06-30-2020 JOINT FINANCE COMMITTEE PACKETMeeting
of the
Tuesday, June 30, 2020
7:30 a.m.
Joint Finance
Elk River City Hall
Virtual
Committee
Meeting Protocol
AGENDA
No sidebar discussions
No interruptions
State your concern
Ensure you understand
Don’t take things personally
Adhere to time limits
Come prepared
1.CALL MEETING TO ORDER
Ensure all are heard
2.CONSIDER AGENDA
3.CONSENT AGENDA
Considered to be routine and noncontroversial by the Economic Development Finance Committee and will be approved by one
motion. There will be no separate discussion of these items unless a Committee member, staff member, or citizen so requests, in
which case the item will be removed from the consent agenda and considered under the regular agenda.
3.1June 15, 2020, Special Meeting Minutes
3.2Revolving Loan Fund Balance Report
4. GENERAL BUSINESS
4.1COVID-19 Small Business Emergency Microloan Applications
5.ANNOUNCEMENTS
6.ADJOURNMENT
Dan Tveite Statement and Determination, as President of the The Economic Development
Authority for the City of Elk River MinnesotaRegardingConducting Meetings by Telephone
or Other Electronic Means
AsPresident of the The Economic Development Authority for the City of Elk River Minnesota (the
“EDA”), Minnesota, I find as follows:
a.The spread of COVID-19 in the United States and Minnesota has raised serious public health
concerns and resulted in a great deal of uncertainty. Much remains unknown about the virus
and how it spreads.
b.On March 11, 2020, the World Health Organization determined that the COVID-19 outbreak
constitutes a pandemic. On March 13, 2020, President Trump declared a national state of
emergency as a result of the pandemic.
c.On March 13, 2020, Governor Tim Walz issued Emergency Executive Order 20-01 declaring
a state of peacetime emergency to address the COVID-19 pandemic in Minnesota. The
Governor’s Executive Order triggered activation of the County’s emergency management plan
and enabled the Countyto exercise its emergency powers.
d.Mayor John Dietz of the City of Elk River, Minnesota declared a local emergency due to the
COVID-19 pandemic in Minnesota.
until further notice, or until
e.On March 26, 2020, City Administrator Cal Portner declared that
such time as the State of Minnesota determines to no longer be in a state of emergency, all
meetings of the EDA governed by Minnesota Statute, Section 13D shall be conducted by
telephone or other electronic means.
f.Minnesota Statutes, Section 13D.021 authorizes cities and other public bodies to meet by
telephone or other electronic means if the presiding officer, chief legal counsel, or chief
administrative officer determines that meeting in person or by interactive television is not
practical or prudent because of a health pandemic or an emergency has been declared.I
have consulted with theEDA’s chief legal counsel and chief administrative officer.
Based on the above findings, I determine as follows:
1.In accordance with the declarations of the Mayor and the City Administrator, until further
notice, all meetings of the EDA may be conducted by telephone or other electronic means in a
manner satisfying the requirements in Minnesota Statutes, Section 13D.021and the
declarations of the Mayor and the City Administrator.
2.As is practical and feasible, the EDAwill provide notice of how the public may listen to or
view meetings as they are being conducted, and the EDAwill continue to make recordings of
its meetings available to the public.
3.All votes occurring at meetings in which all or some of the members are participating by
telephone or electronic means will be conducted by roll call.
1
Meeting of the Elk River Joint Finance Committee
Held at Elk River City Hall
Held Via Zoom Meeting
Monday, June 15, 2020
Members Present: Dan Tveite, Ryan Hardin, Nate Ovall, Rhonda Magnussen, Chad Vitzthum,
and Michelle Eder
Members Absent: Larry Toth
Staff Present: Amanda Othoudt, Economic Development and Colleen Eddy, Economic
Development Specialist
Others Present: None
1. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Joint Finance
Committee was called to order by Dan Tveite at 7:34 a.m.
2. Consider Agenda
Motion by Eder and seconded by Blesener to approve the June 15, 2020, Joint
Finance Committee agenda.
Motion carried 6-0.
3. Consent Agenda
Motion by Blesener and seconded by Eder to approve the May 26, 2020 Joint Finance
Committee meeting minutes with the following change:
Charlie Blesener attended the May 26, 2020 meeting.
Motion carried 6-0.
4.1 COVID-19 Small Business Emergency Microloan Applications
Ms. Othoudt presented the staff report and explained the application and microloan criteria.
Ms. Othoudt stated she received 12 inquiries, 7 applications (2 applicants did not qualify per
Executive Orders 20-04 and 20-08) and four submitted complete applications.
The commission discussed the following four applications:
1.Pyramid Fitness Group, LLC dba Anytime Fitness
a.Requested $20,000 Microloan and $5,000 Property Tax Relief
b.Commissioner Hardin asked what type of lease Anytime, as it just moved to a
different location. Ms. Othoudt stated Anytime Fitness has a Triple Net Lease.
Motion by Vitzhum and seconded by Ovall to approve Pyramid Fitness Group, LLC
dba Anytime Fitness $20,000 Microloan applicationand $5,000 Property Tax Relief
application. Motion carried 5-0 with Chair Tveite abstaining.
2.Daddy-O’s Café, Inc.
a.Requested $5,000 Property Tax Relief
Motion by Magnussen and seconded by Eder to approve Daddy-O’s Café, Inc.
Microloan application. Motion carried 6-0.
3.CHOW Mixed Grill and BBQ
a.Requested $20,000 Microloan and $5,000 Property Tax Relief.
i.Discussion regarding taxes due date– the County extended the deadline
th
to pay property taxes to July 15.
Motion by Blesener and seconded by Vitzhum to approve CHOW Mixed Grill &
BBQ $20,000 Microloan application and $5,000 Property Tax Relief application.
Motion carried 5-0 with Commissioner Ovall abstaining.
4.Inspire Studio, LLC
a.Requested $20,000 Microloan
Motion by Vitzhum and seconded by Blesener to approve Inspire Studio, LLC
$20,000 Microloan application. Motion carried 6-0.
The two applicants who did not qualify per Executive Orders 20-04 and 20-08 were Ralphies
and Geared Up Sports.
5.1 Announcements
Ms. Othoudt notified the committee that there is an at large vacancy on the committee and
to send Ms. Othoudt any recommendations.
6.Adjournment
There being no further business,Mr. Tveite adjourned the meeting at 7:58 a.m.
Minutes prepared by Colleen Eddy.
_____________________
Tina Allard
City Clerk
___________________
Amanda Othoudt
Economic Development Director
YYYYYYY
Current
Micro Loan Fund 240DEED Jobs Incentive Loan Fund 242
6/11/20
Principal
$69,219.18$26,411.45$12,787.95185,270.76158,673.24151,603.21
$154,481.48$262,900.06$495,547.21
Outstanding
$
$936.90$965.61$724.20$343.65
Current
Monthly
Payment
$1,050.07$1,011.77$2,642.66
606060606084
120
Term
(Months)
Rate
2.00%3.00%3.00%3.00%2.03%2.00%3.00%
CurrentInterest
Loan
$74,999$19,175
Amount
$185,200$100,000$126,000$200,000$200,000
MICRO LOANS
6/3/20168/6/2015
Date
Loan
9/10/20138/28/201810/1/20197/17/2018
12/22/2016
$896,148.37$127,963.09
ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
BorrowerDie ConceptsHeritage MillworkRalphies#1Ralphies#2 TOTAL MICRO LOANSDistinctive IronScott Morrell LLCOrluckFund Cash Balances 06/11/20:Micro Loan Fund - 240State DEED Jobs
Incentive - 242
Request for Action
To Item Number
Joint Finance Committee 4.0
Agenda Section Meeting Date Prepared by
General Business June 30, 2020 Amanda Othoudt, EDD
Item Description Reviewed by
COVID-19 Small Business Emergency Microloan Cal Portner, City Administrator
Program
Reviewed by
Action Requested
Review each individual application and provide a recommendation to the Economic Development Authority.
Background/Discussion
At their June 3, 2020, meeting, the EDA adopted the COVID19 Small Business Emergency Microloan
Program in response to the COVID-19 pandemic. The new program features a $20,000 loan, whichincludes a
forgivable loan component of up to $5,000 for property tax relief to assist our local, small businesses which
have been identified in the Governors Executive Orders 20-04 and 20-08.
Program Highlights:
1.Businesses affected by Governors Executive Orders 20-04 and 20-08
2.Maximum of $20,000 loan
3.Amortized over 10 years
4.5-year balloon, option of a 2-year extension
5.Zero percent interest
6.No equity requirement
7.Six-month deferment
8.Application fee waived
9.Up to $5,000 is eligible for forgiveness for property tax relief for taxes payable in 2020
10.Lease or proof of ownership is required
11.In good standing with the city and Secretary of State
12.Program funds are on a first-come, first-serve basis for qualifying businesses.
13.As a condition for receiving funding, all recipients are required to submit a brief report to the EDA
within two months after receiving funds, specifying how the funds were used and providing evidence in
the form of paid invoices, statements or similar documentation
Forgivable:Up to $5,000 is eligible for forgiveness for property tax relief for taxes payable in 2020. Lease or
ownership documentation is required. Forgiveness for property tax relief will be granted if the borrower has
met the reporting requirements listed below.
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness,exceptional
service, and community engagement that encourages and inspires prosperity
Extension:In the event the borrower is unable to obtain conventional financing to replace the microloan at
the end of five years, the loan may be extended up to two additional years at a market rate of interest.
Collateral:Loans must be supported by sufficient collateral, which will include personal guarantees and/or
corporate guarantees.
Reporting:
As a condition for receiving funding, all recipients are required to submit a brief report to the EDA within sixty
(60) days of receiving funds, specifying how the funds were used and providing evidence in the form of paid
invoices, statements or similar documentation.
Permitted Fund Uses:
Awarded funds may be used exclusively for current payroll obligations (may not include employees who have
been laid off), lease or mortgage payments, utilities, accounts payable, property taxes and other critical business
expenses that can’t be paid as a direct result of the COVID-19 pandemic. Awarded funds may not be used for
business owner’s/manager’s personal uses or expenses.
Ineligible Fund Uses:
Assistance cannot be provided to businesses or nonprofits that:
1.Do not have a physical business address within the City of Elk River
2.Are home-based businesses
3.Derive income from passive investments without operational ties to operating businesses
4.Primarily generate income from gambling activities
5.Generate any part of its income from adult-oriented or tobacco/vaping-related activities
6.Have no current or historical financial statements
7.Previously received emergency funds from the EDA
Since the release of this program we have received 14 inquiries and eight applications. Two applications did
not qualify as an eligible business affected by the Governor’s Executive Orders 20-04; 20-08 and notice of
ineligibility was provided to the applicants. One applicant withdrew their application because they were not
comfortable sharing their company financial information with the city.
The following application has been reviewed:
Pinnacle Foods, LP d.b.a. Perkins of Elk River
The applicant requested $5,000 in property tax relief for taxes payable in 2020 and has supplied a complete
application with supporting documentation. The applicant is an eligible business type noted in Executive
Orders 20-04; and 20-08. Pinnacle Foods, LP owns their building which has a property tax liability of
$32,486.00 payable in 2020, of which $16,243.00 is still due. The applicant is not in violation of any city codes,
ordinances, licensing requirements or delinquent taxes, bills, or charges due to the city.
Financial Impact
The EDA allocated funding of this program of up to $200,000 from the general microloan fund account. The
total financial impact if this application is approved is $5,000. A total of $5,000 is eligible for forgiveness under
the program.
N:\\Departments\\Community Development\\Economic Development\\EDA\\Administrative\\Agenda\\Joint Finance Committee Agenda
Packets\\2020\\06302020\\4.1 sr COVID19 Small Business Emergency Microloan Program Applications.docx
If this application is approved, the program will have expended $70,000, which a total of $20,000 is eligible for
forgiveness.
Attachments
COVID-19 Small Business Emergency Microloan Program
Application and Review Worksheet
Executive Orders 20-04; 20-08
N:\\Departments\\Community Development\\Economic Development\\EDA\\Administrative\\Agenda\\Joint Finance Committee Agenda
Packets\\2020\\06302020\\4.1 sr COVID19 Small Business Emergency Microloan Program Applications.docx
Name of Applicant: Pinnacle Foods, LP dba Perkins of Elk River
Date Received: 6/1/2020
Amount Requested: $5,000 Forgivable Loan
Property Tax Liability:(Unverified, Information not submitted by applicant)
Eligibility Y/N
1.Eligible business types include locally owned and operated businesses noted in
Y
Executive Orders 20-04 and 20-08, including but not limited to:
a.Restaurants, cafes, coffeehouses, and other places of public
X
accommodation offering food or beverage for on-premises consumption
b.Taverns, brew pubs, microbreweries, distilleries, wineries, tasting rooms
and other places of public accommodation offering alcoholic beverages
for on-premises consumption
c.Gymnasiums, fitness centers, indoor sports facilities, indoor exercise
facilities, exercise studios, businesses offering massage therapy or similar
body work, spas, salons, nail salons, cosmetology salons and barber
shops. This includes, but is not limited to, all salons and shops licensed by
the Minnesota Board of Cosmetologist Examiners and the Minnesota
Board of Barber Examiners.
d.Art and music studios
e.Bowling alleys, skating rinks and other similar recreational or
entertainment facilities
f.Other businesses deemed nonessential under executive orders adopted by
the Governor of the State of Minnesota
g.Other businesses as approved by the EDA
2.The business must have been in operation prior to the Governor’s Executive
Y
Order
3.Be a legal entity registered with the Office of the Minnesota Secretary of State
Y
and be in good standing
4.Be a conforming or legally nonconforming use under the current city zoning
Y
regulations of the city
5.Not be in violation of the city’s zoning code No
Violations
6.Be in compliance with city ordinances, codes, licensing, and must not have any
Y
delinquent taxes, bills, or other charges due to the city
Supporting Documentation: Y/N/NA
1.Proof of ownership or signed lease. Y
2.Proof of submittal, acceptance, approval and/or denial of SBA and Y
DEED loan applications (not absolutely required)
3.Copy of page from business’s most recent federal tax return Y
indicating gross receipts or sales
4.A W-9 form (with signature)Y
5.Other supporting documentation you wish to provide to the EDA N/A
to assist in understanding the applicant’s situation.
6.Narrative descriptions and estimated calculations of the negative Y
impacts on the business due to COVID-19
7.Description of costs to be paid with the proceeds of the loanY
8.Narrative description of the plans for resuming operations Y
following the COVID-19 crisis