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MEMORANDUM <br /> <br />DATE: November 6, 2013 EDC Agenda Item 4.B <br /> <br />TO: Economic Development Commission <br /> <br />FROM: Matthew Bachler, Community Development Intern <br /> <br />SUBJECT: City of Arden Hills Revolving Loan Fund <br /> <br /> <br /> <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 RLF in order to participate in the <br />Minnesota Investment Fund (MIF) program, managed by the Department of 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 the loan 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 CPI loan 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 /> <br /> <br />Background <br />The use of revolving loan funds is regulated by guidelines that were first adopted by the City in <br />1997. At the EDA meeting on August 26, 2013, staff and commissioners discussed the goals of <br />the RLF and whether the guidelines needed to be updated to reflect new priorities. The Arden <br />Hills Business Subsidy Criteria and City Public Financing Guidelines were also reviewed to <br />evaluate how these policies might impact or limit the use of the RLF. <br /> <br />Any revisions the City wishes to make to the RLF guidelines are required to be reviewed by <br />DEED prior to EDA and City Council approval. At a minimum, the guidelines should be <br />changed to 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 />summary of the discussion from the EDA meeting on August 26th <br /> <br />: <br />Loan Amount and Terms <br />The EDA discussed setting a 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