended re-writing the guidelines to allow flexibility that
doesn't give advantage. Mayer stated he would agree as long as it means
they are providing a better product.
Mayer asked if the original language of the evaluation criteria was written
by legal counsel.
Fair suggested that the amount of loan for eligibility be increased and
updated.
Mayer asked what the revolving loan fund balance is. Koropchak stated
that when the criteria was established, started with $200,000. Cash
balance is around $800,000. Demeules recommended a minimum loan
amount of $25,000.
b. Consideration to review the role of Ehlers & Associates and Kennedy
& Graven in the preparation of documents and individual fees
associated with Tax Increment Financing.
Herbst suggested that while some fees are set as flat fees, actual projects
vary in nature, and so the actual expenses will be uneven. Viering
commented that the attorneys should provide an estimate at the project
initiation. Fair commented that property issues can be complex, and an
estimate may not be an accurate reflection of costs as a project moves
forward. Fair noted that if the EDA uses estimates, it should have
contingencies.
Viering noted that the problem is that the flat fee is not specific to the
amount. Tapper said that in his experience the problem isn't so much the
expense, but the lack of a control mechanism. He suggested some type of
reporting on expenses. Herbst noted that reporting may also take more
time and therefore cost more money.
Viering stated that the applicant should have some expectation of probable
costs.
c. Consideration to review and discuss the Preliminary Development
Agreements including deposit amount and to recommend amending
at the regular EDA meeting.
The Commissioners did not have time to review this item prior to their
regularly scheduled meeting.
•
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d. Other
• NONE
4. Adjournment.
By consensus.
•
MINUTES
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, March 12t", 2008
1. Call to Order.
Chairman Demueles called the meeting to order at 6:10.
2. Roll Call
Commissioners Clint Herbst, Bill Fair, Dan Frie, Bill Demueles, Bill Tapper, Bob
Viering and Wayne Mayer present.
3. Reading of minutes.
MOTION BY COMMISSIONER BILL FAIR TO APPROVE THE CITY OF
MONTICELLO EDA MINUTES OF FEBRUARY 13th, 2008.
MOTION SECONDED BY COMMISSIONER VIERING . MOTION
CARRIED, 7-0.
4. Approval of the EDA bills and communications.
• Tapper asked why Kennedy & Graven had charged for the workshop session on
January 16t", and Ehlers had not. Koropchak indicated that she would talk with
them about the expense.
Tapper asked if the item noted as "follow-up on recorded documents for Walker"
on the Kennedy and Graven expenses is an additional bill Walker will be asked to
pay. Koropchak indicated that they would not be asked to pay that bills as that
expense came after the Certificate of Completion and reconciliation of
preliminary fees. Any costs after that time are charged as administrative costs to
the TIF district. Mayer asked for clarification. Koropchak responded that
administrative costs are coded to the district and recovered from the district.
MOTION BY COMMISSIONER TAPPER TO APPROVE THE BILLS WITH
THE EXCLUSION OF PAYMENT OF KENNEDY & GRAVEN BILLINGS OF
$950.00 AS RELATED TO TRAINING UNTIL KOROPCHAK CAN
NEGOTIATE.
MOTION SECONDED BY COMMISSIONER VIERING. MOTION CARRIED
6-1, WITH COMMISSIONER FAIR IN OPPOSITION.
Commissioner Fair stated that it wasn't made clear to Kennedy & Graven that
they were donating their time and believed the expense should be paid. Herbst
Economic Development Authority Minutes - 03/12/08
agreed with that point and asked Koropchak to provide further clarification in the
future.
5. Report of the Executive Director
Koropchak reviewed her report briefly, pointing out that the Higher Education
committee had met. She noted that she had gone before the Chamber of
Commerce to ask for Chamber support in moving forward on these efforts. Based
on that discussion, she had also emailed Anoka Ramsey to request that they
provide a perspective on job description for a project coordinator.
Koropchak reported that the claim against the HRA regarding a Transformation
Home Loan had been dismissed.
Herbst inquired about the call of interest on the Cedar Street Garden Center.
Koropchak replied that the caller asked general questions about the space, but she
had not heard back after the initial conversation.
6. Report of Committees
a. Marketing - Frie explained that the Marketing Committee had met to
discuss a plan to market the City as a whole and build relationships. He
noted that the billboard will eat up a majority of the budget. Frie indicated
that the committee is looking into the possibility of getting exposure on a .
commercial realtor website. At this time, they don't' have a specific
recommendation, but they are looking at alternatives.
b. Fiber Optics -Mayer reported that the task force had met and reviewed
action on the various parallel paths that are being followed in anticipation
of the bond sale.
Prior to the next agenda item, Commissioner Tapper requested reconsideration of the
meeting room setting for the EDA. Tapper stated that he has found it too difficult to
use the room due to sound and technical issues. Tapper requested that this be added as
as agenda item 8g.
7. Unfinished Business
a. Consideration to hear an update relative to the administrative cost
shortfall associated with the Purchase and Development Contract
between the EDA and W12E Properties LLC.
Koropchak reported that the EDA has not yet received payment from
Walker In-Store related to this item.
•
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Viering commented that he and Tapper had met with Brian Walker.
Walker indicated at that time that he does not dispute that he owes the
money. However, Walker believes is a matter of principal on the
communication of expenses. Viering reported that outside of this
experience, Walker reported that he did have a positive experience.
Herbst suggested that while the current flat fee is uneven, the EDA needs
to incorporate more clarity into documentation. Tapper noted that the
EDA did commit that we would propose to improve the language.
Viering recommended setting another work session to go through final
versions of the items discussed in the workshop.
Koropchak suggested writing a letter to Walker referencing the amended
language and discussing how the financial project management will be
approached in the future.
Herbst noted that Walker was supposed to pay at a certain time. Viering
suggested sending the letter and requesting payment, prior to engaging in
legal action. Tapper confirmed that they made it clear that the amount
would stand.
Fair recommended that instead, the EDA should keep the letter regarding
improvements to the procedure separate and then follow the normal
. procedures for the invoice.
The consensus of the Authority was to table discussion for procedure and
then letter.
b. Consideration to approve the January 21, 2008 WSB, Inc. Invoices.
Koropchak reported that she did have WSB go back and further define
what the work invoiced involved. Viering stated that he did not believe
there was enough detail in the first invoice relating to as-builts.
Koropchak reviewed what as-builts involve.
Herbst recommended that at the minimum, the consultants should be
documenting the dates of work and hours on the project that day.
Viering stated that he would still like to get the same level of detail as
present on attorney billings. Herbst noted that the comments on the
bottom of the invoice describe the work completed.
MOTION BY COMMISSIONER TAPPER TO APPROVE PAYMENT
OF $2,278.50 AND $190.75 FOR WSB ENGINEERING SERVICES
ASSOCIATED WITH OTTER CEEK CROSSING.
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MOTION SECONDED BY COMMISSIONER FRIE. MOTION
CARRIED, 7-0.
8. New Business
a. .Consideration to call for a public hearing date to amend the Business
Subsidy Criteria of the City of Monticello Economic Development
Authority.
MOTION BY COMMISSIONER FAIR TO TABLE ACTION ON THE
BUSINESS SUBSIDY CRITERIA OF THE CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY TO CONCLUDE
UNFINISHED WORK.
MOTION SECONDED BY COMMISSIONER TAPPER.
MOTION CARRIED, 7-0.
MOTION BY COMMISSIONER FAIR TO CALL FOR A WORKSHOP
OF THE CITY OF MOTNICELLO ECONOMIC DEVLEOPMENT
ATHORITY FOR 4:00 PM on Apri19~' TO CONCLUDE ACTION ON
UNFINISHED BUSINESS AND TO ADD TO THE WORKSHOP
AGENDA AN ITEM CALLING FOR A PUBLIC HEARING ON THE .
BUSINESS SUBSIDY CRITERIA.
MOTION SECONDED BY COMMISSIONER VIERING. MOTION
CARRIED, 7-0.
b. Consideration to approve amending the EDA Preliminary
Development Agreements
MOTION TO TABLE ACTION ON AMENDING THE EDA
PRELIMINARY DEVELOPMENT AGREEMENTS.
MOTION SECONDED BY COMMISSIONER HERBST. MOTION
CARRIED, 7-0.
c. Consideration to discuss creating a supplement gap funding program
to encourage purchase of unoccupied single-family homes and to
authorize further direction.
Koropchak noted that the Authority had requested to have this item on the
agenda. Koropchak referenced the supporting data that had been included
for the Authority's reference.
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i Viering noted that this is an area he deals with professionally in terms of
mortgages and lending. He explained that based on his information,
Monticello is one of the hardest areas hit by the mortgage crisis. He stated
that the foreclosure rate for Monticello is averaging 3% at a time when the
national average is 1 %., and the state average is 1 -1 lh %. He stated
that of the 24 recent home sales, there were 12-13 foreclosed properties.
Viering indicated that many of these properties are damaged when sold
and there are not financing options to fix them.
Viering noted that there has been a significant fall back in market values,
as well. Generalizing, he has seen properties sold for 20-50%. less. This
makes homes more affordable, bnt there aren't 100% financing options in
place any longer, which makes it more difficult for first-time home buyers.
Herbst suggested that when a home goes into foreclosure and the bank
becomes the owner, it may be a natural progression that the home value is
lower. Herbst suggested the City and EDA are in a difficult position, as
they don't want neighborhoods to be damaged and devalued, but a false
remedy may not be the answer either.
Viering suggested that a gap program for first time homes buyers may
help solve the problem. There are all sorts of bills in federal and state
• legislature to help those facing foreclosure. The question is how to help
put people into homes that are there.
Fair stated the program may not even be feasible if the EDA only has
$70,000 in funding. Fair noted that the EDA has to use funding from
surplus in housing districts. Koropchak indicated that she had provided
the Commissioners with information on the projections over the life of the
districts; the $70,000 number is only the cash balance today. The EDA
could start a program on uncommitted funds of $1.4 million. Koropchak
advised that she would need to an update the projection and did not
necessarily recommend using uncommitted funds. Koropchak stated that
the applicant would need to meet low to moderate income levels in order
to qualify for the funding.
Viering noted that there are also grant funds available. Fair stated that he
has questions about whether and EDA program would be in competition
with what is out there.
Viering noted that the Monticello area has been hit harder than most. Frie
suggested that communities that were growing the fastest sometimes
experience the highest levels of foreclosure. Frie stated that he believes
there is an opportunity. He cited that 86% of recent sales were bank-
owned properties. Only 7% of the market represents properties being sold
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by actual home owners. He noted that Wright County sales are slightly
up, but the sale prices are down. Frie noted that there is a long lag time
from the time the home goes on the market until it sells, some stay empty
for up to a year. There are opportunities and financing available, but
almost all buyers are back to conventional financing. Frie stated that he
thinks there may be an opportunity in that the EDA can stimulate the
market for first time home buyers and help them with improvements
related to the condition of the properties. Even if we could participate
with a very small loan program for these first-time buyers, Frie stted that it
could greatly stimulate the market.
Herbst commented that perhaps the sale price should reflect what needs to
be done inside. Tapper stated that the issue is financing. Herbst suggested
that if buyers can't finance the homes, perhaps they shouldn't be buying as
that is the problem that created the crisis.
Herbst stated that his concern is the neighborhoods that are affected. Fair
noted that perhaps this is again a situation where the lending industry
gains and the whole problem was the lending industry. The EDA maybe
ailing out those who have reaped the profits.
Mayer asked if anyone is aware of the percentages of foreclosures that are
single family versus townhomes, as Monticello has an overabundance of
townhomes. Viering noted a lot of the foreclosures are single family
homes. Mayer asked if the program would be in the form of a loan or a
grant.
Viering stated he would recommend a loan. Viering recommended that
the EDA form a subcommittee to develop something more specific.
Viering commented that being proactive will help Monticello. Tapper
agreed, stating that such programs can be viewed as an opportunity or as a
negative. The question is whether it moves common good of the City
forward faster.
MOTION BY COMMISSIONER VIERING TO TABLE ACTION FOR
THE PURPOSE OF GATHERING MORE INFORMATION AND TO
APPOINT COMMISSIONERS VIERING, FRIE AND TAPPER AND
TWO ADDITIONAL MEMBERS TO A HOUSING COMMITTEE FOR
FURTHER STUDY AND RECOMMENDATION.
MOTION SECONDED BY TAPPER.
O'Neill commented that it would be important to have other staff
members involved and get a more comprehensive view of the problem and
perhaps other community members with expertise in this area, depending
on the subject matter.
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Tapper suggested allowing Viering to find two additional members.
Mayer commented that the three members would want to gather as much
consultation as possible, and in that case would request that other
members of the community could volunteer as necessary.
MOTION CARRIED, 7-0.
d. Consideration to review HRA Goals and proposed Comp Plan,
Economic Development Strategies. Discuss development and process
for establishment of EDA Objectives, Strategies and Tasks (Work
Plan).
Koropchak reported that the item had been presented to the IDC for
information. At this point, she wanted to present them for the EDA's
review and determine what will be the IDC's role and the EDA's role.
Although the development strategies are interrelated, she would
recommend that the EDA take the first four and IDC take last four. From
that point, Koropchak stated that she would develop a work plan.
Herbst stated that he liked the fact that it gives the EDA a direction.
Mayer agreed, stating that stated that the IDC and EDA are working
together to achieve a common direction. He commented that the IDC
should be the City's means for industry and commerce development, as
the Chamber of Commerce is a private organization.
Viering asked if perhaps joint workshop with IDC should be set.
Koropchak stated that her thought was that she would prepare an initial;
draft work plan and present it to the EDA for review. She noted that she
had used the comp plan as the foundation. O'Neill stated that the draft
comp plan that has received a lot of input and will be a key document in
defining the workload. He noted that it will also be important to get the
Finance Director directly involved, so that we can tie in resources to do
what the EDA would like to do.
Fair stated that if comp plan is adopted, that should be the guide plan for
the vision. For example, Fair cited the strategy to acquire more City-
owned business park. In that case, the City should set a plan and policy to
go in that direction.
Fair noted that asub-committee is typically on-going. He thinks that the
EDA can address this topic at the April workshop. Mayer stated that as
much as volunteers are all attending meetings, he thinks it would be
beneficial for the whole body to discuss this as a whole group.
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Mayer asked if the Higher Education sub-committee grew out of bio-
science efforts. Koropchak stated that it came out of the IDC's efforts in
that regard. Mayer confirmed that they report to IDC.
Koropchak stated that she doesn't know that the work plan will get done
in one meeting.
e. Consideration to review infrastructure construction costs associated
with Phase I and Phase II of Otter Creek Crossing.
Koropchak reported that the she had provided financial information for
information purposes only. The EDA will want to review this information
in order to determine whether the $1.00 per square foot is still economical.
f. Consideration of an update on the request for information for CCD
property.
Koropchak provided an update on this item, stating that the HRA had done
some negotiation downtown properties, including this property, 103 Pine
Street. At this time, the property owner is requesting for information on
EDA funding options to do some improvements.
Koropchak stated that there are some revenues in older districts available,
but the EDA would need to discuss terms of use.
Herbst stated that if the City and EDA are serious about redevelopment,
that building never seemed to fit the area and it does not seem to have the
appropriate parking. Mayer referenced that it uses the adjacent City
parking lot.
Herbst noted that in the near future, River Street might be closed. Once
you start improving these properties, it creates a problem.
Fair stated that the HRA had offered top price for that piece, based on raw
land values south of the freeway. Mayer asked if the property is brought
up to code, does the EDA lose any advantage of using TIF. Koropchak
confirmed that it becomes more difficult.
Mayer asked if the property owner would be willing to listen to another
offer. Koropchak stated that she didn't know. Mayer noted that not
knowing the future transportation situation also makes it difficult. Fair
noted that the EDA had developed a program for matching funds for
facade improvements.
Koropchak stated that as properties become available, it has been the
direction for the City or HRA to consider purchase. She noted that there
8
Economic Development Authority Minutes - 03/12/08
are differing opinions on redevelopment versus revitalization of
downtown. At this point, she just wanted to make them aware of the
property owner's request and gauge the interest of the EDA to purchase.
g. Meeting Room
Herbst stated that he understands Tapper's frustration. Perhaps the
Council has to look at speakers or other audio improvements. Herbst
indicated that it is important to get pubic input and give the public the
ability to gain knowledge of what is happening.
Tapper agreed, but stated that it is difficult to hear.
Fair noted that for this room, the equipment needs to be taken up and
down before and after each meeting, which makes the problem worse.
Viering asked if the EDA could make a recommendation to Council on
this item. Mayer noted that when FiberNet launches, it will affect the
City's capabilities.
Fair noted that there also needs to be seating for the public. He
recommended that the City proceed with quotes on acoustics.
Mayer also requested that the City proceed with purchase of wireless
microphones.
9. Adjourn
MOTION TO ADJOURN BY COMMISSIONER MAYER.
MOTION SECONDED BY COMMISSIONER TAPPER. MOTION CARRIED,
7-0.
•
9
EDA Agenda - 04/09/08
4. Approval of the EDA bills and communication.
A. Reference and background:
There are two EDA invoices from WSB in the amount of $60.50 (Exhibit A) and $7,910
(Exhibit B) associated with the construction of infrastructure improvements in Otter Creek
Crossings. One invoice from Wright County Recorder for recording of HRA document and
EDA Lease Agreements associated with the refinance of the bond for a total of $138 (Exhibit
C).
B. Alternative Actions:
1. A motion to approve payment of invoices EXHIBIT A., B., and C.
2. A motion to deny approval of payment for voices EXHIBIT A., B., and C.
3. A motion approving or denial of individual payment of voices.
4. A motion to table.
C. Staff Recommendation:
Staff recommends Alternative No. 1. WSB was again asked to provide a line item description
of the services.
D. Supporting Data.
Copy of invoices.
•
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•
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~~
d~ Associates, Ina
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701 Xtrtla Avonur S: Il300
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(763)1I1~80U (763)1.11.1700 U~V
Date:
To: 4~ ~ 1 ~ ~'ax No:
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ite: D~ ~ ~tJG f~0 S Project No:
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Comments.
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U
City of Monticello February 21, 2008
Attn: Tom Kelly Project No: 01488-920
505 Walnut Street, Suite 1 Invoice No: 36
Monticello, MN 55362-8831
Otter Creek Industrial Campus /Preliminary Plat /Final Grading Plan
CP# 2006.18C
phase 3 Construction
Professional Personnel
Hours Rate Amount
Project ManagemenUCoordination
Sisson, Shibani 1/16!08 .50 121.00 60.50
Totals .50 60.50
Total Labor 60.50
Total this Phase x60.50
Total this Invoice 560.50
Billings to Date
Current Prior Total
Labor 60.50 101,447.25 101.507.75
Consultant 0.00 4,450.00 4,450.00
Expense 0.00 450.00 450.00
Field Services 0.00 14,020.50 14,020.50
Totals 60.50 120,367.75 120,428.25
Comments: Discussion with prime contractor and restoration subcontractor on quantities to final out
project.
Approved by:
Reviewed by: Bret Weiss
Project Manager: Shibani Sisson
•
City of Monticello
Attn: Tom Kelly
505 Walnut Street, Suite 1
Monticello, MN 55362-8831
February 21, 2008
Project No: 01627-570
Invoice No: 19
Dalton Ave 8~ Westerly Road Extension (Dalton Court)
CP# 2006-15C
Phase 3 Construction
Professional Personnel
Hours Rate Amount
Project ManagemenUCoordination
Elkin, Phillip 4.00 105.00 420.00
Weiss, Bret .50 134.00 67.00
As-bunts
Cunningham, Jacob 1.00 68.00 68.00
Hackman, Doug 54.00 96.00 5,184.00
Totals 59.50 5,739.00
Total Labor 5,739.00
• Field Services Billing
3-Person Survey Crew
Total Field Services
13.0 Hours @ 167.00
2,171.00
2,171.00 2,171.00
Total this Phase $7,910.00
Total this Invoice $7,910.00
Billings to Data
Current Prior
Labor 5,739.00 78,397.25
Consultant 0.00 2,429.19
Expense 0.00 440.00
Field Services 2,171.00 47,238.00
Totals 7,910.00 128,504.44
Total
84,136.25
2,429.19
440.00
49,409.00
136,414.44
ICJ
nr r~- uc curer is • uu ~ ..~~ ..,..,
Project 01627-570 MON7 -Dalton Ave and Westerly Road Extension Invoice 19
Comments:
project Management -Coordination with contractor to review quantities for payment.
As-bullts -Drafting of final as-built plans using field data obtained. As-built plans include showing final utility
elevations, utility material type, tie information for services, contractor and material subcontractor information, etc.
3-Person Survey Crew -Topographic survey of all utility structures (manholes/valveslhydrants, etc), conduit
crossings and service stubs for completion of as-built plans.
Approved by:
Reviewed by: Bret Weiss
Project Manager: Shlbani Bisson
•
Page 2
I'1~' R-CJG GCJCJU 1G' CJ1 "" "`
Wednesday, Apri102, 2008
Project retail
11:37:03 AM
WSB 8 Associates, Inc.
For the period 111108 -1151/08
Regular Total Total
cription Hours Ovt Hns Hours
Protect Number: 01627570 MONT -Dalton Ave and Westerly Road Exte
Princpal: Bret Weiss Percent Compl: Compensation:
Consultant Fee:
Project Manager Shlbani Sisson Labor Pct Compl:
Reimburs Allow:
Client: Monticello Expense Pct Compl:
Start Data: 6/1106
Status: Active t_st Compl Date: 7/10/06.
Type; Regular
Phase Number: 1 Feastbllity / Prei. Des.
Principal: Bret Weiss Percent Campl: Compensation:
Consultant Fee:
Project Manager: Shibani Sisson Labor Pd Compl: Reimburs Allow:
Client: Monticello Expense Pct Compl: /1/06 eted OH Rate:
Bud
Start Date: 6 g
Status: Dormant Fst Compl Date: 7110106 MultiplieMAmount;
Unit Table: Revenue Method: 8
Phase Number. 2 Final Design
Principal: Bret Weiss
Project Manager. Shlbani Sisson
Client: Monticello
Status: Dormant
phaso Number: 3 Construction
rtnCipal: Bret Weiss
'~roject Manager; Shibani Sisson
CIIenC Monticello
Status: Active
Labor
005 Project Mgmt
F 00006 Weiss, Bret 111.1108
F 00174 Elkin, Phillip 1/29108
F 00174 Elkin, Phillip 1/30108
F 00174 Elkin, Phillip 1/31108
Total for 00174 __
Percent Compl: Compensation:
Labor Pct Compl: Consultant Fee:
Expense Pet Compl: Reimburs Allow:
Start Date: 6/1106 ~ 8udgeted OH Rate:
Est Compl Date: 7110106 MultipliedAmount:
Unit Table; Revenue Method: 8
Percent Compl: Compensation;
Labor Pct Compl: Consultant Fee:
Expense Pct Compl: Reimburs Allow:
Start Date: 6!1/06 Budgeted OH Rate:
Est Compl Date: 7/10/06 Multiplier/Amount:
Unit Table: Revenue Method: B
.50
2,00
1.00
1.00
4.00
.50
z.00
1.00
1.00
4.00
F 00094 Hackman, Doug 117/08 4.00 a.00
in office as-bunts
F 00094 Hackman, Doug 1!8/08 2.00 2,00
In office as-bunts
F 00094 Hackman, Doug 1/9/08 6.00 6.00
In office aa-bunts
F 00094 Hackman, Doug 1110!08 7,00 7.00
In office as-bunts
F 00094 Hackman, Doug 1/11108 8.00 8.00
In afflce as-bunts
F 00094 Hackman, Doug 1/14!08 3.50 3.50
F 00094 Hackman, Doug 1/15108 7.50 7.50
F 00094 Hackman, Doug 1116100 t1.00 0.00
v4.1.21 (CPRICE) • Cost Selected By: Protect 01827-570 Page 1
111 It CJG GVCIIJ 1G• V1 "" "`
Project Detail For the period 1!1108 -1131108 Wednesday, April 02, 2008 - 91:37:04 AM
Regular Total Total
Descrlpdon Hours Ovt Mrs Hours
F 00094 Hackman, Doug 1/17/08 8.00 8•~
Total for 00094 54.00 5a.o0
F 00252 Cunningham, 112108 1.00 1.00
Jacob
plotted ph:,"'~.'~_ __ _
69 3-Person C~)
F 00011 Keeling, Kevin 1/4/08 8.00 8.00
F 00011 Keeling, Kevin 1/11/08 5.00 5.00
Total for 00011 13.00 13.00
F 000'77 Vogt, Richard 1/11108 5.00 5.00
F 00156 MrAnallen, 114/08 8.00 8.00
Timothy
F 00156 McAnallen, 1/11/08 5.00 5.00
Timothy
Total for 00156 13.00 13.00
F 00252 Cunningham, 1/4108 8.00 8.00
h'~
Jacob 39
00 ~
39
00
~ ~ ~ ~
~ ~~
otal for 769 . .
;
ToGa1 for L.a or 98.60 98.50
Total for Overhead (F..stlmabad)
Total Labor and Overhead 98.50 98.50
Expenses
Rslmbursable Expanses
543.00 3-Person Spry Crew / Exp GPS ! HDS Crew
F UN 0000081 1/31!08
Total for 3 98.50 98.50
Phase Number: 9 ""Do Not Use"
Principal: Bret Weiss Percent Compl; Compensation:
Project Manager. Shlbanl Blason Labor Pct Ccmpl: Consukant Fee:
Client: Monticello Expense Pct Compl: Reimburs Allow:
Start Date; 6/1106 Butlgeted OH Rate:
Status: Dormant Est Compl Date: 7110/06 MultiplierrAmount:
Unit Table: Revenue Method: B
Total for 0'1627.670 98.50 98.50
v4.1.Z1 (CPR1C~ • Cost Selected By: DroJect 01627.570 Page 2
TOTAL P.06
INVOICE
•
CITY OF I~O~TICELLO
Code:
CITY OF MONTICELLO
ATTN: ACCTS PAYAB~E~.~ia~• Invoice #: I200800000027
505 WALNUT ST #1 [1 Issued Date: MAR 31, 2008
MONTICELLO, MN 55362 Account #: 154
LARRY A UNGER
WRIGHT COUNTY RECORDER
ATTN BARB GABRELCIK (INVOICE/ESCROW)
WRIGHT COUNTY GOVERNMENT CENTER
10 2ND STREET NW RM 210
BUFFALO, MN 55313-1196
OK T07 ~A o
Document #:A-1081398 Orig. Date:
On Behalf Of: RE: JOHN LAI
Instrument: EASEMENT
Services: COMPLIANCE FUND
STATE GENERAL FUND
11.00
10.50
2/29/2008
TECHNOLOGY FUND 10.00
GENERAL ABSTRACT 14.50
Transaction Total ............... 46.00
Document #:A-1081399 Orig. Date: 3/06/2008
Behalf Of: RE: ERIC A OLSON
Instrument: EASEMENT
Services: COMPLIANCE FUND 11.00
STATE GENERAL FUND 10.50
TECHNOLOGY FUND 10.00
GENERAL ABSTRACT 14.50
Transaction Total .............. 46.00
Document #:A-1081499 Orig. Date: 3/07/2008
On Behalf Of: HOUSING & REDEVELOPMENT AUTHORITY
Instrument: TERMINATION (MISC)
Services: COMPLIANCE FUND 11.00
STATE GENERAL FUND 10.50
TECHNOLOGY FUND 10.00
GENERAL ABSTRACT 14.50
~ y_~ n
Last Invoice:
3/06/2008
Page 2
CITY OF MONTICELLO
ATTN: ACCTS PAYABLE
505 WALNUT ST #1
MONTICELLO, MN 55362
INVOICE
Invoice #: I200800000027
Issued Date: MAR 31, 2008
Account #: 154
Document #: A-1081499 Orig. Date: 3/07/2008
Transaction Total ...............
Document #:A-1081500 Orig. Date: 3/07/2008
On Behalf Of: ECONOMIC DEVELOPMENT AUTHORITY
Instrument: LEASE
Services: COMPLIANCE FUND
STATE GENERAL FUND
TECHNOLOGY FUND
GENERAL ABSTRACT
Transaction Total ...............
Document #:A-1081501 Orig. Date: 3/07/2008
On Behalf Of: ECONOMIC DEVELOPMENT AUTHORITY
Instrument: LEASE
Services: COMPLIANCE FUND
STATE GENERAL FUND
TECHNOLOGY FUND
GENERAL ABSTRACT
Transaction Total ...............
Document #:A-1082164 Orig. Date: 3/13/2008
On Behalf Of: QUAD DEVELOPMENT
Instrument: DEVELOPMENT AGREEMENT.
Services: COMPLIANCE FUND
STATE GENERAL FUND
TECHNOLOGY FUND
11.00
10.50
10.00
14.50
4 6 . 0 0 ~~ ~+-:c~
~.,~1~,
46.00
11.0 0 C'~.'r~1
10.50 ~ i
10.00
14.50
46.00
11.00
10.50
10.00
GENERAL ABSTRACT 14.50
Transaction Total ............... 46.00
Total Amount Charged this Invoice 276.00
r~
PAYMENT IS DUE UPON RECEIPT; PLEASE INCLUDE INVOICE # AND SEND ATTN: BARB.
THANK YOU, WRIGHT COUNTY RECORDER
µ
EDA Agenda - 04/09/08
5. Report of the Executive Director.
a) CCD Property - At the March EDA meeting, the commissioners were informed of the
inquiry and plans by the owner to condo-out this downtown property. The commissioners
were asked of their interest to again attempt a purchase of this property in lieu of the fact that
once a property is brought up to code it becomes difficult to meet the structurally substandard
test for a Redevelopment TIF District. The commissioners felt the asking price did not match
the current market and was to high. Attached for your information is a copy of a letter
prepared by the Community Development Department to Ms. Froslie.
b) Cedar Street Garden Center -The demolition contractor is working on the City Farm
demolition first and is expected to start on the Garden Center the last part of next week.
c) WRE Properties -The EDA has not received the first one-half of the administrative cost
shortfall payment in the amount of $2,937.725 from Mr. Walker which was due March 2,
2008. Commissioners Tapper and Viering reported at the March 12 EDA on their visit with
Mr. Walker. I have not drafted a second letter and noted the future approach by the EDA as
to improved communication to developers as it relates to administrative costs.
d) Whitmore Transformation Home Loan, 312 East River Street -The renovation work has
been completed and final inspection OK'd by the Building Department. Since the actual costs
were lower than the estimated cost by the contractor, the banker and EDA will split the
difference. EDA contribution $9,581.
e) Higher Education Group -They are scheduled to meet on Friday, April 4. Lynn Olson,
MBLCH District, and myself met with the Chamber Board in March to seek their support as
this is a local business, education, and government partnership. It is agreed that there is a need
to hire a facilitator to create an awareness for and to coordinate the higher education curriculum
and business needs. How is the position funded and space needs? Anoka-Ramsey has been
asked for a job description.
fj UMC made their balloon payment of $238,205.24 on March 21, 2008, on the State/City
Grant of $290,000. According to the Grant Agreement between the City and State, the City is
required to reimburse the State $190,000 by April 15. The reimbursement check has been
requested of the Finance Department.
g) Business Subsidy Job Creation Reports -Since the State has been slow at revising their
forms, the reporting date has been extended to May 1, 2008.
h) GMEF Loan No. 021 (Tappers Inc.) -Balloon payment due May 1, 2008.
i) EDA Bond Refinanced -Bond Counsel .Fee (in escrow) and copy of excess bond proceeds.
j) TIF Newsletter.
k) Leads -Truck Driver Training Facility -One to five jobs, prefer to lease. Space to practice
backing up trailers. Did not respond.
* Small Environmental Concrete Construction Service facility -Twelve jobs up to 40. 3,000 +
sf building and addition 2.5 acres that allows outdoor storage. Purchase or lease. Referred to
1`J
EDA Agenda - 04/09/08
Demeules Ta er and B'orklund re resentatives (I-2 zone.)
pp ~ J p
1) Vacation - Had a great time in the warm sun!
m) Marketing -Received three of four bids from outdoor sign vendors. MN Real Estate article
due in April. Perhaps should check into listing Otter Creek Crossing with brokerage firm for
greater exposure.
n) Mark Ruff, Steve Bubul, Tom Kelly, and I met on March 31 to go revenues and
expenditures for Otter Creek Crossing in preparation of a report to commissioners.
•
•
March 27, 2008
MONTICELLO
Kathleen Froslie
1680 Skyline Drive
Tavares, FL 32778
RE: 103 Pine Street Property
Dear Ms. Froslie,
Thank you for your inquiry regarding your property at 103 Pine Street.
In your request for information, you indicated interest in possibly converting the building into
condominium units. Although the opportunity for condominiums is allowed by ordinance for your
property, City staff would recommend the following steps to accomplish this process:
Contact Wright County Surveyor (763-682-7691) and Auditors Office (763-682-7578) to discuss the
process for proceeding with a condominium plat. The City of Monticello does not review condo plats.
The process will likely require a full property survey and site plan for the building, and will require
review fees.
In regard to condominium by-laws, please contact your attorney on proceeding with those documents.
These are civil documents, which the City does not review or approve.
Once you have determined that you would like to proceed, you will need to work with the City of
Monticello Building Department on meeting code requirements for condo units. Some of the basic
requirements:
• A common access to a restroom facility will be required for all condominium units. (Each unit is
not required to have its' own entrance.
• The Building Department will require that other building code items are met, including those
pertaining to fire safety and separation.
In relationship to the possible addition of parking on the River Street side, the City Engineer has
determined that is not a viable option at this time. Due to the proximity of the intersection with
Highway 25 and the grade differences, parking would not be allowed to encroach into the right of way in
this area.
Additionally, with any change in use, the City will need to analyze current parking capacity and the
potential for additional parking needs created by a new user.
•
Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831 • (763) 295-2711 • Fax (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 • (763) 295-3170 • Fax (763) 271-3272
Kathleen Froslie
March 27th, 2008
Page 2
The Economic Development Authority did review information related to your request. Economic
Development Director Ollie Koropchak will contact you with information regarding their comments.
Thank you for your patience as the City prepared a response to your inquiry. Please do not hesitate to
contact me with any further questions.
Sincerely,
%~ ,.
~~,
Angela Sc~ium ~n~~
Community Development Coordinator
c: Gary Anderson, Chief Building Official
Bruce Westby, City Engineer
,Ollie Koropchak, Economic.Develo~ment. Director
ti ..
•
•
Offices in 470 U.S. Bank Plaza
200 South Sixth Street
Ylinneapolis Minneapolis, MN SS402
Saint Paul (612) 337-9300 telephone
(612) 337-9310 fax
St. Cloud hrrp://www.kennedy-graven.com
Affirmative Action, Equal Opportunity Employer
ANDREW J. PRATT
Attorney at Law
Direct Dial (612) 337-9212
Email: apratt@kennedy-graven.com
March 18, 2008
City of Monticello EDA
Ollie Koropchak
505 Walnut Street, Suite 1
Monticello, MN 55362
Re: $6,180,000 Public Project Revenue Refunding Bonds, Series 2008A (City of Monticello,
Minnesota Lease Obligation)
Dear Ollie:
Our bond counsel fee for the issue was paid by the escrow agent. For your records, I've enclosed a copy
of our statement for services.
It was a pleasure working with you and Ehlers and Associates, Inc. on this issue. We look forward to
being of service again in the future.
Also enclosed is a copy of our approving opinion for your files.
Yours truly,
KENNEDY & GRAVEN,CHARTERED
By ~~
Andrew .Pratt
ams
Cc: Jaymes Paulson, U.S. Bank National Association
Enclosures
MN190-128
Offices in ti70 U.S. Bank Plaza
. , 200 Soudl Sixth Srreet
Minneapolis Minneapolis, MN 75402
t•• (612) 337-9300 telephone
SainC Paul (612) 337-9310 fax
Sr. Cloud http://www.kennedy-graven.com
C H A R T E R E D Affirmative ,Anion, Equal Oppornmity Employer
March 18, 2008
City of Monticello EDA
Ollie Koropchak
505 Walnut Street, Suite 1
Monticello, MN 55362
For all legal services rendered in connection with the issuance and sale of $6,180,000 Public Project
Revenue Refunding Bonds, Series 2008A (City of Monticello, Minnesota Lease Obligation), including
preparation and examination of proceedings, supervision of bond preparation and arrangements for and
supervision of closing and delivery of the bonds, and the issuance of approving opinion thereon.
•
AMOUNT DUE: $14,000.00
PAID BY ESCROW: $14,000.00
TOTAL DUE: $00.00
MN190-128
Offices in 470 U.S. Bank Plaza
200 South Sixth Street
Mirineapohs Minneapolis, MN 55402
Saint Paul (612} 337-9300 telephone
(612) 337-9310 fax
St. Cloud http:!/www.kennedy-graven.com
Affirmative Acrion, Equal Opportunity Employer
$6,180,000
City of Monticello Economic Development Authority
Public Project Revenue Refunding Bonds
Series 2008A
(City of Monticello, Minnesota Lease Obligation)
We have acted as bond counsel to the City of Monticello Economic Development Authority (the
"Authority") in connection with the issuance by the Authority of its Public Project Revenue Refunding
Bonds, Series 2008A (City of Monticello, Minnesota Lease Obligation), originally dated
February 20, 2008 (the "Bonds"), in the total principal amount of $6,180,000. The Bonds are being
issued. pursuant to Resolution No. 2008-02 of the Authority, adopted January 30, 2008 (the "Bond
Resolution"). A portion of the proceeds of the Bonds will be deposited in an escrow fund, pursuant to an
Escrow Agreement (Series 2008A), dated as of February 1, 2008 (the "Escrow Agreement"), between the
Authority and U.S. Bank National Association, as escrow agent, to advance refund certain maturities of
$7,555,000 Public Project Revenue Bonds, Series 2000A (the "Series 2000A Bonds"), issued by the
Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "HRA").
• The Series 2000A Bonds were issued to refund the outstanding principal amount of $7,385,000
Temporary Public Project Revenue Bonds, Series 1998 (the "Series 1998 Bonds"), issued by the HRA.
The Series 1998 Bonds were issued to finance the acquisition, construction and equipping of certain
facilities, consisting of a community center, armory and city hall (the "Facilities") constructed on certain
land (the "Site") in the City of Monticello, Minnesota (the "City"). The Site was leased by the HRA from
the City pursuant to a Ground Lease, dated as of December 1, 1998 and amended as of March 1, 2000
(the "Original Ground Lease"). The Facilities were leased by the City from the HRA pursuant to a Lease-
Purchase Agreement, dated as of December 1, 1998 and amended as of March 1, 2000 (the "Original
Lease"). The City Council of the City has transferred the control, authority and operation of all projects
of the HRA, including the Series 2000A Bonds and all agreements related thereto, to the Authority
pursuant to Minnesota Statutes, Section 469.094, subdivision 2.
In connection with the issuance of the Bonds, the Authority and the City have entered into an
Amended and Restated Lease-Purchase Agreement, dated as of February 1, 2008 (the "Lease"), and an
Amended and Restated Ground Lease, dated as of Febntary 1, 2008 (the "Ground Lease"}, which
agreements supersede in all respects the Original Lease and Original Ground Lease, respectively.
Capitalized terms not defined herein shall have the meanings assigned to such terms in the Lease.
For the purpose of rendering this opinion we have examined certified copies of certain
proceedings taken by the Authority and the City in the authorization, sale and issuance of the Bonds,
including the Bond Resolution, the Ground Lease, the Lease, the Escrow Agreement, the fornz of the
Bonds, and certain other proceedings and documents furnished by the Authority and the City. From our
examination of such proceedings and other documents, assuming the genuineness of the signatures
• thereon and the accuracy of the facts stated therein and continuing compliance by the Authority and the
326627v3 AJP MN190-128
City with the covenants in the Bond Resolution and the Lease to comply with the Internal Revenue Code
of 1986, as amended (the "Code"), and based upon laws, regulations, rulings and decisions in effect on
the date hereof, it is our opinion, as of the date hereof, that:
1. The Bonds are in due form, have been duly executed and delivered, and are valid and
binding limited obligations of the Authority, enforceable in accordance with their terms, except as such
enforcement may be limited by Minnesota or United States laws relating to bankruptcy, reorganization,
moratorium or creditors' rights.
2. The Ground Lease, the Lease and the Escrow Agreement have been duly executed and
delivered by the parties thereto, and are valid and binding obligations of such parties, enforceable in
accordance with their terms, except as such enforcement may be limited by Minnesota or United States
laws relating to bankruptcy, reorganization, moratorium or creditors' rights.
3. The Bonds are not a general obligation of the Authority, and no owner of a Bond shall
ever have the power to compel the exercise of any taxing power of the Authority for the payment of the
Bonds. The principal of and interest on the Bonds are payable solely from Lease Payments to be made by
the City under the Lease and amounts, if any, received by the Authority from re-leasing the Site and the
Facilities following an Event of Default under the Lease or termination of the Lease upon non-
appropriation by the City. The Lease Payments payable under the Lease are payable solely from moneys
to be appropriated by the City Council of the City for this purpose each year in the City's annual budget,
but the City Council is not required to appropriate or provide moneys for this purpose. If moneys are not
appropriated by the City Council to pay Lease Payments for any year, the Lease will be terminated at the
end of the preceding year, and the City is not required to pay Lease Payments coming due after such
termination. Neither the Lease, the City's obligation to pay Lease Payments, nor the Bonds, are a general
obligation or indebtedness of the City, and the full faith and credit of the City is not pledged for their
payment.
4. Interest on the Bonds is excludable from gross income of the recipient for federal income
tax purposes, and, to the same extent, from taxable net income for Minnesota income tax purposes, and is
not a preference item for purposes of the computation of the federal alternative minimum tax, or the
computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates, but
such interest is includable in the computation of "adjusted current earnings," used in the calculation of
federal alternative minimum taxable income of corporations, and is subject to Minnesota franchise taxes
on corporations (including financial institutions) measured by income and the alternative minimum tax
base. We express no opinion regarding other federal or state tax consequences arising with respect to the
Bonds.
5. This opinion is subject to the condition that the Authority and the City comply with all
requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that
interest thereon be, or continue to be, excludable from gross income for federal income tax purposes and,
to the same extent, from taxable net income for Minnesota income tax purposes. The Authority and the
City have covenanted to comply with all such requirements. Failure to comply with certain of such
requirements may cause interest on the Bonds to be included in gross income for federal tax purposes and
taxable net income for Minnesota income tax purposes retroactively to the date of issuance of the Bonds.
We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency
of the Official Statement or other offering material relating to fhe Bonds, and accordingly we express no
opinion with respect thereto.
~~
LJ
326627v3 AJP MN190-128
This opinion is given as of the date hereof and we assume no obligation to update, revise, or
supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or
any changes in law that may hereafter occur.
Dated at Minneapolis, Minnesota, February 20, 2008.
n
U
326627v3 AJP NiN190-128
CITY Of MONTICELLD
505 WALNUT ST SUITE 1
NONTICELI.D, ~1N 55362
TR# 20 REti# 01 OP# 1 03x1712008
03/17/2008 10:53:03
~~ RECEIPT REPRINTED ~*
Miscellan~pu~ ;;;;;.,
RCCDUNT~: 365.3310
FINANCE Receippt#: 22059
BND PROCDS SER2008A
PRYOR: US BANY,
Ah1T : 1, 512. ~4
Tendered
CHECI(: 102514025 1, 512.9G
CHANGE: .00
TUTRL':" `_:_ .~ .___ ~ .: ~,:~T1 51-x:94 ,~, ,, , Ithority
t.. , ,
-~ : THAN}' ;~ ~
~,~`~ x-
o
Oo
FREERS p --
& ASSOCIATES 1 N C
MAR 1 1 2003
CITY OF MONTICELLO
<.
Re: $6,180,000 Public Project Revenue Refunding Bonds, Series 2008A
City of Monticello Economic Development Authority, Minnesota
Enclosed is a check in the amount of $1,512.94 representing the~~;~,~pp~J,p~,~{~(contingency) for
the above issue. As noted in the closing memo, this amounts 'I etc e"p'osl{e~o"{he Debt Service
Account for the Series 2008A Bonds.
If you have any questions, please call. ~ - ,3 6 ~~, 3 ~ 3 /~
Sincerely,
FREERS & ASSOCIATES, INC.
Debra Eller
Enclosure
L E A D E R S I N P U B L I C F I N A N C E
Equal Opportunity Employer
Charter Member of the National Association
of Independent Public Finance Advisors
•
3060 Centre Pointe Drive, Roseville, MN 55113-1105 651.697.8500 fax 651.697.8555 www.ehlers-inc.com
TIF Staff
Arlin Waelti (651) 296-7979
Arlin. Waelti(?%state.mn.us
Marsha Pattison (651) 296-4716
Marsha. Pattisonr state.mn.us
isa McGuire (651) 296-9255
L isa. McGuireta)state. mn. us
Kurt Mueller (651) 297-3680
Kurt. M uellerrinstate. mn. us
Suk Shah (651) 296-7001
Suk.Shahld~state. mn. us
Travis McGlothlen (651) 297-8342
Travis. McG lothlenrr%;state. inl]. us
Michael Kolles (651) 284-3543
Michae].Kollasia~state.mn.us
Leanne Pfeninger (651) 282-2386
Leanne. Pfenin~~er(ii'~state.nm. us
Office of the State Auditor
Tax Increment Financing Division
525 Park St., Suite 500
St. Paul, MN 55103
Phone: (651) 296-4716
Fax: (651) 297-3689
tl td I V 1 S i on(Gllaud IIOr. State.n]71.145
2008 TIF Technical Amendments
Following are highlights of the technical amendments to the Tax Increment Financing Act, en-
acted aspart of the first Omnibus Tax Bill of 2008, Chapter 154. These amendments are effec-
tive June 30, 2008, unless otherwise stated.
1. The "coverage" portion of the blight test for redevelopment TIF districts and renewal and
renovation TIF districts was modified. The TIF Act previously allowed demolition and
removal of substandard buildings within 3 years of filing the request for certification
(C12D) of a parcel to be included in a TIF district. These removed buildings were included
in the blight coverage test.
The law now permits previously demolished improvements, such as streets, utilities, park-
ing lots, or similar structures, to be part of the blight coverage test. For buildings and im-
provements to qualify, (i) the parcel must be occupied by substandard buildings or im-
provements within three years of filing the CRD, (ii) the authority must find by resolution,
prior to demolition, that the parcel is intended to be included in a TIF district, and (iii) such
buildings and improvements must be removed by the authority or removed by a developer
under a development agreement. Minn. Stat., ~ 469.174, subd. 10 and IOa.
2. The receipt of first TIF payments can be delayed up to four years from approval of a dis-
trict's TIF plan. (This election to delay does not apply to economic development districts.)
There is generally a 2-year delay between approval of the TIF plan and the collection of the
first increment. This amendment provides two additional years of delay. The election
must be in the TIF plan. The municipality in which the district is located must approve the
election. Minn. Stat.,~ 469.175, subd. 1 (b).
3. The county auditor is required to certify the original net tax capacity of a TIF district
within 30 days after receipt of the request for certification and receiving sufficient informa-
tion to identify the parcels included in the district. Minn. Stat.,~ 469.177, subd. 1
4. The definition of "qualified housing district" was repealed and the term "qualified hous-
ing" deleted from the TIF Act, effective the day following final enactment. Final enact-
ment was March 7, 2008. All housing districts are exempt from the "but-for" finding that
the housing will increase the TIF district's market value and from the prohibition on in-
cluding green acres and similar parcels in a district. These exemptions previously applied
only to qualified housing districts. The limitation restricting the expenditure of increment
from a housing district for non-housing purposes was clarified. The TIF Act previously
allowed the square footage for non-housing use to 20 percent of the total square footage of
the buildings receiving assistance. Now, an addition to the original building constructed
more than 3 years after the construction of the original building is treated as a separate
building for purposes of the test. Minn. Stat., ~ 469.1761, subd. 1 (c)
To read the statutory language and a summary of all TIF technical amendments, please click
on https://www.revisor.le~.state.mn.us/laws/?id=1.54&year=2008&type=0 (Article 9) or
http://www.house.le~.state.mn.us/hrd/bs/85/HF3201.html# Toc1914~5907 (Article 9).
OFFICE OF THE STATE AUDITOR March 2008 Special Edition
EDA Agenda - 04/09/08
7. Unfinished Business.
A. Consideration to approve the revised January 2008 Kennedy & Graven (EDA
General Mattersl Invoice.
A. Reference and background:
At the March EDA meeting, the commissioners approved all invoices with the exception of an
invoice from Kennedy & Graven associated with costs for preparation and presentation of a tax
increment financing and tax abatement workshop held in January 2008. I contacted Attorney
Bubul regarding the concerns raised by the commissioners and attached is a cover letter and a
revised invoice for consideration to approve. The invoice was reduced from $950 to $100.
B. Alternative Action:
A motion to approved the revised January 2008 Kennedy & Graven (EDA General
Matters) Invoice in the amount of $100.
2. A motion to deny approval of the revised January 2008 Kennedy & Graven (EDA
General Matters) Invoice in the amount of $100.
i 3. A motion to table approval.
C. Recommendation:
Recommendation is Alternative No. 1 as invoice was reduced.
D. Supporting Data:
Original invoice, cover letter and revised invoice.
•
Kennedy & Graven, Chartered
200 South Sixth Street
. Suite 470
Minneapolis, MN 55402
(612) 337-9300
41-1225694
February 29, 2008
Invoice # 82112
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
Monticello, MN 55362
MN190-00101 General HRA Matters
Through January 31, 2008
For All Legal Services As Follows: Hours Amount
1/2/2008 SJB E-mails/telephone conference with O. Koropchak. 0.20 40.00
1/14/2008 SJB Conference with T Hagen regarding EDA/Council training 0.25 50.00
1/15/2008 SJB Prepare materials for council/EDA training 1.00 200.00
1/16/2008 SJB Attend council/EDA training 3.00 600.00
1/29/2008 SJB Email from/to Koropchak regarding home loan program, 0.30 60.00
• EDA powers
Total Services : $ 950.00
Total Services and Disbursements:$ 950.00
QK TO PAY? ~~~"'
Code: ~'~'3 - `!~''3 ° ~ . ~-0 4~
Initial:
..
C H A R T E R E D
Offices in 470 U.S. Bank Plaza
200 South Sixrh Street
Minneapolis Minneapolis, MN 55402
Saint Paul (612) 337-9300 telephone
(612) 337-9310 fax
St. Cloud http://www.kennedy-graven.com
Affirmative Action, Equal Opportunity Employer
STEPHEN J. BUBUL
Attorney at Law
Direct Dial (612) 337-9228
Email: sbubul@kennedy-graven.com
March 14, 2008
Ollie Koropchak
City of Monticello
505 Walnut Street, Suite 1
Monticello, Minnesota 55362-8822
Dear Ollie:
As you requested, enclosed is a revised invoice for services in January, 2008, with the
fees related to the Council and EDA training session removed.
I apologize for any misunderstanding on this point. Normally, when I am asked to
provide specific training for councils and commissions, that work is part of our legal
services. Based on my experience with many other clients, I assumed the Council and .
EDA expected that there would be a fee.
I now understand that the EDA did not anticipate a fee (and perhaps has different
financial arrangements with its financial advisor). Therefore I have agreed to withdraw
the amounts related to that training session.
In the future, I will attempt to clarify in advance the work we do for the City and EDA
that is part of paid legal services.
If you or EDA commissioners have any questions, please let me know.
Verbtruly yours,
tephen J. Bubul
SJB
•
330336v1 SfB MN190-101
•
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
41-1225694
February 29, 2008
Invoice # 82403
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
Monticello, MN 55362
MN190-00101 General HRA Matters
Through January 31, 2008
For All Legal Services As Follows: Hours Amount
1/2/2008 SJB E-mails/telephone conference with O. Koropchak. 0.20 40.00
1/29/2008 SJB Email from/to Koropchak regarding home loan program, 0.30 60.00
EDA powers
Total Services : $ 100.00
•
Total Services and Disbursements:$ 100.00
•
EDA Agenda - 04/09/08
• 7. Unfinished Business.
B. Consideration to hear subcommittee report on supplement gap fundinE Grogram
options to encourage purchase of unoccupied single-family homes and to
authorize further direction.
A. Reference and background:
At the March EDA meeting and after much discussion, the commissioners tabled this item for
the purpose to gather more information. A Housing Subcommittee of Commissioners Bob
Viering, Bill Tapper, Dan Frie and two additional individuals was formed to gather community
and neighborhood input and report back at the April meeting.
With the Executive Director on vacation, the subcommittee had not met as of Apri12; however,
the subcommittee hopes to meet prior to the Apri19 meeting and will report or provide a
recommendation to the commissioners at the EDA meeting.
•
•
EDA Agenda - 04/U9/08
8. New Business:
A. Consideration to call for a public hearing date to amend the Business SubsidX
Criteria of the City of Monticello Economic Development Authoritk
A. Reference and back rog und:
At the EDA workshop prior to the regular EDA meeting, the commissioners reviewed the
combined HRA and EDA Business Subsidy Criteria. Due to the consolidation of the HRA and
EDA, the two documents were combined into one document. Using the original EDA Criteria,
the major change was to intergrade the Tax Increment Financing Criteria into the EDA Criteria.
Due to those changes and other changes and in accordance with the Minnesota Statutes, any
amendments to the Business Subsidy Criteria are subject to a public hearing. Therefore, the
EDA is asked to call for a public hearing date of Wednesday, May 14, 2008, at 6:00 p.m.
Additionally, as the GMEF Guidelines state that no changes to the Guidelines shall be instituted
without prior approval of the City Council, it is suggested the proposed changes for approval
be placed on the City Council agenda of April 14, 2008.
B. Alternative Action:
1. A motion to call for a public hearing date of Wednesday, May 14, 2008, at 6:00 p.m.
to amend the Business Subsidy Criteria for the City of Monticello EDA and authorizing
the proposed changes to the GMEF Guidelines be placed on the April 14 Council
Agenda for approval.
2. A motion to deny calling for a public hearing date of Wednesday, May 14, 2008, at
6:00 p.m. to amend the Business Subsidy Criteria for the City of Monticello EDA.
3. A motion to table any action.
C. Recommendation:
Staff recommends Alternative No. 1 for compliance of the Minnesota Statutes and GMEF
Guidelines..
D. Supporting Data:
None.
•
2007
DIST #2
DIST 1-1 DIST #1 METCALF/ DIST #3 DIST #4 DIST #5
K -MART IXI LARSON FSI IXI #2 CONST. 5
DIST #6
RAIN- DIST #7 DIST #b DIST #9 DIST #10
DANCE NAWCO NSP TAPPER REMMELE
DIST #11 DIST #12
MARTIE AROPLAX
DIST #13
STANDARD DIST #15 DIST #18 DIST #19 DIST #20
(SHINGOBEE) DIST #14 CUSTOM DIST #16 DIST #17 RIVER MISS. PRAIRIE
57170 SUBURBAN CANOPY POLYCAST FAYMAR MILL SHORES WEST
Cash Surplus deficit 1/1/07(per TIF Reports
$0 $0 $59,820 $0 $0 $606,220
$179,675 $0 $0 $0 $0
$0 $0
$0 $01 $0 $0 $0 $0 $23,451 $94,465
REVENUE:
Orig. developer agreement obligations
Taxes
$43,593 $54,097 $38,236 $32,834 $22,151
Delinquent Taxes
Hr 'ead Credit
$25,000
RE or legal fees
$311,000 $59,413 $50,000 $102,000
Property Rental
$130,000
Loan Repayments -Principal
Loan Repayments -Interest
$365,000
Tax increments
$155,000
Tax increment - Deficiencies
$165,000 $120,000
Interest income
Bond/Loan Proceeds
O/S interfund loan balances as of 12/31/07
Sale of Land - Walker In -Store
$0
Application Fees Revenue
Escrow deposits - application fee
Other Misc. Revenue
Adj. - 1995 TIF Correction (trx in,debt serv)
Transfer in - Land Sales
Transfer in from debt service and other funds
$0
TOTAL
$0 $0 $43,593 $0 $0 $54,097 $38,236 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $32,834 $22,151
EXPENSES:
$0
Adjustment
Transfer to other funds - HRA & Gen
$0
Salaries
$0 $0
Fringe benefits PERA,FICA, Health
$250,472
Dues, memberships
O, Jing bond debt 12/31/06
Legal publication
$17 1 $101 1 $17 $17 1 $17
Travel, Conferences, Schools
$0
Prooertv taxes
Prof. services --legal
$50
Prof. services --en r
Prof. services --construction
$0
Prof. services--misc.,
$1,250
Inspection Fees
Int expense --debt
$2,617
Pr. .I expense --debt
($2,617)
Contract 4 Deed - Principal
Principal
Contract 4 Deed - Interest
$0
Misc. other expense incl. Fiscal Agent Fees
$0
TIF loan (pay as you o
$31,857 $8,614
Transfer of Land Sales To HRA General
Decertification Reimbursement
$9,000
Land acquisition
$459,014
Transfer to other funds - Debt Service
$0
Land Acquisition - TIF Surplus
$0
TOTALS
$0 $0 $17 $0
Cash Surplus deficit 12/31/07
$0 $0 $103,396 $0 $0 $199,903 $217,895 $0 $0
careen = not in 213 expenses.
ADDITIONAL NOTES:
Original (interfund) Loans
$36,751
$32,000
$0 1 $191,551 $0
Original bond debt
$0
$23,000
$80,000 1
$80,000 $75,000
Outstanding bond debt 12/31/92
Orig. developer agreement obligations
Loan/bond payments due in 1993
Imam Me-
$150,000
$25,000
# of years left to collect TIF
$311,000 $59,413 $50,000 $102,000
Total amts to be received (based on 19921A22
$130,000
ADDITIONAL NOTES:
Url inal intertund Loans
$36,751
$32,000
$0 1 $191,551 $0
$0
$0
$23,000
$80,000 1
$80,000 $75,000
$65,000
Orig. developer agreement obligations
$150,000
$25,000
$17,500
$311,000 $59,413 $50,000 $102,000
$325,830
$130,000
Original bond debt
$260,000
$365,000
$350,000
$155,000
$140,000
$165,000 $120,000
$75,000
O/S interfund loan balances as of 12/31/07
$0
$0
$0
$0
$43,318
_O/F eloper armnt obligations 12/31/07
$0
$0
$0
$0
$0 $0
$0 $0
$250,472
$38,798
O, Jing bond debt 12/31/06
$0
$0
$0
$0
Loanioond payments due in 2008
$0
Principal
$0
$0
$0
$0
$0
$3,000
$9,000
Interest
$0
$0
$0
$0
$0
$23,000
$4,500
# of years left to collect TIF
0
3
0 0 4
6
0
0 0
0 0 0
0 01 01 01 01 01
161
17
Total amts to be received based on 2007 TIF
$0
$0
$0 $0 $0
$0
$0
$0 $0
$0 $0 $0
$0 $0 I $0 I $0 I $0 I $0 I
$0 I
.w
2007
DIST #23 DIST #26
DIST #21 DIST #22 DIST #22-1 DIST #22. DIST #22.3 DIST #22.4 DIST 922.5 DIST #22.7 DIST #22.8 COMPANIES DIST #24 DIST #25 TWIN CITY DIST #27 DIST #28 DIST #29 DIST #30 DIST #31 DIST #32 DIST #33
LAKE DOWNTOWN CUB SUNNY FRONT BLOCK 52 AMOCO BILK 52/ LANDMARK (MIDWEST ST. BLUE CHIP DIE JJ Co./ IRTI FRONT CMHP UMC PROD. Tappers
TOOL REDEV. FRESH STREET JOHNSON SO II GRAPHICS BENEDICTS DEV. CASTINGS Profile Pwdr PORCH STAMP Holdings
Cash Surplus deficit 1/1 /07perTlF Re orfs
$0 $1,132,971 ($12,586) ($12,517) ($788,168) $16.986) (534,082) $3,941 ($2,228) $80,682 $16,240 $17,616 $25,705 $0 $7,829 $18,676 $7,905 $53,450 $0 $173
REVENUE:
$40,000
Taxes
$317,385 $46,790 $37,063 $9,845 $27,434 $10,708 $72,774 $20,694
Delinquent Taxes
Hr- --tead Credit
Orig. developer areement obligations
Original bond debt
R or legal fees
$185,000 $492,000
Property Rental
$32,000
Loan Repayments -Principal
$40,000
Loan Repayments -Interest
Tax increments
$100,000
Tax increment - Deficiencies
$0
Interest income
Bond/Loan Proceeds
$54,264
Sale of Land - Walker In -Store
Application Fees Revenue
Escrow deposits - application fee
O/S I-veloper a rmnt obligations 12/31/07
Other Misc. Revenue
Adj. - 1995 TIF Correction (trx in,debt serv)
$0
Transfer in - Land Sales
$14,752
Transfer in from debt service and other funds
TOTAL
EXPENSES:
$0 $317,385 $0 $0 $0 $0 $0 $0 $0 $0 $46,790 $0 $37,063
� $0 $9,845 $27,434 $10,708 $72,774 $0 $20,694
Adjustment
$850,000
Transfer to other funds - HRA & Gen
Salaries
Fringe benefits PERA,FICA, Health
Dues, memberships
Legal publication
$17 1 $17 $17 $17 $17 $17 $17 $17 $17 $17
Travel, Conferences, Schools
$0
Property taxes
Prof. services --legal
$466 $39
Prof. services--engr
Prof. services --construction
Prof. services--misc.,
$9,654
Inspection Fees
$20,000
IntP' expense --debt
$13,545 $2.210
Pr I expense --debt
Corl„act 4 Deed - Principal
$21,442) ($3,197
Contract 4 Deed - Interest
$50,000
Misc. other expense incl. Fiscal Agent Fees
Interest
# of years left to collect TIF
TIF loan (pay as you o
$18,401 $16,118 $45,709 $36,124 $9,364 $24,549 $71,196 $19,762
Transfer of Land Sales To HRA General
$0
2
Decertification Reimbursement
$78,602 $14,682
Land acquisition
$7,900
22
Transfer to other funds - Debt Service
$4,000
6
Land Acquisition - TIF Surplus
$0 $0 $0 $0
TOTALS
Cash Surplus deficit 12/31/07
$0 $28,538 $0 $0 $0 $0 $16,118 $0 $0 $78,619 $45,726 $14,699 $1,154 $0 $9,380 $24,604 S5,390) $71,212 $0 $19,779
$0 $1,421,818 ($12,586) ($12,517) $788,168) 516.986) $5G,200! $3,941 $2228) $2,063 $17,305 $2,917 $61,614 $0 $8,293 $21,506 $24,004 $55,012 $0 $1,088
Vleell - IIUL In L IJ eXPe11Se6.
ADDITIONAL NOTES:
Original interfund Loans
Orig. developer agreement obligations
Original bond debt
Outstanding interfund loan balances as of 12/31/9
Outstanding developer agreement obligations 12/3
Outstanding bond debt 12/31/92
Loan/bond payments due in 1993
Principal
Interest
# of years left to collect TIF
Total amts to be received based on 1992+A22 TIF $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1 $0 $0
Ilr I -LL ouu-mums: tyo7o,744)
District 1-22 Net: $543,073
ADDITIONAL NOTES:
vn Ina( Inierrunc Loans
$31,$00 $140,142 $500,000 1
$181,000
$40,000
$158,000
Orig. developer areement obligations
Original bond debt
$945,000
$185,000 $492,000
$440,000
$32,000
$225,000
$40,000
$220,000
$395,000
$100,000
0/S interfund loan balances as of 12/31/07
$0
$0
$54,264
$156,232
O/S I-veloper a rmnt obligations 12/31/07
$0$196,146
$0
$66,692
$14,752
$157,748
$186,254
$79,107
OL fin bond debt 12/31/06
$850,000
Loa,.. _.end payments due in 2008
$0
Principal
$105,000
$0 $0
$20,000
$0
$27,000
$6,500
$6,000
$2,100
$50,000
$13,000
Interest
# of years left to collect TIF
$32,870
0 17 0 0
$15,000
0 0 0 0 01 2
$25,000
19
$0
2
$9,000
3
$2,500
4
$14,000
23
$7,900
22
$25,000
5
$4,000
6
Total amts to be received based on 2007 TIF
$0 $0 $0 $0
$0 $0 $0 $0 $0 1 $0
$0
$0
$0
$0
$0
$0
$0
$0
2007
DIST #34 DIST #35 DIST #36 DIST #37 DIST #38
1-94 LNDMRK DALHMR Karlsburger WALKER TIFGENERAL
INTERCHG SQUARE DISTRIB Foods SURPLUS HRA
TOTALS
Cash Surplus deficit 1/1 /07er TIF Reports (312,427) $15,271 j $83.602)F7 (523,904) $0 $0 (.315,940)
$1,311,108
REVENUE:
$0
Taxes $37,168 $53,592 $22
$824,387
Delinquent Taxes $326
$326
Ho -stead Credit $19,490
$19,490
Rt Dr legal fees
$0
Pro,,_, ry Rental
$0
Loan Repayments -Principal ($24,639)
$24,639
Loan Repayments -Interest ($15,755)
Tax increments
$0
Tax increment - Deficiencies
$0
Interest income $42,376
$42,376
Bond/Loan Proceeds
$0
Sale of Land - Walker In -Store ($103,084)
($1
Application Fees Revenue $6,368
$6,368)
$6,368
Escrow deposits - application fee
$0
Other Misc. Revenue
Adj. - 1995 TIF Correction (trx in,debt serv)
Transfer in - Land Sales
Transfer in from debt service and other funds $1,500
$0
$0
$0
$1,500
TOTAL
1 $37,168 $0 $53,592 $6,368 $0 (579,764)
$750,969
EXPENSES:
Adjustment
$0
Transfer to other funds - HRA & Gen
$0
Salaries $19,749
$19,749
Fringe benefits PERA,FICA, Health $3,987
$3,987
Dues, memberships $125
$125
Legal publication $17 $17 $17 1 1 $467 $701
$1,551
Travel, Conferences, Schools $522
$522
Property taxes
�n
Prof. services --legal $248 $49 1 $11,862 $4,856
$17,569
Prof. services--engr $39,565
$39,565
Prof. services --construction $11,103 $186,333
$197,436
Prof. services--misc., $6,132 ($6,132) $446 $13,591 $578
$25,518
Inspection Fees $3,598
$3,598
Inte „expense --debt
$13,138
Pr ' expense --debt
$27,256)
Col. ..t 4 Deed - Principal $100,000
$100,000
Contract 4 Deed - Interest $45,858
$45,858
Misc. other expense incl. Fiscal Agent Fees
$0
TIF loan (pay as you o
$281,694
Transfer of Land Sales To HRA General
$0
Decertification Reimbursement
$93,284
Land acquisition
$459,014
Transfer to other funds - Debt Service $137,900
$137,900
Land Acquisition - TIF Surplus
$0
TOTALS
$6,149 $17 ($5,868) $11,597 $25,920 $0 $543,771
$1,386,976
Cash Surplus deficit 12/31/07
$18,592 $15,28Sj $24,142) 529,134) (525,920) $0 (5639,475)
$675,101
1- II I G I J Zul IJCJ.
ADDITIONAL NOTES:
un inai intertuntl Loans
Orig. developer agreement obligations
Original bond debt
Outstanding interfund loan balances as of 12/31/9
Outstanding developer agreement obligations 12/3
Outstanding bond debt 12/31/92
Loan/bond payments due in 1993
Principal
Interest
# of years left to collect TIF
Total amts to be received based on 1992+A22 TIF
DDITIONAL NOTES:
Original interfund Loans $437,561
Orig. developer areement obligations
Original bond debt
O/S interfund loan balances as of 12/31/07 $437,561
O/S d welo era rmnt obligations 12/31/07
OL finbond debt 12/31/06
Loa nd payments due in 2008
Principal
Interest
0 of years left to collect TIF 0 0 0 0
Total amts to be received based on 2007 TIF $0 $0 $0 $0
k FUND SUMMARY - 12/31/07
icludes Debt Service Funds)
EDA Agenda - 04/09/08
8. New Business.
B. Consideration to review and accept 2007 Annual TIF/General Fund Report.
A. Reference and background.
The 2007 TIF/General Fund Report was prepared by Assistant Treasurer Kelly. After review
of the report, the commissioners will be asked to accept the 2007 Report.
B. Alternative Action:
1. Motion to accept the 2007 Annual TIF/General Fund Report.
2. Motion to not accept the 2007 Annual TIF/General Fund Report.
3. Motion to table any action.
C. Recommendation:
No recommendation is provided.
D. Supporting Data.
TIF/General Fund Report.
8. New Business:
EDA Agenda - 04/09/08
C. Consideration to review and accept the 2007 GMEF Financial Statements,
Activity Report, and 2008 Proposed Budget.
A. Reference and Background:
In order to comply with GMEF Guidelines: 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 each year.
Enclosed are the year-end statements, proposed budget,. and activity report. Assistant
Treasurer Kelly prepared the Balance Sheet and Statement of Revenue and Expenditures. The
Executive Director prepared the Activity Report and 2008 Cash Flow Projections.
In year 2007, no balloon payments for GMEF Loans were due. The 2007 approved GMEF
Loan No. 026 for Washburn Computer Group became null and void on February 8, 2008;
therefore, no funds will be disbursed.
The Assistant Treasurer and Executive Director will review the documents with the EDA for
questions and comments prior to consideration of the following alternative action.
B. Alternative Action:
A motion to accept the 2007 EDA financial staterents and activity report for
submission to the City Council on April 14, 2008.
2. A motion to not accept the 2007 EDA financial statements and report.
A motion to table any action.
C. Recommendation:
If the EDA commissioners make a finding that the statements and report are acceptable,
recommendation is alternative no. 1. All GMEF loan paybacks are current.
D. Supporting Data:
Copies of financial statements and report.
•
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
GREATER MONTICELLO ENTERPRISE FUND
REVISED STATEMENT
BALANCE SHEET
DECEMBER 31, 2007
ASSETS
Cash in Bank $ 761,299.78
Notes Receivable - TJ Martin $ -
Notes Receivable - GWJ, LLC $ -
Notes Receivable - UMC $ 160,501.09
Notes Receivable - Tapper's 3 $ 31,204.74
Notes Receivable - WSI $ 308,940.18
Notes Receivable - Tapper's 4 $ 185,069.37
Notes Receivable - Karlsburger $ 193,108.18
TOTAL ASSETS: $ 1,640,123.34
FUND EQUITY
Fund Balance $ 1,640,123.34
Reserved for Economic Development
Participation Loans
TOTAL LIABILITIES AND FUND EQUITY: $ 1,640,123.34
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•
2007
ECONOMIC DEVELOPMENT AUTHORITY ACTIVITY REPORT
MEETING DATE SUBJECTS
Apri124, 2007 Motion to approve EDA Officers for 2007:
Chair Bill Demeules
Vice Chair Barb Schwientek
Assist Treasurer Rick Wolfsteller
Treasurer Ron Hoglund
Secretary Ollie Koropchak
Motion to accept the EDA 2006 Year-End Financial
Statements and Activity Report for submission to the City
Council on May 14 or 29, 2007.
Motion to authorize final payment of $100,000 to the Liquor
Store Fund in Budget Year 2008.
•
Motion to accept the Business Subsidy Criteria and Bylaws of
the EDA as written (no amendments.)
Motion to amend Section 3-3-6 of the Bylaws of the EDA to
reflect that the annual report shall be provided to the City of
Monticello after the EDA annual meeting.
August 8, 2007 Reviewed the preliminary GMEF Loan Application from
Washburn Computer Group.
Motion to approve GMEF Loan No. 026 for Washburn
Computer Group in the amount of $275,000, term consistent
with conventional lender, fixed interest rate of 6.25% and a
loan fee of $200. Collateral, guarantees and other condition
requirements to be determined and prepared by the GMEF
Attorney. Approval is subject to public hearing on the Business
Subsidy, lender commitment, credit worthiness, building plan
approval, and council ratification of EDA action.
n
U
2007 EDA Activity Report continued
A motion to call for a public hearing on August 21, 2007 at
4:00 p.m. for the proposed business subsidy to Washburn
Computer Group.
August 21, 2007 Public Hearing on Business Subsidy for Washburn Computer
Group.
A motion to approve the Business Subsidy Agreement for
GMEF Loan No. 026 to Washburn Computer Group.
December 18, 2007 Organizational Meeting of the Reconstituted City of Monticello
Economic Development Authority.
Motion to elect Bill Fair as President pro tem and appointed
Bob Viering as recording Secretary pro tem of the EDA.
Motion to adopt amended Bylaws of the City of Monticello
EDA.
Motion to nominate and elect Bill Demeules as President of the
EDA.
Motion to nominate and elect Dan Frie as Vice President of the
EDA.
Motion to nominate and elect Angela Schumann as Secretary ex
officio of the EDA.
Motion to nominate and elect Bill Tapper as Treasurer of the
EDA.
Motion to nominate and elect Tom Kelly as Assistant Treasurer
ex officio of the EDA.
Motion to adopt Resolution No. 2007-01 accepting transfer of
projects and programs from HRA to EDA; approving certain
organizational matter.
2
2007 EDA Activity Report continued
Motion to adopt Resolution No. 2007-02 providing for the Sale
of $6,100,000 Public Project Revenue Refunding Bonds, Series
2008.
Motion to approve the Second Amendment to Contract for
Private Development by and between the City of Monticello
EDA and Master's Fifth Avenue.
Motion to approve the Second Amendment to Contract for
Private Development by and between the City of Monticello
EDA, the City of Monticello, and First National Bank of Elk
River, as assignee to Front Porch Associates, LTD.
Motion to approve an annual fee increase as presented by
Ehlers & Associates.
•
•
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
2008 CASH FLOW PROJECTION
,.BEGINNING CASH BALANCE, January 2008 $ 761,299.78
RECEIPTS
Appropriations, Expected
MIF Fed or State
$
-0-
Notes Amortization Payments -
Tapper Inc.
-0-
Muller Theater
-0-
SMM, Inc.
-0-
Aroplax Corp.
-0-
Custom Canopy, Inc.
-0-
Standard Iron
-0-
Vector Tool
-0-
Tapper's II
-0-
SELUEMED
-0-
T.J. Martin
-0-
Mainline Distrib.
-0-
Aroplax Corp. II
-0-
TCDC
-0-
IRTI
-0-
EDMA
-0-
VisiCom
-0-
UMC
$162,194.02
Tapper III
$
31,883.26
WSI ($1,483.49 Mo) 6-09
$
17,801.88
Tapper Holdings ($1,417 Mo.) 7-10
$
17,004.00
Karlsburger Foods($1,714.83 Mo.) 3-12
$
20,577.96
Interest Income - Investment (est.)
$
30,000.00
Loan Fees
$
200.00
Loan Fees Other
$
3,000.00
Miscellaneous
$
-O-
TOTAL RECEIPTS
TOTAL BEGINNING BALANCE AND RECEIPTS
EXPENDITURES
GMEF Loans -
Speculative
Re -payment to Liquor Fund 2007
(Budget year 2008)
Legal Fees
Miscellaneous
TOTAL EXPENDITURES
$ 300,000.00
$ 100,000.00
$ 3,000.00
$ 1,000.00
$ 282,661.12
$1,043,960.90
$ 404,400.00
EXPECTED CASH BALANCE, December 2008 $ 639,560.90
EDA Agenda - 04/09/08
8. New Business:
D. Consideration to review year-end balances of other sources of revenue.
A. Reference and Background:
In addition to the EDA cash and investments of $761,299.78, the EDA has two other sources
of revenue for loan disbursements. The total payback (P&I) received from the Twin City Die
Casting (Federal) Loan was $595,875.60, the balloon payment was paid in June 2007. The
payback (P&I) received in 2007 from the UMC (State) Loan was $81,948.61. The UMC
balloon payment was paid March 2008. The current balance of these two other sources of
revenue including interest income -investment minus expenditures is $685,276.24. Federal
restrictions apply to the TCDC payback dollars. See Exhibit A.
All GMEF loan paybacks were current year-end 2007.
Exhibit B shows the revenues the EDA received from the City Liquor Store Fund and the
approved paybacks and grants. The Executive Director recommends the Commissioners
request an accountability of the 2006 and 2007 approved transfers as no expenditure
was shown on the EDA revenue and expenditure statement. With the previously
approved transfers by the EDA commissioners, the GMEF balance is independent of city
i funds.
In the future, the Executive Director recommends the EDA upon approval of an GMEF Loan
disburse the funds from the UMC (State MIF) first to recycle those dollars into the GMEF
account. Foremost, the Executive Director recommends the EDA market and disburse the
TCDC (Federal MIF). It would be great to recycle the $595,876 into the GMEF account to
eliminate the Federal restrictions.
No action is required by the EDA, information only.
MINNESOTA INVESTMENT FUND
FINANCIAL REPORT
December 31, 2007
GRANT TOTALS -TWIN CITIES DIE CAST (federal
Payback began in July, 2000 for 7 years ending in June, 2007.
Annual principal and interest payback total is $61,176.72.
ORIGINAL PAID REMAINING
Principal $500,000.00 $500,000.00 $0.00
Interest $95,747.11 $95,875.60 ($128.49)
TOTAL $595,747.11 $595,875.60 ($128.49)
EXPENDED: $468,266.60 6/2/00
$20,859.00 8/9/00
$10,874.40 8/15/00
$500,000.00
GRANT TOTALS - UMC/TOMANN (state)
Payback began in October 2003 for 5 years ending in March 2008.
Annual principal payback is $19,280.64.
City keeps first $100,000 plus interest.
ORIGINAL PAID REMAINING
Principal $290,000.00 $50,060.21 $239,939.79
Interest $33,439.16 $31,888.40 $1,550.76
TOTAL $323,439.16 $81,948.61 $241,490.55
EXPENDED:
$92,138.56
$109,377.84
$88,483.60
$290,000.00
REVENUES
Principal Payback -TCDC (fed}
Interest Payback -TCDC (fed}
Principal Payback -UMC (st)
Interest Payback -UMC (st)
Interest Income -Investment:
2000
2001
2002
2003
2004
2005
2006
2007
TOTAL REVENUES
EXPENDITURES
Prof Svc fees -TCDC (fed)
Legal fees -TCDC (fed)
Transfer to GMEF - 2004 WSI 023 (st)
TOTAL EXPENDITURES
FUND BALANCE FOR MN INV FUND
4/17/03
6/26!03
9/4/03
$500,000.00
$95,875.60
$50,060.21
$31,888.40
$119.19
$3,071.00
$5,356.00
$7,678.00
$9,157.00
$0.00
$34,659.48
$47,525.10
$703,205.40
$3,306.55
$824.75
$13,797.86
$17,929.16
$685,276.24
EDA annual reports 2006.x1s: 4/3/2008
EDA - LINE OF CREDIT FROM CITY
SOURCE - CITY LIQUOR STORE FUND
Report - April 2008
Revenues from City Liquor Store Fund to EDA:
1991 Tapper GMEF Loan
$ 73,000.00
1992 Suburban GMEF Loan
$ 50,000.00
1992 Aroplax GMEF Loan
$ 65,000.00
1994 Standard Iron GMEF Loan
$75,000.00
1995 Victor Tool GMEF Loan
$ 50,000.00
1996 Standard Iron GMEF Loan
$ 70,000.00
TOTAL REVENUES
Approved Paybacks and Grant::
2001 to city debt service fund
$ 77,000.00
2003 to city debt service fund
$ 70,000.00
2006 to city debt service fund (Budget year 2007)
$ 80,891.00
DMRF Grants
$ 55,109.00
2007 to city debt service fund (Budget year 2008)
$100,000.00
TOTAL PAYBACKS AND GRANTS
F_x�.,b.t (4
$383,000.00
$383,000.00
BALANCE, APRIL 2008 $ 0
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
LOAN STATUS
December 31, 2007
Economic Development Authority (EDA) was created in 1989.
APPROVED LOANS
Tapper/Genereux (1990) $88,000.00
Muller/Monti Theatre (1990) $50,000.00
Barger/Suburban #004 (1992) $50,000.00
Schoen/Aroplax #005 (1992) $85,000.00
Birkeland/Custom Canopy #006 (1993) $42,500..00
Demeules/Standard Iron #007 (1993} $75,000.00
Blue Chip DevNector Tool #010 (1995) $50,000.00
Tapper's #011 (1996) $100,000.00
Standard Iron/Seluemed #013 (1996) $70,000.00
T J Martin #014 (1998) $87,500.00
Mainline Distr#015 (1999) $100,000.00
Aroplax #016 (1999) $100,000.00
TC Die Cast #017 (2000) $100,000.00
Integrated Recycling #018 (2001 } $72,500.00
EDMA #019 (2001) $30,000.00
Tapper's #021 (2002) $55,000.00
i Tomann/UMC #022 (2002) $200,000.00
WSI Industries #023 (2004) $350,000.00
Tappers Holdings #024 (2005) $200,000.00
Karlsbuger #025 (2007) $200,000.00
TOTAL APPROVED LOANS
APPROVED PAYBACKS
2001 to Hwy Liquor
2003 to Hwy Liquor
TOTAL APPROVED PAYBACKS
APPROVED GRANTS
DMRF Liquor Fund Grants
($77,000.00)
($70,000.00)
($55,109.34)
$2,105,500.00
($147,000.00)
($55,109.34)
TOTAL APPROVED LOANS &PAYBACKS
•
$1,903,390.66
EDA annual reports 2006.x1s: 4/3/2008 ~
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
UDAG Fund:
LOAN STATUS
1991 to Tapper
December 31, 2007
LOAN DISBURSEMENTS (transferred to GMEF)
Liquor Fund:
1992 to Aroplax
1991 to Tapper
$73,000.00
1992 to Suburban
$50,000.00
1992 to Aroplax
$65,000.00
1994 to Standard Iron
$75,000.00
1995 to Vector Tool
$50,000.00
1996 to Standard Iron
$70,000.00
2001 payback from EDA
($77,000.00)
2003 payback from EDA
($70,000.00)
DMRF Liquor Fund Grant
($55,109.34)
Total Liquor Fund
$180,890.66
UDAG Fund:
1991 to Tapper
$15,000.00
1991 to Muller
$50,000.00
1992 to Aroplax
$20,000.00
1993 to Custom Canopy
$42,500.00
1996 to Tapper's
$100,000.00
1999 to Aroplax (0 16)
$100,000.00
1999 (2000) to Mainline
$39,546.38
2000 to TC Die Cast
$56,781.04
Total UDAG Fund
$423,827.42
UDAG (recycled funds):
2001 to Integrated Recycling
$72,500.00
2001 to EDMA
$30,000.00
2003 to UMC 022
$125,000.00
2004 to WSI 023
$260,000.00
Total Recycled UDAG
$487,500.00
SCERG Fund:
1998 to T J Martin 014
$87,500.00
1999 to Mainline 015
$60,453.62
2000 to TC Die Cast 017
$23,198.02
2004 to WSI 023
$16,202.14
Total SCERG Fund
$187,353.78
SCERG (recycled funds):
2004 to WSI 023
$60,000.00
Total Recycled SCERG
$60,000.00
MN INV Fund:
TT 12004 to WSI 023 (recycled state funds) $13,797.86
EBAaannual reports 2006.xls: 4/3/2008 $13,797.86
2
C
•
•
GREATER MONTICELLO ENTERPRISE FUND (GMEF)
LOAN STATUS
December 31, 2007
GMEF (recycled funds):
2000 to TC Die Cast 017
2003 to UMC 022
2003 to Tapper 021
2005 to Tapper Holdings 024
2007 to Karlsburger 025
Total GMEF Fund
$20,020.94
$75,000.00
$55,000.00
$200, 000.00
$2oo,aoo.oo
$550,020.94
TOTAL LOAN DISBURSEMENTS
EDA annual reports 2006.x1s: 4/3/2008
$1,903,390.66
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EDA Agenda - 04/09/08
• 8. New Business:
E. Consideration to review revenues and expenditures associated with
development of Otter Creek Crossings (Monticello Business Center.)
This item was removed from the April agenda and will be placed on the May agenda allowing
the Assistant Treasurer time for preparation.
•
•
8. New Business:
EDA Agenda - 04/09/08
F. Consideration to establish and approve a deposit amount and fee range for the
Preliminary Development Agreements.
A. Reference and background:
The purpose of this exercise is to evaluate and improve the manner of which administrative
costs are handled up-front with developers as these are sometime unforeseeable costs to
developers (small business owners.)
CURRENT ADMINISTRATIVE EXPENDITURES:
Ehlers & Associates -Flat fee range established in 2006 and still applicable for creation of TIF
District and modification of Central Monticello Redevelopment Project Plan No. 1.
Economic District $8,000 to $10,000
Small Redevelopment District$10,000 to $15,000
Large Redevelopment District$13,000 to $19,000
Housing District $8,000 to $10,000
2008 Hourly rate - $160 per hour.
Kennedy & Graven -Please refer to EXHIBIT A. - letter referring to legal services. Flat fees
not the general practice of Kennedy & Graven.
For Monticello Business Center (Otter Creek) - preparation of Purchase and Development
Contract and preparation of land closing.
For other economic, redevelopment, housing projects -preparation of Redevelopment or
Development Contract.
2008 Hourly rate - Shareholder $200 per hour.
Associate - $170
Paralegal - $120
Law Clerk - $115
At the workshop during review of the Preliminary Development Agreement it was
noted to define what constitutes "administrative costs" which is essential to determine
a deposit or fee range.
•
EDA Agenda - 04/09/08
CURRENT RECOVERY OF ADMINISTRATIVE EXPENDITURES:
Deposit for Monticello Business Center (Otter Creek) $10,000.
Shortfall billed at time of Certificate of Completion issued.
Typical total administrative cost ranges between $15,000 to $17,500.
Deposit for other economic or redevelopment projects $7,500.
Shortfall billed at time of Certificate of Completion issued.
Typical total administrative cost ranges between $5,500 and $7,500 between 2002-2005.
The recommendation is to remain consistent with the two respective deposit amounts.
The estimated costs for addendum letter can be determined by past history or by
request for estimate from legal consultant. I review requesting legal estimates for
each project as cumbersome and will only increase the legal consultant fees.
St. Michael does not require a Preliminary Development Agreement or deposit and it depends
upon the size of the project whether the developer is charged for the administrative costs. On
small projects, they recover their Administrative Costs as an eligible expenditure of tax
increment district. I will try and check with Big Lake. Our consultants indicate the majority of
their clients charge the administrative costs to the developers.
B. Supporting Data:
Letter from Kennedy & Graven and draft of addendum letter.
2
~x~'v 4~
Offices in 470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis Minneapolis, MN 55402
Saint Paul (612) 337-9300 telephone
(612) 337-9310 fax
St. ClOUd hctp://www.kennedy-graven.com
Affirmative Action., Equal Opportunity Employer
February 27, 2008
Ollie Koropchak
City of Monticello
505 Walnut Street, Suite 1
Monticello, Minnesota 55362-8822
RE: Legal Services
Dear Ollie:
STEPHEN J. BUBUL
Attorney at Law
Direct Diai (612) 337-9228
Email: sbubul@kennedy-graven.com
VIA E-MAIL
AND U.S. MAIL
You asked us to provide an updated proposal regarding our fees for legal services to the
Monticello Economic Development Authority ("EDA").
As you know, we have provided services related to redevelopment and economic
development for both the housing and redevelopment authority for many years. The
services include drafting of development agreements, review and analysis of tax
increment and other financing mechanisms, handling real estate transactions, preparing
loan documents, and other similar work. We understand that the EDA will now handle
all those transactions.
Our current hourly rates for this type of work are $200 per hour for shareholders and
$170 per hour for associates. Rates for paralegals are $120 per hour, aild for law clerks
$115 per hour. Our invoices also include usual and customary charges for copying,
mileage and similar disbursements.
These rates are effective for calendar year 2008, and would be subject to adjustment
thereafter.
You also asked. whether we can provide a flat rate for development agreements.
Unfortunately, that is not a practical option except in unusual circumstances. Unlike
preparation of a tax increment plan, a development agreement varies with the nature of
each transaction and the degree of negotiation with counsel for individual developers. It
is very difficult to predict how involved those negotiations will be. Also, agreements that
involve real estate transactions are different (and somewhat more complicated) than those
that solely involve financial assistance. In real estate transactions, the work cannot be
easily predicted because of many variables, including title and environmental conditions.
328471 v l SJB MN 1.90-101
011ie Koropchak
February 27, 2008
Page 2 of 2
The only exception would be a circumstance where the EDA undertakes a series of
virtually identical transactions, which have little opportunity for variation. If that
situation arises, we could provide a flat fee for that series (which would be determined at
that time based on the nature of the transaction.)
If you or EDA commissioners have other questions, please let me know.
Very truly yours,
Stephen J. Bubul
SJB
328471vl SJB MN190-101
Date
MONTICELLO
Developer
Address
RE: Project Title
Dear
As an addendum to the Preliminary Development Agreement, the City of Monticello Economic
Development Authority (EDA) hereby provides with an estimate of
administrative costs as defined in the Preliminary Development Agreement.
Estimated financial consultant fees (Ehlers & Associates) $
Estimated legal consultant fees (Kennedy & Graven) $
TOTAL ESTIMATED ADMINISTRATNE COSTS $
Please understand the above administrative costs are only estimates and subject to change upon
completion of the actual work performed.
As a point of reference, in the past few years the EDA has completed three development projects
similar to yours. The administrative costs ranged between $15,000 to $18,000 for these projects.
Payment of administrative costs shall be as follows:
The Developer shall deliver a security payment (deposit) to the City of Monticello EDA in the
form of cash or a certified check in the amount of $ ,such delivery shall occur
upon execution of the Preliminary Development Agreement.
If at any time or upon issuance of the Certificate of Completion identified within the
Contract, the City of Monticello EDA determines that the
deposit is insufficient to pay the Administrative Costs, the Developer is obligated to pay such
shortfall within 15 days after receipt of a written notice from the EDA containing evidence of
the unpaid costs.
Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831 • (763) 295-2711 • Fax (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 • (763) 295-3170 • Fax (763) 271-3272
If any balance of funds deposited remains upon issuance of the Certificate of Completion
pursuant to the
balance to the Developer.
Contract, the EDA shall promptly return such
Please do not hesitate to contact the Office of the City of Monticello EDA at 763-271-3208 if
you have any questions. The City of Monticello is excited about your project and appreciates
that has selected Monticello as the home for your business.
Sincerely,
CITY OF MONTICELLO
ECONOMIC DEVELOPMENT AUTHORITY
Executive Director
c: Project File
2