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Finance Committee Minutes Page 2 <br /> December 10,2013 <br /> 5.I Ethanol Technology Default <br /> Ms. McDowell Poehler updated the committee members that Ethanol Technology's <br /> principles had not filed bankruptcy. She stated that the city's chance of collection <br /> may be improved if the other creditors have since "moved on". She stated that the <br /> city could take action if it received a direct assignment of the loan from the bank. <br /> Discussion followed regarding possible actions for collecting on the loan. It was the <br /> consensus of the committee to work with the bank to obtain assignment of the loan. <br /> If assignment is secured, the guarantors will be contacted for payment and this item <br /> will be brought before the EDA for final action. <br /> 5.2 Bank of Elk River Default <br /> Staff reviewed the reports collected from DEED and reports sent in from Economic <br /> Development staff regarding employment numbers. Bill LaVigne,representing The <br /> Bank of Elk River, stated that in December 2010, the bank had 76.5 full time <br /> employees,which reflects 13.49 additional employees. He noted that that this is the <br /> number from the downtown bank in relation to the project. Mr. LaVigne explained <br /> the confusion in tracking new jobs, since they move employees within the <br /> organization from other sites. He stated that if they bring an employee in from <br /> another location, a new hire would technically be at the location the employee came <br /> from, even though the downtown bank actually added another employee. <br /> Motin stated he would like to know where we go from here since the 20 jobs were <br /> not met. Mr. LaVigne stated that he was not sure why the agreement states 20 jobs at <br /> $15 per hour. Mr. LaVigne asked how the 20 jobs number was determined. Ms. <br /> McDowell Poehler stated that the number was based on the $300,000 subsidy. He <br /> stated that he realized the goal was to increase the economic base in the community <br /> and 20 jobs at$15/hour would generate $624,000/year in wages. Mr. LaVigne <br /> continued by stating that the 13.49 jobs had an average wage of$30.41/hour, <br /> generating$822,000,injecting more money into the economy than the 10 jobs at$15 <br /> per hour would have generated. Mr. LaVigne asked what is important the end result <br /> or how we got there. Motin stated that purpose of the program is to get better than <br /> living wages not just a few with larger wages. Ms. McDowell Poehler stated that wage <br /> and job goals are required by the state. <br /> Lundberg stated that he felt the agreement could be rewritten to reduce the number <br /> of jobs and then also the amount of subsidy. He stated that they need to take into <br /> consideration the extenuating circumstances of the financial crash. <br /> Ovall stated that SBA loans usually require one job per$35,000 in assistance. He <br /> questioned how they arrived at 20 jobs for$300,000 when only 9 jobs would be <br /> required in a SBA. <br /> P O I E R E O I <br /> NATURE <br />