EDA Agenda 04-11-2012EDA MEETING
Wednesday, April 11, 2012
6:00 p.m.
Mississippi Room - 505 Walnut Street, Monticello, MN
Commissioners: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy Hinz, Matt Frie,
and Council members Tom Perrault and Brian Stumpf
Staff: Executive Director Megan Barnett - Livgard, Finance Director Tom Kelly
1. Call to Order
2. Approve Meeting Minutes:
a. March 14, 2012
3. Consideration of additional agenda items
4. Consideration of approving a GMEF loan for Jacobson Veterinary Urgent Care Clinic
5. Presentation by Podawiltz Development: proposing a subsidized rental townhouse project
6. Consideration of purchasing property zoned B -4 and owned by John Chadwick
Consideration of cancelling the listing agreement between Commercial Realty Solutions
and the Monticello EDA and discuss the idea of creating a broker incentive fee for the
Monticello Business Center
8. Director Report
9. Adjourn
MINUTES
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, March 14, 2011- 6:00 p.m.
Commissioners Present: President Bill Demeules, Vice President Bill Tapper, Treasurer Tracy
Hinz, and Council Members Tom Perrault and Brian Stumpf
Commissioners Absent: Matt Frie
Staff: Executive Director Megan Bamett - Livgard, Finance Director Tom Kelly
1. Call to Order
Bill Demeules called the meeting to order at 6 p.m.
2. Approve Meeting Minutes
BILL TAPPER MOVED TO APPROVE THE FEBRUARY 8, 2012 EDA MINUTES.
MOTION WAS SECONDED BY TOM PERRAULT AS AMENDED. MOTION
CARRIED 4 -0. (Brian Stumpf abstained.)
3. Consideration of additional agenda items None
4. Consideration of authorizing WSB to review, delineate and assess the function of
each identified wetland in the Monticello Business Center industrial park
Several of the available outlots in the Monticello Business Center may contain wetlands
which reduce their developable area. Identifying such wetlands would provide the City
with more detailed information about property for sale and help to accurately market it to
future industrial users. In addition, knowing this information prior to determining site
location will likely save the developer engineering costs. Staff pointed out that recently
Suburban Manufacturing had to shift the site of their building several times due to the later
identification of wetlands on property purchased from the City.
Bill Demeules asked why this hadn't already been done. Staff did not have that
information.
Brian Stump asked if wetland delineation were something that City Engineer Bruce
Westby might be able to address to reduce the cost. Staff noted that the process would be
time - consuming and delay the progress of other city engineering projects.
Staff indicated that previous wetland discussions may have been related to road
improvements.
Bill Tapper confirmed that this detailed analysis would include the 13 acre Chadwick
property.
Economic Development Authority Minutes 03/14/12
Tom Perrault would like to have had more information. In particular, he wondered if WSB
was to have handled this issue but may have dropped the ball.
BILL TAPPER MOVED TO AUTHORIZE WSB TO REVIEW, DELINEATE AND
ASSESS THE FUNCTION OF EACH IDENTIFIED WETLAND ON CITY -OWNED
PROPERTY IN THE MONTICELLO BUSINESS CENTER INCLUDING THE
CHADWICK PROPERTY. MOTION WAS SECONDED BY BRIAN STUMPF.
MOTION CARRIED 4 -1 WITH TOM PERRAULT OPPOSED.
5. Consideration of adopting a Relocation Policy and a Relocation Assistance Policv
In an effort to address the complex nature of redevelopment and business /resident
relocation challenges, staff drafted a Redevelopment Priorities Policy and a Relocation
Policy for EDA consideration. The draft policies were modeled after Brooklyn Park's
adopted policies and reviewed by Kennedy & Graven and Wilson Development. These
policies were drafted to be broad in scope and not only answer questions related to the
implementation of the Embracing Downtown project but relocation issues due to
redevelopment throughout Monticello.
Bill Demeules noted the importance of establishing policies which acknowledge the rights
of residents and business owners and demonstrate the City's willingness to work in
cooperation during the relocation process. He also pointed out the need to be consistent
city -wide when labeling and referring to parcels in order to eliminate confusion.
Tom Perrault expressed his concern about a statement related to the availability of power
of eminent domain. Staff pointed out that, according to state statute, eminent domain
cannot be used for economic development. The need for public infrastructure, however, is
often a reason to consider the purchase of property.
BRIAN STUMPF MOVED TO ADOPT THE MONTICELLO REDEVELOPMENT
PRIORITIES POLICY AND RELOCATION POLICY. MOTION WAS SECONDED BY
BILL TAPPER. MOTION CARRIED 5 -0.
6. Director Report
The City Council did not approve moving forward with the branding and image project.
Staff plan to refine the branding proposal and bring it forward at a later date.
There were no applications submitted for the open EDA seat. The position will be posted
through the end of March.
Adjournment
Economic Development Authority Minutes 03/14/12
BILL TAPPER MOVED TO ADJOURN THE MEETING AT 6:18 PM. TRACY HINZ
SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Kerry T. Bum
Approved: April 11, 2012
Attest:
Megan Barnett- Livgard, Executive Director
EDA: 4/11/12
4. Consideration of adopting Resolution #2012 -035 approving a GMEF Loan for
Monticello Pet Hospital Urgent Care Clinic.
A. REFERENCE AND BACKGROUND:
Monticello Pet Hospital is requesting a $140,000 dollar GMEF loan to assist in opening an
after -hours urgent care veterinary facility. As you may recall Monticello Pet Hospital
(Jacobson Properties) recently obtained a $50,000 dollar GMEF loan to assist in expanding
their existing pet clinic facility located off of Highway 25. The new facility is located behind
Wal -mart and construction is almost complete. The Jacobson's would like to include opening
an urgent care facility as part of their relocation and business expansion plans.
The requested loan will be utilized for equipment purchases in an effort to free up "cash" that
can be utilized for working capital. Working capital expenditures will include salaries and
marketing. The new facility is anticipated to create 13 liveable wage jobs. The veterinary
clinic facility required a Conditional Use Permit, which has been approved by the City. The
proposed urgent care facility meets zoning code requirements and does not require an
amendment to the CUP.
Due to the fact that the proposed loan is less than $150,000 a public hearing is not required.
Al. Budget Impact: The GMEF balance is $1,042,000.
B. ALTERNATIVE ACTIONS:
Motion adopt Resolution #2012 -035 approving a GMEF loan for Monticello Pet
Hospital.
2. Motion to deny approving a GMEF loan for Monticello Pet Hospital.
3. Motion to table for further research and discussion.
C. STAFF RECOMMENDATION:
Staff recommends approval. The Jacobson's have completed a very comprehensive analysis
of the animal urgent care demand in the trade area. It appears the proposed business endeavor
can be supported by the demand and business projections. Furthermore, the proposed new
business would bring in 13 new full time livable wage paying jobs to the community.
Furthermore, the request meets GMEF guidelines.
D. SUPPORTING DATA:
GMEF Application
Resolution #2012 -035
Loan Agreement
EDA RESOLUTION NO. 2012-035
RESOLUTION APPROVING A LOAN AGREEMENT
BETWEEN THE CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY AND JACOBSON
VETERINARY PROPERTIES LLC
BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the City of Monticello
Economic Development Authority, Monticello, Minnesota (the "Authority" or "Holder ") as
follows:
Section 1. Recitals.
1.01. The Authority and Jacobson Veterinary Properties LLC (the `Borrower ") desire to
enter into a loan agreement (the "Loan Agreement ") for a GMEF Loan to be used for equipment
purchases as described in Exhibit A hereto (the "Property") in order to establish an urgent care
veterinary clinic thereon.
1.02. Pursuant to the Loan Agreement, the Authority will loan to the Borrower the sum of
$140,000 (the "Loan"), evidenced by a promissory note (the "Note ") and a mortgage (the
"Mortgage "), to be executed and delivered to the Authority by the Borrower.
1.03. The terms of the Loan Agreement and Note shall conform to the Amended GMEF
Guidelines approved by the Authority on 23`d March 2009, including a term of the loan of seven
years, and a fixed interest rate of 3.0 %.
Section 2. Loan Agreement and Note Authorized.
2.01. The Authority hereby authorizes and directs Authority staff and consultants to
negotiate and prepare the Loan Agreement and Note as provided herein, and authorizes
execution of the Loan Agreement and all documents prepared in connection therewith.
Approved this 11th day of April, 2012, by the Board of Commissioners of the City of Monticello
Economic Development Authority.
President
ATTEST:
Executive Director
391681v1 MNI MN325 -23
EXHIBIT A
Property
369581v1 MNI MN325 -21 A -1
391681vl MNI MN325 -23
M )N I ICH -1
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
BUSINESS SUBSIDY APPLICATION
BUSINESS ASSISTANCE FINANCING
Name of Contact Person: l A( ICK CL
Address:
Telephone number:
Business Name:
Business Address:
REQUESTED INFORMATION
Addendum shall be attached hereto addressing in detail the following:
1. A map showing the exact boundaries of proposed development.
2. Give a general description of the project including size and location of building(s); business
type or use; traffic information including parking, projected vehicle counts and traffic flow;
timing of the project; estimated market value following completion.
3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property.
Include a statement as to how the proposed development will conform to the land use
designation and how the property will be zoned.
4_ A statement identifying how the increment assistance will be used and why it is necessary to
undertake the project.
5. A statement identifying the public benefits of the proposal including estimated increase in
property valuation, newjobs to be created, hourly wages and other community assets.
6. A written description of the developer's business, principals, history and past projects
1 understand that the application fee will be used for EDA staff and consultant costs and may be partially
refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the EDA
Board and be based on the costs incurred by the EDA prior to withdraw of the request for assistance. If
the initial application fee is insufficient, 1 will be responsible for additional deposits.
SIGNATURE
Applicant's signature:
Date: C9 /% o24 /a
City of Monticello Economic Development Authority
Business Subsidy Application
Business Assistance Financing
March 19, 2012
Contact: Linda Jacobson. Practice Administrator
612 - 385 -5805 cell, 763 - 295 -3410 office
a) Monticello Pet Hospital, PLLC (Scott L. Jacobson 100% Shares)
b) Jacobson Veterinary Properties, LLC (Scott & Linda Jacobson, real estate holding
company 50/50)
c) Associated Animal Urgent Care, PLLC (Scott L. Jacobson 100% Shares)
4134 School Blvd (New facility under construction)
Monticello, MN 55362
(New Location for a, b & c)
1260 S. Cedar Street
Monticello, MN 55362
(current location for location [a] until April 27, 2012)
Addendum: Requested information
1. See maps for CUP approval and platting related to new address 4134 School Blvd.
2. Total building is 7,860 square feet, single occupant, 100% occupied veterinarian facility
located on a newly platted lot referred to as: Lot 1 Block 1 Monticello Business Center,
Sixth Addition. We will provide full service veterinary medicine and surgical services,
urgent care, boarding, grooming, pet retail and training services. We average 72
transactions or visits per business day and around 24 during our Saturday hours. Our new
facility will enable us to better service the veterinary needs of Monticello and
surrounding communities along with expansion into full time urgent care services which
would add approximately 255 additional consumer visits per week. Our estimated
market value upon completion is $1.2 million.
3. Currently we have been granted a CUP for veterinary and ancillary services to be
provided in this B4 district. We conform to the needs that B4 was intended for and will
enhance this neighborhood as a destination service that draws consumers to the area See
prior GMEF Application. Primary business district located off of School Blvd adjacent
to Walmart and other retail/office locations.
4. This request is for an expansion to our current GMEF loan.
The Monticello and surrounding communities have a great need for after hour urgent care
services for dogs and cats. Currently the closest option for nearly every veterinary
facility within 40 miles of our practice is either Blaine or St. Cloud. That means a dog
that gets injured or hit by a car in Buffalo will have to drive nearly 40 -50 minutes before
any care can be provided.
The same is true for transfer services. All day practices in this region currently need to
transfer hospitalized patients to an overnight care facility when we close for the evening.
This is at a considerable expense and inconvenience to the client and in many cases they
elect to just bring their pet home and wish for the best. Clients and other veterinary
practices need a cost effective and local alternative. There are currently 22 practices in
the immediate vicinity and another 12 outlying facilities that would immediately benefit
from a local option for transfer and urgent care referral services. (see map)
We have tracked our client's use of emergency after hour services for one year. The
results are astounding at the lost revenue that leaves Monticello for the emergency
services offered elsewhere. If we calculate the average sales and assume that nearly all
our neighboring practices experience the same amount of revenue loss, the overall
opportunity for job growth and business expansion in Monticello is great.
Monticello is conveniently located off of 94 at an integral crossroad with HWY 25. This
makes our practice a convenient location for patients to come when their regular practice
is closed for the evening or weekend. There is an enormous need in the veterinary
community for jobs. There are many eager graduates looking for opportunities to get
involved in a high paced practice and gain experience and even more technicians and
assistants.
We would create 13 full time positions that would range from Doctors to assistants and
receptions services. These salaries would range from $80,000 to $30,000. In an effort to
make this opportunity a reality we are requesting assistance with our new construction
expense. We have a great deal of equipment that is being acquired to ensure that we can
provide all the necessary services to offer not only exceptional day practice services, but
urgent care as well. There are certain standards that we will need to meet to be considered
a viable urgent care facility. As we continue to invite specialists to the area to practice in
fields such as dermatology, behavioral, surgery and radiology our practice will meet their
needs from an equipment and facility standpoint. We are requesting the assistance to
offset the cost of this equipment in an effort to free up working capital to start the Urgent
Care facility.
5. Scott Jacobson, DVM is the primary principal for these businesses. He graduated with
his Doctorate in Veterinary Medicine from Ross University in 2003. Prior to his
graduation his residency took him to 3 practices gaining a wealth of diverse back
ground knowledge in veterinary medicine. He has been practicing in the Monticello
area for 7 years. Linda Jacobson, Practice Administrator comes from a veterinary
background as well. A graduate with 3 bachelor degrees in Architecture,
Construction Management and Danish from the University of Minnesota and a minor
in Pre -Med studies she worked throughout college and high school as a practice
manager at a veterinary practice in Rosemount, MN. Following her completion of
her undergraduate she was employed in pharmaceutical sales as a director of sales
and marketing development. She has a diverse business background that will
contribute to the overall success and implementation of practice goals. Heritage
Construction has a history of successful project completion in the Monticello and
surround areas.
Thank you for taking the time to consider our application.
LOAN AGREEMENT
This Loan Agreement ( "Agreement") is made this _ day of April, 2012, between
Monticello Pet Hospital, PLLC, a Minnesota limited liability company ( "Borrower ") and the City of
Monticello Economic Development Authority ( "Lender "), a public body corporate and politic under
the laws of Minnesota.
RECITALS
A. In consideration for the loan contemplated by this Agreement, Borrower is executing
and delivering to Lender this Loan Agreement.
B. Lender agrees to loan to Borrower the maximum amount of $140,000 to pay a
portion of the costs of certain equipment necessary for the expanded operation of an existing
veterinary clinic located in the City of Monticello, Minnesota (the "City"), which equipment is
listed at Exhibit A hereto (the "Equipment ").
ACCORDINGLY, to induce Lender to make the Loan to Borrower, and for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. The Loan Amount. Subject to and upon the terms and conditions of this Agreement,
Lender agrees to loan to Borrower the sum of One Hundred Forty Thousand and no /100ths Dollars
($140,000), or so much thereof as is disbursed to Borrower in accordance with this Agreement (the
"Loan"). The Loan shall be evidenced by a promissory note ( "Note ") payable by Borrower to
Lender and substantially in the form of Exhibit B attached to this Agreement, which shall be dated
as of the date of this Agreement. Proceeds of the Loan shall be disbursed in accordance with
Section 3 hereof.
2. Repayment of Loan. The Loan shall be repaid with interest as follows:
(a) Interest at the rate of three percent (3.0 %) per annum shall accrue from the
Loan Closing Date (as hereinafter defined) until the Loan is repaid in full.
(b) Payments of principal and interest shall commence on June 1, 2012 (the
"Initial Payment Date ") and continue on the first day of each and every month thereafter
until paid in full. Such payments shall fully amortize the principal and interest over seven
(7) years, and the final unpaid balance of principal and interest shall be due and payable on
the first day of the eighty -fourth (84th) month following the Initial Payment Date.
C[1I1Fi:101& III 4111MIRE
Disbursement of Loan Proceeds.
(a) The Loan proceeds shall be paid to Borrower in accordance with the terms
and conditions of this Agreement. Notwithstanding anything to the contrary herein, if the
cost of the Equipment exceeds the amount to be reimbursed under this Agreement, such
excess shall be the sole responsibility of the Borrower.
(b) All disbursements of proceeds of the Loan will be made subject to the
conditions precedent that prior to the date of such disbursement:
(i) The Lender has received from Borrower, without expense to Lender,
executed copies of this Agreement and the Note, and Borrower further having
caused to be executed and delivered to Lender a security agreement in substantially
the form set forth hereto at Exhibit C (the "Security Agreement ");
(ii) The Lender has received a written statement from the Borrower's
authorized representative certifying with respect to each payment: (a) that none of
the items for which the payment is proposed to be made has formed the basis for any
payment previously made under this Section (or before the date of this Agreement);
and (b) that each item for which the payment is proposed is included in the
Equipment;
(iii) Borrower has provided evidence satisfactory to Lender that Borrower
has established a separate accounting system for the exclusive purpose of recording
the receipt and expenditure of the Loan proceeds; and
(iv) Borrower has paid $500 to Lender as a loan origination fee;
(v) Borrower has paid to Lender the full amount of the legal fees
incurred by Lender in the negotiation and preparation of this Agreement and any
other agreement or instrument securing the Loan; and
(vi) No Event of Default shall have occurred and be continuing.
(c) Whenever the Borrower desires a disbursement to be made hereunder, which
shall be no more often than weekly, the Borrower shall submit to the Lender a draw request
in the form attached as Exhibit D duly executed on behalf of the Borrower, accompanied by
paid invoices or other comparable evidence that the cost has been incurred and paid or is
payable by Borrower. Each draw request shall constitute a representation and warranty by
the Borrower that all representations and warranties set forth in this Agreement are true and
correct as of the date of such draw request.
(d) If the Borrower has performed all of its agreements and complied with all
requirements to be performed or complied with hereunder, including satisfaction of all
applicable conditions precedent contained in this Section, the Lender shall make a
disbursement to the Borrower in the amount of the requested disbursement or such lesser
amount as shall be approved, within twenty days after the date of the Lender's receipt of the
400584vl MNI MN325 -24
draw request.
4. No Business Subsidy.
(a) The parties agree and understand that the purpose of the Lender's financial
assistance to the Borrower is to provide a business loan of less than $150,000, and is not
a "business subsidy" within the meaning of Minnesota Statutes, Sections 116J.993 to
116J.995.
(b) Job Goals. Notwithstanding the exemption from the requirements of the
Business Subsidy Act described in Section 4(a), the parties agree and understand that the
Loan is being made, in part, for the purpose of facilitating the creation of jobs in the City.
Accordingly, the Borrower agrees that within one year after the date of this Agreement,
Borrower will create at least 13 full -time equivalent jobs in the City in connection with the
expanded operation of the veterinary clinic and to pay wages of at least $14.40 per hour in
connection with each job created.
(c) Reports. The Borrower must submit to the Lender a written report regarding job
and wage results by no later than February 1 of each year, commencing February 1, 2013
and continuing until the date the goals stated in Section 4(b) are met. The Lender will
provide information to the Borrower regarding the required forms. If the Borrower fails to
timely file any report required under this Section, the Lender will mail the Borrower a
warning within one week after the required filing date. If, after 14 days of the postmarked
date of the warning, the Borrower fails to provide a report, the Borrower must pay to the
Lender a penalty of $100 for each subsequent day until the report is filed. The maximum
aggregate penalty payable under this Section is $1,000.
5. Representations and Warranties. Borrower represents and warrants to Lender that:
(a) Borrower is duly authorized and empowered to execute, deliver, and perform
this Agreement and to borrow money from Lender.
(b) The execution and delivery of this Agreement, and the performance by
Borrower of its obligations hereunder, do not and will not violate or conflict with any
provision of law and do not and will not violate or conflict with, or cause any default or
event of default to occur under, any agreement binding upon Borrower.
(c) The execution and delivery of this Agreement has been duly approved by all
necessary action of Borrower, and this Agreement has in fact been duly executed and
delivered by Borrower and constitutes its lawful and binding obligation, legally enforceable
against it.
(d) Borrower warrants that it shall keep and maintain books, records, and other
documents relating directly to the receipt and disbursements of Loan proceeds and that any
duly authorized representative of Lender shall, at all reasonable times, have access to and
the right to inspect, copy, audit, and examine all such books, records, and other documents
4005840 MNI MN325 -24 3
of Borrower pertaining to the Loan until the completion of all closeout procedures and the
final settlement and conclusion of all issues arising out of this Loan.
(e) Borrower warrants that it has fully complied with all applicable state and
federal laws pertaining to its business and will continue to comply throughout the terms of
this Agreement. If at any time Borrower receives notice of noncompliance from any
governmental entity, Borrower agrees to take any necessary action to comply with the state
or federal law in question.
(f) Borrower warrants that it will use the proceeds of the Loan made by Lender
solely for the Equipment.
(g) Borrower warrants that it will not create, permit to be created, or allow to
exist any liens, charges, or encumbrances prior to the obligation created by this Loan
Agreement, except as otherwise authorized in writing by Lender.
6. Event of Default by Borrower. The following shall be Events of Default under this
Agreement:
(a) failure to pay any principal or interest on the Loan when due;
(b) any representation or warranty made by Borrower herein or in any
document, instrument, or certificate given in connection with this Agreement, the Note, or
the Security Agreement is false when made;
(c) Borrower fails to pay its debts as they become due, makes an assignment for
the benefit of its creditors, admits in writing its inability to pay its debts as they become due,
files a petition under any chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter existing, becomes "insolvent" as that term is generally defined
under the Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay
its debts as they become due in any involuntary bankruptcy case commenced against it, or
fails to obtain a dismissal of such case within thirty (30) days after its commencement or
convert the case from one chapter of the Federal Bankruptcy Code to another chapter, or be
the subject of an order for relief in such bankruptcy case, or be adjudged a bankrupt or
insolvent, or has a custodian, trustee, or receiver appointed for, or has any court take
jurisdiction of its property, or any part thereof, in any proceeding for the purpose of
reorganization, arrangement, dissolution, or liquidation, and such custodian, trustee, or
receiver is not discharged, or such jurisdiction is not relinquished, vacated, or stayed within
thirty (30) days of the appointment;
(d) a garnishment summons or writ of attachment is issued against or served
upon Lender for the attachment of any property of Borrower in Lender's possession or any
indebtedness owing to Borrower, unless appropriate papers are filed by Borrower contesting
the same within thirty (30) days after the date of such service or such shorter period of time
as may be reasonable in the circumstances;
400584v I MNI MN325 -24 4
(e) any breach or failure of Borrower to perform any other term or condition of
this Agreement not specifically described as an Event of Default in this Agreement and such
breach or failure continues for a period of thirty (30) days after Lender has given written
notice to Borrower specifying such default or breach, unless Lender agrees in writing to an
extension of such time prior to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, Lender will not unreasonably
withhold its consent to an extension of such time if corrective action is instituted by
Borrower within the applicable period and is being diligently pursued until the Default is
corrected, but no such extension shall be given for an Event of Default that can be cured by
the payment of money (i.e., payment of taxes, insurance premiums, or other amounts
required to be paid hereunder);
(f) any breach by Borrower of any other agreement between Borrower, and
Lender, or the City.
7. Lender's Remedies upon Borrower's Default. Upon an Event of Default by
Borrower and after provision by Lender of written notice, Lender shall have the right to exercise
any or all of the following remedies (and any other rights and remedies available to it):
(a) declare the principal amount of the Loan and any accrued interest thereon to
be immediately due and payable upon providing written notice to Borrower;
(b) suspend its performance under this Loan Agreement;
(c) take any action provided for at law to enforce compliance by Borrower with
the terns of this Agreement and the Note;
(d) exercise its rights under the Security Agreement.
In addition to any other amounts due on the Loan, and without waiving any other right of
Lender under any this Agreement or any other instrument securing the Loan applicable
documents, Borrower shall pay to Lender a late fee of $250 for any payment not received in full
by Lender within 30 calendar days of the date on which it is due. Furthermore, interest will
continue to accrue on any amount due until the date on which it is paid to Lender, and all such
interest will be due and payable at the same time as the amount on which it has accrued.
8. Lender's Costs of Enforcement of Agreement. If an Event of Default has occurred
as provided herein, then upon demand by Lender, Borrower shall pay or reimburse Lender for all
expenses, including all attorneys fees and expenses incurred by Lender in connection with the
enforcement of this Agreement and the Note, or in connection with the protection or enforcement of
the interests and collateral security of Lender in any litigation or bankruptcy or insolvency
proceeding or in any action or proceeding relating in any way to the transactions contemplated by
this Agreement.
9. Indemnification.
400584v1 MNI MN325 -24 5
(a) Borrower shall and does hereby agree to indemnify against and to hold
Lender, and its officers, agents, and employees, harmless of and from any and all liability,
loss, or damage that it may incur under or by reason of this Agreement, and of and from any
and all claims and demands whatsoever that may be asserted against Lender by reason of
any alleged obligations or undertakings on its part to perform or discharge any of the terms,
covenants, or agreements contained herein.
(b) Should Lender, or its officers, agents, or employees incur any such liability
or be required to defend against any claims or demands pursuant to this Section, or should a
judgment be entered against Lender, the amount thereof, including costs, expenses, and
attorneys fees, shall bear interest thereon at the rate then in effect on the Note, shall be
secured hereby, shall be added to the Loan, and Borrower shall reimburse Lender for the
same immediately upon demand, and upon the failure of Borrower to do so, Lender may
declare the Loan immediately due and payable.
(c) This indemnification and hold harmless provision shall survive the
execution, delivery, and performance of this Agreement and the creation and payment of
any indebtedness to Lender. Borrower waives notice of the acceptance of this Agreement
by Lender.
(d) Nothing in this Agreement shall constitute a waiver of or limitation on any
immunity from or limitation on liability to which Borrower is entitled under law.
10. Miscellaneous.
(a) Waiver. The performance or observance of any promise or condition set
forth in this Agreement may be waived, amended, or modified only by a writing signed by
Borrower and Lender. No delay in the exercise of any power, right, or remedy operates as a
waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy.
(b) Assignment. This Agreement shall be binding upon Borrower and its
successors and assigns and shall inure to the benefit of Lender and its successors and
assigns. All rights and powers specifically conferred upon Lender may be transferred or
delegated by Lender to any of its successors and assigns. Borrower's rights and obligations
under this Agreement may be assigned only when such assignment is approved in writing
by Lender.
(c) Governing Law. This Agreement is made and shall be governed in all
respects by the laws of the state of Minnesota. Any disputes, controversies, or claims
arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and
all parties to this Agreement waive any objection to the jurisdiction of these courts, whether
based on convenience or otherwise.
(d) Severability. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect
other provisions or applications that can be given effect, and this Agreement shall be
4005840 MNI MN325 -24 6
construed as if the unlawful or unenforceable provision or application had never been
contained herein or prescribed hereby.
(e) Notice. All notices required hereunder shall be given by depositing in the
U.S. mail, postage prepaid, certified mail, return receipt requested, to the following
addresses (or such other addresses as either parry may notify the other):
To Lender: City of Monticello Economic Development Authority
505 Walnut Street
Suite 1
Monticello, MN 55362
Attn: Executive Director
To Borrower: Monticello Pet Hospital, PLLC
1260 S. Cedar Street
Monticello, MN 55362
(f) Termination. If the Loan is not disbursed pursuant to this Agreement by
December 31, 2012, this Agreement shall terminate and neither party shall have any further
obligation to the other, except that if the Loan is not disbursed because Borrower has failed to
use its best efforts to comply with the conditions set forth in Section 3 of this Agreement then
Borrower shall pay to Lender all reasonable attorneys fees, costs, and expenses incurred by
Lender in connection with this Agreement and the Note.
(g) Entire Agreement. This Agreement, together with the Exhibits hereto, which are
incorporated by reference, constitutes the complete and exclusive statement of all mutual
understandings between the parties with respect to this Agreement, superseding all prior or
contemporaneous proposals, communications, and understandings, whether oral or written,
concerning the Loan.
(h) Headings. The headings appearing at the beginning of the several sections contained
in this Agreement have been inserted for identification and reference purposes only and shall not be
used in the construction and interpretation of this Agreement.
400584v1 MNI MN325 -24 7
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
proper officers thereunto duly authorized on the day and year first written above.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
President
By:
Executive Director
[SIGNATURE PAGE TO LOAN AGREEMENT - CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITYJ
400584v1 MNI MN325 -24
MONTICELLO PET HOSPITAL, PLLC
IC
Title:
[SIGNATURE PAGE TO LOAN AGREEMENT- MONTICELLO PET HOSPITAL, PLLC]
400584v MNI MN325 -24
EXHIBIT A
EQUIPMENT
400584v1 MNI MN325 -24 A -1
EXHIBIT B
PROMISSORY NOTE
- $140,000-
-3.0 %-
2012
Monticello Pet Hospital, PLLC, a Minnesota limited liability company ( "Maker "), for value
received, hereby promises to pay to the City of Monticello Economic Development Authority, a
public body corporate and politic under the laws of Minnesota or its assigns (Authority and any
assigns are collectively referred to herein as "Holder "), at its designated principal office or such
other place as the Holder may designate in writing, the principal sum of One Hundred Forty
Thousand and no /100ths Dollars ($140,000) or so much thereof as may be advanced under this
Note, with interest as hereinafter provided, in any coin or currency that at the time or times of
payment is legal tender for the payment of private debts in the United States of America. The
principal of and interest on this Note are payable in installments due as follows:
1. Interest at the rate of three percent (3.0 %) per annum shall accrue from the date of
each disbursement pursuant to each draw request, as described in the loan agreement of even date
between Borrower and Lender ( "Loan Agreement ") until the Loan is repaid in full.
2. Payments of principal and interest shall commence on June 1, 2012 (the "Initial
Payment Date ") and continue on the first day of each and every month thereafter until paid in full.
Such payments shall fully amortize the principal and interest over three (3) years; and the final
payment of unpaid principal and interest shall be due and payable on the first day of the thirty -sixth
(36`I') month following the Initial Payment Date.
3. The Maker shall have the right to prepay the principal of this Note, in whole or in
part, with interest accrued to the date of such prepayment, on any date a principal and interest
payment is due and payable.
4. This Note is given pursuant to the Loan Agreement and a security agreement of
even date herewith delivered by Borrower (the "Security Agreement "). If any such security is
found to be invalid for whatever reason, such invalidity shall constitute an Event of Default
hereunder.
All of the agreements, conditions, covenants, provisions, and stipulations contained in the
Loan Agreement, the Security Agreement, or any other instrument securing this Note are hereby
made a part of this Note to the same extent and with the same force and effect as if they were fully
set forth herein. It is agreed that time is of the essence of this Note. If an Event of Default occurs
under the Loan Agreement, the Security Agreement, or any other instrument securing this Note,
400584v1 MNI MN325 -24 B -1
then the Holder of this Note may at its right and option, without notice, declare immediately due and
payable the principal balance of this Note and interest accrued thereon, together with reasonable
attorneys fees and expenses incurred by the Holder of this Note in collecting or enforcing payment
hereof, whether by lawsuit or otherwise, and all other sums due hereunder or any instrument
securing this Note. The Maker of this Note agrees that the Holder of this Note may, without notice
to and without affecting the liability of the Maker, accept additional or substitute security for this
Note, or release any security or any party liable for this Note or extend or renew this Note.
5. The remedies of the Holder of this Note as provided herein, and in the Loan
Agreement, the Security Agreement, or any other instrument securing this Note shall be
cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole
discretion of the Holder of this Note, may be exercised as often as occasion therefor shall occur; and
the failure to exercise any such right or remedy shall in no event be construed as a waiver or release
thereof.
The Holder of this Note shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the
Holder and then only to the extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event. This Note may not be amended, modified, or changed except only by an
instrument in writing signed by the party against whom enforcement of any such amendment,
modifications, or change is sought.
6. If any term of this Note, or the application thereof to any person or circumstances
shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of
such term to persons or circumstances other than those to which it is invalid or unenforceable shall
not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest
extent permitted by law.
7. It is intended that this Note is made with reference to and shall be construed as a
Minnesota contract and is governed by the laws thereof. Any disputes, controversies, or claims
arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to
this Note waive any objection to the jurisdiction of these courts, whether based on convenience or
otherwise.
8. The performance or observance of any promise or condition set forth in this Note
may be waived, amended, or modified only by a writing signed by the Maker and the Holder. No
delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any
single or partial exercise of any other power, right, or remedy.
9. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things
required to exist, happen, and be performed precedent to or in the issuance of this Note do exist,
have happened, and have been performed in regular and due form as required by law.
[REST OF THE PAGE INTENTIONALLY LEFT BLANK]
400584v1 MNI MN325 -24 B -2
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the
_ day of 2012.
MONTICELLO PET HOSPITAL, PLLC
0
Title:
[SIGNATURE PAGE FOR PROMISSORY NOTE - MONTICELLO PET HOSPITAL, PLLC
4005840 MNI MN325 -24 B -3
EXHIBIT C
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of , 2012, is made and entered
into by and between MONTICELLO PET HOSPITAL, PLLC (the "Debtor "), a Minnesota
limited liability company with its principal place of business at 1260 S. Cedar Street, Monticello,
Minnesota 55362 and the CITY OF MONTICELLO ECONOMIC DEVELOPMENT
AUTHORITY (the "Secured Party"), a public body corporate and politic, with its principal place
of business at 505 Walnut Street, Suite 1, Monticello, Minnesota 55362.
1. Security Interest and Collateral. To secure the payment of that certain Promissory
Note in the original aggregate principal amount of $140,000, issued pursuant to a Loan
Agreement dated as of , 2012 (the "Loan Agreement "), between the Secured
Party and the Debtor, the proceeds of which will be applied to the acquisition of certain medical
equipment for use at a veterinary facility owned by the Debtor and located at 4134 School
Boulevard in the City of Monticello, Minnesota (the "Facility "), the Debtor hereby grants the
Secured Party a security interest (herein called the "Security Interest ") in the following property
(herein called the "Equipment "):
any and all machinery and equipment installed in, attached to, or used in connection
with the Facility, as described in Exhibit A hereto,
together with all parts, additions, replacements, and repairs to the Equipment now or hereafter
installed in, attached to, or used in the Facility, and the proceeds thereof (collectively with the
Equipment, the "Collateral ").
2. Debtor's Representations, Warranties, and Covenants. Debtor represents,
warrants, covenants, and agrees as follows:
(a) Organization. The Debtor is a Minnesota limited liability company, and Debtor
has full power and authority to execute, deliver, and perform this Security Agreement, and to
own its property and conduct its business as presently conducted and as proposed to be
conducted.
(b) Authorization. The execution, delivery, and performance of this Security
Agreement by the Debtor has been duly authorized by all necessary action and will not:
(i) require any consent or approval of any entity which has not been obtained; or
(ii) violate any material provision of any indenture, contract, agreement or instrument
to which Debtor is a party or by which it is bound.
(c) Performance by Debtor. Unless Debtor obtains Secured Party's written consent to
4005840 MNI MN325 -24 C-1
the contrary, or except as provided in the Loan Agreement, Debtor shall not:
(i) terminate its interest in any of the Collateral; or
(ii) sell, transfer, or assign, or offer to sell, transfer or assign all or any part of the
Collateral or permit all or any part of the Collateral to be sold, transferred, or assigned; or
(iii) remove or consent to the removal of any of the Equipment from the Facility.
(d) Title to Collateral. Debtor shall keep good marketable title to all of the Collateral,
and none of the Collateral is subject to any lien or security interest except for the security interest
created by this Security Agreement and other security interests consented to in writing by
Secured Party. Debtor has not granted, and will not grant or permit to exist, any lien or security
interests in all or a portion of the Collateral other than the liens in favor of Secured Party and
other liens consented to in writing by Secured Party. Debtor shall defend the Collateral against
all claims and demands of all and any other persons at any time claiming any interest therein
adverse to Secured Party.
(e) Actions and Proceedings. There are no actions at law, suits in equity, or other
proceedings before any governmental agency, commission, bureau, tribunal, or other arbitration
proceedings against or affecting Debtor, that if adversely determined would adversely affect
Debtor's interest in the Collateral or would adversely affect the rights of Debtor to pledge and
assign all or a part of the Collateral or the rights and security afforded Secured Party hereunder.
(f) Insurance. The Debtor agrees it will keep the Equipment insured, or cause the
Equipment to be kept insured, at all times against loss by fire or other hazards concerning which,
in the judgment of the Secured Party, insurance protection is reasonably necessary and in
amounts sufficient to protect against loss or damage of the Equipment. Such policy or policies
will contain a loss payable clause in favor of Secured Party or its successors or assigns, in form
satisfactory to Secured Party, provided, however, that Debtor may, at its reasonable discretion,
self - insure the Equipment.
(g) No Fixture. If any of the Collateral is or becomes a fixture, Debtor agrees to
furnish Secured Party, at Secured Party's request, with a statement or statements signed by all
persons who have or claim an interest in the real estate concerned, which statements shall
provide that the signer consents to the security interest created hereby and disclaims any interest
in the Collateral as fixtures.
(h) Understandings Regarding Collateral. Debtor acknowledges that the Collateral is
or will be of the design, capacity, and manufacture specified for and by Debtor, and that Debtor
is satisfied that the same is or will be suitable for its intended purposes. Debtor further
acknowledges and agrees that Secured Party has not made, and does not make, any
representation, warranty, or covenant with respect to merchantability, fitness for any purpose,
durability, patent, copyright or trademark infringement, suitability, or capability of any item of
Collateral in any respect or in connection with any other purpose or use of Debtor, or any other
representation, warranty, or covenant of any kind or character expressed or implied with respect
4005841 MNI MN325 -24 C_2
thereto. Debtor accordingly agrees not to assert any claim whatsoever against Secured Party
based thereon. Debtor further agrees, regardless of cause, not to assert any claim whatsoever
against Secured Party for loss of anticipatory profits or consequential damages.
(i) Use of Collateral. The Collateral will be used for its intended business purpose
and will at all times be located at the Facility, except as provided in the Loan Agreement.
0) Condition of Collateral. Debtor will keep the Collateral in good condition and
repair, reasonable wear and tear excepted, and will permit Secured Party to enter the Facility at
reasonable times and upon reasonable notice for the purpose of examining the Collateral.
(k) Costs of Collection. In the event of any action or proceeding to collect or realize
upon the Collateral or to enforce any of Secured Party's rights hereunder, the Debtor shall pay:
(i) all of Secured Party's attorneys fees and legal expenses, with interest thereon,
incurred by the Secured Party;
(ii) all taxes, levies, insurance expenses, and costs of repairs to, or maintenance of,
the Collateral; and
(iii) all costs of the Secured Party reasonably incurred in taking possession of,
disposing of, or preserving the Collateral after any Event of Default (defined below).
3. Event of Default. Upon the occurrence of a default in the payment of the Note, or
under the terms of the Loan Agreement or this Security Agreement, the Secured Party may
exercise any remedy available to it under the terms of the Loan Agreement, the Note, or this
Security Agreement, and may, without limiting any other right or remedy available to it, exercise
and enforce any and all rights and remedies available upon default to a secured party under the
Uniform Commercial Code as enacted in the State of Minnesota, Minnesota Statutes, Chapter
336, as amended (the "UCC "), and the Secured Party and all representatives of the Secured Party
are hereby granted the right to enter upon any property of the Debtor, without a hearing or prior
notice thereof, for the purpose of taking possession of the Collateral. If notice to the Debtor of
any intended disposition of the Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if given (in the manner
specified in this Security Agreement) at least ten calendar days prior to the date of the intended
disposition or other action.
4. Further Assurances. The Debtor shall execute and deliver to the Secured Party,
promptly and at the Debtor's expense, financing statements, including without limitation a UCC -
1 Financing Statement listing the Equipment and all proceeds thereof as collateral. Debtor
agrees that the Secured Party is authorized, at its option, to file a photocopy or other reproduction
of this Security Agreement as a financing statement and such photocopy or other reproduction
shall be sufficient as a financing statement under the UCC, and the Debtor hereby irrevocably
appoints the Secured Party as the Debtor's attorney -in -fact to execute and file, from time to time,
on its behalf, one or more financing statements with respect to the Collateral and to execute such
other documents and instruments on behalf of the Debtor as the Secured Party, in its sole
400584v1 MNI MN325 -24 C -3
judgment, shall deem necessary or desirable for the purposes of effectuating this Security
Agreement, such power being coupled with an interest.
5. Cumulative Remedies. All of the Secured Party's rights and remedies herein are
cumulative and in addition to any rights or remedies available at law or in equity, including the
UCC, and may be exercised concurrently or separately. The Debtor shall pay all costs, expenses,
losses, damages, and legal costs (including attorneys fees) incurred by the Secured Party as a
result of enforcing any terms or conditions of this Security Agreement.
6. No Liability Imposed on the Secured Part v. The Secured Party shall not be
obligated to perform or discharge, nor does it hereby undertake to perform or discharge, any
obligation, duty, or liability, nor shall this Security Agreement operate to place responsibility for
the control, care, or management of the Equipment upon Secured Party; provided, that upon
payment in full of the Note, the Secured Party shall execute and file UCC termination statements
in the offices in which financing statements with respect to the Collateral are effective.
7. Indemnification. The Debtor hereby agrees to indemnify and to hold the Secured
Party harmless of and from any and all liability, loss, or damage which it may or might incur
under or by reason of this Security Agreement, and of and from any and all claims and demands
whatsoever which may be asserted against it by reason of any alleged obligations or undertakings
on its part to perform or discharge any of the terms, covenants, or agreements contained herein.
Should the Secured Party incur any such liability or be required to defend against any such
claims or demands, or should a judgment be entered against the Secured Party, the amount
thereof, including costs, expenses, and attorneys fees, shall bear interest thereon at the rate then
in effect on the Note, shall be secured hereby, and shall be added to the obligations of the Debtor
secured hereunder. The Debtor shall reimburse the Secured Party for such additional obligations
immediately upon demand, and upon the failure of the Debtor to do so, the Secured Party may
declare such additional obligations immediately due and payable.
8. Expenses of Secured Party. All expenses paid or incurred in protecting, storing,
warehousing, insuring, handling, and shipping the Collateral, all costs of keeping the Collateral
free of liens, encumbrances, and security interests (other than the security interest created by this
Security Agreement), and the removing of the same and all excise, property, sales, and use taxes
imposed by state, federal, or local authority on any of the Collateral or with respect to the sale
thereof, shall be borne and paid for by the Debtor and if the Debtor fails to promptly pay any
amounts thereof when due, the Secured Party may, at its option, but shall not be required to, pay
the same, and upon such payment the same shall constitute additional obligations of the Debtor
and shall bear interest at the rate specified in the Note and shall be secured by the security
interests granted hereunder.
9. Continuing Rights. The rights and powers of the Secured Party hereunder shall
continue and remain in full force effect until the Note (and any additional obligations referred to
in Sections 7 and 8 hereof) is paid in full.
10. Books and Records. The Debtor will permit the Secured Party, and its
representatives, at reasonable rimes and upon reasonable notice, to examine the Debtor's books
400584v1 MNIMN325 -24 C -4
and records (including data processing records and systems) with respect to the Facility and the
Collateral and make copies thereof at any time and from time to time, and the Debtor will furnish
such information reports to the Secured Party and its representatives regarding the Collateral as
the Secured Party and its representatives may from time to time request. The Secured Party shall
have the authority, at any time, to require the Debtor to place upon the Debtor's books and
records relating to the Collateral and other rights to payment covered by the security interest
created in this Security Agreement a notation stating that any such Collateral and other rights of
payment are subject to a security interest in favor of the Secured Party.
11. Successors and Assigns. This Security Agreement and each and every covenant,
agreement, and provision hereof shall be binding upon the Debtor, and its successors and
assigns, and shall inure to the benefit of the Secured Party, and its successors and assigns.
12. Governing Law. This Security Agreement is executed pursuant to and shall be
governed by the laws of the State of Minnesota.
13. Severability. It is the intent of this Security Agreement to confer to the Secured
Party the rights and benefits hereunder to the full extent allowable by law, including all rights
available under the UCC. The unenforceability or invalidity of any provisions hereof shall not
render any other provision or provisions herein contained unenforceable or invalid. Any
provisions judicially determined to be unenforceable shall be severable from this Security
Agreement.
14. Miscellaneous.
(a) Waiver. The performance or observance of any promise or condition set forth in
this Security Agreement may be waived only in writing. No delay in the exercise of any power,
right or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other
power, right or remedy.
(b) Assignment. This Security Agreement shall be binding upon the Debtor, and its
successors and assigns, and shall inure to the benefit of the Secured Party, and its successors and
assigns. All rights and powers specifically conferred upon the Secured Party may be transferred
or delegated by the Secured Party to any of its successors and assigns, including any successor
holder of the Note.
(c) Certain Defined Terms. Capitalized terms used in this Security Agreement and
defined in this Security Agreement, the Loan Agreement or the Note are used with the meanings
given in this Security Agreement, the Loan Agreement or the Note.
(d) Other Matters. If any provision or application of this Security Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other
provisions or applications which can be given effect, and this Security Agreement shall be
construed as if the unlawful or unenforceable provision or application had never been contained
herein or prescribed hereby. All representations and warranties contained in this Security
Agreement or in any other agreement between Debtor and Secured Party shall survive the
400584v1 MNI MN325 -24 C_5
execution, delivery, and performance of this Security Agreement and the creation and payment
of any indebtedness to Secured Party. Debtor waives notice of the acceptance of this Security
Agreement by Secured Party.
(e) Notice. All notices required hereunder shall be given by depositing in the U.S.
mail, postage prepaid, certified mail, return receipt requested, to the addresses first set forth
above (or such other addresses as either party may notify the other).
(The remainder of this page is intentionally left blank.)
400584v1 MNIMN325 -24 C_6
IN WITNESS WHEREOF, the Debtor and the Secured Party have executed this Security
Agreement as of the date set forth above.
MONTICELLO PET HOSPITAL, PLLC
Its
an
Its
THIS DOCUMENT DRAFTED BY:
Kennedy & Graven, Chartered (MNI)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337 -9300
Scott L. Jacobson
Linda Jacobson
400584vl NINI NM325 -24 C -7
DEBTOR'S ACKNOWLEDGMENT
to the
Security Agreement, dated as of , 2012
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of 2012,
by Scott L. Jacobson and Linda Jacobson, the and ,respectively, of
Monticello Pet Hospital, PLLC., a Minnesota limited liability company, on behalf of the company.
Notary Public
400584A MNI MN325 -24 C-8
Signature of the Secured Party with respect to the Security Agreement, dated as of
.2012.
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
President
By:
Executive Director
400584vl MNI MN325 -24 C_O
SECURED PARTY'S ACKNOWLEDGMENT
to the
Security Agreement, dated as of , 2012
STATE OF MINNESOTA )
ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this _ day of , 2012, by
and , the President and Executive Director, respectively, of
the Pine Island Economic Development Authority, a public body corporate and politic, on behalf of
the Authority.
Notary Public
400584v1 MNIMN325 -24 G+_10
EXHIBIT A TO SECURITY AGREEMENT
EQUIPMENT
400584v l MNI MN325 -24 C -1 1
DRAW REQUEST
TO: City of Monticello Economic Development Authority
505 Walnut Street, Suite 1
Monticello, MN 55362
Attn: Executive Director
DISBURSEMENT DIRECTION
The undersigned Authorized Representative of Monticello Pet Hospital, PLLC, a
Minnesota limited liability company (the `Borrower "), hereby authorizes and requests you to
disburse from proceeds of the Loan, in accordance with the terns of the Loan Agreement
between the City of Monticello Economic Development Authority ( "Lender ") and the Borrower,
dated as of , 2012 (the "Agreement "), the following amount to the following
person and for the following proper cost of the Equipment:
1. Amount:
2. Payee:
3. Purpose:
all as defined and provided in the Agreement. The undersigned further certifies to the Lender
that (a) none of the items for which the payment is proposed to be made has formed the basis for
any payment previously made under Section 3 of the Agreement (or before the date of the
Agreement); and (b) that each item for which the payment is proposed is Equipment, eligible for
funding from the proceeds of the Loan.
Dated:
Borrower's Authorized Representative
4005841 MNIMN325 -24 D -1
EDA: 4/11/12
5. Presentation by Podawiltz Development: proposing a subsidized rental townhouse
rp oiect.
A. REFERENCE AND BACKGROUND:
Bill Kemp from Podawiltz Development will be at the EDA meeting to discuss the
opportunity to construct affordable workforce housing in Monticello. The development will
require the creation of a new housing TIF district. The developer desires to provide affordable
workforce rental townhouses to Monticello and area residents. Mr. Kemp will review their
product line, financing structure, income guidelines, desired location and timeline.
B. ALTERNATIVE ACTIONS:
None at this time
C. STAFF RECOMMENDATION:
The EDA will be asked to provide general direction to the developer regarding the proposed
development. If the EDA is generally in favor of the project staff will bring back a formal
resolution of support at the May EDA meeting.
D. SUPPORTING DATA:
General information regarding the proposed housing product
Proposed Workforce
Townhomes
Monticello, MN
Podawiltz Development Corporation
The Development
. 36 workforce rental housing townhomes with
two stall garages.
. Tot Lot.
. Maintenance free exterior products. Premium
interior products which minimize maintenance
and enhance the tenant living environment.
Project Location
, ?n?n
Green Building Criteria
, Site - utilizes existing infrastructure,
protects environment, walkways, erosion
control.
, Water conservation features - water closets,
showers, etc.
. Energy Efficiency - Energy Star appliances,
efficient lighting both interior and exterior.
, Construction waste recycled
Healthy living environments - humidity
control, building materials, HVAC sizing,
etc.
Similar PDC Development (2010)
4/5/2012
Similar I'13C: D2ve1tYpl1lent (2010)
Similar PDC Development (2010)
Affordable Rental Housing Need
MHFA Community Profile Data
r City Census Tract in which proposed site is
located and in Wright County:
• High Need: Growing Workforce
• High Need: Affordable Rental Housing
• Significant Gain in Households
• 18,995 jobs with low to moderate income wages
within 5 miles of this site. 80 -100 percentile
4/5/2012
Similar PDC Development (2010)
Similar PDC Development (2010)
Comparative Tenant Profile
P Occupation /Employment:
Teacher
10.0%
Self Employed
12.0%
Instructor
4.0%
Retired
8.0%
Cosmetologist
4.0%
Health Care
25.0%
Bartender
4.0%
Post Office
4.0%
Hospitality
4.0%
Daycare
4.0%
Manufacturing
21.0%
2
Rent and Income Requirements
. Rent and income are restricted by IRS program
requirements. (30 year)
. Rent and Income restrictions usually reflect the
local market place and are affordable to a large
segment of the local households & workforce.
. Households must have adequate incomes to
pay housing related costs.
It is NOT a rent subsidy program.
Target Incomes By AMI
60% of the Area Median Income
Wright County
1 Person = $35,280
. 2 Person = $40,320
. 3 Person = $45,360
. 4 Person = $50,340
. 5 Person = $54,420
. 6 Person = $58,440
Proposed Unit Mix
. 22 - Two Bedroom Townhomes
. 14 - Three Bedroom Townhomes
Rent and Income Requirements
. Households must have sufficient incomes to
pay housing and related housing expenses.
. Minimum household monthly income is 2.5
times the monthly rent.
. The maximum household rent is equal to or
below 60% of the area median income adjusted
for family size.
Proposed Monticello Rents
2 Bdrm = $454 to 755
3 Bdrm = $505 to $855
Owner pays water and sewer. Tenant pays heat
hot water, and electricity. Rent includes a two
stall garage.
On -Site Resident Manager
Developer Requests
. Support of the development indicated by
Council Resolution submitted with the
Application.
. City "Local Contributions" with a present value
of approximately
$ 150,000 for 2 points
$ 350,000 for 4 points
We will work with your EDA staff and consultant
to determine final need
4/5/2012
191
Impact of Requests / Project
r "Local Contributions, Regulatory Cost
Avoidance or Cost Reductions:"
• Will provide a minimum of 2 selection points;
• Allow tenant rents to be set below 30% of 50%
AMI (10 selection points).
. As such, the application will be very
competitive and will have an increased
likelihood of MHFA selection.
Impact of Requests / City
. City will continue to receive current land value
taxes.
. Will provide full SAC and WAC fees
. Bldg Permit fees
Impact of Requests / City
. The provision of quality affordable housing to 36 work
force households for a period of thirty years.
. The economic impact of the discretionary income of 36
additional households the local economy.
. Economic impact of the construction related purchases
and jobs during the construction phase.
. Assistance to Monticello employers with quality tenants
as prospective employees.
Housing Tax Credits Overview
. Longest lived Federal Housing Program.
. Limited funding is available to each state based
on population.
. Program is administered by the MHFA
(Minnesota Housing Finance Agency).
. Yearly applications are competitive and
projects are selected on a point basis. Points
are awarded for multiple considerations
including local government support.
. Distribute PDC Estimated Selection Points.
0
EDA: 4/11/2011
6. Consideration of purchasing property zoned B -4 and owned by John Chadwick.
A. REFERENCE AND BACKGROUND:
On February 13, 2012 the City Council was asked to consider a request by John Chadwick to
adjust the special assessment on his property located north of Chelsea Street by either of the
following two options:
1. Reducing (reapportionment) of the assessments
2. Purchasing the property
Special Assessment Background:
The special assessments on the subject property are related to the improvements and
infrastructure for Chelsea Road from 90`h Street to CSAH 39, through Otter Creek Crossing.
The project was funded by the 2005 Improvement Bond the City issued.
The project was constructed in 2005 /2006 with the assessments being levied in 2006 for pay
2007 taxes. As part of an assessment agreement, Mr. Chadwick and his business partner at
the time Mr. Bowers agreed to pay 79% of the assessment costs, or $2,311,908.93 with Moon
Motors being assessed $284,680.40 and the City $704,844.46. This assessment amount was
determined by using the available front footage on both sides of the new roadway and the
agreement that property located on the freeway side of the street was worth twice as much as
the non freeway frontage. The net result of this analysis is how the overall assessment
percentage was developed. The assessment amount also included a large contribution related
to a land purchase that was necessary to complete the street construction. The City land does
not have much useable front footage and is mostly wetland, which is why the assessments
were levied in the manner they were. The costs were assessed at 5.50% interest over a ten -
year period. Bret Weiss from WSB Engineering will be present at the meeting to provide
further details, history, and answer any questions.
In 2008/2009 Mr. Chadwick and Bowers dissolved their partnership, each taking
approximately an equal split of both property and assessment. In 2009 both requested and
council approved reassessing the balance of the assessments over a new 15 -year term
beginning in 2010 at 5.50 %.
At the end of 2011 the balance of the assessments would have been $586,649.70 on Outlot C
(Bowers) and $690,763.44 for Outlot D (Chadwick). However Mr. Bowers has not paid the
property taxes since 2008 and owes delinquent taxes and assessments of $619,932.48. Mr.
Chadwick stopped paying taxes half way through 2010 and owes $170,796.11 in delinquent
taxes and assessments.
Property Owner Proposal:
Mr. Chadwick's property is currently listed for sale. It is his opinion that due to the current
economic conditions, the amount of commercial land available in the city and the required
assessments on the property, his ability to attract commercial end users has been impeded.
EDA: 4/11/2011
Mr. Chadwick and City Staff have met several times to discuss viable remedies, which could
include the following;
1. Reduce his assessments to what they would be if the assessments had originally been levied
at 50% for his parcel and 50% for the City parcels
2. Calculate the assessment as if the City levied 50% to the City and 50% to Mr. Chadwick.
Instead of refunding Mr. Chadwick the difference between the existing assessment and the
50150 calculation, apply the difference towards the City purchasing the property. This would
equate to approximately 2.5 acres of the total 19.08 acres.
3. The City out -right purchase Mr. Chadwick's property.
The County values the subject property at $1,662,800. John Chadwick is asking $2,077,810
for the subject property.
Outstanding taxes: $170,796.11
Outstanding assessment: $690,763.44
Consideration:
The City Council discussed each one of the above options at the February 13, 2012 workshop.
After much discussion, the City Council decided none of proposed options were viable at this
time. They may consider lowering the interest rate of the assessment at a later date.
City Council consensus was to direct the topic to the EDA to consider purchasing Mr.
Chadwick and potentially Mr. Bower's property for the purpose of economic development
and/or a future interchange.
Al. Budget Impact: If the EDA were to purchase the property staff would have to
research available funds. It is anticipated that the EDA general fund would ultimately
be the funding source. Currently the EDA has a general fund balance of 2.8 million.
While the EDA could bond to purchase the property, City staff would not recommend
this method due to the fact a viable project is not in the works.
Surplus TIF would not be a viable option in this situation for the following reasons:
1. Property is outside TIF districts boundary line
2. Surplus balances do not equal asking price
3. Does not qualify as a redevelopment project
B. ALTERNATIVE ACTIONS:
Motion authorizing City Staff to begin negotiations with Mr. Chadwick for the
purchase of his 19.08 acre parcel.
2. Motion to deny purchasing Mr. Chadwick's parcel.
EDA: 4/11/2011
Motion to table for further research and discussion.
4. Motion authorizing City staff to begin negotiating with Mr. Bower for the purchase of
his 19 acre parcel.
C. STAFF RECOMMENDATION:
Staff does not have a specific recommendation at this time. However, staff would like to point
out a few additional pieces of information.
a. The EDA is in the process of implementing a quite large redevelopment project in
downtown. While, it is anticipated that the type of users desired for downtown will not
directly compete with the subject property. It should be noted that financial resources are
limited and the EDA may find it difficult to purchase Mr. Chadwick's (and Mr. Bower's)
parcel and continue to invest in downtown.
b. Staff does not believe Mr. Chadwick's parcel is the best location and land configuration for
a future industrial park. The EDA will need to analyze if purchasing Mr. Chadwick's (and
potentially Mr. Bower's) property is at a price worth paying holding costs until such time as
smaller lot industries begin to initiate new construction projects and/or an exact location of an
interchange is determined and initiated.
c. The EDA did analyze purchasing the subject 19 acre parcel and Mr. Bower's property when
they analyzed the purchase of Mr. Chadwick's 13.6 acre parcel in 2011. At that time the EDA
choose not to purchase the parcels due to the uncertainty of timing and location of an
interchange and also due to the property owner's asking price. Bret Weiss will also be
available to answer questions related to a potential future interchange location. Upon
preliminary analyses of a future interchange location within the Otter Creek vicinity, it was
determined that Mr. Bower's parcel was needed not Mr. Chadwick's.
D. SUPPORTING DATA:
Parcel Map
February 13, 2012 Special workshop meeting minutes.
MINUTES
SPECIAL WORKSHOP /MEETING— MONTICELLO CITY COUNCIL
Monday, February 13, 2012 — 6:00 p.m.
Mississippi Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Torn Perrault, Glen Posusta, Brian Stumpf
Absent: None
Others: Jeff O'Neill, Torn Kelly, Bret Weiss, Joel Jamnik, John Chadwick, Angela
Schumann, Bruce Westby
1. Call to Order
Mayor Herbst called the Special Meeting to order at 6 p.m.
2. Purpose of Workshop: Discussion of options related to John Chadwick assessments
Jeff O'Neill explained that John Chadwick had requested an opportunity to discuss the
assessments on land owned by him and J. Bowers with Council. Jeff handed around an
outline to discuss history, project outcomes, assessments, options, and Council direction.
3. Consideration of directing staff regarding action on John Chadwick property
Jeff O'Neill asked John Chadwick to talk briefly about his assessments and land
situation. John Chadwick mentioned his support of the Monticello community and
projects that he has developed. He talked about his involvement with some of the
industrial projects such as Jefferson Commons. He discussed the evolution of the
Rernmele property and how that eventually was traded off to the City. He reviewed some
of the big box developments that were developed on land that was originally industrial
land and rezoned to commercial. John Chadwick commented that each of those
developments hurt his ability to develop his commercial property located along the
freeway.
Jeff O'Neill noted that the City really never felt that Jolm Chadwick's property would be
used for big box type of commercial development. That corridor already was built up
with car dealers and Moon Motors, with the land to the west considered for industrial
development. Per John Chadwick's request, the zoning was changed from industrial to
corn mercial some years ago.
Bret Weiss talked about the development of the Otter Creek Industrial Park and Chelsea
Road project. Originally, the Rask house was located on land that was bought by Denny
Hecker for development of his car dealership. The City negotiated a deal with Hecker for
land used for the Chelsea Road alignment at quite a significant amount of $2.1 million.
At that time, the assessment formula was developed to accommodate the cost of the land
for the right -of -way property on the Chelsea Road project, The formula was based on
usable front footage with John Chadwick's property absorbing the larger percentage, as
he had quite a bit more developable land.
Special City Council Minutes— February 13, 2012 Page 1
John Chadwick commented that, looking back, it might have been better to divide up the
land in a different manner. He noted that there is no historical evidence that the land
along the freeway would have been valued that much higher. Glen Posusta commented
that he recalled sitting in the meeting and thinking that John Chadwick's land was the
most valuable and wondered why the City did not get a share of the better land, which
may have resulted in a different allocation of the assessments. Lloyd Hilgart commented
that a lot of people invested in property during the years of the good economy and paid
too much. He felt that John Chadwick's property might have better value if there would
be an interchange built in that area. Bret Weiss stated that the City did not have any
intention of building an interchange in that area so that would not have been a factor at
the time.
Jeff O'Neill noted that Tom Kelly put together some options that Council could look at if
they feel there is merit in John Chadwick's concerns. It was noted that the City is
responsible for the bond payments regardless of any options that might be taken.
a. Prepare a new assessment program (not recommended as there are a number of
obstacles to overcome)
b. Purchase a piece of land from John Chadwick based on assessment value (not
recommended as this would produce a very shall piece of land that would
probably not be usefid to the City)
c. Purchase land from John Chadwick and /or Bowers (possible if City perceives
there would be future value; potentially the City could take back the land through
forfeiture if taxes and assessments are not paid)
Brian Stumpf asked if the $2.60 per sq ft for a purchase would be based on both John
Chadwick and Bowers property and who would be responsible for the assessments? Jeff
O'Neill explained that the rate could be applied for a purchase of either John Chadwick
and/or Bowers land. John Chadwick stated that he would pay off the balance of the
assessments and Bowers would take care of the balance on his property.
Glen Posusta suggested that perhaps the purchase of land should be considered by the
Economic Development Authority (EDA). Tom Kelly commented that the EDA general
fund could be used toward that but not the excess funds that need to be spent by the end
of the year. Jeff O'Neill explained that Tom Kelly does not recommend that the City
invest in land for which they do not have an immediate purpose as that would put undue
pressure on the City's financial condition. If Council is interested in looking at a land
purchase, they should direct staff to look into this further and meet again to discuss.
Jeff O'Neill asked if anyone feels that the assessment process was done in an unfair
mamier. Clint Herbst commented that he thinks the methodology was done with the
proper intent; unfortunately the market inflated the prices at the time.
John Chadwick commented that the City did lower the interest rate from 6.5 percent to
5.5 percent, which he appreciated. Clint Herbst asked Tom Kelly what the City is paying
Special City Council Minutes — February 13, 2012 page 2
now on those bonds. Tom Kelly explained that the bonds were advance refunded so there
is a lower rate now on those bonds. Clint Herbst suggested that perhaps one thing the
City could do for John Chadwick would be to lower his interest rate.
There was some discussion about the possibility of a future interchange in this area,
where the City would purchase the land for that. Clint Herbst stated that he thinks CR 39
is still the better choice for a new freeway interchange. There is more space available
and gives more flexibility for future access to that area. Bret Weiss concurred with that
and noted that the area by John Chadwick's land would be much tighter. He estimated
that it would probably cost $25 -30 million for an interchange on the west end. Clint
Herbst noted that it is likely there could be a future need for an interchange especially
with the development of Bertram Park.
Jeff O'Neill summarized that it appears that the discussion should be moved to the EDA
to consider options for purchase of the property from John Chadwick and possibly
Bowers as part of future economic development goals, Clint Herbst asked John
Chadwick if he is also speaking for Bowers, and John Chadwick said that he had
discussed this with him and he is willing to be part of a deal with the City.
Tom Perrault asked if there was a possibility of adjusting the financing for the special
assessments. It was pointed out that has already been done. Clint Herbst suggested
keeping in mind that the City could consider lowering the interest rate.
Council consensus was to turn this over to the EDA for consideration of land purchase
and possibly look at changing the terms of the assessment.
4. Adjournment
TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:47 P.M.
LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0,
Recorder: Catherine M. Shuman _ t�
Approved: February 27, 2012
Attest:
Ci n trator
special City Council Minutes — February 13, 2012 Page 3
EDA: 4/11/12
7. Consideration of cancelling the listing agreement between Commercial Realty Solutions
and the EDA and discuss the idea of creating a broker incentive fee for the Monticello
Business Center.
A. REFERENCE AND BACKGROUND:
City Staff would like to discuss the merits of cancelling the existing listing agreement
between Commercial Realty Solutions and the EDA for the Monticello Business Center.
It appears that the trend in the EDA owned industrial park will most likely result in offering
TIF assistance to companies. When the City is providing TIF assistance to a company, the
reality is that city staff is very active in the negotiations and interactions with the company.
Often times the company ends up dealing directly with City staff instead of the listed broker.
Therefore staff is recommending that the existing listing agreement with Commercial Realty
Solutions be cancelled. The EDA is a member of MNCAR and therefore can list the industrial
property on the MLS database in order to still gain commercial broker exposure.
Staff would like to discuss an alternate idea with the EDA for the industrial park. In an effort
to continue to incentivize brokers to pay attention to Monticello, staff would like to discuss
creating a $3,000 dollar Broker Incentive Fee for the industrial park. Basically the terms or
commissions of a normal land transaction would remain the same. However, if a broker
brought a client to the City that ended up being a viable project in the Monticello Business
Center, that broker would receive a $3,000 dollar "bonus" after the property closed.
A few things to note, staff will need to discuss the idea with the EDA attorney. The proposed
incentive fee would be a pilot program and should be reviewed on a yearly basis. Lastly, the
fee would come from the EDA general fund and again should be highly monitored to ensure
funds are available each year.
B. ALTERNATIVE ACTIONS:
1. Motion to cancel the listing agreement for Monticello Business Center between the
Monticello EDA and Commercial Realty Solutions.
2. Motion directing staff to work with Kennedy and Graven to determine viable terms and
parameters to implement a Broker Incentive Fee for the Monticello Business Center.
3. Motion to deny canceling the listing agreement with Commercial Realty Solutions.
4. Motion to deny initiating a Broker Incentive Fee.
5. Motion to table item for further research and discussion.
EDA: 4/11/12
C. STAFF RECOMMENDATION:
Staff is recommending that the contract between the EDA and Commercial Realty Solutions
be cancelled. Staff did discuss cancelling the contract with Wayne Elam. Wayne understood
the reasons why the EDA should no longer list the property with a commercial broker. Wayne
also stated the Broker Incentive Fee was a creative approach to draw further attention to
Monticello
D. SUPPORTING DATA:
None
8. Economic Development Director Report:
City Council:
The City Council adopted the Relocation Assistance and Redevelopment Priorities
Policy at their March 26, 2011 meeting.
The City Council approved increasing the city's water and sewer rates by 8% and
12 %, respectively. The increase will become effective on the next billing cycle (April
2012). The new rates will cover operations of the systems but not asset replacement.
The new rates are as follows:
Water Rates
Current
Reside ntial/Townhomes/Commercial and Irrigation
0- 3,740gallons(minimum) 14.30
3,741 - 29,920 gallons 0.95 /748gallons
29,921 - 100,000 gallons 1.10 /748gallons
over 100,000 gallons 1.20 /748gallons
If commercial irrigation is metered separately, no minimum applied)
Industrial Rate
All water usage
Sewer
Reside ntia [/Town homes /Commercial
1st 3,740 gallons (minimum)
Over 3,740 gallons
Sewer Rates Special Cases
1.14/748 gallons +sales tax
16.75
3.00 per 748 gallons
$20.00X #of people in household
Snowbirds (gone during 1st quarter) Winter consumption rate based on
Industrial
Based on usage
10,472gallons per quarter.
1.80/748 gal Ions
Proposed
15.4440
1.026/748 gallons
1.188/748 gallons
1.296/748 gallons
1.2312/748 gallons +sales tax
18.7600
3.36 per748 gallons
$22.40X #of people in household
Winter consumption rate based on
10,472 gallons per quarter.
2.016/748 gallons
At the March 12, 2012 City Council meeting, the Council approved rezoning the
Simonson Lumber property from Industrial to B -2 Limited Commercial. The rezoning
complies with the comprehensive plan.
The City Council held a special workshop meeting on March 26, 2012 to discuss the
opportunity to purchase an existing building on County Road 75 (Broadway) for the
purpose of opening a second liquor store. After lengthy discussion the City Council
voted 4 -1 authorizing staff to submit a purchase agreement to the property owner.
Staff and the property owner are currently still in negotiations, however it does appear
that an agreement will be reached soon. The building does currently house one tenant
(convenience store). Therefore relocation costs for the existing business will apply to
this transaction.
Inquiries:
Staff recently met with commercial brokers regarding a potential opportunity to attract
additional medical facilities to the community. Staff will continue to work with the
brokers to explore all viable options.
Marketing:
Staff is in the process of planning the annual commercial broker breakfast event. This
year the event will be held on Friday, April 27, 2012 and will consist of a bus tour.
Cornerstone Cafe will be catering a breakfast that participants can eat on the go. Staff
has asked Jim McComb and Kathy Anderson to attend in an effort to draw more
attention to the event. Brokers and developers are well aware of the work and success
of Jim and Kathy. Hopefully partnering with these two well known constituents will
result in greater attendance and excitement about development opportunities in
Monticello. More details to follow as the date approaches. MNCAR included a "save
the date" flyer in their most recent newsletter.
Business Communications & Retention Initiatives:
City staff is working with the Chamber to participate in the Grow MN business visits.
Staff is in the process of scheduling a BR &E Leadership Team meeting to discuss
status of projects and explore opportunities to implement projects that have not been
initiated at this time.
Embracing Downtown:
The downtown leadership team will be meeting on April 11, 2012 at 8am.
MISC.
The City Engineer is meeting with effected property owners along the potential
alignment for the future Fallon Avenue overpass. The purpose of the meetings is to
educate the potential affected properties owners about the overpass project and review
any questions or concerns. Staff is hopeful the project will be under construction in the
next few years.
Due to the growing concern regarding available skilled workforce, the Monticello
Workforce Center is hosting a Partners in Workforce Development
seminar /informational exchange on April 13, 2012.
Attached to this report is a copy of the presentation Tom Kelly, Finance Director,
presented at the Chamber property and tax meeting held in March.
The City received notice that we did not receive a DEED Redevelopment Grant.
EDA April 11, 2012
2012 BUDGET and
PROPERTY TAX LEVY
2012 General Fund Budget
General Fund (operating) budget of
$6,748,398.
General Fund Budget is an 4.34%
increase from 2011 budget.
The General Fund is a balance budget.
Maintains services at current levels.
Tax levy of $5,456,248.
2012 Other Budgets
Capital Project Fund budget of $8,794,719 and
includes transfers to Debt Service Funds.
Funding sources include special assessments, other
City Funds, and possible bond proceeds.
City adopts a 5-year CIP.
No core street project proposed for 2012
2012 projects total $4,100,000 and include;
First year cost of the Fallon Avenue overpass.
Fast 7- Street/Highway 25 intersection improvements.
Overlay of rural outlaying streets.
Street lighting improvements
2012 Budget Highlights
Total Expenditure Budget of $43,276,745.
Includes debt service ($6,693,202) and
capital expenditures ($4,794,719).
Includes Natatorium /MCC Improvements
of $1,621,000.
Expenditures budget is a 0.72% increase
from 2011 budget.
Total Revenue budget of $36,907,203.
Maintains services at current levels.
2012 Community Center Fund Budget
Expenditure budget of $4,211,964.
Includes $1,621,000 for
natatorium/building improvements
Charges for services total $1,201,100
Requires the use of $1,129,889 of
reserves and $700,000 of liquor funds.
Tax levy of $1,150,000.
2012 Other Budgets
Debt Service expenditures of $6,693,202.
Tax levy of $1,218,752.
Outstanding debt of $60,011,000 as of
12/31/11.
Includes Revenue Bonds of $26,445,000 to
fund FiberNet Monticello project.
2012 Other Budgets
Enterprise fund budgets of $15,222,515.
Revenues include rate increases for water
and sewer operations.
Rates fund operations and a portion of
infrastructure replacement.
Liquor Fund contributes $250,000 to the
Street Reconstruction Fund to reduce the tax
levy for street projects and $700,000 to fund
MCC natatorium improvements.
MVHC Changed to MVE
v State Legislative Change beginning for
taxes payable in 2012.
Market Value Homestead Credit Program
(MVHC) replaced by Market Value
Exclusion (MVE) Program.
v Change made to balance State budget.
MVE shifts property tax burden to other
property classes.
MVHC Changed to MVE
New MVE reduces "taxable market value ".
Lowers local governments tax capacities,
which increases the tax rates.
Homes valued at or below $76,000 receive
full exclusion of $30,400 and homes
valued $413,800 or above receive no
exclusion.
v State is no longer involved.
Shifts tax burden to non - homesteaded or
higher valued properties.
2012 Other Budgets
Budget includes FiberNet Monticello
operations.
Budgeted expenditures of $5,907,071
including $1,768,337 of debt service
payments.
Revenue budget of $2,533,592.
Original business plan projected-
expenditures exceeding revenues at t
point.
MVHC Changed to MVE
MVHC reduced taxes through a State
credit on the tax bill.
State was to pay local governments for
credit amount.
v MVHC program was in effect for 10 years,
but fully funded only twice.
Left local government with budget deficits.
MVHC Changed to MVE
Comparison on a home valued $200,000
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IDm
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City Property Taxes on Residentlal Property
cM�,.wMin�an
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3
Tax Levy Information
City tax rate is 6' lowest in Wright County.
Smallest rate increase of all Cities in Wright County.
Conclusion
Total Budget for all funds of $43,276,745.
Total Levy of $7,850,000.
Tax Rate of 49.972 %.
City is 40.6% of total property tax.
Biggest tax impact is from the change from
MVHC to new MVE.
Tax Levy Information
Total tax rate of 123.028 %.
March 19, 2012
The Honorable Clint Herbst
Mayor, City of Monticello
505 Walnut St.
Monticello, MN 55303
RE: Redevelopment Grant Program
Project: Embracing Downtown
Dear Mayor Herbst:
The Department of Employment and Economic Development has completed its review of the
twenty -seven applications for the Redevelopment Grant Program received on January 3, 2012.
We are not able to offer you a grant at this time because your project did not score within the
funding range.
If you would like to discuss your application, or other funding programs that may be applicable
to your project, please call me at 651- 259 -7454.
Sincerely,
Meredith Udoibok, Director
Office of Brownfields and Redevelopment
C: Megan Barnett Livgard
Business and Community Development Division
1st National Bank Building ■ 332 Minnesota Street, Suite E200 ■ Saint Paul, MN 55101 -1351 USA ■ www.positivelyminnesota.com
Toll Free: 800 - 657 -3858 ■ Phone: 651- 259 -7114 ■ Fax: 651 - 296 -5287 ■ TTY/TDD: 651 - 296 -3900
An equal opportunity emplooer and service provider.
DEED — Office of Brownfields and Redevelopment
AWARDS FROM JAN 2012 GRANT ROUND
FOR THE REDEVELOPMENT GRANT PROGRAM