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EDA Minutes 09-12-2012MINUTES ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, September 12, 2012 - 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie, Rod Dragsten and Council Member Tom Perrault Commissioners Absent: Council Member Brian Stumpf Staff Present: Executive Director Jeff O'Neill, Wayne Oberg and Angela Schumann 1. Call to Order Bill Demeules called the meeting to order at 6 p.m. 2. Approve Meeting Minutes TOM PERRAULT MOVED TO APPROVE THE AUGUST 8, 2012 REGULAR EDA MINUTES AS CORRECTED. BILL TAPPER SECONDED THE MOTION. MOTION C:_RI Id10 3. Consideration of approving payment of bills Staff asked that the EDA make formal motion to approve payment for bills at its regular monthly meetings until staff developed a full understanding of budgeted projects within the EDA General Fund budget and the City's General Fund Economic Development budget. Invoices for the previous month were included for review. Staff confirmed that relocation consultant Dan Wilson followed strict federal standards and obtained verification documents before Montgomery Farms tenant relocation invoices are authorized for payment. Wilson's status summary report on tenant relocation progress and payments for the Montgomery Farms property was included in the agenda packet. Staff agreed to make a Finance Department summary report available as well. In addition, Demeules requested a summary report of the money spent on relocation costs (including utilities) to determine how much more costly it is to acquire property with tenants versus the cost of acquiring vacant property. Perrault asked about TIF District 1 -9 referenced in the Ehlers & Associates draft report. Staff noted that the report should have instead referred to TIF District 1 -19. ROD DRAGSTEN MOVED TO APPROVE PAYMENT OF BILLS FOR SEPTEMBER 12, 2012. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED 6 -0. EDA Agenda — 09/12/12 4. Consideration of additional aEenda items a) TIF 1 -5 b) McDonald's c) Update on search for new EDA director 5. Consideration to review and recommend approval of the EDA General Fund budget for 2013 Wayne Oberg outlined the EDA budget spreadsheet which itemized all TIF Districts, the Greater Monticello Enterprise Fund (GMEF), and the EDA General Fund. The proposed 2013 budget retains the Economic Development Director position. One quarter of the budgeted salary is provided by the EDA General Fund and the balance is accounted for within the Economic Development budget as part of the City's General Fund. Oberg summarized that in the past interest earnings had been distributed based on the fund balance rather than based on the cash balance. He pointed out that, although land may go up in value, it does not earn interest and is not a revenue source for the EDA General Fund. Jeff O'Neill also noted that the EDA does not have the authority to acquire revenue through a tax levy. Oberg stated that the $2.4 million listed as the EDA General Fund balance for the end of August is comprised of assets held for resale. He indicated that amount was unavailable for expenditure until the assets are sold. He confirmed that land held for resale is accounted for at the lower of cost or market value. He pointed to the importance of using administrative funds in TIF districts rather than funding from the General Fund. Up to 10% of a TIF district's tax increment can be used for staff and other administrative expenses, including consulting costs. However, staff costs would have to be carefully documented. There is $3.8 million in TIF funding available among the TIF administrative accounts. TIF District 1 -22, in particular, has an estimated $1.7 million available. Bill Tapper asked how the EDA General Fund had originally been funded. Staff agreed to look into the history of the fund. Oberg pointed out that moving forward he would recommend that the total EDA budget be divided into subfimds in order to more readily clarify which funds were utilized when making EDA expenditures. O'Neill agreed that it would be useful to have a clear picture of where discretionary spending is available for various EDA initiatives. Tapper also asked how the EDA could be expected to approve a budget that isn't fimded. Matt Frie asked where the money was coming from to pay obligations. Angela Schumann EDA Agenda — 09/12/12 pointed out that some EDA expenses had been paid through from the Economic Development budget within the City's General Fund. Tracy Hinz asked staff to identify the 2013 projected tax increment revenue from each of the TIF districts and a best estimate as to how the EDA Director salary cost might be allocated across the districts. TRACY HINZ MOVED TO TABLE ACTION ON THE EDA GENERAL FUND BUDGET FOR 2013 FOR FURTHER RESEARCH AND DISCUSSION. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED 6 -0. 6. Consideration to approve 2013 Wright County Economic Development Partnership annual membership dues The EDA was asked to consider renewing membership in the Wright County Economic Development Partnership. Perrault suggested that, since the EDA was unsure about its budget for next year, action on this issue be tabled. TOM PERRAULT MOVED TO TABLE ACTION ON PAYMENT OF THE WRIGHT COUNTY ECONOMIC DEVELOPMENT PARTNERSHIP ANNUAL MEMBERSHIP DUES. BILL TAPPER SECONDED THE MOTION. MOTION CARRIED 6 -0. 7. Consideration to appoint a Commissioner to the review committee for the Economic Development Chapter of the Monticello Comprehensive Plan The IEDC had concluded that an assessment of the need for future industrial land area was a top priority. Staff recommended that the Planning Commission, IEDC and EDA work together to complete a thorough review of the Economic Development chapter in the Comprehensive Plan. This would be a first step in a more detailed review of City goals related to industrial land use identification and the potential for another or expanded future industrial park. BILL TAPPER MOVED TO RECOMMEND THE APPOINTMENT OF ROD DRAGSTEN TO A JOINT WORK SESSION BETWEEN REPRESENTATIVES OF THE IEDC, PLANNING COMMISSION AND EDA TO REVIEW THE ECONOMIC DEVELOPMENT CHAPTER OF THE COMPREHENSIVE PLAN AS RELATED TO ANALYSIS OF INDUSTRIAL LAND SUPPLY. TRACY HINZ SECONDED THE MOTION. MOTION CARRIED 6 -0. 8. Director Report Fred's Auto The EDA closed on the Fred's Auto property on West Broadway and has title insurance and an escrow in place to proceed to clear up the title issue. Braun Intertec will complete the required Limited Scope Investigation. This information will be forwarded to the Minnesota Pollution Control Agency for review. The Department of Commerce's Economic Development Authority Minutes — 09/12/10 Petrofund will remove the tanks at no charge if the City can document where the tanks are located and that they were not used after 1987. The majority of the clean -up costs should be reimbursable. Embracing Downtown/TIF District Update Block 34: Staff is working with Ehlers & Associates to understand the redevelopment potential and costs on Block 34. Ehlers is working through scenarios which include variables such as redevelopment of the downtown and the completion of needed infrastructure improvements at the comer of TH 25 /CSAH 75. Scenarios will be brought forward for EDA review when completed. TIF District 1 -22: It appears that parcels were previously knocked out of TIF District 1- 22. A number of projects which occurred after the knockdown period maybe eligible to be knocked back into the district to generate additional tax increment. Block 52: The EDA received a request from a property owner in the downtown area to consider acquisition of a parcel on Block 52. Staff will compile a list of EDA priorities and potential funding sources and bring the information forward to a joint session of the EDA and City Council. Bill Demeules will meet with staff to provide direction in compiling this information in advance of the meeting. TIF 1 -19: Oberg had determined that there was additional increment in TIF 1 -19 which could potentially be used for other purposes since the note obligation to Mississippi Shores was complete. Northland will work with Kennedy & Graven to analyze possible uses for housing district increments at no cost to the EDA. Options may include a continuation of the transformation home loan program, funding to address meeting objectives for aging multi - family stock, and possibly relocation costs. Embracing Downtown Leadership Team Redevelopment Priorities Discussion Steve Johnson had presented an outline of redevelopment priorities specific to the use of TIF funds in the downtown for EDA consideration. McCombs and King Contracts Staff had provided a written overview of the status of the McComb Group and the Economic Development Services contract. Both expenses were to be paid from the General Fund but are now being coded to TIF 1 -22 as legitimate administrative expenses. Industry of the Year The Industry of the Year Award event is scheduled to be held at 7:30 a.m. on Wednesday, October 24th, 2012 in conjunction with Minnesota Manufacturer's Week. EDA members were encouraged to provide nominations for the award. Business Expansion & Retention Updates Staff pointed out that there had been a number of important business expansions and Economic Development Authority Minutes — 09/12/10 remodels in the community which were noted in the Director's Report. Minnesota Youth Soccer Association (MYSA) The MYSA membership will vote on the option of constructing field and office headquarters for their organization at the current biosolids site north of Bertram Park on November 3'd. The City offered to sell the land to the MYSA with the expectation that the economic development benefit to the area would be significant. The first phase of the project would consist of 16 fields and an additional 8 fields would be constructed in the second phase. This proposed project would accelerate the timing of planned future system upgrades to the wastewater treatment facility on that site. The land use proposal is also subject to review by both the Wright County Board and the Monticello Orderly Annexation Area Board. 9. Consideration of items added to the agenda a) TIF 1 -5 — Perrault said that he'd expected to make a decision about TIF 1 -5 spending. Staff stated that it wouldn't be appropriate to make a decision without first identifying priorities and funding sources. The EDA is required to allocate but not spend the funds from TIF District 1 -5 by year-end. Staff agreed to clarify the requirements for conducting a public hearing. b) McDonald's - Perrault shared that "Ronald McDonald" said that he knew a lot about Tax Increment Financing (TIF) at the recent McDonald's event. c) Update on search for new EDA Director - Any decision related to the position will result from a discussion between the EDA, City Council and the City Administrator and take shape over months. 10. Adiourn BILL TAPPER MOVED TO ADJOURN THE MEETING AT 7:49 PM. MATT FRIE SECONDED THE MOTION. MOTION CARRIED 6 -0. Recorder: Kerry T. Bum Approved: November 14, 2 12 Attest: %' C-_-9AXJ Jeff eill, Executive Director 5