4.3. SR 11-09-1998 - Laserfiche WebLink

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'ity of Item #4.3. River MEMORANDUM TO: Mayor & City Council FROM: DATE: Paul T. Steinman, Director of Economic Development November 9, 1998 SUBJECT: Sherburne County Business Development Fund Issue The Economic Development Authority will be reviewing the issue of the city's participation in the Sherburne County Business Development Fund at its meeting prior to the Council meeting on November 9. Staff is recommending that the EDA request the Council to approve the city's participation in the Sherburne County Business Development Fund by pledging to invest up to $250,000 in FDIC insured certificates of deposit with area banks to create a pool of funds to attract/retain industrial and manufacturing businesses in Sherburne County. Background The Sherburne County Business Development Fund is an interest rate buy-down program. The city, as an investor in the program, is called upon to buy certificates of deposit with designated banks at the time a business application has been approved. The investors will take a very minor reduction in the interest rate it could otherwise receive through other investments, and pass this savings along to the business. The investors dollars to this program are all federally insured and cities are allowed to purchase certificates of deposit as a legal investment instrument. One example of a project might be as follows: manufacturing business approved for $500,000 (maximum) loan ten investors (i.e. cities, utility companies, banks, etc.) are called upon to purchase $50,000 worth of certificates of deposit with the designated bank 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425