HomeMy WebLinkAbout[04] Minutes CITY OF ST. JOSEPH
ECONOMIC DEVELOPMENT AURTHORITY
Meeting Minutes — Wednesday, August 25, 2010
Present: EDA Board Members Carolyn Yaggie- Heinen, Ken Jacobson (3:09 p.m.), Al Rassier, and Dale
Wick.
Absent: Tom Skahen.
Also present: EDA Director Cynthia Smith - Strack.
Chairperson Wick called the August 25, 2010 regular meeting of the St. Joseph EDA to order at 3:03 p.m.
Agenda.
Chairperson Wick introduced the agenda.
Moved by Rassier and second by Heinen to approve the agenda as presented. Motion carried 3 -0.
Approval of Minutes.
Chairperson Wick introduced the minutes from the July 21, 2010 regular EDA meeting.
Motion by Heinen, second by Rassier to approve the minutes from the July 21, 2010 meeting as
presented. Motion carried 3 -0.
EDA Accounts Payable and Approval of Financial Reports.
Wick introduced the topic. Accounts payable for the month totaled $2,480.00 and included monthly
contract services. Wick then introduced the monthly financial reports.
Motion Rassier, second by Heinen to approve the accounts payable and financial reports as presented.
Motion carried 3 -0.
2010 CIP Budget
Wick introduced the agenda item and noted a potential discrepancy in the accompanying staff
memorandum. Wick noted the City Council had asked staff to address the question of what to do in the
event local govemment aid was reduced for the 2011 budget. The staff memo referenced a need to
reduce the EDA budget by twenty-five (25) percent. Wick noted the staff memo could be potentially
misleading. Wick further explained the preliminary EDA budget included an annual expense component
and capital improvement program component. The capital component included $60,000 in EDA projects
for 2011 including: $35,000 for redevelopment/revitalization, $15,000 for student rental transition, and
$10,000 for the BFA grant program. The preliminary expense budget totaled $43,540 the same as 2010.
Wick inquired of Board Members as to what line item(s) should be reduced in the event the EDA was
directed to reduce the 2011 budget by $40,000. Wick opined capital projects such as revitalization and
rental conversion could be reduced since participation in landscaping projects was unlikely in the near
term. In addition Wick stated the BFA grant program seemed to be well received and an important
economic development component.
Rassier indicated support for the BFA grant program and for retaining flexibility within the capital
programs.
Wick noted that in 2010 the "revitalization /redevelopment" capital program included all three priority
areas: downtown revitalization, student rental transition, and BFA under one project title.
Rassier suggested identification of $20,000 as opposed to $40,000 in potential reductions. Rassier noted
the EDA had been careful in review of capital programs /projects and determined a need for $60,000 to be
successful in its efforts at economic expansion /diversification.
Wick inquired as to other Board Members thoughts on reducing the revitalization program budget by
$20,000.
Rassier indicated the $20,000 potential reduction seemed to be a reasonable alternative and that the
EDA needed adequate resources and flexibility to accomplish its goals.
Heinen asked the Board Members whether or not they thought the initial preliminary budget proposal of
$43,540 for EDA expenditures and $60,000 for capital projects was sound. Heinen indicated she felt the
initial preliminary budget was indeed sound and illustrative of EDA need and that the EDA had devoted a
significant amount of time to budget preparation and recommendation.
Jacobson noted he did not want to see the EDA take a step backward in its effectiveness. However, he
agreed with Rassier's suggestion of identification of $20,000 in reduced capital programs in the event the
need was realized. Jacobson suggested reducing the redevelopment /revitalization capital project by
$5,000 and reducing the rental conversion capital program by $15,000. Jacobson stated he was very
concerned about large student rental facilities becoming vacant.
Wick noted that under that scenario the EDA would retain $30,000 for redevelopment/revitalization and
$10,000 for the BFA program.
Motion Heinen, second Jacobson to reduce the capital project line item for rental conversion from
$20,0000 to $5,000 and to reduce the capital project line item for redevelopment/revitalization from
$35,000 to $30,000. Motion carried 4:0.
State Jobs Incentive Package Opportunities
Wick introduced the agenda item. Strack reminded EDA Members of the various incentives available to
local government units through the Mn. Jobs Bill approved in April, including:
a. The establishment of compact development districts which function like redevelopment TIF
districts but do not require a finding of 'substandard building' to be eligible.
b. The creation of economic development districts for use by businesses not included in
manufacturing, industry, or technology.
c. The temporary authority to use excess revenue in existing TIF districts withheld for administration
of the district for uses external to the district.
The EDA discussed several potential project and eligibility /timing thereof. The EDA directed STract to
follow up with Concrete Pius and Millstream Shops /Lofts regarding potentially taking advantage of
available incentives.
The issue will be added to the September agenda for additional discussion.
Rental Housing Working Group
Chairperson Wick introduced the agenda item. Strack reported the first meeting of the Working Group
was held earlier in the day with the following perspectives shared:
1. The method of determining the value of rental property is based on rent generated. If anticipated,
a loss of rental income is capitalized, therefore, the actual economic impact of Toss of rental
payments exceeds actual rent payments. Such loss directly equates to basic sale value of
property.
EDA Minutes — August 25, 2010 2
2. Property values and City taxable market value will be affected by decreased rental property
values; based on this fact, public involvement is warranted.
3. St. Joseph Student Housing reports 126 of 169 units rented this year. This is down dramatically
from previous years.
4. Rental property owners note a difficulty in obtaining financing and refinancing for rental property
based on unknowns and assumed decrease in demand.
5. Investigate the potential availability of external funding to transition single family rental units to
use by first time home buyers. Perhaps set a goal of transitioning 3, 5, or 10 houses per year.
6. Consider and be mindful of timing of issues.
7. Others should be invited to join Working Group — CSB, SJU, more SF rental unit owners, owners
of other apartments.
8. Next session — Sept. 22, 2010; 1 p.m. same location. For next session Working Group members
are to brainstorm transitional strategies
Board Member Announcements
None.
Adjournment.
Motion Jacobson, second Heinen to adjoum the EDA meeting. Meeting adjoumed by consensus at 3:45
PM.
Cynthia Smith - Strack
EDA Director
EDA Minutes — August 25, 2010 3