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EDA - June 2, 2020
❑# 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV ECONOMIC DEVELOPMENT AUTHORITY MEETING June 2, 2020 6:00 p.m. Conference Rooms A & B 1. Call to Order— 6:00 p.m. 2. Approval of Minutes (May 19, 2020 Regular) 3. Review of EDA By -Laws 4. Consider COVID-19 Programs 5. Other Business 6. Adjournment Some or all members of the Andover EDA may participate in the June 2, 2020 EDA meeting by telephone or video conference rather than by being personally present at the EDA meeting place at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, MN 55304. Members of the public can physically attend, although there is very limited seating in the City Council Chambers as appropriate social distancing will be done by the Council and visitors. 1 6.61 M W 02 • k ... . NLD6 05 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: CC: FROM: SUBJECT: DATE: Economic Development Author Jim Dickinson, City Administy Michelle Harmer, Deputy City Approval of Minutes June 2, 2020 INTRODUCTION The following minutes were provided by Staff reviewed by Administration and submitted for EDA approval: May 19, 2020 Regular DISCUSSION The minutes are attached for your review. ACTION REQUIRED The EDA is requested to approve the above minutes. �Resspeectfully submitted, Michelle Harmer Deputy City Clerk Attach: Minutes 6� 2 3 4 5 6 ANDOVERECONOMICDEVELOPMENTAUTHORITYMEETING- 7 MAY 19, 2020 -MINUTES 8 9 10 The Meeting of the Andover Economic Development Authority was called to order by President 11 Julie Trade May 19, 2020, 6:00 p.m., at the Andover City Hall,,1685 Crosstown Boulevard NW, 12 Andover, Minnesota. 13 14 Present: Commissioners Sheri Bukkila, Jamie Barthel, Valerie Holthus 15 (arrived at 6:04 p.m.), Ted Butler, Kari Kafer and Greg Mueller 16 17 Absent: None 18 19 Also present: EDA Executive Director, Jim Dickinson 20 Community Development Director, Joe Janish 21 22 23 24 APPROVAL OFMINUTES 25 26 March 2, 2020, Regular Meeting: Correct as written. 27 28 Motion by Bukkila, Seconded by Barthel, to approve the minutes as written. Motion carried 4 29 ayes and 1 present (Butler). 30 31 SWEAR IN NEWL YAPPOINTED COMMISSIONERS _ 32 33 Mr. Dickinson administered the oath of office to the newly appointed Commissioners Kari Kafer 34 and Greg Mueller. 35 36 COMMERCIAL PROJECTACTIVITY 37 38 Mr. Janish updated on the following: 39 40 Upper Midwest Athletic Construction — City Council recently granted a CUP for Interim 41 Performance Standards to utilize parking stops vs. high back curb. This project has received 42 approval with the requirement that we reevaluate the screening once complete to be certain it 43 works. The City Code allows for the Council to require review of any outside ordinance so if 44 concerns exist after the completion there is room to work with the applicant to provide additional © 45 screening. 46 47 Hearth Development, 1714 Bunker Lake Boulevard— Two tenant spaces remain to be leased. 48 ® Andover Economic Development Authority Meeting Minutes — May 19, 2020 Page 2 1 Clocktower Commons, 15190 Bluebird Street — The final building pad location interest is 2 relatively low at this point. 3 4 Andover High School, 2115 Andover Boulevard — Phase 2 is underway. Footings are being 5 completed for outdoor education classrooms and new field house. 6 7 Interest in Hughes Industrial Park — Interest in this area comes and goes. A 10-acre property 8 east of the park has been on the market and City Council reviewed with the landowner desired 9 roadway connections through the parcel at a past workshop. 10 11 Andover Public Works Maintenance Building, 1900 Veterans Memorial Boulevard — Working 12 on punch list items and the move in process has been initiated. 13 14 Andover Community Center, 15200 Hanson Boulevard — Multi -purpose rink floor is in place, 15 mechanical for hockey facilities are being installed, running track is in and bleachers shop plan is 16 approved. 17 18 YMCA Expansion, 15200 Hanson Boulevard — Is under construction, which will include a new 19 gymnasium. Mechanical rough -in is complete, structure is in place, fireproofing is complete and 20 elevator shaft is in place. 21 22 Beberg Landscaping (self-storage),13535 Grouse Street — After staff completed the commercial 23 site plan review, staff was contacted that the developer desires to adjust each building by six inches 24 which requires a resubmittal of plan sets. RLS is approved by the City Council. Staff continues 25 to work with deed transfers and easements. 26 27 Legacy Christian Academy, 3037 Bunker Lake Boulevard — Construction is underway to build a 28 three-story classroom addition between the existing buildings to replace temporary classrooms. 29 30 Riverdale Church, 3210 Bunker Lake Boulevard — Continues to work on their interior remodel 31 which they hope will create an "open design" to provide a more modern appeal and allow for more 32 interaction for all ages. 33 34 Integra Dental, 13783 This Street, Suite 400 — Expansion is underway to add additional 35 workstations, the work is almost complete. 36 37 CVS Pharmacy, 3633 Bunker Lake Boulevard — CV S Health Club is complete. 38 39 Casey's, 15246 Bluebird Street — A permit was submitted for a full commercial kitchen and 40 interior remodeling. ® 41 42 Restaurants/Fast Food — Currently staff is aware of companies continuing to look for land to 43 locate to in Andover. 44 45 Margie's Kitchen and Cocktails, 13735 Round Lake Boulevard, Suite 105 — City Council Andover Economic Development Authority Meeting Minutes — May 19, 2020 Page 3 1 approved a CUP for on -sale liquor license on February 18, 2020. Permit review is complete. They 2 plan to open sometime in July. 4 TCF Site — TCF was approached by private parties about acquiring the lot from them. Staff has 5 heard from three parties who have made offers on the site. Two uses would be allowed according 6 to current zoning regulations. A third parry contacted City staff indicating they also made an offer. 7 Staff is unsure at this time if TCF has actually sold the parcel. 9 Train for Andover Station — Staff is attempting to follow up with a potential business on this 10 particular lot. This lot is owned by the Association. 11 12 Hanson Boulevard and 133rdAvenue Monument Sign —This should be underway. Some items 13 have been ordered and Demars Signs has taken the lead on this project. 14 15 71" Avenue and Bunker Lake Boulevard — Staff continues to work with Quest Development and 16 CenterPoint Energy on acquiring a roadway easement through the CenterPoint property. 17 CenterPoint has agreed to an alignment. The proposed developer is working on an easement 18 description for the property. The proposed developer is waiting for title work on the property. 19 Surveying work for boundaries have been completed according to the developer. 20 21 Holasek Property — This parcel has become relatively silent at the moment. 22 23 COVID-19 — The City has set up a page with several resources for businesses and residents on the 24 City of Andover website. 25 26 Overall Marketing — City staff continues to work with parties interested in investing in Andover 27 and marketing all commercial sites. Staff continues to work with Anoka County Regional 28 Economic Development (ACRED) on marketing of the community and Anoka County. 29 30 DISCUSS ABATEMENT AT 2557 BUNKER LAKE BOULEVARD 31 32 Mr. Janish explained the EDA owned property at 2557 Bunker Lake Boulevard is empty. The 33 original direction from the EDA has been to demo buildings as they become vacant. After an 34 asbestos inspection of the building it was determined there is asbestos material in the ceiling. 35 Staff contacted three contractors that specialize in the removal of asbestos. The cost is 36 significantly higher to scrape the ceiling verses removing the ceiling. Staff is recommending the 37 removal of the ceiling panels. By removing the ceiling panels, it does prevent the Fire and 38 Sheriff Departments from using the building for training exercises. 39 40 President Trude asked if the building can be demoed without removing the ceiling. Mr. Janish 41 indicated by not removing the asbestos and just demoing all the building materials become 42 hazardous. 43 44 The Bunker redevelopment area was discussed. 45 © Andover Economic Development Authority Meeting Minutes —May 19, 2020 Page 4 I Commissioner Kafer asked if there has to be a disclosure regarding removing the asbestos sent to 2 the surrounding houses. Mr. Janish replied no. 3 4 Motion by Holthus, Seconded by Barthel approving the removal of asbestos and demolition by 5 Envirobate for 2557 Bunker Lake Boulevard. Motion carried unanimously. DISCUSS COVID EMERGENCYLOAN FUND 9 Mr. Dickinson stated currently there is a bill in the process at the State Senate that would 10 distribute funds based on a dollar amount per resident to local communities. The City could I 1 receive anywhere from $1.6 to $2.8 million. Staff began to look at what would be qualifying 12 expenditures for the funds and developed a program to allocate funds to qualifying small 13 businesses. Mr. Dickinson indicated there will be some City costs that will be recouped from the 14 funds. The expenditures have to have been accrued during the COVID period through December 15 31, 2020. 16 17 Mr. Dickinson stated the program through application would assist small businesses upon re- 18 opening. 19 Q20 Mr. Janish presented the highlights of the program: 21 22 • Maximum amount: $10,000 or some other dollar amount determined by amount 23 given and EDA approval. 24 • Term: up to five (5) years. 25 • Rate:0% 26 • Deferment: first six (6) months of payments deferred. 27 • Forgiveness: up to 100% forgiven based on meeting set criteria. 28 • Eligible uses of funds: payroll, accounts payable, lease/mortgage payments, 29 utilities, inventory, and other business -related expenses. 30 31 Businesses who are eligible to apply for funds through COVID ELF program must meet the 32 following criteria: 33 34 • Have a physical non-residential location within the City. (In -home businesses would not 35 qualify) 36 • Employ no more than 40 full-time employees. 37 • Faced mandated full or partial closure or were deemed non -essential by the State of 38 Minnesota. 39 40 In order to apply the applicants would need to provide the following: ©41 42 • Two most recent business tax returns. 43 • Credit check authorization form. 44 0 Personal financial statement form. © Andover Economic Development Authority Meeting Minutes — May 19, 2020 Page 5 1 • Payroll reports from the I" quarter 2020 showing employment levels, details on if the 2 position is full or part-time and wage. 3 • Next three (3) months of itemized operating expenses (May, June, July). 4 • Proof of business address 5 • Articles of incorporation. 6 • SBA form 1368. 7 • CMDC debt schedule form. 8 9 President Trude indicated she feels the criteria seems intimidating for a small "mom and pop" 10 business. Mr. Janish stated the primary focus is the applicant proving they were operating as a 11 business. 12 13 Commissioner Barthel indicated he would like to see LLC added as a qualifying criteria and he 14 likes the idea of having a third parry reviewing the applications. 15 16 Mr. Dickinson reiterated this is a bill making its way through the legislative process and may be 17 altered. Staff is looking for EDA input at this time, if approved, staff will be looking for a 18 formal motion at the June 2, 2020 EDA meeting. 19 20 President Trude stated $10,000 seems like a low amount. Mr. Janish replied the amount can be 21 changed. 22 23 Commissioner Butler asked what the EDA's primary interest in this would be. Mr. Dickinson 24 replied to help small businesses get started back-up. 25 26 The EDA discussed the program and concurred to move forward with refining the program to be 27 prepared if funds are approved by the State. 28 29 ECONOMIC DEVELOPMENT STRA TEG Y DISCUSSION 30 31 Mr. Dickinson stated with new commissioners on the EDA he thought it would be a good time to 32 discuss EDA strategies over the course of the next 1-2 years. Discussion points on where the 33 EDA would like to see staff spend their time on EDA items. Staff has put together a strategy list: 34 35 • Strategy 1: Define the role of the Andover EDA 36 • Strategy 2: Market the City of Andover 37 • Strategy 3: Public Inventory/Assets 38 • Strategy 4: Private Inventory/Assets 39 • Strategy 5: Tools 40 ©41 Commissioner Bukkila asked about exploring a program that could help older homes in the City 42 with exterior upgrades. 43 44 President Trude indicated Coon Rapids has a similar program in place. Mr. Dickinson said there Andover Economic Development Authority Meeting Minutes — May 19, 2020 Page 6 1 are some programs that offer housing rehab loans. President Trude suggested adding that to the 2 list. 3 4 Commissioner Butler suggested prioritizing the projects, such as the redevelopment area on 5 Bunker Lake Boulevard and getting that done first. 6 7 Commissioner Barthel agreed to add both those items to the strategy list. 8 9 Commissioner Mueller asked when there has been a formal review of the EDA By -Laws. Mr. 10 Dickinson answered prior to 2004. 11 12 Commissioner Mueller suggested reviewing the By -Laws since there could be some changes that 13 need to be made since the last review. 14 15 Commissioner Kafer agreed with reviewing the By -Laws and prioritizing the redevelopment 16 area. 17 18 OTHER BUSINESS 19 20 There was none. 21 22 ADJOURNMENT 23 24 Motion by Barthel, Seconded by Bukkila to adjourn. Motion carried unanimously. The meeting 25 adjourned at 6:57 p.m. 26 27 Respectfully submitted, 28 29 Michelle Harmer, Recording Secretary 30 M A• C I T Y NLD6 A © CC: Jim Dickinson, Executive Dir FROM: Joe Janish, Community Develop nt 'rector SUBJECT: Review of EDA By -Laws DATE: June 2, 2020 INTRODUCTION During the May 19, 2020 Andover EDA meeting staff was asked to provide a copy of the By -Laws for the EDA for review. Attached members will find the By -Laws adopted in 1994. As you will see the By -Laws are general in nature and provide the inner workings of the Andover EDA, but do not a lot of detail. Other items that reflect the By -Laws include the general statement on the City of Andover Website for the Economic Development page: The Economic Development Department is responsible for a wide range of activities + designed to meet the city's needs for a diversified and thriving economic base. The goals of ® the Department are: • Stimulate business growth in Andover • Market Andover as a location for business • Promote thriving commercial and industrial districts • Promote a real estate market that offers a diverse array of options for purchasing and leasing of business properties • Maintain a supportive business climate • Stay connected with the existing business community As noted this item was requested by the Andover EDA and staff will be available for any questions that members may have. Attached: • By -Laws of the Andover Economic Development Authority DATED April, 1994. © 0 MN Statutes related to Economic Development Authorities © BY-LAWS OF THE ANDOVER ECONOMIC DEVELOPMENT AUTHORITY DATED: APRIL 5, 1994 1. The Authority Section 1.1 Name of the Authority. The name of the Authority shall be the Andover Economic Development Authority (hereinafter, the "Authority"), and its governing body shall be called the Board of Commissioners (hereinafter, the "Board"). Section 1.2 Office. The principal office of the Authority shall be the Andover City Hall. Section 1.3 Seal. The Authority shall have an official seal. 2. Organization Section 2.1 Officers. The officers of the Authority shall consist of a President, a Vice president, a Secretary, a Treasurer, and an Assistant Treasurer. The President, the Vice president and the Treasurer shall be members of the Board and shall be elected annually, and no Commissioner may serve as President and Vice President at the same time. The offices of Secretary and Assistant Treasurer need not be held by a Commissioner. Section 2.2 President. The President shall preside at all meetings of the Board. Section 2.3 Vice President. The Vice President shall preside at any meeting of the Board in the absence of the President and may exercise all powers and perform all responsibilities of the President if the President cannot exercise or perform the same due to absence or other inability. Section 2.4 President Pro Tem. In the event of the absence or inability of the President and the Vice President at any meeting, the Board may appoint any remaining Commissioner as President Pro Tem to preside at such meeting. Section 2.5 Treasurer. The Treasurer shall receive and be responsible for Authority money, shall disburse Authority money by check only, keep an account of all Authority receipts and disbursements and the nature and purpose relating thereto, shall file the authority's financial statement with the Secretary at least once a year as set by the Authority and be responsible for the acts of the Assistant Treasurer. Section 2.6 Assistant Treasurer. The Assistant Treasurer shall have all the powers and duties of the Treasurer if the Treasurer is absent or disabled. Section 2.7 Secretary. The Secretary shall keep or cause to be kept minutes of all meetings of the Board and shall maintain or cause to be maintained all records of the Authority. The Secretary shall also have such additional duties and responsibilities as the Board may from time to time by resolution prescribe. Section 2.8 Executive Director. The Executive Director shall be the Administrator of the City of Andover, shall be the chief appointed executive officer of the authority and shall have such additional responsibilities and authority as the Board may from time to time by resolution prescribe. S \: J X Procedures of Board of Commissioners Section 3.1 Annual Meeting. The annual meeting of the Board shall be held on the first regular City Council meeting date, immediately following the City Council meeting, of the month of January of each year. Section 3.2 Regular or Special Meetings. Regular or special meetings of the Board may be called by the President or, in the event of the President's absence or inability, by the Vice President at any time, upon three days prior notice to all Commissioners and the executive Director. Upon the same notice, regular or special meetings of the Board may also be called by any two Commissioners. The Executive Director shall post notice of any regular or special meeting in the principal office of the Authority no less than three days prior to such regular or special meeting. Section 3.3 Quorum. A quorum of the seven member Board shall consist of four Commissioners. In the absence of a quorum, no official action may be taken by, on behalf of, or in the name of the Board or the Authority. Section 3.4 Adoption of Resolutions. Resolutions of the Board shall be deemed adopted if approved by not less than four Commissioners. Resolutions may but need not be read aloud prior to vote taken thereon. Section 3.5 Rules of Order. The meeting of the Board shall be governed by the most recent edition of Robert's Rule of Order. 4. Miscellaneous Section 4.1 Fiscal Year. The fiscal year of the Authority shall be the calendar year. Section 4.2 Treasurer's Bond. The Treasurer shall give bond to the state conditioned for the faithful discharge of official duties. The bond must be approved as to form and surety by the Authority and filed with the Secretary and must be for twice the amount of money likely to be on hand at any time as determined at least annually by the Authority, provided, however, that said bond must not exceed $300,000. Section 4.3 Checks. An Authority check must be signed by the Treasurer and Assistant Treasurer. The check must state the name of the payee and the nature for which the check was issued. Section 4.4 Financial Statement. The Authority shall examine the financial statement together with the Treasurer's vouchers, which financial statement shall disclose all receipts and disbursements, their nature, money on hand and the purposes to which it shall be applied, the Authority's credits and assets and its outstanding liabilities. If the Authority finds the financial statement and Treasurer's vouchers to be correct, it shall approve them by resolution. Section 4.5 Report to City. The Authority shall annually make a report to the City Council giving a detailed account of its activities and of its receipts and expenditures for the preceding calendar year. © Section 4.6 Budget to City. The Authority shall annually send its budget to the City Council which budget includes a written estimate of the amount of money needed by the Authority from the City in order for the Authority to conduct business during the upcoming fiscal year. © Section 4.7 Employes. The Authority may employ technical experts and agents and other employees as it may require and determine their duties, qualifications and compensation. Section 4.8 Services. The Authority may contract for the services of consultants, agents, public accountants and others as needed to perform its duties and to exercise its powers. The authority may also use the services of the City Attorney or hire a general or special counsel, as determined by the Authority. Section 4.9 Supplies Purchasing Facilities and Services. The Authority may purchase the supplies and materials it needs. The Authority may use the facilities of the City's purchasing department. The City may furnish offices, structures and space, stenographic, clerical, engineering and other assistance to the Authority. Section 4.10 Execution of Contracts. All contracts, notes and other written agreements or instruments to which the Authority is a part or signatory or by which the Authority may be bound shall be executed by the President and the Executive Director or by such other Commissioners or Officers of the Authority as the Board may by resolution prescribe. Section 4.11 Amendment of By -Laws. These By -Laws may be amended by the Board by majority vote of all the Commissioners, provided that any such proposed amendment shall first have been delivered to each Commissioner at least three days prior to the meeting at which such amendment is considered. Section 4.12 Tax Increment Expenditures. The expenditure of any tax increment generated © from Tax increment Financing District No. 1-1 or Tax Increment Financing District No. 1-2 shall be approved (1) by a four -fifth (4/5) vote of the Board if the expenditure is for tax increment eligible improvements located within the area designated on the attached map; or, (2) by a majority vote of the Board if the expenditure is for tax increment eligible improvements located within the area designated on the attached map. EADI MINNESOTA STATUTES 2019 2 • 469.0721 CANNON FALLS; REDWOOD FALLS; PORT 469.108 SPECIAL LAW; OPTIONAL USE. AUTHORITY. 469.1081 LIABLE IN CONTRACT OR TORT. 469.0722 LIMITATION OF POWERS. 469.1082 COUNTY ECONOMICDEVELOPMENT AUTHORITY 469.0723 PROCEDURAL REQUIREMENT. OR HOUSING AND REDEVELOPMENT AUTHORITY 469.0724 GENERAL OBLIGATION BONDS. WITH ECONOMIC DEVELOPMENT POWERS. AREA REDEVELOPMENT 469.0725 NAME. 469.0726 REMOVAL OF COMMISSIONERS FOR CAUSE. 469.109 PURPOSE. 469.073 DETROIT LAKES. 469.110 DEFINITIONS. 469.111 LOCAL OR AREA AGENCIES; ESTABLISHMENT. 469.074 DULUTH. 469.075 FERGUS FALLS. 469.112 MUNICIPALITIES MAY JOIN TOGETHER. 469.076 GRANITE FALLS. 469.113 CONFLICT OF INTEREST. 469.077 HASTINGS. 469.114 AGENCIES; MEETINGS, EXPENSES. 469.0772 KOOCHICHING COUNTY; PORT AUTHORITY. 469.115 POWERS OF AGENCIES. 469.0775 MANKATO; PORT AUTHORITY. 469.116 BOND ISSUE FOR REDEVELOPMENT PURPOSES. 469.078 MINNEAPOLIS. 469.117 EMINENT DOMAIN PROCEEDINGS. 469.079 NORTH MANKATO. 469.118 LOANS TO REDEVELOPMENT AGENCIES. 469.080 PLYMOUTH. 469.119 LOAN APPLICATION REQUIREMENTS. 469.081 RFD WING. 469.122 LIMITATION OF POWERS. 469.0813 ROSEMOUNT; PORT AUTHORITY. 469.123 EXAMINATION AND AUDIT OF LOCAL AGENCY. 469.082 ROSEVILLE; PORT AUTHORITY. CITY DEVELOPMENT DISTRICTS 469.083 ST. CLOUD. 469.124 PURPOSE. 469.084 ST. PAUL. 469.125 DEFINITIONS. 469.085 SOUTH SAINT PAUL. 469.126 AUTHORITY GRANTED. 469.0855 WABASHA. 469.127 TAX STATUS. 469.0856 ORTONVILLE. 469.128 GRANTS. • 469.086 WADENA. 469.130 MAINTENANCE AND OPERATION. 469.087 WARROAD. 469.131 ADMINISTRATION. 469.088 WHITE BEAR LAKE. 469.132 ADVISORY BOARD. 469.089 WINONA. 469.133 RELOCATION. ECONOMIC DEVELOPMENT AUTHORITIES MINED UNDERGROUND SPACE DEVELOPMENT 469.090 DEFINITIONS. 469.141 REGULATION TO PROTECT MINED UNDERGROUND SPACE. 469.091 ECONOMIC DEVELOPMENT AUTHORITY. RURAL DEVELOPMENT FINANCING AUTHORITIES 469.092 LIMIT OF POWERS. 469.142 PURPOSES. 469.093 PROCEDURAL REQUIREMENT. 469.143 DEFINITIONS. 469.094 TRANSFER OF AUTHORITY. 469.095 COMMISSIONERS; APPOINTMENT, TERMS, 469.144 ESTABLISHMENT; BOARD. VACANCIES, PAY, REMOVAL. 469.145 FINANCING PROJECTS AND FACILITIES. 469.096 OFFICERS; DUTIES; ORGANIZATIONAL MATTERS. 469.146 ISSUANCE OF BONDS AND NOTES. 469.097 EMPLOYEES; SERVICES; SUPPLIES. 469.147 PROCESSING AGREEMENT. 469.098 CONFLICT OF INTEREST. 469.148 APPLICATIONS FOR LOAN GUARANTIES. 469.099 DEPOSITORIES; DEFAULT; COLLATERAL. 469.149 AGREEMENTS FOR RESERVATION OF TAX INCREMENTS. 469.100 OBLIGATIONS. 469.151 STATE AND COUNTY NOT LIABLE ON BONDS. 469.101 POWERS. MUNICIPAL INDUSTRIAL. DEVELOPMENT 469.102 GENERAL OBLIGATION BONDS. 469.103 REVENUE BONDS; PLEDGE; COVENANTS. 469.152 PURPOSES. 469.104 SECTIONS THAT APPLY IF FEDERAL LIMIT 469.153 DEFINITIONS. APPLIES. 469.154 DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT DUTIES. 469.105 SALE OF PROPERTY. 469.106 ADVANCES BY AUTHORITY. 469.155 POWERS. 411,151 AUTHORIZATION OF PROJECTS AND BONDS. 469.101 CITY MAY LEVY TAXES FOR ECONOMIC • DEVELOPMENT AUTHORITY. 469.157 DETERMINATION OF COST OF PROJECT. Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.089 MINNESOTA STATUTES 2019 80 © Subd. 12. Meetings by telephone or other electronic means. The port authority may conduct meetings as provided by section 13D.015. History: 1987 c 291 s 90; 1 Sp2019 c 7 art 2 s 5 ECONOMIC DEVELOPMENT AUTHORITIES 469.090 DEFINITIONS. Subdivision 1. Generally. In sections 469.090 to 469.108, the terms defined in this section have the meanings given them herein, unless the context indicates a different meaning. Subd. 2. Authority. "Authority" means an economic development authority. Subd. 3. City. "City" means a home rule charter or statutory city. Subd. 4. Development. 'Development" includes redevelopment, and "developing" includes redeveloping. Subd. 5. Cost of redevelopment. "Cost of redevelopment" means, with respect to an economic development district project, the cost of: (1) acquiring property, whether by purchase, lease, condemnation, or otherwise; (2) demolishing or removing structures or other improvements on acquired properties; (3) correcting soil deficiencies necessary to develop or use the property for an appropriate use as © determined by the authority; (4) constructing or installing public improvements, including streets, roads, and utilities; (5) providing relocation benefits to the occupants of acquired properties; (6) planning, engineering, legal, and other services necessary to carry out the functions listed in clauses (1) to (5); and (7) the allocated administrative expenses of the authority for the project. History: 1987 c 291 s 91 469.091 ECONOMIC DEVELOPMENT AUTHORITY. Subdivision 1. Establishment. A city may, by adopting an enabling resolution in compliance with the procedural requirements of section 469.093, establish an economic development authority that, subject to section 469.092, has the powers contained in sections 469.090 to 469.108 and the powers of a housing and redevelopment authority under sections 469.001 to 469.047 or other law, and of a city under sections 469.124 to 469.133 or other law. If the economic development authority exercises the powers of a housing and redevelopment authority contained in sections 469.001 to 469.047 or other law, the city shall exercise the powers relating to a housing and redevelopment authority granted to a city by sections 469.001 to 469.047 or other law. Subd. 2. Characteristics. An economic development authority is a public body corporate and politic and a political subdivision of the state with the right to sue and be sued in its own name. An authority carries out an essential governmental function when it exercises its power, but the authority is not immune from © liability because of this. Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 81 MINNESOTA STATUTES 2019 469.092 Subd. 3. Unpaid officers, directors, and agents; liability. Section 317A.257 applies to an economic • development authority or to a nonprofit corporation exercising the powers of an economic development authority. History: 1987 c 291 s 92; 1994 c 623 art 5 s 2; 2013 c 125 art I s 107 469.092 LIMIT OF POWERS. Subdivision 1. Resolution. The enabling resolution may impose the following limits upon the actions of the authority: (1) that the authority must not exercise any specified powers contained in sections 469.001 to 469.047, 469.090 to 469.108, and 469.124 to 469.133 or that the authority must not exercise any powers without the prior approval of the city council; (2) that, except when previously pledged by the authority, the city council may by resolution require the authority to transfer any portion of the reserves generated by activities of the authority that the city council determines is not necessary for the successful operation of the authority to the debt service fund of the city, to be used solely to reduce tax levies for bonded indebtedness of the city; (3) that the sale of all bonds or obligations issued by the authority be approved by the city council before issuance; (4) that the authority follow the budget process for city departments as provided by the city and as implemented by the city council and mayor; (5) that all official actions of the authority must be consistent with the adopted comprehensive plan of • the city, and any official controls implementing the comprehensive plan; (6) that the authority submit all planned activities for influencing the action of any other governmental agency, subdivision, or body to the city council for approval; (7) that the authority submit its administrative structure and management practices to the city council for approval; and (8) any other limitation or control established by the city council by the enabling resolution. Subd. 2. Modification of resolution. The enabling resolution may be modified at any time, subject to subdivision 5, and provided that any modification is made in accordance with this section. Subd. 3. Report on resolution. Without limiting the right of the authority to petition the city council at any time, each year, within 60 days of the anniversary date of the first adoption of the enabling resolution, the authority shall submit to the city council a report stating whether and how the enabling resolution should be modified. Within 30 days of receipt of the recommendation, the city council shall review the enabling resolution, consider the recommendations of the authority, and make any modification it considers appropriate. Modifications must be made in accordance with the procedural requirements of section 469.093. Subd. 4. Compliance. The city council's determination that the authority has complied with the limitations imposed under this section is conclusive. Subd. 5. Limits; security. Limits imposed under this section must not be applied in a manner that impairs the security of any bonds issued or contracts executed before the limit is imposed. The city council must • Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.092 MINNESOTA STATUTES 2019 82 © not modify any limit in effect at the time any bonds or obligations are issued or contracts executed to the detriment of the holder of the bonds or obligations or any contracting parry. History: 1987 c 291 s 93; 2013 c 125 art 1 s 107 469.093 PROCEDURAL REQUIREMENT. Subdivision 1. Enabling resolution. The creation of an authority by a city must be by written resolution referred to as the enabling resolution. Before adopting the enabling resolution, the city council shall conduct a public hearing. Notice of the time and place of hearing, a statement of the purpose of the hearing, and a summary of the resolution must be published in a newspaper of general circulation within the city once a week for two consecutive weeks. The first publication must appear not more than 30 days from the date of the public hearing. Subd. 2. Modifications. All modifications to the enabling resolution must be by written resolution and must be adopted after notice is given and a public hearing conducted as required for the original adoption of the enabling resolution. History: 1987 c 291 s 94 469.094 TRANSFER OF AUTHORITY. Subdivision 1. Economic development, housing, redevelopment powers. The city may, by ordinance, divide the economic development, housing, and redevelopment powers granted under sections 469.001 to 469.047 and 469.090 to 469.108 between the economic development authority and any other authority or © commission established under statute or city charter for economic development, housing, or redevelopment as provided in subdivision 2. Subd. 2. Project control, authority, operation. The city may, by resolution, transfer the control, authority, and operation of any project as defined in section 469.174, subdivision 8, or any other program or project authorized by sections 469.001 to 469.047 or 469.124 to 469.133 located within the city, from the governmental agency or subdivision that established the project to the economic development authority. The city council may also require acceptance of control, authority, and operation of the project by the economic development authority. The economic development authority may exercise all of the powers that the governmental unit establishing the project could exercise with respect to the project. When a project or program is transferred to the economic development authority, the authority shall covenant and pledge to perform the terms, conditions, and covenants of the bond indenture or other agreements executed for the security of any bonds issued by the governmental subdivision that initiated the project or program. The economic development authority may exercise all of the powers necessary to perform the terms, conditions, and covenants of any indenture or other agreements executed for the security of the bonds and shall become obligated on the bonds when the project or program is transferred as provided in this subdivision. If the city transfers a housing project or a housing development project to the economic development authority, the city must transfer all housing development and management powers relating to that specific project to the authority. Subd. 3. Transfer of personnel. Notwithstanding any other law or charter provision to the contrary, the city council may, by resolution, place any employees of the housing and redevelopment authority under the direction, supervision, or control of the economic development authority. The placement of any employees ® under the direction, supervision, or control of the economic development authority does not affect the rights Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 83 MINNESOTA STATUTES 2019 469.095 of any employees of the housing and redevelopment authority, including any rights existing under a collective • bargaining agreement or fringe benefit plan. The employees shall become employees of the economic development authority. History: 1987 c 291 s 95; 1990 c 532 s 11,12; 2013 c 125 art I s 107 469.095 COMMISSIONERS; APPOINTMENT, TERMS, VACANCIES, PAY, REMOVAL. Subdivision 1. Commissioners. Except as provided in subdivision 2, paragraph (d), an economic development authority shall consist of either three, five, or seven commissioners who shall be appointed after the enabling resolution provided for in section 469.093 becomes effective. The resolution must indicate the number of commissioners constituting the authority. Subd. 2. Appointment, terms; vacancies. (a) Three -member authority: the commissioners constituting a three -member authority, one of whom must be a member of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of two, four, and six years, respectively. Thereafter all commissioners shall be appointed for six -year terms. (b) Five -member authority: the commissioners constituting a five -member authority, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of two, three, four, five, and six years respectively. Thereafter all commissioners shall be appointed for six -year terms. (c) Seven -member authority: the commissioners constituting a seven -member authority, two of whom must be members of the city council, shall be appointed by the mayor with the approval of the city council. Those initially appointed shall be appointed for terms of one, two, three, four, and five years respectively . and two members for six years. Thereafter all commissioners shall be appointed for six -year terms. (d) The enabling resolution may provide that the members of the city council shall serve as the commissioners. (e) The enabling resolution may provide for the appointment of members of the city council in excess of the number required in paragraphs (a), (b), and (c). (f) A vacancy is created in the membership of an authority when a city council member of the authority ends council membership. A vacancy for this or another reason must be filled for the balance of the unexpired term, in the manner in which the original appointment was made. The city council may set the term of the commissioners who are members of the city council to coincide with their term of office as members of the city council. Subd. 3. Increase in commission members. An authority may be increased from three to five or seven members, or from five to seven members by a resolution adopted by the city council following the procedure provided for modifying the enabling resolution in section 469.093. Subd. 4. Compensation and reimbursement. A commissioner, including the president, shall be paid for attending each regular or special meeting of the authority in an amount to be determined by the city council. In addition to receiving pay for meetings, the commissioners may be reimbursed for actual expenses incurred in doing official business of the authority. All money paid for compensation or reimbursement must be paid out of the authority's budget. Subd. 5. Removal for cause. A commissioner may be removed by the city council for inefficiency, neglect of duty, or misconduct in office. A commissioner shall be removed only after a hearing. A copy of • Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.095 MINNESOTA STATUTES 2019 84 Qthe charges must be given to the commissioner at least ten days before the hearing. The commissioner must be given an opportunity to be heard in person or by counsel at the hearing. When written charges have been submitted against a commissioner, the city council may temporarily suspend the commissioner. If the city council frids that those charges have not been substantiated, the commissioner shall be immediately reinstated. If a commissioner is removed, a record of the proceedings, together with the charges and findings, shall be filed in the office of the city clerk. History: 1987 c 291 s 96 469.096 OFFICERS; DUTIES; ORGANIZATIONAL MATTERS. Subdivision 1. Bylaws, rules, seal. An authority may adopt bylaws and rules of procedure and shall adopt an official seal. Subd. 2. Officers. An authority shall elect a president, a vice-president, a treasurer, a secretary, and an assistant treasurer. The authority shall elect the president, treasurer, and secretary annually. A commissioner must not serve as president and vice-president at the same time. The other offices may be held by the same commissioner. The offices of secretary and assistant treasurer need not be held by a commissioner. Subd. 3. Duties and powers. The officers have the usual duties and powers of their offices. They may be given other duties and powers by the authority. Subd. 4. Treasurer's duties. The treasurer: (1) shall receive and is responsible for authority money; © (2) is responsible for the acts of the assistant treasurer; (3) shall disburse authority money by check only; (4) shall keep an account of the source of all receipts, and the nature, purpose, and authority of all disbursements; and (5) shall file the authority's detailed financial statement with its secretary at least once a year at times set by the authority. Subd. 5. Assistant treasurer. The assistant treasurer has the powers and duties of the treasurer if the treasurer is absent or disabled. Subd. 6. Treasurer's bond. The treasurer shall give bond to the state conditioned for the faithful discharge of official duties. The bond must be approved as to form and surety by the authority and filed with the secretary. The bond must be for twice the amount of money likely to be on hand at any one time, as determined at least annually by the authority provided that the bond must not exceed $300,000. Subd. 7. Public money. Authority money is public money. Subd. 8. Checks. An authority check must be signed by the treasurer and one other officer named by the authority in a resolution. The check must state the name of the payee and the nature of the claim that the check is issued for. Subd. 9. Financial statement. The authority's detailed financial statement must show all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the authority's credits and assets, and its outstanding liabilities in a form required for the city's financial ® statements. The authority shall examine the statement together with the treasurer's vouchers. If the authority Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 85 MINNESOTA STATUTES 2019 469.098 finds that the statement and vouchers are correct, it shall approve them by resolution and enter the resolution • in its records. History: 1987 c 291 s 97 469.097 EMPLOYEES; SERVICES; SUPPLIES. Subdivision 1. Employees. An economic development authority may employ an executive director, a chief engineer, other technical experts and agents, and other employees as it may require, and determine their duties, qualifications, and compensation. Subd. 2. Contract for services. The authority may contract for the services of consultants, agents, public accountants, and other persons needed to perform its duties and exercise its powers. Subd. 3. Legal services. The authority may use the services of the city attorney or hire a general counsel for its legal needs. The city attorney or general counsel, as determined by the authority, is its chief legal advisor. Subd. 4. Supplies. The authority may purchase the supplies and materials it needs to carry out sections 469.090 to 469.108. Subd. 5. City purchasing. An authority may use the facilities of its city's purchasing department in connection with construction work and to purchase equipment, supplies, or materials. Subd. 6. City facilities, services. A city may furnish offices, structures and space, and stenographic, clerical, engineering, or other assistance to its authority. Subd. 7. Delegation power. The authority may delegate to one or more of its agents or employees • powers or duties as it may deem proper. History: 1987 c 291 s 98 469.098 CONFLICT OF INTEREST. Subdivision 1. Disclosure; criminal penalty. (a) Before taking an action or making a decision which could substantially affect the commissioner's or an employee's financial interests or those of an organization with which the commissioner or an employee is associated, a commissioner or employee of an authority shall: (1) prepare a written statement describing the matter requiring action or decision and the nature of the potential conflict of interest; and (2) submit the statement to the commissioners of the authority. (b) The disclosure under paragraph (a) shall be entered upon the minutes of the authority at its next meeting. The disclosure statement must be submitted no later than one week after the employee or commissioner becomes aware of the potential conflict of interest. However, no disclosure statement is required if the effect on the commissioner or employee of the decision or act will be no greater than on other members of the business, profession, or occupation or if the effect on the organization with which the commissioner or employee is affiliated is indirect, remote, and insubstantial. (c) A potential conflict of interest is present if the commissioner or employee knows or has reason to know that the organization with which the commissioner or employee is affiliated is, or is reasonably likely to become, a participant in a project or development which will be affected by the action or decision. • Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.098 MINNESOTA STATUTES 2019 86 © (d) Any individual who knowingly fails to submit a statement required by this subdivision or submits a statement which the individual knows contains false information or omits required information is guilty of a misdemeanor. Subd. 2. Effect of disclosure; criminal penalty. (a) If an employee has a potential conflict of interest, the employee's superior shall immediately assign the matter to another employee who does not have a potential conflict of interest. (b) A commissioner who has a potential conflict of interest shall not attempt to influence an employee in any matter related to the action or decision in question, shall not take part in the action or decision, and shall not be counted toward a quorum during the portion of any meeting of the authority in which the action or decision is to be considered. (c) Any individual who knowingly violates this subdivision is guilty of a misdemeanor. Subd. 3. Conflicts forbidden; criminal penalty. A commissioner or employee of an authority who knowingly takes part in any manner in making any sale, lease, or contract in the commissioner's or employee's official capacity in which the commissioner or employee has a personal financial interest is guilty of a misdemeanor. Subd. 4. Agent or attorney. For one year after termination of a position as a commissioner or employee of an authority, no former commissioner or former employee of an authority shall appear personally before any court or governmental department or agency as agent or attorney for anyone other than the authority in connection with any proceeding, application, request for ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which the authority is substantially © interested, and with respect to which the commissioner or employee took any action or made any decision as a commissioner or employee of the authority at any time within a period of one year prior to the termination of that position. Subd. 5. Limitations. With respect to each program established by the authority to provide financial assistance or financing for real property other than rental assistance programs, an employee or commissioner may not receive such financial assistance or financing more than once. Subd. 6. Injunction. The county attorney may seek an injunction in the district court to enforce the provisions of this section. Subd. 7. Exceptions. The exceptions in section 471.88 apply to this section. History: 1987 c 291 s 99; 2008 c 197 s I 469.099 DEPOSITORIES; DEFAULT; COLLATERAL. Subdivision 1. Named; bond. Every two years an authority shall name national or state banks within the state as depositories. Before acting as a depository, a named bank shall give the authority a bond approved as to form and surety by the authority. The bond must be conditioned for the safekeeping and prompt repayment of deposits. The amount of bond must be at least equal to the maximum sums expected to be deposited at any one time. Subd. 2. One bank account. An authority may deposit all its money from any source in one bank account. Subd. 3. Default; collateral. When authority funds are deposited by the treasurer in a bonded depository, the treasurer and the surety on the treasurer's official bond are exempt from liability for the loss of the Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 87 MINNESOTA STATUTES 2019 469.101 deposits because of the failure, bankruptcy, or other act or default of the depository. However, an authority • may accept assignments of collateral from its depository to secure deposits just as assignments of collateral are permitted by law to secure deposits of the authority's city. History: 1987 c 291 s 100 469.100 OBLIGATIONS. Subdivision 1. Taxes and assessments prohibited. An authority must not levy a tax or special assessment, except as otherwise provided in sections 469.090 to 469.108, pledge the credit of the state or the state's municipal corporations or other subdivisions, or incur an obligation enforceable on property not owned by the authority. Subd. 2. Budget to city. Annually, at a time fixed by charter, resolution, or ordinance of the city, an authority shall send its budget to its city's council. The budget must include a detailed written estimate of the amount of money that the authority expects to need from the city to do authority business during the next fiscal year. The needed amount is what is needed in excess of any expected receipts from other sources. Subd. 3. Fiscal year. The fiscal year of the authority must be the same as the fiscal year of its city. Subd. 4. Report to city. Annually, at a time and in a form fixed by the city council, the authority shall make a written report to the council giving a detailed account of its activities and of its receipts and expenditures during the preceding calendar year, together with additional matters and recommendations it deems advisable for the economic development of the city. Subd. 5. Audits. The financial statements of the authority must be prepared, audited, filed, and published • or posted in the manner required for the financial statements of the city that established the authority. The financial statements must permit comparison and reconciliation with the city's accounts and financial reports. The report must be filed with the state auditor by June 30 of each year. The auditor shall review the report and may accept it or, in the public interest, audit the books of the authority. Subd. 6. Compliance examinations. At the request of the city or upon the auditor's initiative, the state auditor may make a legal compliance examination of the authority for that city. Each authority examined must pay the total cost of the examination, including the salaries paid to the examiners while actually engaged in making the examination. The state auditor may bill monthly or at the completion of the audit. All collections received must be deposited in the general fund. History: 1987 c 291 s 101; 1989 c 335 art 4 s 88 469.101 POWERS. Subdivision 1. Establishment. An economic development authority may create and define the boundaries of economic development districts at any place or places within the city, except that the district boundaries must be contiguous, and may use the powers granted in sections 469.090 to 469.108 to carry out its purposes. First the authority must hold a public hearing on the matter. At least ten days before the hearing, the authority shall publish notice of the hearing in a newspaper of general circulation in the city. Also, the authority shall find that an economic development district is proper and desirable to establish and develop within the city. Subd. 2. Acquire property. The economic development authority may acquire by lease, purchase, gift, devise, or condemnation proceedings the needed right, title, and interest in property to create economic development districts. It shall pay for the property out of money it receives under sections 469.090 to 469.108. It may hold and dispose of the property subject to the limits and conditions in sections 469.090 to 469.108. • Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.101 MINNESOTA STATUTES 2019 88 © The title to property acquired by condemnation or purchase must be in fee simple, absolute. The authority may accept an interest in property acquired in another way subject to any condition of the grantor or donor. The condition must be consistent with the proper use of the property under sections 469.090 to 469.108. Property acquired, owned, leased, controlled, used, or occupied by the authority for any of the purposes of this section is for public governmental and municipal purposes and is exempt from taxation by the state or by its political subdivisions, except to the extent that the property is subject to the sales and use tax under chapter 297A. The exemption applies only while the authority holds property for its own purpose. The exemption is subject to the provisions of section 272.02, subdivision 39. When the property is sold it becomes subject to taxation. Subd. 3. Options. The economic development authority may sign options to purchase, sell, or lease property. Subd. 4. Eminent domain. The economic development authority may exercise the power of eminent domain under chapter 117, or under its city's charter to acquire property it is authorized to acquire by condemnation. The authority may acquire in this way property acquired by its owner by eminent domain or property already devoted to a public use only if its city's council approves. The authority may take possession of property to be condemned after it files a petition in condemnation proceedings describing the property. The authority may abandon the condemnation before taking possession. Subd. 5. Contracts. The economic development authority may make contracts for the purpose of economic development within the powers given it in sections 469.090 to 469.108. The authority may contract or arrange with the federal government, or any of its departments, with persons, public corporations, the © state, or any of its political subdivisions, commissions, or agencies, for separate or joint action, on any matter related to using the authority's powers or performing its duties. The authority may contract to purchase and sell real and personal property. An obligation or expense must not be incurred unless existing appropriations together with the reasonably expected revenue of the authority from other sources are sufficient to discharge the obligation or pay the expense when due. The state and its municipal subdivisions are not liable on the obligations. Subd. 5a. Construction contracts. For all contracts for construction, alteration, repair, or maintenance work, the authority may award contracts to the vendor offering the best value, and "best value" shall be defined and applied as set forth in section 16C.28, subdivisions 1, paragraph (a), clause (2), and paragraph (c), and lb. Alternatively, the authority may award all contracts for construction, alteration, repair, or maintenance work to the lowest responsible bidder, reserving the right to reject any or all bids. Subd. 6. Limited partner. The economic development authority may be a limited partner in a partnership whose purpose is consistent with the authority's purpose. Subd. 7. Rights; easements. The economic development authority may acquire rights or an easement for a term of years or perpetually for development of an economic development district. Subd. 8. Supplies; materials. The economic development authority may buy the supplies and materials it needs to carry out this section. Subd. 9. Receive public property. The economic development authority may accept land, money, or other assistance, whether by gift, loan or otherwise, in any form from the federal or state government, or an agency of either, or a local subdivision of state government to carry out sections 469.090 to 469.108 and to © acquire and develop an economic development district and its facilities under this section. Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 89 MINNESOTA STATUTES 2019 469.101 Subd. 10. Development district authority. The economic development authority may sell or lease land • held by it for economic development in economic development districts. The authority may acquire, sell, or lease single or multiple tracts of land regardless of size, to be developed as a part of the economic development of the district under sections 469.090 to 469.108. Subd. 11. Foreign trade zone. The economic development authority may apply to the board defined in United States Code, title 19, section 81 a, for the right to use the powers provided in United States Code, title 19, sections 81a to 81u. If the right is granted, the authority may use the powers. One authority may apply with another authority. Subd. 12. Relation to other redevelopment powers. The economic development authority may exercise powers and duties of a redevelopment agency under sections 469.152 to 469.165, for a purpose in sections 469.001 to 469.047 or 469.090 to 469.108. The authority may also use the powers and duties in sections 469.001 to 469.047 and 469.090 to 469.108 for a purpose in sections 469.152 to 469.165. Subd. 13. Public facilities. The authority may operate and maintain a public parking facility or other public facility to promote development in an economic development district. Subd. 14. Government agent. An economic development authority may cooperate with or act as agent for the federal or the state government, or a state public body, or an agency or instrumentality of a government or a public body to carry out sections 469.090 to 469.108 or any other related federal, state, or local law in the area of economic development district improvement. Subd. 15. Studies, analysis, research. An authority may study and analyze economic development needs in the city, and ways to meet the needs. An authority may study the desirable patterns for land use for . economic development and community growth and other factors affecting local economic development in the city and make the result of the studies available to the public and to industry in general. An authority may engage in research and disseminate information on economic development within the city. Subd. 16. Public relations. To further an authorized purpose, an authority may (1) join an official, industrial, commercial, or trade association, or another organization concerned with the purpose, (2) have a reception of officials who may contribute to advancing the city and its economic development, and (3) cant' out other public relations activities to promote the city and its economic development. Activities under this subdivision have a public purpose. Subd. 17. Accept public land. An authority may accept conveyances of land from all other public agencies, commissions, or other units of government, if the land can be properly used by the authority in an economic development district, to carry out the purposes of sections 469.090 to 469.108. Subd. 18. Economic development. An authority may carry out the law on economic development districts to develop and improve the lands in an economic development district to make it suitable and available for economic development uses and purposes. An authority may fill, grade, and protect the property and do anything necessary and expedient, after acquiring the property, to make it suitable and attractive as a tract for economic development. An authority may lease some or all of its lands or property and may set up local improvement districts in all or part of an economic development district. Subd. 19. Loans in anticipation of bonds. After authorizing bonds under sections 469.102 and 469.103, an authority may borrow to provide money immediately required for the bond purpose. The loans must not exceed the amount of the bonds. The authority shall by resolution decide the terms of the loans. The loans must be evidenced by negotiable notes due in not more than 12 months from the date of the loan payable to the order of the lender or to bearer, to be repaid with interest from the proceeds of the bonds when the bonds • Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.101 MINNESOTA STATUTES 2019 90 © are issued and delivered to the bond purchasers. The loan must not be obtained from any commissioner of the authority or from any corporation, association, or other institution of which an authority commissioner is a stockholder or officer. Subd. 20. Use of proceeds. The proceeds of obligations issued by an authority under section 469.103 and temporary loans obtained under subdivision 19 may be used to make or purchase loans for economic development facilities that the authority believes will require financing. To make or purchase the loans, the authority may enter into loan and related agreements, both before and after issuing the obligations, with persons, firms, public or private corporations, federal or state agencies, and governmental units under terms and conditions the authority considers appropriate. A governmental unit in the state may apply, contract for, and receive the loans. Chapter 475 does not apply to the loans. Subd. 21. [Repealed, 2000 c 490 art 11 s 441 Subd. 22. Secondary market. An authority may sell, at private or public sale, at the price or prices determined by the authority, any note, mortgage, lease, sublease, lease purchase, or other instrument or obligation evidencing or securing a loan made for the purpose of economic development, job creation, redevelopment, or community revitalization by a public agency to a business, for -profit or nonprofit organization, or an individual. Subd. 23. Supplying small business capital. Notwithstanding any contrary law, the authority may participate with public or private corporations or other entities, whose purpose is to provide seed or venture capital to small businesses that have facilities located or to be located in the district. For that purpose the © authority may use not more than ten percent of available annual net income or $1,000,000 annually, whichever is less, to invest in equities or acquire equity -type investments. These investments can be made directly in eligible corporations or entities or acquired through participation in a public or private seed or venture capital fund. The participation by the authority may not exceed in any year 25 percent of the total amount of funds provided for venture or seed capital purposes by all of the participants. The corporation, entity, or fund shall report in writing each six months to the commissioners of the authority all investments and other action taken by it since the last report. Funds contributed to the corporation or entity must be invested pro rata with each contributor of capital taking proportional risks on each investment. As used in this subdivision, the term "small business" has the meaning given it in section 645.445, subdivision 2. History: 1987 c 291 s 102; 1988 c 580 s 5; 1991 c 295 s 2; 1992 c 363 art 1 s 13; 2000 c 418 art 2 s 7; 2006 c 214 s 20; 2007 c 148 art 3 s 30; 2010 c 389 art 7 s 5; 2014 c 196 art 3 s 3; 1 Sp2017 c I art 7 s 6 469.102 GENERAL OBLIGATION BONDS. Subdivision 1. Authority; procedure. An economic development authority may issue general obligation bonds in the principal amount authorized by two-thirds majority vote of its city's council. The bonds may be issued in anticipation of income from any source. The bonds may be issued: (1) to secure funds needed by the authority to pay for acquired property or (2) for other purposes in sections 469.090 to 469.108. The bonds must be in the amount and form and bear interest at the rate set by the city council. Except as otherwise provided in sections 469.090 to 469.108, the issuance of the bonds is governed by chapter 475. The authority when issuing the bonds is a municipal corporation under chapter 475. Subd. 2. Detail; maturity. The authority with the consent of its city's council shall set the date, denominations, place of payment, form, and details of the bonds. The bonds must mature serially. The first installment is due in not more than three years and the last in not more than 30 years from the date of issuance. Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 91 MINNESOTA STATUTES 2019 469.103 Subd. 3. Signatures; coupons; liability. The bonds must be signed by the president of the authority, • be attested by its secretary, and be countersigned by its treasurer; the signatures may be facsimile signatures. The interest coupons if any, must be attached to the bonds. The coupons must be executed and authenticated by the printed, engrossed, or lithographed facsimile signature of the authority's president and secretary. The bonds do not impose any personal liability on a member of the authority. Subd. 4. Pledge. The bonds must be secured by the pledge of the full faith, credit, and resources of the issuing authority's city. The authority may pledge the full faith, credit, and resources of the city only if the city specifically authorizes the authority to do so. The city council must first decide whether the issuance of the bonds by the authority is proper in each case and if so, the amount of bonds to issue. The city council shall give specific consent in an ordinance to the pledge of the city's full faith, credit, and resources. The authority shall pay the principal amount of the bonds and the interest on it from taxes levied under this section to make the payment or from authority income from any source. Subd. 5. Tax levy. An authority that issues bonds under this section, shall, before issuing them, levy a tax for each year on the taxable property in the authority's city. The tax must be for at least five percent more than the amount required to pay the principal and interest on the bonds as the principal and interest mature. The tax must be levied annually until the principal and interest are paid in full. After the bonds have been delivered to the purchasers, the tax must not be repealed until the debt is paid. After the bonds are issued, the authority need not take any more action to authorize extending, assessing, and collecting the tax. On or before September 15, the authority's secretary shall send a certified copy of the levy to the county auditor, together with full information on the bonds for which the tax is levied. The county auditor shall extend and assess the levied tax annually until the principal and interest are paid in full. The authority shall transfer the surplus from the excess levy in this section to a sinking fund after the principal and interest for which the • tax was levied and collected is paid. The authority may direct its secretary to send a certificate to the county auditor before September 15 in a year. The certificate must state how much available income, including the amount in the sinking fund, the authority will use to pay principal or interest or both on each specified issue of the authority's bonds. The auditor shall then reduce the bond levy for that year by that amount. The authority shall then set aside the certified amount and may not use it for any purpose except to pay the principal and interest on the bonds. The taxes in this section shall be collected and sent to the authority by the county treasurer as provided in chapter 276. The taxes must be used only to pay the bonds when due. Subd. 6. Authorized securities. Bonds legally issued under this chapter are authorized securities under section 50.14. A savings bank, trust company, or insurance company may invest in them. A public or municipal corporation may invest its sinking funds in them. The bonds may be pledged by a bank or trust company as security for the deposit of public money in place of a surety bond. The authority's bonds are instrumentalities of a public governmental agency. History: 1987 c 291 s 103; 1994 c 416 art 1 s 49; 1995 c 256 s 9; 2002 c 390 s 8 469.103 REVENUE BONDS; PLEDGE; COVENANTS. Subdivision 1. Authority. An economic development authority may decide by resolution to issue its revenue bonds either at one time or in series from time to time. The revenue bonds may be issued to provide money to pay to acquire land needed to operate the authority, to purchase or construct facilities, to purchase, construct, install, or furnish capital equipment to operate a facility for economic development of any kind within the city, or to pay to extend, enlarge, or improve a project under its control. The issued bonds may include the amount the authority considers necessary to establish an initial reserve to pay principal and • Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.103 MINNESOTA STATUTES 2019 92 © interest on the bonds. The authority shall state in a resolution how the bonds and their attached interest coupons are to be executed. Subd. 2. Form. The bonds of each series issued by the authority under this section shall bear interest at a rate or rates, shall mature at the time or times within 30 years from the date of issuance, and shall be in the form, whether payable to bearer, registrable as to principal, or fully registrable, as determined by the authority. Section 469.102, subdivision 6, applies to all bonds issued under this section, and the bonds and their coupons, if any, when payable to bearer, shall be negotiable instruments. Subd. 3. Sale. The sale of revenue bonds issued by the authority shall be at public or private sale. The bonds may be sold in the manner and for the price that the authority determines to be for the best interest of the authority. The bonds may be made callable, and if so issued, may be refunded. Subd. 4. Agreements. The authority may by resolution make an agreement or covenant with the bondholders or their trustee. The authority must first decide that the agreement or covenant is needed or desirable to do what the authority may do under this section and to assure that the revenue bonds are marketable and promptly paid. Subd. 5. Revenue pledge. In issuing general obligation or revenue bonds, the authority may secure the payment of the principal and the interest on the bonds by a pledge of and lien on authority revenue. The revenue must come from the facility to be acquired, constructed, or improved with the bond proceeds or from other facilities named in the bond -authorizing resolutions. The authority also may secure the payment with its promise to impose, maintain, and collect enough rentals, rates, and charges, for the use and occupancy © of the facilities and for services furnished in connection with the use and occupancy, to pay its current expenses to operate and maintain the named facilities, and to produce and deposit sufficient net revenue in a special fund to meet the interest and principal requirements of the bonds, and to collect and keep any more money required by the resolutions. The authority shall decide what constitutes "current expense" under this subdivision based on what is normal and reasonable under generally accepted accounting principles. Revenues pledged by the authority must not be used or pledged for any other authority purpose or to pay any other bonds issued under this section or under section 469.102, unless the other use or pledge is specifically authorized in the bond -authorizing resolutions. Subd. 6. Not city debt. Revenue bonds issued under this section are not a debt of the authority's city nor a pledge of that city's full faith and credit. The bonds are payable only from project revenue as described in this section. A revenue bond must contain on its face a statement to the effect that the economic development authority and its city do not have to pay the bond or the interest on it except from revenue and that the faith, credit, and taxing power of the city are not pledged to pay the principal of or the interest on the bond. Subd. 7. Not applicable. Sections 469.153, subdivision 2, paragraph (e), and 469.154, subdivisions 3, 4, and 5 do not apply to revenue bonds issued under this section and sections 469.152 to 469.165 if the interest on the revenue bonds is subject to both state and federal income tax or if the revenue bond proceeds are not loaned by the authority to a private person. Subd. 8. Tax increment bonds. Obligations secured or payable from tax increment revenues and issued pursuant to this section or section 469.102 are subject to the provisions of section 469.178. © History: 1987 c 291 s 104; 2006 c 259 art 9 s 8 Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 93 MINNESOTA STATUTES 2019 469.105 469.104 SECTIONS THAT APPLY IF FEDERAL LIMIT APPLIES. Sections 474A.01 to 474A.21 apply to obligations issued under sections 469.090 to 469.108 that are limited by federal tax law as defined in section 474A.02, subdivision 8. History: 1987 c 291 s 105; 2005 c 10 art I s 71 469.105 SALE OF PROPERTY. Subdivision 1. Power. An economic development authority may sell and convey property owned by it within the city or an economic development district if it determines that the sale and conveyance are in the best interests of the city or district and its people, and that the transaction furthers its general plan of economic development. This section is not limited by other law on powers of economic development authorities. Subd. 2. Notice; hearing. An authority shall hold a hearing on the sale. At the hearing a taxpayer may testify for or against the sale. At least ten, but not more than 20, days before the hearing the authority shall publish notice of the hearing on the proposed sale in a newspaper. The newspaper must be published and have general circulation in the authority's county and city. The notice must describe the property to be sold and state the time and place of the hearing. The notice must also state that the public may see the terms and conditions of the sale at the authority's office and that at the hearing the authority will meet to decide if the sale is advisable. Subd. 3. Decision; appeal. The authority shall make its findings and decision on whether the sale is advisable and enter its decision on its records within 30 days of the hearing. A taxpayer may appeal the decision by filing a notice of appeal with the district court in the city or economic development district's county and serving the notice on the secretary of the authority, within 20 days after the decision is entered. • The only ground for appeal is that the action of the authority was arbitrary, capricious, or contrary to law. Subd. 4. Terms. The terms and conditions of sale of the property must include the use that the bidder will be allowed to make of it. The authority may require the purchaser to file security to assure that the property will be given that use. In deciding the sale terms and conditions the authority may consider the nature of the proposed use and the relation of the use to the improvement of the authority's city and the business and the facilities of the authority in general. The sale must be made on the authority's terms and conditions. The authority may publish an advertisement for bids on the property at the same time and in the same manner as the notice of hearing required in this section. The authority may award the sale to the bid considered by it to be most favorable considering the price and the specified intended use. The authority may also sell the property at private sale at a negotiated price if after its hearing the authority considers that sale to be in the public interest and to further the aims and purposes of sections 469.090 to 469.108. Subd. 5. One-year deadline. Within one year from the date of purchase, the purchaser shall devote the property to its intended use or begin work on the improvements to the property to devote it to that use. If the purchaser fails to do so, the authority may cancel the sale and title to the property shall return to it. The authority may extend the time to comply with a condition if the purchaser has good cause. The terms of sale may contain other provisions that the authority considers necessary and proper to protect the public interest. A purchaser must not transfer title to the property within one year of purchase without the consent of the authority. Subd. 6. Covenant running with the land. A sale made under this section must incorporate in the deed as a covenant running with the land the conditions of sections 469.090 to 469.108 relating to the use of the land. If the covenant is violated the authority may declare a breach of the covenant and seek a judicial decree from the district court declaring a forfeiture and a cancellation of the deed. • Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.105 MINNESOTA STATUTES 2019 94 © Subd. 7. Plans; specifications. A conveyance must not be made until the purchaser gives the authority plans and specifications to develop the property sold. The authority must approve the plans and specifications in writing. The authority may require preparation of final plans and specifications before the hearing on the sale. History: 1987 c 291 s 106 469.106 ADVANCES BY AUTHORITY. An authority may advance its general fund money or its credit, or both, without interest, for the objects and purposes of sections 469.090 to 469.108. The advances must be repaid from the sale or lease, or both, of developed or redeveloped lands. If the money advanced for the development or redevelopment was obtained from the sale of the authority's general obligation bonds, then the advances must have not less than the average annual interest rate that is on the authority's general obligation bonds that are outstanding at the time the advances are made. The authority may advance repaid money for more objects and purposes of sections 469.090 to 469.108 subject to repayment in the same manner. The authority must still use rentals of lands acquired with advanced money to collect and maintain reserves to secure the payment of principal and interest on revenue bonds issued to finance economic development facilities, if the rentals have been pledged for that purpose under section 469.103. Advances made to acquire lands and to construct facilities for recreation purposes if authorized by law need not be reimbursed under this section. Sections 469.090 to 469.108 do not exempt lands leased from the authority to a private person, or entity from assessments or taxes against the leased property while the lessee is liable for the assessments or taxes under the lease. History: 1987 c 291 s 107 469.107 CITY MAY LEVY TAXES FOR ECONOMIC DEVELOPMENT AUTHORITY. Subdivision 1. City tax levy. A city may, at the request of the authority, levy a tax in any year for the benefit of the authority. The tax must be not more than 0.01813 percent of estimated market value. The amount levied must be paid by the city treasurer to the treasurer of the authority, to be spent by the authority. Subd. 2. Reverse referendum. A city may increase its levy for economic development authority purposes under subdivision 1 in the following way. Its city council must first pass a resolution stating the proposed amount of levy increase. The city must then publish the resolution together with a notice of public hearing on the resolution for two successive weeks in its official newspaper or if none exists in a newspaper of general circulation in the city. The hearing must be held two to four weeks after the first publication. After the hearing, the city council may decide to take no action or may adopt a resolution authorizing the proposed increase or a lesser increase. A resolution authorizing an increase must be published in the city's official newspaper or if none exists in a newspaper of general circulation in the city. The resolution is not effective if a petition requesting a referendum on the resolution is filed with the city clerk within 30 days of publication of the resolution. The petition must be signed by voters equaling five percent of the votes cast in the city in the last general election. The election must be held at a general or special election. Notice of the election must be given in the manner required by law. The notice must state the purpose and amount of the levy. History: 1987 c 291 s 108; 1988 c 719 art 5 s 84; 1989 c 277 art 4 s 64; 1992 c 511 art 5 s 13; 2013 c143art 14s80 469.108 SPECIAL LAW; OPTIONAL USE. A city that has established a port authority by special law or that has been granted the power to establish a port authority by special law, or a city whose city council has been authorized to exercise the powers of a © port authority by special law may elect to use the powers granted in sections 469.090 to 469.108. If the Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 95 MINNESOTA STATUTES 2019 469.1082 election is made, the powers and duties set forth in sections 469.090 to 469.108 supersede the special law • and the special law must not be used after the election. The use of powers under sections 469.090 to 469.108 by a city described in this section does not impair the security of any obligations issued or contracts or agreements executed under the special law. Control, authority, and operation of any project may be transferred to the authority in the manner provided in section 469.094. History: 1987 c 291 s 109 469.1081 LIABLE IN CONTRACT OR TORT. Subject to the provisions of chapter 466, an authority shall be liable in contract or in tort in the same manner as a private corporation. The commissioners of an authority shall not be personally liable as such on its contracts, or for torts, not committed or directly authorized by them. The property or funds of an authority shall not be subject to attachment, or to levy and sale on execution, but, if an authority refuses to pay a judgment entered against it in any court of competent jurisdiction, the district court for the county in which the authority is situated may, by writ of mandamus, direct the treasurer of the authority to pay the judgment from any unencumbered funds available for that purpose. History: 1991 c 342 s 13 469.1082 COUNTY ECONOMIC DEVELOPMENT AUTHORITY OR HOUSING AND REDEVELOPMENT AUTHORITY WITH ECONOMIC DEVELOPMENT POWERS. Subdivision 1. Authority to create. A county may form a county economic development authority or grant a housing and redevelopment authority the powers specified in subdivision 4, clause (2), if it receives • a recommendation to do so from a committee formed under subdivision 2. An economic development authority established under this section has all the powers and rights of an authority under sections 469.090 to 469.1081, except the authority granted under section 469.094 if so limited under subdivision 4. This section is in addition to any other authority to create a county economic development authority or service provider. Nothing in this section shall alter or impair any grant of powers, or any other authority granted to a community development agency, a county housing and redevelopment authority, or any county as provided in section 383D.41; Laws 1974, chapter 473, as amended; or Laws 1980, chapter 482, as amended. Any county that has granted economic development powers to a community development agency or a county housing and redevelopment authority under any of these provisions may not form a county economic development authority or grant a housing and redevelopment authority the powers specified in subdivision 4, clause (2). Subd. 2. Local committees. Upon notice to all local government units and development agencies within the county, a county may adopt a resolution to create a committee to recommend options for a county economic development service provider. The committee shall consist of no fewer than 11 and no more than 15 members appointed by the county board. At least one city official, at least one housing and redevelopment official, and at least one township official from the county to be served by the county economic service provider shall be included on the committee. Members may also represent school districts, political subdivisions that currently provide services under sections 469.001 to 469.047 and 469.090 to 469.1081, nonprofit or for -profit housing and economic development organizations, business, and labor organizations located within the county. Political subdivision representatives must be selected by their local governments and must constitute at least 50 percent of the • Copyright © 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 469.1082 MINNESOTA STATUTES 2019 96 © total committee membership. The county may appoint no more than two county commissioners. The committee shall select a chair at its initial meeting. Subd. 3. Committee report. The committee shall issue its report within 90 days of its initial meeting. The cornrnittee may request one 60-day extension from the county board. The report must contain the committee's recommendation for the preferred organizational option for a county economic development service provider, including the distance from the boundary of the city that may be controlled by each affected city in subdivision 5. The distance may not exceed two miles from the city boundary. The report must contain written findings on issues considered by the committee including, but not limited to, the following: (1) identification of the current level of economic development, housing, and community development programs and services provided by existing agencies, any existing gaps in programs and services, and the capacity and ability of those agencies to expand their activities; and (2) the recommended organizational option for providing needed economic development, housing, and community development services in the most efficient, effective manner. Subd. 4. Organizational options. The committee may only recommend: (1) establishment of a county economic development authority to operate under sections 469.090 to 469.1081, except that the county shall not have the powers of section 469.094 without the consent of an existing county housing and redevelopment authority operating within that county. For the purposes of a county economic development authority's operation, the county is considered to be the city and the county board is considered to be the city council; (2) requiring an existing county housing and redevelopment authority or multicounty housing and redevelopment authority to operate under sections 469.090 to 469.1081; (3) that the county pursue special legislation; or (4) no change in the existing structure. Subd. 5. Area of operation. The area of operation of a county economic development service provider created under this section shall include all cities and townships within a county that have adopted resolutions electing to participate. A city or township may adopt a resolution electing to withdraw participation. The withdrawal election may be made every fifth year following adoption of the resolution electing participation. The withdrawal election is effective on the anniversary date of the original resolution provided notice is given to the county economic development authority not less than 90 nor more than 180 days prior to that anniversary date. The city or township electing to withdraw retains any rights, obligations, and liabilities it obtained or incurred during its participation. Any city or township within the county shall have the option to adopt a resolution to prohibit the county economic development service provider created under this section from operating within its boundaries and (1) within an agreed -upon urban service area, or (2) within the distance approved in the committee report referenced in subdivision 3. If a city or township prohibits a county economic development service provider created under this section from operating within its boundaries, the city's or township's property taxpayers shall not be subject to the property tax levied for the county economic development service provider. Subd. 6. City economic development authorities. If a county economic development service provider has been established under this section, existing city economic development authorities shall continue to function and operate under sections 469.090 to 469.1081. Additional city economic development authorities may be created within the area of operation of the county economic development service provider created © under this section without the explicit concurrence of the county economic development service provider. Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 97 MINNESOTA STATUTES 2019 469.110 Subd. 7. Continuation of existing county and multicounty housing and redevelopment authorities. Existing county and multicounty housing and redevelopment authorities shall continue to function and operate under the provisions of sections 469.001 to 469.047. Subd. 8. Nine -member boards authorized. In addition to the board options under section 469.095, a county economic development authority may have a nine -member board. If the authority has a nine -member board, at least two members must be county commissioners appointed by the county board. Of the county economic development authority board members initially appointed, two each shall be appointed for terms of one, two, or three years, respectively, and one each for terms of four, five, or six years, respectively. Thereafter, all authority members shall be appointed for six -year terms. History: 2000 c 484 art I s 4; 1 Sp2005 c I art 4 s 106; 1 Sp2005 c 3 art 7 s 10; 2010 c 347 art I s 25 AREA REDEVELOPMENT 469.109 PURPOSE. The legislature finds that there exists in the state certain areas of substantial and persistent unemployment causing hardship to many individuals and their families and that there also exist certain rural areas where development and redevelopment should be encouraged. The legislature finds that the powers and facilities of the state government and local communities, in cooperation with the federal government, should assist rural areas and areas of substantial and chronic unemployment in planning and financing economic redevelopment by private enterprise, enabling those areas to enhance their prosperity by the establishment of stable and diversified local economies, and to provide new employment opportunities through the • development and expansion of new or existing facilities and resources. The legislature finds that the establishment of local or regional area redevelopment agencies in Minnesota having the power to acquire, build, lease, sell, or otherwise provide plants and facilities for industrial, recreational, or commercial development will create new employment and promote economic redevelopment of rural areas and of depressed or underdeveloped areas in the state, and that the accomplishment of these objectives is a public purpose for which public money may be spent. History: 1987 c 291 s 110 469.110 DEFINITIONS. Subdivision 1. Generally. In sections 469.109 to 469.123, the terms defined in this section have the meanings given them herein, unless the context indicates otherwise. Subd. 2. Department. 'Department' means the Department of Employment and Economic Development. Subd. 3. Local agency. "Local agency" means the area or municipal redevelopment agencies created or authorized to be created by sections 469.109 to 469.123, or the governing body of any Indian tribe or any entity established and recognized by that governing body. Subd. 4. Municipality. "Municipality" means any home rule charter or statutory city, county, town, or school district. Subd. 5. Governing body. "Governing body" means the council, board of trustees, or other body charged with governing any municipality. . Copyright 0 2019 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. A C I T Y • A NLD6 06 E9 © 1685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 • WWW.ANDOVERMN.GOV TO: President and Commissioners CC: Jim Dickinson, Executive Direc FROM: Joe Janish, Community Development Dire for" SUBJECT: Discuss Covid-19 Emergency Loan Fund DATE: June 2, 2020 INTRODUCTION The State of Minnesota did not pass a bill last regular session to distribute CARES Act funding (Federal funding based on a dollar amount per resident to local communities), it is expected this would occur during a special session. In preparation if this occurring, staff wanted to be prepared to roll out a program as quickly as possible. In order to do this staff has developed the attached program. The Andover EDA reviewed this item at their last meeting, and provided some changes which have been incorporated. This program would be used to assist companies with their startup of the business upon re -opening. The highlights of the program include: © • Maximum amount: $10,000 or some other dollar amount determined by amount given and EDA approval. • Term: up to five (5) years • Rate:0% • Deferment: first six (6) months of payments deferred • Forgiveness: up to 100% forgiven based on meeting set criteria • Eligible uses of funds: payroll, accounts payable, lease/mortgage payments, utilities, inventory, and other business related expenses. Businesses who are eligible to apply for funds through the COVID-19 ELF program must meet the following criteria: • Have a physical non-residential location within the City; • Employ no more than 50 FTE; • Faced mandated full or partial closure or were deemed non -essential by the State of Minnesota In order to apply applicants would need to provide the following depending on business structure: • Two most recent business tax returns; • Credit check authorization form; • Personal financial statement form; • Payroll reports from the I" quarter 2020 showing employment levels, details on if the position is full or part-time and wage; © • Next 3 months of itemized operating expenses (May, June, July); • Proof of business address (mortgage statement, lease, or other document); • Articles of incorporation; • SBA Form 1368; • CMDC Debt Schedule Form 10 Staff is looking for Andover EDA input, direction and consideration of approval. Attached: • Coronavirus Relief Fund Guidance for State, Territorial, Local and Tribal Governments April 22, 2020. • DRAFT COVID-19 Emergency Loan Fund Policy H 141 Coronavirus Relief Fund Guidance for State, Territorial, Local, and Tribal Governments Apri122, 2020 The purpose of this document is to provide guidance to recipients of the funding available under section 601(a) of the Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The CARES Act established the Coronavirus Relief Fund (the "Fund") and appropriated $150 billion to the Fund. Under the CARES Act, the Fund is to be used to make payments for specified uses to States and certain local governments; the District of Columbia and U.S. Territories (consisting of the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands); and Tribal governments. The CARES Act provides that payments from the Fund may only be used to cover costs that — are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.' The guidance that follows sets forth the Department of the Treasury's interpretation of these limitations 10 on the permissible use of Fund payments. Necessary expenditures incurred due to the public health emergency The requirement that expenditures be incurred "due to" the public health emergency means that expenditures must be used for actions taken to respond to the public health emergency. These may include expenditures incurred to allow the State, territorial, local, or Tribal government to respond directly to the emergency, such as by addressing medical or public health needs, as well as expenditures incurred to respond to second -order effects of the emergency, such as by providing economic support to those suffering from employment or business interruptions due to COVID-19-related business closures. Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments. The statute also specifies that expenditures using Fund payments must be "necessary." The Department of the Treasury understands this term broadly to mean that the expenditure is reasonably necessary for its intended use in the reasonable judgment of the government officials responsible for spending Fund payments. Costs not accounted for in the budget most recently approved as of March 27, 2020 The CARES Act also requires that payments be used only to cover costs that were not accounted for in the budget most recently approved as of March 27, 2020. A cost meets this requirement if either (a) the cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost © ' See Section 601(d) of the Social Security Act, as added by section 5001 of the CARES Act. H is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation. The "most recently approved" budget refers to the enacted budget for the relevant fiscal period for the particular government, without taking into account subsequent supplemental appropriations enacted or other budgetary adjustments made by that government in response to the COVID-19 public health emergency. A cost is not considered to have been accounted for in a budget merely because it could be met using a budgetary stabilization fund, rainy day fund, or similar reserve account. Costs incurred during the period that begins on March 1, 2020, and ends on December 30, 2020 A cost is "incurred" when the responsible unit of government has expended funds to cover the cost. Nonexclusive examples of eligible expenditures Eligible expenditures include, but are not limited to, payment for: 1. Medical expenses such as: • COVID-19-related expenses of public hospitals, clinics, and similar facilities. • Expenses of establishing temporary public medical facilities and other measures to increase COVID-19 treatment capacity, including related construction costs. • Costs of providing COVID-19 testing, including serological testing. • Emergency medical response expenses, including emergency medical transportation, related Q to COVID-19. • Expenses for establishing and operating public telemedicine capabilities for COVID-19- related treatment. H 2. Public health expenses such as: • Expenses for communication and enforcement by State, territorial, local, and Tribal governments of public health orders related to COVID-19. • Expenses for acquisition and distribution of medical and protective supplies, including sanitizing products and personal protective equipment, for medical personnel, police officers, social workers, child protection services, and child welfare officers, direct service providers for older adults and individuals with disabilities in community settings, and other public health or safety workers in connection with the COVID-19 public health emergency. • Expenses for disinfection of public areas and other facilities, e.g., nursing homes, in response to the COVID-19 public health emergency. • Expenses for technical assistance to local authorities or other entities on mitigation of COVID-19-related threats to public health and safety. • Expenses for public safety measures undertaken in response to COVID-19. • Expenses for quarantining individuals. 3. Payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID- 19 public health emergency. PA H 4. Expenses of actions to facilitate compliance with COVID-19-related public health measures, such as: • Expenses for food delivery to residents, including, for example, senior citizens and other vulnerable populations, to enable compliance with COVID-19 public health precautions. • Expenses to facilitate distance learning, including technological improvements, in connection with school closings to enable compliance with COVID-19 precautions. • Expenses to improve telework capabilities for public employees to enable compliance with COVID-19 public health precautions. • Expenses of providing paid sick and paid family and medical leave to public employees to enable compliance with COVID-19 public health precautions. • COVID- I 9-related expenses of maintaining state prisons and county jails, including as relates to sanitation and improvement of social distancing measures, to enable compliance with COVID-19 public health precautions. • Expenses for care for homeless populations provided to mitigate COVID-19 effects and enable compliance with COVID-19 public health precautions. 5. Expenses associated with the provision of economic support in connection with the COVID-19 public health emergency, such as: • Expenditures related to the provision of grants to small businesses to reimburse the costs of business interruption caused by required closures. • Expenditures related to a State, territorial, local, or Tribal government payroll support ® program. • Unemployment insurance costs related to the COVID-19 public health emergency if such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise. 6. Any other COVID-19-related expenses reasonably necessary to the function of government that satisfy the Fund's eligibility criteria. Nonexclusive examples of ineligible expenditures' The following is a list of examples of costs that would not be eligible expenditures of payments from the Fund. I. Expenses for the State share of Medicaid.' 2. Damages covered by insurance. 3. Payroll or benefits expenses for employees whose work duties are not substantially dedicated to mitigating or responding to the COVID-I9 public health emergency. 2 In addition, pursuant to section 5001(b) of the CARES Act, payments from the Fund may not be expended for an elective abortion or on research in which a human embryo is destroyed, discarded, or knowingly subjected to risk of injury or death. The prohibition on payment for abortions does not apply to an abortion if the pregnancy is the result of an act of rape or incest; or in the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life -endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless an abortion is performed. Furthermore, no government which receives payments from the Fund may discriminate against a health care entity on the basis that the entity does not provide, pay for, provide coverage of, or refer for abortions. © , See 42 C.F.R. § 433.51 and 45 C.F.R. § 75.306. S 4. Expenses that have been or will be reimbursed under any federal program, such as the reimbursement by the federal government pursuant to the CARES Act of contributions by States to State unemployment funds. 5. Reimbursement to donors for donated items or services. 6. Workforce bonuses other than hazard pay or overtime. 7. Severance pay. 8. Legal settlements. H 0 0 COVID-19 EMERGENCY LOAN FUND POLICY r Adopted EDA: June XX, 2020 Adopted City Council: June XX, 2020 Andover Economic Development Authority © 1685 Crosstown Blvd. N.W. Andover, MN 55304 763.755.5100 H H Table of Contents I. Introduction II. Purpose And Authority III. Objectives IV. General Criteria V. Financing Criteria VI. Application Process Andover EDA—COVID-19 Emergency Loan Fund Policy C] INTRODUCTION The Andover Economic Development Authority COVID-19 Emergency Loan Fund program ("COVID-19 ELF Program") was created as a means to assist businesses within the City of Andover which have been negatively impacted by the COVID-19 pandemic with costs associated with re -opening of the business. The COVID-19 ELF Program offers no - interest forgivable loans to eligible businesses with a physical location in the municipal city limits of Andover. The COVID-19 ELF Program is administered by the Andover Economic Development Authority. II. PURPOSE AND AUTHORITY A. The purpose of this policy is to establish the EDA's position relating to the use of the COVID-19 ELF Program. This policy shall be used as a guide in the processing and review of applications requesting loan funds. B. The criteria are to be used in conjunction with other relevant policies of the City and/or EDA. C. The EDA reserves the right to approve or reject projects on a case -by -case basis, taking into consideration factors considered appropriate by the City, in addition to established policies, criteria, and potential benefits. Meeting the criteria does not guarantee a COVID-19 ELF Program loan shall be approved. Approval or denial of an application is at the sole discretion of the EDA. Ill. OBJECTIVES The objective of the COVID-19 ELF Program is to deploy a local pool of funds to support local small businesses in order to ensure the viability of the businesses as they move past the COVID-19 pandemic and seek to re -open or return to pre -pandemic operations. This may be accomplished by some or all of the following means: A. Provide needed finances to small businesses within the community which have been negatively affected financially as a direct result of the COVID-19 pandemic; B. Ensure the viability of Andover businesses moving past this crisis; C. Limiting the number of job losses as a direct result of the pandemic by assisting businesses return to their pre -pandemic employment levels; 10 D. Limiting the number of businesses which would potentially permanently close due to COVID-19 pandemic impacts. Thereby also limiting the total Andover EDA —COVID-19 Emergency Loan Fund Policy 3 © number of potential vacancies in key commercial and industrial areas of the City. IV. GENERAL CRITERIA A. ELIGIBLE EXPENDITURES The COVID-19 ELF Program may be used for working capital purposes defined as: 1. Paying fixed debts; 2. Payroll costs; 3. Accounts payable; 4. Utility payments; 5. Inventory costs; 6. Paying other direct business -related bills. B. ELIGIBLE BUSINESS DETAILS: To qualify for a COVID-19 ELF Program loan, eligible businesses must meet the following criteria: 1. Be considered an eligible business type, as defined in IV.0 of this policy; 2. Have no more than 50 FTE (full-time equivalent) employees at the location address. Special consideration may be given to businesses which utilize independent contractors and sole proprietors within their business; 3. The business must have a physical non-residential address within the City of Andover. Proof of address shall be required when applying; 4. All business applicants must be an allowed use through zoning of the property or be a legally non -conforming use; 5. Be a legal entity registered with the Minnesota Secretary of State, and be in good standing 6. Any applicant must not have delinquent taxes, bills or charges due to the City from February 2020 or prior. C. ELIGIBLE BUSINESS TYPES: Eligible businesses which may apply for the COVID-19 ELF Program include businesses which have been deemed non -essential by the State of Minnesota or those which have faced mandated closures per State of Minnesota orders. Non -profits may apply for a reduced amount to the COVID-19 ELF Program if they 10 also have been Deemed non -essential by the State of Minnesota or which have Andover EDA—COVID-19 Emergency Loan Fund Policy 4 Cfaced mandated closures per State of Minnesota orders. D. INELIGIBLE ACTIVITIES The COVID-19 ELF Program may not be used for the following activities: 1. Agriculture (crop or livestock production, etc.); 2. Purchasing of machinery or vehicles; 3. Moving expenses; 4. Land acquisition for speculation; E. REVIEW CRITERIA Assistance must be evaluated on the existence of the following conditions: 1. Demonstrated financial need; 2. Number of jobs retained at the location; 3. Financial ability to continue business operations; 4. Timeliness of funds being needed. © F. REQUIRED DOCUMENTS The following documents are required at that time of application. Additional documents may be requested by the EDA, if deemed necessary to completely review and application. 1. Two most recent years of tax returns; 2. Credit check certification form; 3. Personal financial statement, if appropriate; 4. Payroll Report(s) 5. Three-month itemized expense report; 6. Articles of Incorporation, XXXX; 7. Proof of Address; 8. SBA Form 1368 G. EDA RIGHTS The EDA reserves and retains the right to deny any loan application for funding. All loan receipts shall be required to indemnify the City of Andover, the Andover Economic Development Authority, and any officers acting on their behalf. 0 H. CONFLICT OF INTEREST Andover EDA—COVID-19 Emergency Loan Fund Policy © An officer of the City will not have a personal financial interest or personally benefit financially from the business to be assisted. Minn. Stat. 471.87 and 471.88 provide guidance on conflict of interest. I. GOVERNMENT DATA PRACTICES Information contained in the application for assistance will become a matter of public record with the exception of those items protected under Minn. Stat. 13.591. V. FINANCING CRITERIA A. LOAN SIZE All loans shall have a maximum amount of $10,000. Actual amount TBD based on what is Non -profits shall have a maximum amount of $5,000. received from the State B. INTEREST RATES aAll loans shall have an interest rate of 0%. C. TERMS All loans shall have a term of no more than five (5) years. D. DEFERMENTS All repayments shall be deferred for a total of six (6) months upon issuance of funds. Any awarded business of a COVID-19 ELF Program loan shall have the ability to repay portions of the loan during the deferment period should the business so choose. E. FORGIVENESS Up to 100% of the loan has the ability to be forgiven by the EDA upon successful completion of the following: 1. If the business maintains operations within the City for six (6) months upon award of a COVID-19 ELF loan, 50% of the loan shall be forgiven; 2. If the business returns employment levels to that of pre -pandemic levels within six (6) months upon award date, the remaining 50%shall be forgiven. © F. FEES Andover EDA— COVID-19 Emergency Loan Fund Policy 6 © There shall not be an application fee to apply for a COVID ELF loan. Any fees related to underwriting, legal, loan closing, filing, recording, and other fees incurred will be paid for by the Economic Development Authority at the time of loan issuance. Ma u VI. APPLICATION PROCESS All applications for funding from COVID-19 ELF will be accepted on a first -come, first - served basis. Applications will be required to be submitted to the City of Andover. Upon submission of an application, City of Andover staff will review the application to ensure complete information is provided. If additional information is needed, staff will request the needed information. Upon funds from the program being requested to the amount of or exceeding the total fund amount, applications will no longer be accepted. Andover EDA— COVID-19 Emergency Loan Fund Policy