6.4. EDSR 05-21-2018 - Laserfiche WebLink

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��i Eof lk — - Request for Action River To Item Number Economic Development Authori 6.4 Agenda Section Meeting Date Prepared by General Business May 21, 2018 Amanda Othoudt,EDD Item Description Reviewed by Revolving Loan Fund Exemption Lori Ziemer,Finance Director Reviewed by Cal Portner, City Administrator Action Requested Approve or deny by motion,a one-time exemption for the Minnesota Investment Fund, state-funded revolving loan fund account. Background/Discussion Elk River has the opportunity to take advantage of the Minnesota Investment Fund (MIF) state-funded revolving loan fund account (RLF) one-time exception program. The program would allow the city to "cleanse" the state MIF funds currently on hand in the Jobs Incentive Microloan RLF account so they could be used without the limitations generally applicable to MIF revolving loan funds. The 2017 Legislature passed legislation allowing cities, counties and townships with RLFs seeded by MIF to use 80% of the uncommitted balance for any lawful purpose if 20% of the balance is returned to the State of Minnesota. To utilize this one-time exception, this form must be completed and submitted to DEED by June 1, 2018. After DEED approval, the 80%would be moved from the RLF account and the 20% transferred to DEED. The balance of the MIF account is $221,961.62. At their August 21, 2017, meeting, the EDA deposited $66,000 of reserve money into the MIF account for a project that did not proceed. DEED staff indicated that the EDA could withdraw and deposit this money back into reserves,which would decrease the amount sent to the state. The state would receive $31,192.32 of the $155,961.62 balance leaving$124,769.30 for EDA use. The balance of the Development Fund is $740,083.07 and the balance of the Micro Loan Fund is $720,186.52 The EDA continues to receive revolving loan payments on two state MIF loans,with a balance of $277,710.91. The exemption does not apply to these funds. The most important question is whether the strings placed by DEED on the MIF funds in the Job Incentive Microloan RLF hamper the EDA's ability to use them such that it makes sense to return a portion. Looking at the policy for the Jobs Incentive Microloan program,there are some provisions that are tied to the MIF program guidelines The Elk River Vision A Y�elcoming community nvith revolutionary and spirited resourcefulness, exceptional p D W E H E D D Y service, and community engagement that encourages and inspires prosperity ,g /` UR