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City of Arden Hills Economic Development Commission June 4, 2014 Page 1 of 5 MEMORANDUM DATE: June 4, 2014 EDC Agenda Item 4.C TO: Economic Development Commission FROM: Matthew Bachler, Associate Planner SUBJECT: City of Arden Hills Revolving Loan Fund Background At the Economic Development Authority (EDA) meeting on April 28, 2014, staff presented recommendations on how the Revolving Loan Fund (RLF) program could be restructured to improve its effectiveness. Specifically, the topics of loan structure, project eligibility, financial criteria, and the approval process were discussed. The recommendations shared with the EDA were reviewed by the Economic Development Commission (EDC) at their April 2014 meeting. Generally, the EDA was supportive of the proposed guidelines. The partnership between the City and local banks in administering the loans was discussed and the EDA directed staff to develop a Participation Agreement that would adequately protect the City in the event of a loan default. The EDA agreed that the job creation and retention requirements in the existing RLF Guidelines should be updated, but felt that some type of job creation or retention criteria should be kept in the revised program. All loan applications would need to receive final approval from the EDA. Since this body is comprised entirely of the members of the City Council, a special meeting of the EDA could be convened following any regular City Council meeting in order to take action on an application. The EDA was comfortable with either having a new finance committee or a third party financial advisor make a recommendation to the EDA on a loan proposal. Additional discussion on the servicing of revolving loans is included in a later section of this memo. Program Overview The following is a draft version of the revised guidelines based on past discussions with the EDC and direction provided by the EDA.