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08-25-2006 EDAMEDA Board of Directors Minutes of Meeting Friday, August 25, 2006 Members present in bold print: Members: Tim Ulrich Steve Jansick Jim Haugen Duane Hoversten Casey Stotts Mike McGraw Staff: Miles Seppelt, EDA Executive Director Dan Sexton, EDA Assistant Ken Merrill, Finance Director I. Tim Ulrich called the meeting to order at 7:00 a.m. II. Approve Agenda- No action III. Review and Approve Meeting Minutes a. Review minutes from July 28th EDA Board Meeting Don Walser Marc Vaillancourt MIS/P: Jansick, Hoversten to approve the minutes from the July 28, 2006 EDA Board meeting as written. Passed unanimously. b. Review minutes from July 19th Finance Team Meeting MIS/P: McGraw, Jansick to approve the minutes from the July 19, 2006 Finance Team Meeting as written. Passed unanimously. IV. Director's Report Miles Seppelt gave the following report: A. Goebel Land Transaction — The city council has approved for the deeding of the property. The paperwork for the deed transfer has been filed and the EDA is just awaiting confirmation for McLeod County. B. Warrior Manufacturing — The City Council and Planning Commission have approved Warrior's proposal. Warrior is in the process of getting underway, they have currently filed for grading permits to prep the site for construction. C. Cornerstone Commons — The construction is back on track. Brick is being applied to the exterior of the structure. According to the owners the structure is approximately 50% of its leased D. Minnesota Investment Network — Mr. Seppelt commented on the meeting with Brian Johnson. He mentioned that the Finance Team was a little apprehensive about the idea of prospecting for possible clients. They recommended a more hands off approach. Mr. Ulrich requested the input of the EDA Board's perceptions. Members agreed that the idea of prospecting for individuals to invest in this fund was shaky. Members didn't want to be associated with setting individuals up with an investment that has no guarantees E. Business Recruitment EDA Board Meeting August 25, 2006 Page 2 of 4 a. Nordic Components — They are currently looking for a new facility around 15- 20,000 sq. ft. to own. They were given a tour of the industrial park. Mr. Seppelt will keep the board up to date on this project. b. Alexis Systems — Mr. Seppelt informed the board that at the last Community Venture Network (CVN) meeting introductions were made this Alexis Systems. He further explained what Alexis Systems does and why they are looking at Hutchinson as a prospect for relocation. Mr. Seppelt commented on a site visit that was provided for the company on Wednesday, August 23rd. Currently Mr. Seppelt is waiting for Alexis Systems to submit their financial structure, business plan and confirmation from Ridge Water for approval to use their existing facility in the Industrial Park. Further discussion followed in reference to the employment needs of the company, this company as a future prospects and the board's general perception of the company. V. Review May Financial Statements Mr. Merrill gave the following report: • On Pg 1 under operations for the EDA, there is $218,001 cash on hand. The total fund balance as of July 31, 2006 is $217,865. Total Mortgages Receivable is $76,608. • Pg 2 and 3 is the statement of revenue and expenses. The EDA continues to collect $500 each month for the Wetherell Property. The EDA has generated a total of $3,500 to date for the year of 2006. Total expenses for the month of July equal $9,126. • Pg 4 under the EDA Loan Fund, the cash on hand is $119,834. The EDA has generated a fund balance of $144,834 to date the year of 2006. • Pg 5 under the EDA Downtown Loan Fund, cash on hand is $81,540. Mortgages receivable is currently $667,319. $72,553 has been collected this year for loan repayments. A total of $22,087 has been paid out thus far in 2006 including loans, downtown grant program, and miscellaneous. The balance sheet reflects revenues of $50,421 above expenditures. MIS/P: Haugen, Jansick to approve the July financial statements as presented. Passed unanimously. VI. Cenex Redevelopment Cenex is currently in the process of obtaining an appraisal for the property. This was suggested to be completed prior to opening negotiations with the company. Meanwhile the EDA has obtained an appraisal; for the property at a value of $180,000. With appraisals being completed by both parties hopefully a better understand of the property can be attained prior to the meeting and that the transaction will proceed smoothly. VIL Pet Hospital Building Mr. Seppelt informed the board that there was a meeting scheduled with the owner and their attorney, this afternoon to discuss a third appraisal or possible settle meant. The owners have received their appraisal from Hokanson for $164,600. The EDA's appraisal was from Robinson for $70,000. He mentioned that the owners were still very against the EDA's offer. Mr. Seppelt mentioned that there still is nine months left on the grant window for funding on this project. Members of the board suggested the meeting be canceled and that whether a confidential meeting with the owner's attorney may be more productive. Mr. Jansick agreed to schedule a meeting with the attorney unofficially to discuss this matter further. VIII. EDA Budget / Loan Mr. Seppelt commented on the history of the EDA and the proposal of the Levy. When the EDA was originally formed the intent was that the EDA would at some point become self - sufficient, funded by its own levy. Currently the EDA's budget is funded from the general fund, $100,000 annually. This amount EDA Board Meeting August 25, 2006 Page 3 of 4 over the years has maintained relatively level due to staffing changes and funds from rental revenues. The main goal of the levy is to stabilize the EDA funding source with an annual 1.525% draw and not have to rely of the general fund. This would also allow for further transparency to the general public of were their money is going to. Further discussion followed with questions in reference to the amount that should be requested and the timeline necessary for approval. Mr. Merrill mentioned key points from the following list of procedural requirements needed to gain approval: 1) EDA Board of Directors make a formal request (resolution) 2) City Council passes a resolution stating proposed amount of levy 3) Publish resolution together with a notice of public hearing on the resolution for two consecutive weeks in official newspaper. 4) Public hearing held 2 -4 weeks after first publication in the official newspaper. 5) Following hearing, City Council adopts resolution authorizing the EDA levy 6) Resolution authorizing the levy is published 7) If a petition is received, the resolution could be voided. (see below) 8) Send copies of both resolutions to City Schultz at the County. Members of the board discussed that if our resolution was to be submitted that we should go for the full amount need. The action regardless will put the board's proposal up for public debate and the information that Mr. Seppelt presented clearly shows that there is a need for change. It was suggested that information about the EDA's past and present success be mentioned to further sway popular vote. M/S /P: Hoversten, Haugen to approve to move forward with the resolution to levy for $140,000 at 1.525 %. Passed unanimously. IX. Grant & Loan Applications None. X. Chamber CVB Update Mr. Vaillancourt gave the reported the following: • The Chamber /CVB will have a new employee Megan Peterson starting September 5t'. • There will be a Hutchinson Leadership Institute event on September 21S` • The Professional Development Network will be hosting an event. • The Chamber /CVB is co- sponsoring a forum discussion at Ridge Water College for individuals running for State offices. There will also be a forum event for individuals running for local elected positions. • The Arts and Crafts Fair is ready to go. XI. Other Business None. XII. The next meeting will be Friday, September 29, 2006 at 7:00 a.m. EDA Board Meeting August 25, 2006 Page 4 of 4 XIII. Adjourn The meeting adjourned at 8:33 a.m. Respectfully submitted, Dan Sexton EDA Assistant