06-09-2014 JFC MIN Meeting of the Elk River EDA Finance Committee
River Held at the Elk River City Hall
Monday, June 9, 2014
Members Present: Cliff Lundberg, Paul Motiti, Nate O)-all, Chad Vitzthum
Members ,Absent: l.arry 'Toth and Dan 'I veite
Staff Present: I.:conomic Development Director Brian Beeman, Economic
Development Specialist Colleen I;.ddv
Also Present: Springsted Consultant Mikaela I luot
Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the I:.lk River Finance
committee was called to order at 7:3() a.m. by Brian Beeman.
2.1 Fourth Microloan Policy
Director Beeman explained that the City of I?Ik River is required by the State to have
a policy written before the city can use the funds received from 1)11.1). The State is
requiring that the city first develop a draft policy for the funds. Director Beeman and
Mikaela Hoot, Springsted consultant, reviewed the Jobs Incentive Program Micro
Loan policies. The purpose of the Jobs Incentive Program Micro Loan is to assist
existing businesses with expansion and attract new businesses to the city, which will
help expand the City's economy through job retention and creation and
maintain/grow the City's tax base.
The committee members recommended some revisions be made to the policy
pertaining to:
• No working capital except for relocation expenses related to the project,
developer must spell out relocation costs and can't exceed $25,()00 or
20"0 of the project costs;
• 5-year amortization for equipment and not to exceed 20 years
amortization for real estate;
• Stating in the policy that any request $150,00() and above would require
a public hearing due to Business Subsidy laws, but also be allowed to
apply for an amount up to $200,00();
• Define job creation vs. retention;
• (;insider requiring one new full-time job for every 520,00() borrowed and
$10,00( for every job retained;
• Require j( lbs to be at $15.00 per hour or 150"0 of state or federal
minimum wage, whichever is greater, exclusive of benefits required by
law;
t:itv f'nutnce(:om uttce Minutes Page 2
June o),2014
• In the case where the multiple Sources of public financing are requested
(e.g. 1licroloan and Wax Increment Financing) job creation goals shall not
be double-counted.
• Request a current job list from applicant;
• Add a relocation expense component,including allowing discretion if the
developer will be decreasing jobs but increasing the tax base.
Moved by Motin seconded by Lundberg to direct Springsted to revise the
policy per input from the members and to schedule a meeting to review the
policy and revisions. Motion carried 4-0.
2.2 Ethanol Technology Default
Director Reeman provided an update for the members as it has been several months
since the default process was initiated. .1t the December 10, 2013 Iil).\ Finance
Committee meeting, the committee directed staff work with the 11),\ attorney to
collect on 1.thanol 'Technology's microloan default for the remaining balance of
S66,729.66. It was noted that late last year the bank had written off this loan and did
not intend to go after the borrower. The 1:.I).1 concurred with the F1):1 Finance
Committee's recommendation to pursue a payback from the borrower. Since that
time, the F1):1's attorney has been attempting to solicit a response from the bank to
sign off on the assignment of the loan and to receive an accurate principal balance
due from the borrower, including the last date any interest was paid. Because it has
been several months since the process was initiated, staff felt the need to update the
committee. The 1;.I).\ attorney provided a memo updating the committee on the
process of requesting that the bank sign over its interests so that the 1::l) 1 can
pursue collection. Chad 1'itzhum, a representative from First National Bank of I'.lk
River, apologized for the bank's slow response and indicated that they would have an
answer within a week. I f a response is not provided by the bank within one a cek
from the date of this meeting, the attorney will be writing a letter to the hank
requesting that they respond to the documents sent to them.
4. Adjournment
There being no further business, Director Beeman adjourned the meeting of the
Finance Committee at 9:02 a.m.
Minutes {txfepaf-xtl v Colleen I.ddy.
"Tina .Allard, City Clerk
A,74,24...1..._
Brian Beeman, Economic Development Director
P O W E R ED 11
NATURE