09-07-2007 EDAMEDA Board of Directors
Meeting Minutes
7 AM Friday, September 7th 2007
Members present in bold print:
Members
Tim Ulrich Steve Jansick
Casey Stotts Duane Hoversten
Staff
Miles Seppelt, EDA Director
Shan Ghimire, EDA Assistant
Ken Merrill, Finance Director
Guests
Bill Corby
Jim Haugen Diane Gordon
Mike McGraw
I. Mr. Ulrich called the meeting to order at 7:06 AM.
II. Approve Agenda: No action.
III. Review and Approve Meeting Minutes
a. Minutes of July 18th Finance Team Meeting.
M /S /P: Jansick, Gordon to approve the July 17th Finance Team minutes as written.
Approved unanimously.
b. July 27th EDA Board Meeting
M /S /P: Gordon, McGraw to approve the July 27th EDA Board minutes. as presented.
Approved unanimously.
IV. Review July 2007 Financial Statements
Mr. Merrill gave the following report:
• For operations we have cash available of $105,355. Also in operations we have total
mortgage receivable of $62,977. There is also total liabilities of $69,897 and total
fund balance of $98,435.
• For the month of July, there was $500 in revenue from rent and the total income year
to date is $68,650.
• Expenditures were just the typical items; "Professional Services" was higher due to
payments to Ehlers for setting up TIF district for the EDA spec building, other
expenses included engineering fees and soil work.
• For the month total expenditures were $20,568.
• We have a total of $132,517 in cash available in the Economic Development Loan
Fund with one outstanding loan (to Ashwill Industries) which is performing as
required.
The Downtown Loan Fund has $526,621 in cash available with mortgages totaling
$707,019.
Thus far in 2007, we have made loans totaling $136,400 and grants totaling $31,694
in the downtown while we received loan repayments of $71,372.
M /S /P: Gordon, McGraw to approve financials for July 2007. Passed Unanimously
V. Director's Report
Cornerstone Commons
We might not be getting paid off. They had been working with another financial
institution to secure permanent financing but nothing has been finalized as yet.
Warrior manufacturing
Both the $50,000 and the $200,000 loans have been dispersed to the company. At
least 10 people have been hired, so the company has attained all its employment
goals. They are working on their office space.
Industrial Park Design
The design is getting close to be done, having a meeting with SEH soon.
Replacement of Crow River Dam
Project is scheduled to start on the 17th of September.
VI. Cenex Redevelopment Project
Mr. Seppelt informed the Board that the purchase agreement has been written and is
under review by attorneys; hopefully will be finalized by the end of next week. He also
informed that the plan to finance the Spec Building with $150K Downtown Revolving
Loan Fund and the $150K from City's Development Fund has been approved by the
City Council.
If the project moves forward as planned, the structures on site would be demolished by
December 31, 2007 and Cenex would have two years time to clean -up everything on
the site. As per the proposed plan, the EDA obtains the deed for driveway and
`triangle' east of the grain elevator at signing while the EDA provides deed for Goebel
lot only at closing.
VII. Customer Elation Project Update
Mr. Seppelt presented updates on the Customer Elation Project. He mentioned that
development agreement and lease might be signed by Tuesday. The lowest bid, out of
eight totals, came to be $1,738,200 and the bid might be awarded by the Council
meeting on Tuesday, September 11 th 2007.
Mr. Seppelt also provided details about the lease. The lease will be for five years, with
2 -year and 3 -year extensions. The owner has committed for personal guarantee of the
$500,000 MIF loan but not the lease. However, because of the terms of JOBZ
program, the company would not be able to relocate without having to repay a
substantial portion of the JOBZ benefits. The JOBZ program goes until December 31,
2015. The owner is aware of the terms and these are included as a provision in the
Business Subsidy Agreement.
Mr. Seppelt also presented an overview of protections for city and EDA. The EDA can
re -lease of sell building to other businesses as this will be constructed to be a multi-
purpose building. The other protection comes from JOBZ, which requires that the jobs
be maintained until 2015. Bond Structure provides another protection since debt
includes one -year of debt service of $215,000. Also, EDA has $2.22 million in assets
and the $500,000 MIF grant received could potentially be applied to building.
M /S /P: Gordon, Jansick to approve terms of lease as outlined. Passed Unanimously.
VIII. EDA Spec Building — Nordic Components
Mr. Seppelt provided an update on Nordic Component's stand at this point. It was
mentioned that they are not sure whether they will be continuing with their plan to
partner with the EDA on the Spec Building. He also mentioned that the EDA has
several options with regard to the Spec Building project — these are:
- continue with spec building as planned
- complete building plans now and construct the building later
- Put the project on hold for the time being
M /S /P: Jansick, McGraw to put the Spec Building project on hold for the moment and
work on looking for other tenants. Passed Unanimously.
IX. Easement
Mr. Seppelt informed the board that a drainage easement needs to be established on
the EDA's Goebel property and that, because the Charter School would utilize the
same easement, we have an opportunity to share the costs of establishing the
easement.
M /S /P: Jansick, Gordon to establish the needed drainage easement, sharing the costs
involved with the Charter School. Passed Unanimously. Tim Ulrich abstained.
X. Levy Request
Mr. Seppelt indicated that the EDA should propose a new levy amount to the City
Council for 2008, as they will be setting levy's in September. When the EDA levy was
established it was intended that it be kept at a tax rate of 1.525% each year. In this way,
as the city's tax capacity grows, the dollars generated for EDA operations would grow as
well. Applying a tax rate of 1.525% to the current city tax capacity would result in a levy
amount of $146,000 for the 2008 budget.
M /S /P: McGraw, Gordon to recommend a levy request of $146,000 to the City Council.
Passed Unanimously.
XI. Funding Request — Southwest Funding Request
This year the Southwest Initiative Foundation requested a support of $5,000 from EDA,
which is $1,000 more than last year.
M /S /P: Gordon, McGraw to approve a contribution of $5,000 for the Southwest Initiative
Foundation. Passed Unanimously.
XII. Grants & Loan Applications
Sign and Awning Grant
A. Hot Paks, 140 Main St. N $600
M /S /P: Jansick, McGraw to approve a sign and awning grant of amount $600 for Hot
Paks. Passed Unanimously.
B. Sherry Eddy, Dog Training Center, 126 Main St. S $1,400
M /S /P: Mcgraw, Gordon to approve a sign and awning grant not to exceed $2,000 to
Dog Training Center. Passed Unanimously.
XIII. Other Business
It was mentioned that the City's annual recognition banquet for volunteers & staff was
scheduled for September 20th at the Event Center.
XIV. Chamber Update
Mr. Corby updated the Board on the following events:
■ September 12 — Step -Up Your Business at SWIF
■ September 13 — Business After Hours
■ September 14 -15 —Arts and Crafts Festival
■ November 2 -4 — Passport to Hutchinson.
XV. Set next meeting
The next meeting will be Friday, September 28, 2007 at 7:00 am in the City Center
Main Conference Room.
XVI. Adjourn
The meeting adjourned at 8:14 a.m.
Respectfully submitted,
Shan Ghimire, EDA Assistant