EDA Minutes 01-27-1993MINUTES
C MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
ANNUAL MEETING
Wedn,,isday, January 27, 1993 - 7:00 p.m.
City Hall
MEMBERS PRESENT: Chairperson Ron Hoglund, Bob Mosford, Clint
Herbst, Patty Olsen, Harvey Kendall, and Al
Larson.
MEMBERS ABSENT: Barb Schwientek.
STAFF PRESENT: 011ie Koropchak.
STAFF ABSENT: Rick Wolfsteller and Jeff O'Neill.
1. CALL TO ORDER.
Chairperson Hoglund called the EDA meeting to order at 7:00
p.m.
2. CONSIDERATION TO APPROVE THE OCTOBER 28, 1992 EDA MINUTES.
Harvey Kendall made a motion to approve the October 28, 1992
EDA minutes. Seconded by Clint Herbst and with no additions
Lor corrections the minutes were approved as written.
3. CONSIDERATION TO ELECT 1993 EDA OFFICERS.
Al Larson made a motion nominating Ron Hoglund as President,
Barb Schwientek as Vice President, Rick Wolfsteller as
Treasurer, Bob Mosford as Assistant Treasurer, and 011ie
Koropchak as Secretary of the EDA for 1993. Seconded by Clint
Herbst, nominations ceased, and the motion passed unanimously
electing said 1993 EDA officers.
4. CONSIDERATION TO REVIEW AND ACCEPT THE YEAR-END EDA FINANCIAL
STATEMENTS AND ACTIVITY REPORT.
To comply with EDA Ordinance Amendment No. 172, Section 2-3-6,
Assist Treasurer Mosford reviewed the GMEF financial
statements with members stating the prepared statements were
based on his and Koropchak's assumptions. City ledgers posted
no transfers and Mr. Wolfsteller was unavailable to confirm
assumed transfers or to qualify cash in bank of $32,822.33.
The Balance Sheet assets of cash in bank, notes receivable,
and appropriations receivable totaled $497,604.08.
Liabilities and fund equity totaled 497,604.08.
The Statement of Revenues, Expenditures, and Changes in Fund
Balance revenues of appropriations, interest income (notes and
investment), and loan rees totaled $14b,788.04. The $b9b.76
EDA MINUTES
JANUARY 27, 1993
Interest income - investment is actually interest income
earned in 1991 but credited in 1992. Expenditures of legal
fees, services fees, and interest adjustment (notes) totaled
$1,189.24. Therefore, with a beginning year Fund Balance of
$350,005.28, the 1992 year end Fund Balance is $497,604.08.
Mr. Mosford indicated the $210 service fees were to Marquette
Bank for the Tapper and Muller loans and that the SMM and
Aroplax loans were being handled internally by the City. The
$1.74 interest adjustment - notes is the assumed difference
between the city ledger and Marquette's daily computed loan
Interest. The EDA recommended the City Administrator obtain
an annual certification of interest income - notes from
Marquette Bank and thereafter adjust the city ledger to
coincide.
The 1993 Cash Flow Projection is the GMEF's annual budget and
was prepared based on assumptions. With a beginning cash
balance of $32,822.33, receipts projected were appropriations
of $200,000, amortized note payments, interest income -
investment, and loan fees for a total of $236,248.08.
Expenditures projected were three disbursed loans of $200,000,
legal fees, and service fees for a total of $203,315.00.
CExpected cash balance, December 1993 is $65,755.41.
The EDA discussed the potentiality of the Liquor Fund source
running dry and recognized the need to better scrutinize a
development project's "gap" and merit. Additionally, the EDA
discussed other GMEF sources of revenue such as anticipated
UDAG and Economic Recovery Grant paybacks, and the purpose of
the GMEF balloon payments and the scheduled call dates.
Koropchak reviewed with EDA members the 1993 EDA Activity
Report. Harvey Kendall made a motion accepting the Year -End
EDA Financial Statements and Activity Report. Al Larson
seconded the motion and with no further discussion the motion
passed unanimously. Said statements and activity report to be
submitted to the City Council prior to March 1, 1993.
CONSIDERATION TO HEAR THE YEAR-END STATUS OF GMEF LOANS
Koropchak informed the EDA that all four GMEF loan paybacks
are current; however, noted that the Muller loan payment
varies from month-to-month. The EDA suggested to check this
out with the bank and if the trend continues the EDA may need
to consider the establishment of a late penalty period and
fee. Bob Mosford made a motion accepting the year-end status
report of the GMEF loans. Seconded by Harvey Kendall and with
no further discussion the motion passed unanimously.
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EDA MINUTES
JANUARY 27, 1993
6. OTHER BUSINESS:
a) Potential GMEF applicants - Koropchak reviewed the
enclosed Wilson Tool project sheet with EDA members.
Chairperson Hoglund and Mr. Kendall summarized the
company as clean and well-managed with the need to expand
because of a new product line. Two financial package
options will be submitted to the company this Friday.
The EDA suggested not utilizing the available $400,000
REA interest-free loan as an initial fund source but only
as a final incentive source. The total project cost is
estimated at $2,155,000. Option A would include bank,
SBA, GMEF of $100,000, State Grant, CMIF, TIF of
$155,000, and equity of $65,000. Option B would include
bank, GMEF of $100,000, TIF of $155,000, and equity of
$400,000. The EDA supported the use of $100,000 GMEF
because the company appears high quality in -nature and
because of the project size and number of jobs to be
created. If the REA loan was utilized if was recommended
that the loan be directly between the sponsor applicant
(Bridge Water Telephone Company) and the business as an
interest-free loan rather than between the sponsor
applicant and the EDA, who in turn could loan the monies
to the business at a low-interert rate of 1 or 2%.
Two other GMEF applications expected this year are from
All -Temp Distribution who is proposing to construct a
50,000 sq ft refrigerated warehouse and employ 20. And
Custom Canopy who is proposing to construct a 9,3CJ sq ft
office/production facility and employ 13-16. Circuit
Technology, Inc. and the Irish Company have also inquired
about local financial incentives.
The EDA briefly discussed the HRA's decision to eliminate
other financial packaging from the contract between the
HRA and Business Development Services, Inc. The EDA
supported the HRA's decision based on the fact that a
company is informed upfront of their responsibility to
pay the other financial packaging application fees. The
HRA will continue to subsidize the TIP application fee.
b) Acknowledgement of receiving the 1993 Economic
Development Work Plan - Members were informed that the
IDC will maintain tradition and market to industrial
prospects only and the Chamber will assist
commercial/retail prospects. Harvey Kendall made a
motion acknowledging receipt of the 1993 Economic
Development Work Plan. Seconded by Al Larson and with no
further discussion the motion passed unanimously.
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N
BDA MINUTES
JANUARY 27, 1993
c) Other - Koropchak provided EDA members with a copy of
eligible costs under the GMEF real property
acquisition/ improvements and machlnery/equipment policy
as prepared by Mr. Mosford.
7. ADJOURNMENT.
The EDA meeting adjourned at 8:45 p.m.
Oma- �6) r"
011ie Koropchak, EDA executive Director
►'age 4