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MEMORANDUM <br />DATE:EDC Agenda Item 4.B <br />November 6, 2013 <br />TO: <br />Economic Development Commission <br />FROM: <br />Matthew Bachler, Community Development Intern <br />SUBJECT: <br />City of Arden HillsRevolving Loan Fund <br />Summary <br />The Economic Development Authority(EDA)is currently discussing the future use of the City’s <br />Revolving Loan Fund (RLF). The City established the RLFin order to participate in the <br />Minnesota Investment Fund (MIF) program,managed by the Departmentof Employment and <br />Economic Development (DEED). Grant funding received through MIF in 1998 was used to <br />provide Cardiac Pacemakers, Inc. with a low-interest loan for an expansion project. A $100,000 <br />portion of theloan was repaid to the City and was used to capitalize the RLF. As of October 24 <br />2013, the RLF cash balance was $155,649.The CPIloan repayment and investment interest <br />earnings are the only revenue sources represented in this balance. A more detailed history of the <br />RLF was provided in the April 29, 2013, staff report to the EDA (Attached). <br />Background <br />The use of revolving loan funds is regulated by guidelines that were first adopted by the City in <br />1997.At theEDA meeting on August 26, 2013, staff and commissioners discussed the goals of <br />the RLFandwhether the guidelines needed tobe updated to reflect new priorities.The Arden <br />Hills Business Subsidy Criteria and City Public Financing Guidelineswere also reviewed to <br />evaluatehowthese policies might impact or limit the use of the RLF. <br />Any revisions the City wishes to make to the RLF guidelinesare required tobe reviewed by <br />DEED prior to EDA and City Council approval. At a minimum, the guidelines should be <br />changedto state that the Minnesota Business Subsidy Law applies to RLF loans(this law came <br />into effect following the adoption of the guidelines in 1997).Staff is requesting feedback from <br />the EDC on the goals and priorities outlined by the EDA. Specifically, staff is looking for insight <br />on how the business community would view the proposed RLF guidelines. The following is a <br />th <br />summary of the discussion from the EDA meeting on August 26: <br />Loan Amount and Terms <br />The EDA discussed settinga maximum loan amount of$75,000. This number was decided on in <br />part because under the Minnesota Business Subsidy Law, loans of less than $75,000 are not <br />