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09-12-1994 EDA MIN MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, SEPTEMBER 12, 1994 Members Present: President Gongoll, Commissioners Dietz, Duitsman, Farber, Holmgren, and Scheel. Commissioner Dwyer arrived at 7:12 P.M. Members Absent: None Staff Present: Bill Rubin, EDA Executive Director; Peter Beck, City Attorney 1. Call Meetinq To Order Pursuant to due call and notice thereof, the meeting of the Elk River Economic Development Authority was called to order at 7:00 p.m. by President Gongoll. 2. Consider September 12, 1994 Aqenda Bill Rubin requested the following changes to the agenda: Item 5. changed to 5.1. - EDA Financial Update Add Item 5.2. - Statement of Expenses Add Item 12.3. - Star Cities Conference Update Consider Item 7. after Item 4. - Open Mike COMMISSIONER DUITSMAN MOVED TO APPROVE THE SEPTEMBER 12, 1994 EDA AGENDA AS AMENDED. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 6-0. 3. Consider Auqust 8, 1994 Minutes COMMISSIONER FARBER MOVED TO APPROVE THE AUGUST 8,1994 EDA MINUTES. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 6-0. 4. Open Mike No one appeared for this item. 7. Consider Proposed Revisions to the City'S Conflict of Interest Ordinance Peter Beck explained the options he has prepared for revising the City's Conflict of Interest Ordinance. Exhibit A illustrates Option 1, redlining the proposed changes in the existing ordinance. Exhibit B is a clean copy, incorporating the changes. Option 2 is shown on Exhibit C, which cuts back on the existing ordinance and adopts State law. Mr. Beck stated that a memorandum is attached to the exhibits, summarizing the State laws and the City's Conflict of Interest Ordinance. He stated that the City Council will be reviewing the revisions at their meeting on September 26, 1994. Peter noted that they could delay action until sometime in October if more time was needed for other commissions EDA Minutes September 12, 1994 Page 2 to review the proposed changes. He noted that he may make some additions regarding the Open Meeting Law. Commissioner Dwyer arrived at this time (7:12 p.m.). It was the consensus of the EDA to recommend that other commissions should be given time to review the proposed ordinance changes and make comments. 5.1. Consider September EDA Financial Update Bill Rubin review the following financial summary provided by Finance Director Lori Johnson: Micro Loan Fund On August 31, 1994, the Micro Loan Fund had a cash balance of $148,715.17. All loan payments are current with the exception of Americlnn. Block Grant Micro Loan Fund The balance in this fund was $10,645.17 as of August 31, 1994. 5.2. Statement of Expenses Bill Rubin provided the following overview of EDA expenses through August 31, 1994: Personal Services Office Supplies & Charges Contractual Services Transfer to General Fund $1 6, 833.24 529.94 37,092.19 1,000.00 Total Due to City of Elk River $ 55,455.37 Bill explained that the following items are included under contractual services: -Annual $6,000 contribution to Chamber of Commerce -Development activities such as the business park appraisal and independent analysis of the ice area project -Advertising costs include the newsletter, inserts for the City brochure, and advertising in marketing publications. COMMISSIONER DUITSMAN MOVED APPROVAL OF EDA STATEMENT OF EXPENSES. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. . 6. Consider a Recommendation from the EDA to the City Council Reqardinq the Proposed Business Park Rezoninq Bill Rubin provided an overview of the history of the proposed business park (B-P) rezoning. He stated that the Planning Commission unanimously recommended that the City Council approve the B-P rezoning. Previously, the EDA Business Park Task Force, by consensus, recommended that the Planning Commission, EDA, EDA Minutes September 12, 1994 Page 3 and City Council approve the B-P rezoning. The Planning Commission also recommended adjusting the PUD/B-P line west of the Government Center so as to run parallel with US Highway 10 and County Road 30. Discussion followed regarding the southern boundary change proposed by the Planning Commission. COMMISSIONER DWYER MOVED TO RECOMMEND TO THE CITY COUNCIL THAT IT APPROVE THE B-P, BUSINESS PARK ZONING DESIGNATION TO CERTAIN PROPERTIES LOCATED ALONG THE WESTERN AREA OF THE COMMUNITY. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 8. Consider an Update on Central Business District (CBDI Issues Bill Rubin noted that as a result of an August 8th workshop on the CBD, the discussion was continued to the August 11, 1994 HRA meeting. At this meeting, the HRA approved a Request for Proposals (RFP) for the northwest quadrant of King Avenue and Main Street. The RFP calls attention to 3 contiguous properties listed for sale. While making no commitments, given the right proposal, the HRA will consider making a grant for demolition costs, thereby reducing a potential developer's costs. Bill stated that the RFP is an attempt to attract redevelopment into the Central Business District. Bill Rubin explained that the Request for Proposals was published in the Elk River Star News and the Minnesota Real Estate Journal, and also a copy of the RFP was mailed to approximately 40 potential users. He stated that the deadline for submitting proposals is September 14th at 4:00 p.m. Bill noted that the HRA has scheduled a meeting for September 20th to give persons submitting a proposal a chance to explain their concept to the HRA. Bill Rubin stated that also at the August 11, 1994 HRA meeting, the HRA approved its 1995 budget. The budget contains an expenditure of approximately $17,000 to design and construct an initial phase of a river front corridor or pathway. He anticipates that the HRA may contract with a landscape architect to look at opening up property on the river. Bill stated that he has asked the Park and Recreation Commission to consider an equal match of funds in 1995. He suggested that a river front corridor committee or task force be formed, comprising 2 HRA representatives, 2 Park and Recreation commissioners, representatives of the downtown development corporation representing the downtown property owners, and perhaps several citizens from the community at-large. Bill noted that the Park and Recreation Commission will be meeting on September 14th at 4:00 p.m. to discuss this issue. 9. Consider a Request from the City Council to Revise the 1995 EDA Budaet Bill Rubin explained that in order to close the gap in the City's 1995 budget shortfall, the EDA has been asked to absorb additional expenses in the amount of $8,000. These expenses are as follows: EDA Minutes September 12, 1994 Page 4 $6,100 1,400 500 Personnel Redesign & ordering of City pins Video taping expenses for EDA meetings $8,000 President Gongoll expressed his opposition to cutting expenses from the EDA's budget, as it is relatively small. He stated that he would be in favor of Option 1 if the cuts had to be made, but that he would like to continue the newsletter on a semi-annual or annual basis. Commissioner Dwyer pointed out that this cut represented approximately 10 percent of the EDA's budget, and questioned if other departments were being cut 10 percent as well. Bill Rubin stated that he did not have that information. Commissioner Dwyer stated that he was not in favor of using the EDA's fund balance for the expenses. He felt that it has taken time to build up the fund balance and would like to reserve it for projects such as the Tescom TIF Grant. Commissioner Dietz expressed his opposition to cutting the Chamber contribution. He stated that the EDA should consider using the developmental activities fund for making up the shortfall. Commissioner Dietz continued to say that it has been the Council's intent to shift more of the EDA personnel expenses to the EDA budget as time goes on. President Gongoll stated that he felt the availability of developmental funds are the crux of EDA. Commissioner Dietz replied that $16,000 in development activity funds in the 1994 budget were not used. Commissioner Dwyer stated that the EDA was planning to use a portion of the funds for business park activities such as soil borings, appraisal fees, and legal services. He further stated that the TIF funds designated for the business park are being reserved for land acquisition. Commissioner Duitsman explained the difficulty the Council is faced with in balancing the City's budget. He noted that an eleven percent increase in valuation is expected, which will affect the total amount of the levy. Discussion followed regarding the timetable for finalizing the City's budget. Commissioner Holmgren noted that it is difficult to compare the EDA with other City departments in that the EDA is able to levy against property taxes for their funds, the EDA has the ability to grant loans, and the EDA may generate a profit. He further noted that it was foreseen since the EDA's inception that the EDA would support as much as 50 percent of EDA salaries. Bill Rubin stated that it was his understanding the split would be 40-60 between the EDA and the City for 1995, and now a 50-50 spit is being proposed. City Administrator Pat Klaers explained that the EDA is being asked to approve the $8,000 increase in line items at this time. He stated that when further information is available regarding valuations, consideration will be given to the possible deletion of line items and addition of the fund balances. Pat also EDA Minutes September 12, 1994 Page 5 noted that on a City-wide basis, typically 60 to 65 percent of any given department's budget is for salaries. At this time, 50 percent of the EDA's budget is proposed to be used for salaries. COMMISSIONER DUITSMAN MOVED TO AMEND THE 1995 EDA BUDGET BY SHIFTING $8,000 IN EXPENSES FROM THE GENERAL FUND TO THE EDA BUDGET AS FOLLOWS: PERSONAL SERVICES $6,100 - SALARIES FOR EDA COORDINATOR AND SUPPORT STAFF 500 - VIDEO TAPING EXPENSES FOR EDA MEETINGS CONTRACTUAL SERVICES $1,400 - REDESIGN AND REORDERING OF CITY PINS COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 6-l. PRESIDENT GONGOLL OPPOSED. Pat Klaers noted that there is no Truth in Taxation requirement for the HRA or the EDA, only for the City General Fund. He further noted that the tax levy resolutions that the City Council has approved for the HRA and EDA are related to a percentage of the tax base which is .01813 for the EDA. Pat added that it may be possible to have an additional $5,000 in revenues, thereby adjustments of only $3,000 may be necessary. 10. Consider a Proposal from Anoka-Hennepin Technical Colleae reqardina the City's Review and Permittinq Process Bill Rubin explained that he requested a proposal from Linda Browning, a customized training consultant at Anoka-Hennepin Technical College, to address the City's review and permitting process. Bill noted that Ms. Browning was employed by the City of Calgary during the time its population mushroomed; reviewing and implementing similar processes for the City of Calgary. Bill stated that he met with Ms. Browning on Friday, along with Commissioners Dwyer and Gongoll, and also the City Planner, Steve Ach to review her proposal. President Gongoll and Commissioner expressed their satisfaction with Ms. Browning's proposal as well as her qualifications. Commissioner Holmgren expressed his support for the proposal. He stated that elected officials have received comments from time to time, suggesting that the City's permitting and review processes are not as consumer-friendly as they should be. He further stated that this proposal would provide an opportunity to challenge those comments. President Gongoll explained that the focus will be on the EDA process but that nearly all departments will be involved. Bill Rubin stated that he expected the building and zoning administrator, chief building official, city planner and administrative support to be included as well. PRESIDENT GONGOLL MOVED TO ACCEPT THE PROPOSAL SUBMITTED BY LINDA BROWNING TO REVIEW THE CITY'S PERMITTING AND REVIEW PROCESS, AT A COST EDA Minutes September 12, 1994 Page 6 NOT TO EXCEED $3,900. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 11. Consider a Micro Loan Request from Elk River Auto Mall L.L.C. Bill Rubin explained the EDA is in receipt of a request from Elk River Auto Mall L.L.C. (Limited Liability Company) for a $50,000 micro loan. The loan would be used to support the construction of a 16,000 square foot multi-tennant auto mall and an adjacent 5,000 square foot multi-tennant commercial retail building on the same parcel of land. He noted that the L.L.C. is comprised of Mr. John Weicht of John Weicht and Associates, Mr. Jim Rogness of J.R. Autotech Automotive, and Mr. Paul Vincent. Bill further explained that it is proposed that the land and construction costs will total $1,278,000. He stated that there will be two primary lenders financing approximately 70 percent of the project and applicant equity in the amount of $325,000. The proposed EDA loan of approximately $50,000 would represent roughly 4 percent of the total cost. Bill Rubin explained the letter of commitment from the primary lender(s) is not available at this time. Discussion following regarding the financing a project that will only be partially owner-occupied. Commissioner Duitsman stated he did not feel a need to finance a commercial project on raw land. President Gongoll noted that the EDA Finance Committee voted unanimously to approve the loan request by Elk River Auto Mall, contingent upon the participation of the primary lender. Commissioner Farber questioned what would happen if the parties were to default on the loan. Bill Rubin explained that the primary lender would be first in line to collect and the EDA would be second. He noted that the applicant must provide the EDA with a promissory note as well as a personal guarantee. COMMISSIONER HOLMGREN MOVED TO APPROVE THE MICRO LOAN REQUEST FROM ELK RIVER AUTO MALL LLC., CONTINGENT UPON THE RECOMMENDATION OF THE EDA FINANCE COMMITTEE THAT A LETTER OF COMMITMENT BE PROVIDED FROM THE PRIMARY LENDER. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 4-2-1. COMMISSIONERS DUITSMAN AND SCHEEL OPPOSED. COMMISSIONER DWYER ABSTAINED, AS THE BANK OF ELK RIVER IS ONE OF THE PRIMARY LENDERS FOR THE PROJECT. 12.1. Chanqe EDA Meetinq lime Bill Rubin explained the City Council's request to move the EDA meeting time from 7:00 p.m. to 6:00 p.m. , and also outlined several issues that need to be considered in making the change. Commissioner Duitsman stated thaT the City Council has become accustomed to meeting nearly every Monday night at 6:00 p.m. and that they would like to have the option of conducting business after the EDA meeting. EDA Minutes September 12, 1994 Page 7 President Gongoll expressed his concern that there may be a conflict if the EDA conducts a public hearing at a specific time, and the City Council wishes to start their meeting at that time. Bill Rubin stated that the City Council has scheduled a public hearing for 7:00 p.m. and the EDA will begin their meeting at 6:00 p.m. President Gongoll expressed his concern that there is not the clear delineation between the EDA and the City Council that there needs to be. He suggested that the EDA meet on a Tuesday night. He further suggested that at the annual meeting, the EDA should consider adding a non-elected official to serve on the EDA. Commissioner Duitsman stated he is not in favor of Tuesday meetings because he is often out of town beginning on Tuesdays. Commissioner Dwyer asked that Bill Rubin advise the EDA when it would be appropriate to begin discussions on having another non-elected individual serve on the EDA. Bill Rubin stated that the EDA composition is found in the enabling resolution. If the enabling resolution is amended, 30 to 45 days is required for a public hearing. He stated that if the group is considering that action, it would need to take place on or about the first of the year. Commissioner Holmgren stated that they must consider which Council member would retire from-the EDA, and how the four positions on the EDA would be filled; i.e., rotation of Councilmembers on the EDA, etc. PRESIDENT GONGOLL MOVED TO CHANGE THE EDA MEETING TIME FROM 7:00 P.M. TO 6:00 P.M.. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. PRESIDENT GONGOLL MOVED TO CHANGE THE EDA MEETING DAY FROM THE SECOND MONDAY TO THE THIRD TUESDAY OF EACH MONTH. COMMISSIONER SCHEEL SECONDED THE MOTION. THE MOTION FAILED 1-5-1. COMMISSIONERS SCHEEL, DUITSMAN, DIETZ AND FARBER OPPOSED. COMMISSIONER HOLMGREN ABSTAINED. COMMISSIONER SCHEEL MOVED TO CHANGE THE MEETING TIME OF THE OCTOBER 10, 1994 EDA MEETING FROM 6:00 P.M. TO 5:30 P.M. COMMISSIONER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 7-0. 12.2. Chanqe November Meetinq Date COMMISSIONER SCHEEL MOVED TO CHANGE THE NOVEMBER EDA MEETING FROM MONDAY, NOVEMBER 14, 1994, TO TUESDAY, NOVEMBER 15,1994, AT 6:00 P.M.. COMMISSIONER DWYER SECONDED THE MOTION. THE MOTION CARRIED 7-0. 12.3. Star Cities Update Bill Rubin indicated that the annual Star Cities conference is scheduled for September 21 st through September 23, 1994. He noted that Elk River will be EDA Minutes September 12, 1994 Page 8 designated as a 1994 "All Star City" based on its efforts in economic development. President Gongoll suggested that Bill Rubin inform the founding members of the Star Cities project of the City's All Star status. 13. Adjournment There being no further business, COMMISSIONER HOLMGREN MOVED TO ADJOURN THE MEETING. COMMISSIONER FARBER SECONDED THE MOTION. THE MOTION CARRIED 7-0. The meeting of the Economic Development Authority adjourned at 8:50 P.M. Respectfully submitted, MWV ~~~ Debbie Kleckner Recording Secretary