04-26-2022 JFC MIN
Elk River Joint Finance Committee
Held at Elk River City Hall
th
Tuesday, April 26, 2022
Members Present: Ryan Hardin, Rhonda Magnussen, Dan Tveite, Nate Ovall, and Jim
Gromberg
Members Absent: Chad Vitzthum, Larry Toth, Charlie Blesener
Staff Present: Brent O’Neil, Economic Development Director
Joshua Mollan, Economic Development Intern
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 Chair Tveite at 7:34 a.m.
2. Consider Agenda
Motion by Ovall and seconded by Hardin to approve the Joint Finance Committee
agenda. Motion carried 5-0.
3. Consent Agenda
Motion by Ovall and seconded by Gromberg to approve the November 30, 2021, Joint
Finance Committee meeting minutes. Motion carried 5-0.
4.1 Orluck EDA Loan
Mr. O’Neil requested guidance from the committee on the Economic Development
Authority’s loan to Orluck Industries. Mr. O’Neil noted that Orluck has been working with a
third-party consultant which assists companies in debt restructuring and company
reorganization. The EDA’s loan, originally at $200,000, is current, with about $100,000 paid
down. It is secured by two pieces of equipment. However, due to the potential restructuring
or wind-down, the equipment may be liquidated., which a recent appraisal shows is in line
with the current balance, but may be worth less on the open market due to factors such as
relocation. Mr. Ovall discussed some factors to consider, including priority lien position on
equipment. Mr. Tveite questioned how the process would work if the machinery were to be
sold. Mr. Ovall suggested that it would be ideal for the city to stay out of the sale of the
equipment due to the size of the machines and work with the principals or the consultant on
any sale.
Ms. Magnussen questioned the overall process and the committee’s role and action. Mr.
Tveite suggested that the committee advise staff to work with the relative parties involved to
work out the best outcome for the city. There was also discussion on whether EDA needed
to provide notice to Orluck regarding the city taking any actions regarding the equipment
and loan.
Mr. Ovall also suggested that Mr. O’Neil contact an attorney with expertise in work-outs and
UCC filings, and recommended Eric Sherburne at Eckburg Lammers.
Motion by Magnussen and seconded by Gromberg to direct staff to work with the
recommended legal firm and principals and senior lenders involved with the loan
and equipment to maximize recovery for the city and to bring any final action to the
EDA. Motion carried 5-0.
5 Announcements
Staff mentioned that a future item to bring to the committee consideration is an evaluation
of the review process for incentive programs. There was some discussion on working with
the council on developing a new process and policy criteria.
Staff also mentioned the possibility of looking at fees related to loans, particularly small
loans.
6. Adjournment
There being no further business, Mr. Tveite adjourned the meeting at 8:16 a.m.
Minutes prepared by Brent O’Neil and Joshua Mollan.
_____________________
Tina Allard
City Clerk
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Brent O’Neil
Economic Development Director