HomeMy WebLinkAbout07-24-17-EDAAPPROVAL OF AGENDA
APPROVAL OF MINUTES
February 13, 2017 Special EDA
02 -13 -17 EDA.PDF
NEW BUSINESS
Preliminary Budget
Dave Perrault, Interim Director of Finance and Administrative Services
MEMO.PDF
ATTACHMENT A.PDF
Minnesota Investment Fund –EDA Revolving Loan Fund
Matthew Bachler, Senior Planner
MEMO.PDF
ATTACHMENT A.PDF
EDA MEMBER COMMENTS
ADJOURN
President:
David Grant
Commissioners:
Brenda Holden
Fran Holmes
Dave McClung
Steve Scott
Economic Development
Authority
July 24, 2017
6:00 p.m.
City Hall
Address:
1245 W Highway 96
Arden Hills MN 55112
Phone:
651 -792 -7800
Website :
www.cityofardenhills.org
City Vision
Arden Hills is a strong community that values its unique environmental setting,
strong residential neighborhoods, vital business community, well -maintained
infrastructure, fiscal soundness, and our long -standing tradition as a desirable
City in which to live, work, and play.
Agenda
CALL TO ORDER
1.
2.
2.A.
Documents:
3.
3.A.
Documents:
3.B.
Documents:
4.
APPROVAL OF AGENDAAPPROVAL OF MINUTESFebruary 13, 2017 Special EDA02-13 -17 EDA.PDFNEW BUSINESSPreliminary BudgetDave Perrault, Interim Director of Finance and Administrative Services MEMO.PDFATTACHMENT A.PDFMinnesota Investment Fund –EDA Revolving Loan Fund Matthew Bachler, Senior Planner MEMO.PDFATTACHMENT A.PDF
EDA MEMBER COMMENTS
ADJOURN
President:David Grant Commissioners:Brenda HoldenFran HolmesDave McClungSteve Scott Economic Development Authority July 24, 20176:00 p.m. City Hall Address:1245 W Highway 96 Arden Hills MN 55112 Phone:651 -792 -7800 Website : www.cityofardenhills.org City VisionArden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play. AgendaCALL TO ORDER1.2.2.A.Documents:3.3.A.Documents:3.B.Documents:
4.
Approved: July 24, 2017
CITY OF ARDEN HILLS, MINNESOTA
SPECIAL ECONOMIC DEVELOPMENT AUTHORITY MEETING
FEBRUARY 13, 2017
6:45 PM – CITY HALL
CALL TO ORDER/ROLL CALL
Pursuant to due call and notice thereof, President Grant called to order the Economic
Development Authority meeting at 6:45 p.m.
Present: EDA President David Grant; EDA Commissioners Fran Holmes, Dave
McClung, Steve Scott and Brenda Holden (arrived at 6:47 p.m.)
Absent: None
Also present: EDA Secretary William S. Joynes, Sr.; EDA Treasurer Sue Iverson; and
City Clerk Julie Hanson
1.APPROVAL OF AGENDA
MOTION: EDA Commissioner McClung moved and EDA Commissioner Holmes
seconded a motion to approve the meeting agenda as presented. The motion
carried unanimously (4-0).
2.APPROVAL OF MINUTES
A.July 25, 2016
MOTION: EDA Commissioner Holmes moved and EDA Commissioner McClung
seconded a motion to approve the July 25, 2016 Economic Development
Authority Meeting Minutes as presented. The motion carried unanimously
(4-0).
3.NEW BUSINESS
A.Bylaw Change
ARDEN HILLS EDA MEETING – February 13, 2017 2
EDA Treasurer Iverson stated that regular EDA meetings are scheduled to coincide with the
regular City Council meetings as the membership of both Boards are identical. However, at the
January 9, 2017, regular City Council meeting, the Council approved changing its second
meeting of each month to the fourth Monday. Due to this schedule change, is necessary to
amend the EDA bylaws as they pertain to the EDA meetings dates as well so that they coincide
with the new City Council meeting schedule, that being the fourth Monday each quarter.
MOTION: EDA Commissioner McClung moved and EDA Commissioner Holmes
seconded a motion to accept the EDA Bylaw change. The motion carried
unanimously (4-0).
4. EDA COMMISSIONER COMMENTS
None.
5. ADJOURN
MOTION: EDA Commissioner Scott moved and EDA Commissioner McClung seconded
a motion to adjourn the Economic Development Authority meeting. The
motion carried unanimously (4-0).
EDA President Grant adjourned the special Economic Development Authority meeting at 6:47
p.m.
__________________________ __________________________
Julie Hanson David Grant
City Clerk EDA President
Page 1 of 1
New Business – 3A
MEMORANDUM
DATE: July 24, 2017
TO: EDA President and Commissioners
William S. Joynes, Sr., City Administrator
FROM: Dave Perrault, Interim EDA Treasurer
SUBJECT: Preliminary 2018 EDA Budgets
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
EDA Chair and Commissioners Should Consider
The preliminary 2018 budget has been prepared for the Economic Development Authority
(EDA) governing body. The Chair and Commissioners may provide feedback for future budget
sessions.
Background
The EDA is a blended component unit of the City of Arden Hills which makes EDA Funds
Special Revenue Funds of the City. Annually, we are required by the State to set budgets for the
City’s General Fund and all Special Revenue Funds (which includes all the EDA Funds).
These EDA Funds are:
EDA General Fund
EDA Revolving Loan Fund
EDA TIF District #2 Round Lake
EDA TIF District #3 Cottage Villas
EDA TIF District #4 Presbyterian Homes
Overall, the EDA General Fund is in good financial condition for 2017 with an estimated year-
end reserve balance of $200,063
Page 2 of 2
The fund balance being projected at the end of the year includes funds that are intended to be
used for the Gateway Signs program (approximately $45,000). Tax revenues are likely the only
reoccurring source of funding for EDA activities. The City Council approved $90,000 in tax
revenues for the EDA as part of the 2017 budget, which is a $30,000 increase over the prior year.
The current budget projects another $30,000 increase over the previous year’s budget. Although
cost savings have been achieved in previous years due to staff vacancies and less than anticipated
expenditures, the EDA cannot expect similar savings in out years. The EDA will review the
final budget at its October meeting.
Discussion
Staff respectfully request the EDA review the budget for future discussions.
Attachment
Attachment A: 2018 Preliminary EDA Budget
EDA GENERAL
Function: Economic Development
Supervisor: Community Development Director
Fund#: 250
Activity#: 47300
Activity Scope
This Special Revenue Fund accounts for general administration activities that are not
specific to any individual Tax Increme nt Financing (TIF) District, as well as activities
associated with the Economic Development Commission and Economic Development
Authority.
Objectives
1. Consider placement and construction of Gateway Signs.
2. Continue to research the City’s revolving loan program, restrictions, guidelines,
and possible future uses.
3. Consider the use of TIF District 3 funds for low to moderate housing needs.
4. Review operating budget and identify a sustainable funding source.
5. Continue to grow and evolve the business retention program.
Issues
1. Consistent administration of the City’s policies, plan, ordinances, guidelines,
statutes, etc.
2. Promotion of industrial property available.
Measurable Workload Data
None developed at this time.
Budget Commentary
Historically, t he revenue to this fund had been primarily excess increment and
interest with transfers from the General Fund. A transfer was made in 2012 and
2013 for the Conduit Debt revenue received in 2011 and 2012 from the
Presbyterian Homes project. The tax increment excess funding source ended in
2015 with the dercertification of TIF District #2 (Round Lake Road). Transfers
from the General Fund are now the prime funding source.
An administrative charge was established in 2008 and all funds are charged back
for overhead co sts associated with Administration, Finance and Administrative
Services, and Government Building departments in the General Fund. Other costs
such as auditing, financial software, IT, and insurance have been allocated to this
fund also.
Budget Summary
Function: Economic Development Department: EDA General Fund
Appropriation Detail
Actual Actual Budget Amended YTD Preliminary % Change
Activity FY 2015 FY 2016 FY 2017 FY2017 5/31/2017 FY 2018 17 vs 18
Revenues
Taxes 63,361 4,889 - - - - 0.00%
Intergovernmental - - - - - - 0.00%
Miscellaneous 5,639 4,795 5,600 5,600 4,807 5,600 0.00%
Other Financing Sources 30,000 60,000 90,000 90,000 - 120,000 33.33%
Total Revenues 99,000$ 69,684$ 95,600$ 95,600$ 4,807$ 125,600$ 31.38%
Expenditures
Total Personal Services 60,769 42,842 72,301 72,301 12,785 72,301 0.00%
Total Materials and Supplies 257 290 650 650 - 650 0.00%
Other Service Charges 51,961 29,513 61,248 61,248 6,826 57,900 -5.47%
Capital Outlay 10,077 - 45,000 45,000 - 45,000 0.00%
Total Expenditures 123,064$ 72,645$ 179,199$ 179,199$ 19,612$ 175,851$ -1.87%
Fund Balance - January 1 310,687 286,623 283,662 283,662 283,662 200,063
Excess Revenue Over Expenditure (24,064) (2,961) (83,599) (83,599) (14,805) (50,251)
Fund Balance - December 31 286,623$ 283,662$ 200,063$ 200,063$ 268,857$ 149,812$
EDA REVOLVING LOAN FUND
Function: Economic Development
Supervisor: Community Development Director
Fund#: 251
Activity#: 47306
Activity Scope
This Special Revenue Fund was established to administer economic development loans.
The primary revenue source is from investment income.
Objectives
1. To assist local businesses that meet the loan criteria established by the EDA.
Issues
1. The current economy is starting to rebound and is slowly lending itself to
expansion or improvements.
2. Promoting the program to the community businesses.
Measurable Workload Data
None developed at this time.
Budget Commentary
There are currently no planned expenditures at this time. Activity in this fund would
occur if the Economic Development Authority authorized a loan after an application is
made.
Budget Summary
Function: Economic Development Department: EDA Revolving Fund
Appropriation Detail
Actual Actual Budget Amended YTD Preliminary % Change
Activity FY 2015 FY 2016 FY 2017 FY2017 5/31/2017 FY 2018 17 vs 18
Revenues
Total Miscellaneous 3,264 2,652 3,000 3,000 2,676 3,000 0.00%
Total Revenues 3,264$ 2,652$ 3,000$ 3,000$ 2,676$ 3,000$ 0.00%
Fund Balance - January 1 160,869 164,133 166,785 166,785 166,785 169,785
Excess Revenue Over Expenditure 3,264 2,652 3,000 3,000 2,676 3,000
Fund Balance - December 31 164,133$ 166,785$ 169,785$ 169,785$ 169,461$ 172,785$
EDA TIF DISTRICT #2 – ROUND LAKE
Function: Economic Development
Supervisor: Director of Finance and Administrative Services
Fund#: 252
Activity#: 47307
Activity Scope
TIF District No. 2, Round Lake Office, was established as a twenty-five year
Redevelopment District on June 29, 1989. This district is located on the northeast
quadrant of the I-35W/I694 intersection. This district was decertified on December 31,
2015.
Improvements for this dist rict were funded with the issuance of $3,100,000 General
Obligation Tax Increment Bonds on March 1, 1998. Debt Service Fund No. 325 was
created, per statute, to track repayment of the bond principal and interest. This was paid
in full in 2015. An inter-fund loan from the Permanent Revolving Fund No. 411 was
needed for the acquisition of the Indykiewicz property. This loan was repaid in full in
2004. All non-tax increment revenue was transferred out of this fund in 2013 to the PIR
Fund.
Objectives
1. None as the district has been decertified.
Issues
1. Ensure compliance with TIF laws for reporting.
Measurable Workload Data
None developed at this time.
Budget Commentary
No funds are budgeted at this time.
Budget Summary
Function: Economic Development Department: EDA TIF District #2 Round Lake Office Park
Appropriation Detail
Actual Actual Budget Amended YTD Preliminary % Change
Activity FY 2015 FY 2016 FY 2017 FY2017 5/31/2017 FY 2018 17 vs 18
Revenue
Taxes 419,838 - - - - - 0.00%
Miscellaneous 8,537 - - - - - 0.00%
Total Revenue 428,375$ -$ -$ -$ -$ -$ 0.00%
Expenditures
Other Services and Charges 1,361 - - - - - 0.00%
Capital Outlay 422,872 - - - - - 0.00%
Operating Trans 284,900 - - - - - 0.00%
Total Expenditures 709,133$ -$ -$ -$ -$ -$ 0.00%
Fund Balance - January 1 280,758 (0) (0) (0) (0) (0)
Excess Revenue Over Expenditure (280,758) - - - - -
Fund Balance - December 31 (0)$ (0)$ (0)$ (0)$ (0)$ (0)$
EDA TIF DISTRICT #3 – COTTAGE VILLAS
Function: Economic Development
Supervisor: Director of Finance and Administrative Services
Fund#: 253
Activity#: 47305
Activity Scope
TIF District No. 3, Cottage Villas Housing, was originally certified as a Housing District
on May 10, 1993. This district is located on the east side of Cleveland Avenue, just south
of County Road E-2/Cleveland Avenue intersection. This 64 unit Cottage Villas
Apartment complex is available for low-moderate income seniors. Originally, this
district was set to decertify on December 31, 2009. In December, 2009, the City Council
extended this district until December 31, 2019, to allow the City the possibility of using
these funds for other affordable housing projects within the City.
The City entered into a “pay-as-you-go” agreement with Cottage Villas of Arden Hills
Limited Partnership on February 28, 1994. The Development Agreement called for the
developer to be reimbursed for certain public development activities initially estimated at
$834,286. Repayment to the developer would only be from tax increment actually
received from the district. Payments were to be 90% of the tax increment received . The
City is no longer obligated to make payments after February 1, 2010.
Objectives
1. Utilize available funds for low to moderate income housing projects.
Issues
1. Ensure use of funds is consistent with TIF laws.
Measurable Workload Data
None developed at this time.
Budget Commentary
The City no longer has any obligations to pay the development as of February 1, 2010.
Only administrative costs have been planned for 2018.
Budget Summary
Function: Economic Development Department: EDA TIF District #3 Cottage Villas
Appropriation Detail
Actual Actual Budget Amended YTD Preliminary % Change
Activity FY 2015 FY 2016 FY 2017 FY2017 5/31/2017 FY 2018 17 vs 18
Revenues
Taxes 67,844 67,373 65,000 65,000 - 65,000 0.00%
Intergovernmental - - - - - - 0.00%
Miscellaneous 6,938 6,691 7,000 7,000 7,909 7,000 0.00%
Total Revenues 74,782$ 74,064$ 72,000$ 72,000$ 7,909$ 72,000$ 0.00%
Expenditures
Other Services and Charges 1,273 1,894 4,725 4,725 - 4,725 0.00%
Total Expenditures 1,273$ 1,894$ 4,725$ 4,725$ -$ 4,725$ 0.00%
Fund Balance - January 1 326,196 399,705 471,876 471,876 471,876 539,151
Excess Revenue Over Expenditure 73,509 72,171 67,275 67,275 7,909 67,275
Fund Balance - December 31 399,705$ 471,876$ 539,151$ 539,151$ 479,784$ 606,426$
EDA TIF DISTRICT #4 – PRESBYTERIAN HOMES
Function: Economic Development
Supervisor: Director of Finance and Administrative Services
Fund#: 254
Activity#: 47308
Activity Scope
TIF district No. 4, Presbyterian Homes, was established as a 15 year renewal and
renovation district to facilitate the redevelopment of existing senor housing units and
replacement of existing nursing home units. The first increment was received in 2014
with the districted expiring on December 31, 2029.
Objectives
1. Utilize funds for Presbyterian Homes project per the development agreement.
Issues
1. Ensure compliance with TIF laws for uses of available funds.
Measurable Workload Data
None developed at this time.
Budget Commentary
Increment was received starting in 2014 and is estimated for 2018. Payments are based
on 90% of increment received to the developer and estimated for 2018. The only other
charges budgeted are administrative charges.
Budget Summary
Function: Economic Development Department: EDA TIF District #4 Pres Homes
Appropriation Detail
Actual Actual Budget Amended YTD Preliminary % Change
Activity FY 2015 FY 2016 FY 2017 FY2017 5/31/2017 FY 2018 17 vs 18
Revenues
Taxes 146,854 170,282 150,000 150,000 - 150,000 0.00%
Intergovernmental - - - - - - 0.00%
Miscellaneous 654 (77) 650 650 1,490 700 7.69%
Total Revenues 147,508$ 170,205$ 150,650$ 150,650$ 1,490$ 150,700$ 0.03%
Expenditures
Total Materials and Supplies - - - - - - 0.00%
Other Services and Charges 133,850 155,147 139,525 139,525 - 139,525 0.00%
Capital Outlay - - - - - - 0.00%
Total Operating Expenses 133,850 155,147 139,525 139,525 - 139,525 0.00%
Total Expenditures 133,850$ 155,147$ 139,525$ 139,525$ -$ 139,525$ 0.00%
Fund Balance - January 1 4,535 18,193 33,251 33,251 33,251 44,376
Excess Revenue Over Expenditure 13,658 15,058 11,125 11,125 1,490 11,175
Fund Balance - December 31 18,193$ 33,251$ 44,376$ 44,376$ 34,741$ 55,551$
______________________________________________________________________________
City of Arden Hills
Economic Development Authority Meeting July 24, 2017
Page 1 of 2
NEW BUSINESS – 3B
MEMORANDUM
DATE: July 24, 2017
TO: EDA President and Commissioners
William S. Joynes, Sr., City Administrator
FROM: Matthew Bachler, Senior Planner
SUBJECT: Minnesota Investment Fund – EDA Revolving Loan Fund
Summary
Provide direction on whether the City should submit a request for a one-time exception on how
revolving loan fund dollars seeded from the Minnesota Investment Fund can be used by the City.
The one-time exception would allow the City to use 80 percent of the uncommitted funding in
the EDA Revolving Loan Fund as general purpose aid for any lawful expenditure. The remaining
20 percent of the RLF balance would be returned to the State’s general fund. The City must
submit a request to the Department of Employment and Economic Development by June 1, 2018.
Background
The Department of Employment and Economic Development (DEED) established the Minnesota
Investment Fund (MIF) to provide industrial, manufacturing, and technology-related businesses
with low-cost financing to help create or retain jobs. Loans are awarded to and administered by
local units of governments. To qualify for financing, a business must complete a joint application
with a local government. Generally, the program allows local governments to retain a portion of
the loan repayment to create a Revolving Loan Fund (RLF).
In 1998, Cardiac Pacemakers, Inc. received a grant through the MIF program. A $100,000
portion of this loan was repaid to the City and was used to capitalize the EDA RLF. The Cardiac
Pacemakers loan principal and interest were paid off in 2003. The balance in the RLF is now
estimated to be $166,785 as of December 31, 2016. Growth in reserves in the RLF between 2004
and 2016 was derived entirely from interest earnings.
The City used the RLF to administer a second MIF loan for Guidant in 2004. However, none of
the funds currently in the RLF are associated with this agreement as the City forgave its portion
of the Guidant loan. The City has not used the RLF to finance any business development or
expansion projects since 2004 and there are no outstanding loans that the City is awaiting
______________________________________________________________________________
City of Arden Hills
Economic Development Authority Meeting July 24, 2017
Page 2 of 2
repayment on. The use of these revolving loan funds are governed by State statute (Minn. Stat.
116J.8731) as well as guidelines adopted by the City (Attachment A).
Discussion
The 2017 omnibus jobs bill passed by the State Legislature includes language that allows more
flexibility in the use of RLF funds seeded through the MIF program. A statutory city that has
uncommitted money received from repayment of an MIF loan may choose to transfer 20 percent
of the balance of that money to the state general fund before June 30, 2018. Any local entity that
does so may use the remaining 80 percent of the uncommitted money as general purpose aid for
any lawful expenditure. Once the funds have been transferred out of the RLF account, a city
would be required to submit an accounting of the use of the funds to the Legislature by February
15, 2019.
If the EDA chooses to take advantage of this one-time exception, the amount of money that
would be made available to the City for general purpose aid would be approximately $133,428.
The remaining $33,357 balance in the RLF would be transferred to the State general fund. The
exact dollar amount would be determined at the time a request is made based on the then current
RLF balance.
RLF Balance as of
Dec. 31, 2016 (estimate)
Portion for City
General Purpose Aid
(80 Percent)
Portion Returned to
State General Fund
(20 Percent)
$166,785 $133,428 $33,357
Attachments
A. EDA Revolving Loan Fund Guidelines, adopted August 25, 1997
w
CITY OF ARDEN HILLS
ECONOMIC DEVELOPMENT AUTHORITY
REVOLVING LOAN FUND RLF GUIDELINES
As adopted by the City of Arden Hills Economic Development Authority on August 25 1997
W
INTRODUCTION
The creation of a Revolving Loan Fund RLF for the City of Arden Hills was made possible
through the Minnesota Department of Trade and Economic Development DTED Minnesota
Investment Fund MIF As a result of these MIF grants the ensuing guidelines have been
developed for the purposes of administering this fund
PURPOSE
I To create or retain permanent private sector jobs in the City of Arden Hills
2 To provide capital for business development and expansion within the City particularly
for businesses unable to obtain adequate affordable capital from the private capital
market
3 To bolster tax bases of local units of government
4 To leverage other public and private investments in order to achieve the maximum
number of jobs per city dollar
LOAN MANAGEMENT PHILOSOPHY
1 Allow for flexibility in establishing loan terms and conditions to tailor fit loans to the
needs of individual industries
2 Establish and maintain a good working relationship with local private financial
institutions
3 Arrange interest subsidies with local lenders
4 Provide collateral for private financing
5 Provide for principal reductions together with private lenders
6 Make companion or second loans which can reduce the overall interest rate
7 Give direct loans at favorable terms and interest rates
8 Guarantee loans made by private lenders
W
ELIGIBLE PROJECTS
e The following types of activities are eligible for use ofRLF funds for private for profit
businesses
1 ExistinBusiness Expansion Defined as Office Industrial related expansion including
land and building acquisitions and construction remodeling relocation equipment
acquisition and public facilities improvements
2 Business Eouioment Acouisition Defined as the purchase of additional depreciable assets
for the purpose of expanding industrial activities
3 Development of New Business Defined as the establishment Office and Industrial
businesses in all phases including land building acquisition and construction
remodeling and equipment acquisition
4 WorkinCaoital
5 Professional Fees
6 Infrastructure Improvements Necessarv to Support New or EXj landinBusinesses
CRITERIA FOR USE OF FUNDS
1 The project should leverage at least two dollars for every EDA dollar invested
2 Creates at least one White Collar job for every 5 000 in RLF money
Creates at least one High Tech Office High Pay for every 5 000 in RLF money
Creates at least one High Tech ManufacturinglHigh Pay for every 2 500 in RLF money
Retains at least one White Collar High Tech Office High Pay orHigh Tech
Manufacturing High Pay job for every 1 000 in RLF money
3 The project should include a borrower s equity contribution of 10 of the total project
cost at a minimum
4 The EDA may finance no more than 50 ofthe borrower s working capital needs
5 The EDA may finance no more than 33 of the cost of the project
6 Loan will be in a junior collateral position to the major source of project financing unless
revolving loan fund proceeds are the primary source of funds
7 The term of the loan should coincide with the term of the private portion of the loan but
may be shorter
W
8 The interest rate any payment structure are negotiable dependent on the applying
business job creating potential and tax base increasing potential for the community
9 The applicant must meet the undernTiting criteria of the private financial institution
participating in the project
10 Collateral pledged must be approved by both EDA and participating financial institutions
11 Revolving loan fund proceeds can be used to transfer ownership through the acquisition
of fixed assets unless the transfer results in a physical remodeling or expansion project
approved by the EDA
12 Applicants must provide current records in a form acceptable to the EDA
13 Applicants must provide valid bids for the work or equipment proposed
14 The EDA must have available to it projections of performance to support repay ability
with the required business plan
e