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ARDEN HILLS SPECIAL EDA MEETING—AUGUST 26, 2013 2 Community Development Intern Bachler indicated that the guidelines for the use of the RLF were first adopted in 1997, and since then, have not been updated. At the end of July 29, 2013, meeting, the EDA began to discuss how the funds in the RLF could be used to achieve the City's economic development goals and whether the RLF guidelines should be updated to reflect changes in priorities. Community Development Intern Bachler noted that loans issued through the RLF will be regulated by the Minnesota Business Subsidy Law. Loans less than $75,000 are not considered business subsidies and are exempt from the provisions of this law. Any revised guidelines will need to be reviewed by the State Department of Employment and Economic Development prior to EDA and City Council approval. Staff reviewed several questions and requested guidance from the EDA on the City's goals and policies for the RLF. Executive Director Hutmacher commented that the City's current RLF policy is stricter than the State's policy. She stated that the two key components within the policy at this time are for the City to avoid loans over $75,000 and grants over $25,000. With these parameters in mind, she questioned how the Commission wanted to proceed with the program. Discussion ensued regarding the State Business Subsidy Law, the City Business Subsidy Policy, and the size and scale of potential loans within the RLF program. President Grant was in favor of proceeding with smaller loans as this would allow the program to reach more businesses within the community. EDA Commissioner McClung was not sure where he stood on this issue because the City had little experience with the RLF program. In response to the questions in the staff memo, EDA Commissioner Holden stated that she supports loans for commercial fagade improvements, that projects should have a grade of B or better, and that she was open to discussing forgiving a percentage of some loans. EDA Commissioner Holden stated that one goal of the program may be to encourage home occupations to expand into commercial areas within the City. She questioned if the EDC had discussed this issue. Executive Director Hutmacher explained that the EDC was waiting for EDA policy direction. She questioned if the EDA wanted to consider partial forgiveness on the loans or the parameters that should be set on the loans. EDA Commissioner McClung envisioned that this program would assist small businesses with expansion or to bring new businesses into the City. He noted that section 6.2.1) of the City Business Subsidy Policy identifies priorities for giving subsidies. President Grant saw greater benefit in moving businesses to the community.