12-30-2015 JFC MIN ElkMeeting of the Elk River EDA Finance Committee
River Held at the Elk River City Hall
Wednesday, December 30, 2015
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Members Present: Paul Motin, Nate Ovall,Larry Toth, Dan Tveite,Jennifer Wagner, Ryan
Hardin, and Chad Vitzhum (7:36 am)
Members Absent: None
Staff Present: Economic Development Director Amanda Othoudt and Economic
Development Specialist Colleen Eddy
Also Present: Mikaela Huot, Springsted Inc. and Michael Stilwell with Patriot Converting
Inc. (via conference call)
1. Call Meeting to Order
Pursuant to due call and notice thereof, the meeting of the Elk River Finance Committee
was called to order at 7:34 a.m.
2. Consider Agenda
Motion by Motin and seconded by,Wagner to approve the agenda as presented.
Motion carried.,7-0.
3.0 Consent Agenda
Motion by Toth and seconded by Motin to approve the Consent Agenda including
the December 8, 2015 meeting minutes. Motion carried 7-0.
4.1 Patriot Converting Jobs Incentive Microloan Application Financial Review
Ms. Othoudt presented the staff report.
Member Wagner asked if Patriot was retaining current jobs or creating new jobs. Ms.
Othoudt responded with yes, Patriot is retaining their current jobs. Member Tveite stated
that the loan was to add new equipment with the intent of creating new jobs.
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Member Vitzhum requested an explanation of the two microloan funds. Ms. Othoudt
explained the options; one is local and one is a state program and the,general loan fund is
easier to manage.
Member Tveite asked about the payback terms. Ms. Huot stated that there is a term of 5
years on equipment purchases.
Mr. Stilwell, the representative from Patriot stated that the tight time frame between
purchasing the building and opening the business lead to the gap financing,which is being
requested to purchase equipment needed in their new building.
Member Vitzhum stated that typically the commission receives financial information from
the business requesting the loan, along with a qualifying analysis from Springsted,but that
this time they did not receive the information in their packets. Ms. Huot stated that
Springsted received the financial information as they are the third party representation. She
stated that Patriot's 2013—2014 financials did not show profitability, but their 2016—2017
does show profitability. Mr. Stilwell stated that the business was launched in 2013 in Iowa
and that the expenses and salaries were double of what was projected.
Member Toth asked how many employees currently work in the proposed building. Ms. •
Othoudt stated that two businesses have leases set to expire soon. She is working with the
tenants on available options in Elk River. Mr. Stilwell stated that Patriot will acquire the
remaining two spaces once the two tenants leases expire.
Member Motin asked the commission if the loan request fits the requirements of the loan?
Ms. Othoudt stated that it fit with the overall project. Members discussed that it was a solid
project to utilize the funds. Mr. Stilwell stated that he would do a personal guarantee if the
commission requested it.
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Member Vitzhum asked the commission about the logistics of receiving financial reports
from the clients. He stated that there are some inconsistencies between meetings and clients.
Commissioners discussed the public meeting rules and seemed to agree that financial reports
should go to Springsted, being the third party representative. In turn the commission would
like to receive an analysis from Springsted that reflects a recommendation per the financial
projections.
Motion by Member Toth to recommend the EDA approve the recommendation to
• the EDA supporting Patriot Converting-request for Microloan funds with the
stipulation that city finance staff submits a recommendation of which fund Patriot
should utilize. Motion was seconded by Member Vitzhum.'Motion carried 7-0.
5.' Announcements
Member Tveite departed the meeting at 8:28 a.m.
Ms. Othoudt asked the commission if they would like to move the EDA Finance Committee
meeting to the last Tuesday of the'month. The different schedule would allow staff more
time to review the application and for Springsted to put together the needed analysis'. The
commission was in agreement to move the meeting to the last Tuesday of the month.
6.- Adjournment
There being no further business Member Motin moved to adjourn the meeting. Motion was
seconded by Member Vitzhum. The meeting adjourned at 8:42 a.m.
Minutes prepar by Colleen Eddy.
Tina Alfa City Clerk
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A a O oudt, Economic Development Director