07 17 2006 EDA MIN SPECSPECIAL MEETING OF THE ELK RIVER
ECONOMIC DEVELOPMENT AUTHORITY
HELD AT THE ELK RIVER CITY HALL
MONDAY, JULY 17, 2006
Members Present: President Gongoll (6:10 p.m.), Commissioners, Dw~ ex, Farber, Gumphrey,
Klinzing, Motin, and Tveite
:~Iembexs Absenu I~ione
Staff Present: City Administrator Loxi Johnson, Director of Economic Developmem
Catherine Meheech, Citv Attorney Peter Beck, and Depu4- Clerk Tina
Allard
Call Meeting To Order
Pursuant to due call and notice thereof, the meeting of the Economic Development Authority was
called to order at 6:00 p.m. by Vice President Dwyer.
Resolution Calline fox an Election on $12.000.000 General Oblieauon Bonds (Y:b1CA Referendum)
Ms. Johnson stated the Council has directed the city to work with the YMCA on refining a financing
stmctuxe fox a YMCA facien~ in Elk River and to prepare a ballot referendum for die Primary
Election.
Mr. Beck stated the city is not able to partner with the YMCA in a way that meets the YMCA's
requirements because statutory requirements are too restrictive. He stated the EDA as a separate
poetical entit}' can parmex with the YMCA and it creates more flexibiety because the lease agreement
may be entered into. He stated there are still some capital improvement issues that need to be
addressed.
Commissioner Modn questioned what would happen if the city were to prepay the bond. He further
stated Item LG.1. in the Memorandum of Understanding should be changed to 20 from 21.
Ms. Johnson stated it is unlikely the bonds would be paid early but if the citj• refinanced the bonds
they would have to work with the YivICA on terms.
Commissioner Gumphxey stated the term "Community Center" should be removed from the ballet
and replaced with the term "Recreational Faciery." He stated concerns with the YMCA leaving in 20
years and the city being stuck with a facility they can't lease out. He stated it would be easier to sell
the facility to the public as a recreational facility.
Councilmember Farber concurred but for different reasons.
The Commission concurred with the language changes fox the ballot and the resolution.
Steve Bubul, Kennedy & Graven-Stated the EDA as a separate entity is allowed to issue bonds fox
the purpose of promoting economic development. He stated leasing of a YMCA facility would be
considered an economic development function.
Economic Development Authority Minutes Page 2
July 17, 2006
Casey Scott, YIvICA representative-Presented a conceptual rendering of a YMCA facility and
discussed amenities.
Cotnnussioner Tveite asked if the city's bond rating would be affected.
Mx. Bubul stated yes but with the YMCA making payments toward the debt the city might be able to
avoid it
Vice President Dwyer asked fox revenue projections.
Mr. Casey stated the facility would be expected to lose money in the first few years but the YbICA
organization will cover the debt.
Commissioner Motin stated he has many- concerns with the YMCA project. He listed the following
concerns:
• The process used to pass the YIvICA through the EDA
• Intent of EDA statutes with the lease being an economic development function is being
stretched
• Increased project costs from $3 million to $12 million
• Memorandum of Understanding not reviewed by the YMCA
• EDA has had no involvement with this project until this meeting
• YMCA will be in direct competition with other businesses
• Tax burden created fox residents/businesses
• EDA meeting not televised to the public
Commissioner Motin stated it is not the purpose of the EDA to fmance these types of projects.
Commissioner Klinzing stated the YMCA project needs to be put before residents to decide. She
stated Elk River has needed a community center for years. She stated taxpayers do not want to pay
for a community center because they end up paying fox the facility through taxes, membership fees,
and subsidizing (because community centers do not cash flow in many cities). She stated the YMCA
facility would act as the community center for Elk River and provide other functions such as
programming, outreach needs, and community builder. Mayor Klinzing stated having a YMCA
facility will draw companies to Elk River. She stated the reason the city has to act quickly on this
project is to meet election deadlines.
MOVED BY COMMISSIONER GUMPHREY AND SECONDED BY COMMISSIONER
KLINZING TO ADOPT RESOLUTION 06-O1 CALLING FOR AN ELECTION
REGARDING ISSUANCE OF GENERAL OBLIGATION BONDS BY THE
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER IN A
MAXIMUM AMOUNT OF $12,000,000 AND THAT THE TERM "COMMUNTY
CENTER" ON THE RESOLUTION AND PROPOSED BALLOT BE REPLACED
WITH THE TERM "RECREATIONAL FACILITY." MOTION CARRIED 6-1.
Commissioner Motin opposed.
Adjournment
There being no further business, Vice President Dwyer adjourned the meeting of the Elk River City
Council at 6:40 p.m.
Submitted by:
Economic Development Authority Minutes
July t ~, zoo6
Page 3
Tina ~lllaxd
Deputy Clerk