MINUTES OF THE NOVEMBER 22ND, 2010

LAKE OF THE WOODS ECONOMIC DEVELOPMENT AUTHORITY MEETING

  1. The meeting was called to order by President Mike Hovde at 6:12pm, at the Lake of the Woods County Commissioners meeting room. In attendance were, Mike Hovde, Patty Beckel, Greg Hennum, Todd Beckel, Chuck Tischart, Ken Moorman, and Rick Rone. Also in attendance were, Christie Russell, Traci Ryan, Karl Frigaard, and Mike Reed.
  1. Mission Statement:

The following mission statement was reviewed:

The LOW-EDA will respond to economic opportunities by seeking access to technical resources and leverage financial resources that serve to retain and expand all sectors of existing and new businesses that create jobs and promote and retain economic growth/stability throughout the County. The EDA understands that there may be education, training, labor force, housing and redevelopment efforts that will also be required to support these objectives in order to provide needed services, promote the highest and best use of land resources and/or prepare the County to meet the needs of business and industry today and into the future.

Motion was made by Hennum , second by Rone to approve mission statement with changes. Motion carried 7-0.

  1. Minutes:

Motion was made by P Beckel, second by T Beckel to approve minutes with changes.Changes were made to the date of expiration on the board members terms so that they all expire 12/31.

Discussion was had about publishing minutes. Todd will find out if they need to be published. All agreed they should be on county website and emailed to both papers.

  1. By Laws:

Motion was made by Rone, second by Moorman to approve by-laws with changes upon approval of the county attorney. Motion carried 7-0.Changes were made to Section 2.2 to add Treasurer as an officer of the Authority.

  1. Business Subsidy: Traci Ryan will make the following changes and present at the next meeting:
  • Section 3.16 attempts to define “subsidy” - Minnesota Statutes already define what a ‘subsidy’ is and you may want to consider just referencing statutes.
  • Section 4.01 is not as broad as we discussed at the last meeting and you may want to consider either replacing it or augmenting it with some/all of the following:
  1. But-for Test. There is a substantial likelihood that the project would not go forward without the business subsidy requested. These criteria must be supported by representations of the applicant for business subsidy.
  2. Redevelopment. The project will remove, prevent or reduce blight or other adverse conditions of the property, thereby protecting the City’s property values and the general public health, safety, and welfare.
  3. Attraction of New Business. The project will attract or retain competitive and financially strong commercial and industrial companies, which offer the potential for significant growth in employment and tax base.
  4. Highest and Best Land Use. The use of the business subsidy will encourage quality construction and promote the highest and best use of land.
  5. Needed Services. The project will provide a needed service in the community, including health care, convenience and social services which are not currently available.
  6. Unmet Housing Needs. The project will provide housing alternatives the community currently needs but are not available.
  7. Economic Feasibility. The recipient can demonstrate that it has experience and adequate financing for the project, and that the project can be completed in a timely manner.
  8. Impact on City Services and Infrastructure. The project will not significantly and adversely increase the demands for service needs in the City.
  9. Job Creation. The project will create or retain jobs which pay at least $ ____ per hour in wages and benefits. The City may take into account the special needs of small or growth-phase businesses with potential to create high paying jobs in the future.
  10. Tax Base. The project will increase the City’s tax base and generate new property tax revenue.
  • Section 5.01 B – should be clarified that a project needs to meet at least one of the criteria in Section 4 in addition to enhancing the tax base.
  • Section 5.01 K - You may want to review the wage requirement, the current wage listed in the BSC is $11,66/hour this year (changes annually). While this is a requirement for JOBZ deals, you may want to be more flexible for non-JOBZ deals.
  • Section 6.01 & 6.04 – this is a little confusing, we show criteria in Section 4 and are naming different criteria in Section 6.04 – we may want to look to consolidate this and reference it in only one section.
  • Section 7 – see attached application(s) – nice little application – I have attached one that we developed that requests a little more information – you may decide if you want to change.
  • Section 8.01 – This section requires a public hearing for all deals – Minnesota Statutes only require a hearing for assistance that exceeds $150,000 – do you want to follow this policy or statute?
  • Section 9.03 – the relocation language in subsections (a) and (b) is obsolete (also referenced in the Definitions). I would recommend deleting these sections and amending item 3 to end with”…DEED, as per MN Statutes.”

President Hovde called a meeting break at 7:09pm.

President Hovde called the meeting back to order at 7:17pm and opened the public meeting.

Traci Ryan gave a TIF presentation and answered TIF questions.

President Hovde closed the public meeting at 8:16pm and continued on with EDA agenda.

  1. Proposed Budget:

Discussion was had about what is happening with joint powers.

Consensus was to recommend to the Joint Powers that they disband and turn their duties over to the EDA effective January 1, 2011.

Discussed on where the money to run the EDA would come from.

Budget was tabled until the next meeting after the county board has met to discuss the budget.

  1. Lineman School Project:

Traci Ryan updated the board on the Lineman School project presenting the following information:

the County does not have the legal authority to enter this type of debt obligation unless it holds a referendum vote. The EDA does have the statutory authority under MN Statutes 469. In order to provide the security required by North Star, the County would have to convey the property and building to the EDA and assign the construction contracts to the EDA. The EDA would then be able to pledge the property as collateral to Northstar. The EDA would also pledge any lease payments received as collateral on the loan.
While the current Enabling Resolution is not clear on the specific authority to do so, the County did grant all EDA powers to them but limited those that they could act upon without County approval. To address this, the County Board could pass a resolution to allowing the EDA to enter this specific obligation instead of amending the Enabling Resolution.
Additional Security – the loan to the EDA cannot be guaranteed by the County because it would then look too much like a county obligation (which is not legal as indicated above). Instead, Northstar may request additional security that would replace a county guarantee with an annually appropriation agreement to include an EDA levy in the County levy and pledge that EDA levy to the loan should lease payments not be sufficient to cover the loan payments. This would be considered each year as it cannot be approved by the County beyond an annual appropriation.
Timing – North Star attorney Gerad Paul indicated that according to the timeline USDA has provided, the loan agreement must be executed within 120 days of acceptance which he is estimating will be near the end of January

Actions required:
1. North Star to revise loan documents to reflect EDA as the borrower
2. The County will need to decide who will draft the necessary documents – I am cc’ing this to the County Attorney so that she can let us know which pieces of this she would like to complete or if she would defer to Mary Frances and if county approval is required to defer
3. County to draft and execute documents necessary to covey the project site and assign the contracts to the EDA
4. Legal opinion needs to be provided to North Star on the debt obligation
5. Lease Agreement between EDA and Wadena Community College
6. County Board to pass resolution (provided by legal counsel) to authorize the EDA to incur the debt and provide for an EDA levy to be included in the County levy ONLY in the event lease revenues fall short of loan payments and that this would only be considered on an annual basis.
7. Determine time line so that we are assured of meeting USDA’s requirements (Gerad)

To see this project move forward in a timely manner, it would be helpful for the County Board to consider moving forward as proposed at its meeting November 22 and have a discussion with the County Attorney to determine who will be responsible for the legal work required.

Consensus was that the EDA would take on contracts, lease, mortgage and property for the lineman school. The county board would have to agree to this and direct legal counsel to prepare the necessary documents. The County Board will be meeting on this November 23.

With no further business at 9:57pm, the motion was made by Tischart, second by Moorman to adjourn the meeting. Motion carried 6-0 with Rone not present.

Next meeting will be January 10th 2011 at 6:00 pm.