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Home My WebLink AboutRES 2006-58 ADOPTING A BUSINESS ASSISTANCE/SUBSIDY POLICY City of Corcoran County of Hennepin State of Minnesota RESOLUTION NO. 2006- 58 Motion By: Lymangood Seconded By: Grabowski RESOLUTION ADOPTING A BUSINESS ASSISTANCElSUBSIDY POLICY WHEREAS, Minnesota Sta.tues 116J.993-995 outline the requirements for local and state business subsidies including the requirement that cities over 2,500 in population adopt a local business subsidy policy and file annual reports on subsidies provided; and WHEREAS, the Corcoran T� Increment Finance Committee has discussed potential types of business subsidies,public purpose requirements and required job and wage goals which would need to be met to justify public assistance; and WHEREAS, A "Corcoran Business Subsidy Policy" has been prepared which includes the public purpose requirements,requirements and contents for an assistance agreement,processes to be followed by applicants seeking assistance and annual reporting requirements; and WHEREAS, The City of Corcoran has access to tax increment financing dollars and other local, regional and state funds to assist business development and anticipates future requests for financial assistance. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF TI-�E CITY OF CORCORAN, MINNESOTA THAT The Business Assistance/Subsidy Policy, attached as Exhibit A, is hereby adopted. BE IT FURTHER RESOLVED THAT, City staff is hereby directed to forwazd a copy of the Business Assistance/Subsidy Policy to the Minnesota Deparhnent of Employment and Economic Development. VOTING AYE VOTING NAY X Cossette,Tom Cossette,Tom_ _X Grabowski,Chuck Grabowski,Chuck_ X Lymangood,Chuck Lymangood,Chuck Jacobs,Paul Jacobs,Paul X _X Thomas,Ron Thomas,Ron_ Whereupon,said Resolution is hereby declared passed on this 12`h day of October,2006. �� Tom Cossette,Mayor ATTEST: City Seal �,.Q Bea Lindberg,City Cler BIISINESS ASSISTANCE/SUBSIDY POLICY CITY OF CORCORAN,NIINNESOTA Section 1: Purpose The purpose of this policy is to establish City standards with regard to business assistance. The City supports the concept of public/private partnerships as a means of: encouraging continued economic diversity; maintaining a viable taa�base; expanding existing business and industry; attracting quality and compatible business and industry; enhancing and retaining employment opportunities; and,ma.ximi�ing the return on municipal investments such as infrastructure,utilities and services. The standards herein are required by and in compliance with Minnesota Statutes 116J.993 through 116J.995,as amended. Section 2: Definitions For the purposes of this policy,terms herein shall have the meanings given to them in Minnesota Statutes, Section 116J.993. Section 3: Public Purpose Requirements The City may consider business assistance to support private development in circumstances where the proposed project meets a minimum of one of the following uses and new full-time equivalent positions are paid no less than 110% of the federal poverty level for a family of four for the current year as identified by the U.S. Department of Health and Human Services. A. To redevelop blighted or under-utilized areas of the community. B. To encourage redevelopment in the City's commercial and industrial areas to stimulate high levels of property maintenance and private reinvestment in those areas. C. In conjunction with another business assistance use as provided for in this section to increase the tax base. D. To retain jobs wherein job loss is specific and demonstrable. E. To increase the number of jobs and diversity of the employment base. F. To encourage additional unsubsidized private development in the area. G. To offset increased costs of redevelopment (i.e. contaminated site clean-up), over and above those costs that a developer would normally incur. H. To facilitate the development process and to achieve development on sites which would not be developed without this assistance. I. To meet other uses of public policy including, but not limited to, promotion of quality urban design, quality architectural design, energy conservation, decreasing the capital and operating costs of local government, etc. Page -1- Corcoran Business Assistance Policy Adopted 10/12/06,Resolution No.2006-58 Section 4: Assistance Agreement A. A recipient of a business assistance must enter into an agreement with the grantor of the assistance that includes: 1. The amount and type of assistance. If the type of assistance is t�increment financing,the type of district should be specified(e.g. economic development,redevelopment,etc.) 2. A list of financial assistance by all grantors for the project as well as private financing and equity contributed to the project. 3. A statement(s)of public purpose(from Section 3), 4. A statement explaining why the assistance is needed. 5. Goa1s for the assistance, including but not limited to, wage goals for the number of full time equivalent jobs created or retained within two years of the benefit date, increase in tax base, etc. 6. A statement as to the recipient's obligation(s) if the recipient does not fu1fi11 the agreement. At a minimum the agreement must require a recipient failing to meet assistance agreement goals to pay back the assistance plus interest to the grantor provided that repayment may be prorated to reflect partial fulfillment of goals. 7. The name and address of the necipient (and pazent corporation where applicable) and, a description of the financial obligation of the recipient if the goals aze not met. 8. A commitment to continue operations at the site where the assistance is used for at least five (5) years after the benefit date. This requirement may be waived if after a public hearing,the City grants approval of the recipients request to move. 9. A statement as to the proposed project's compliance with the City's Comprehensive Plan. 10. A statement as to the recipient's annual reporting requirements. B. If business assistance in the form of grants must be structured as forgivable loans. Business assistance not structured as a forgivable loans, must include a statement as to the fair market value of the assistance to the recipient, including the value of conveying property at less than a fair market price or other in-kind benefits to the recipient. C. If the business assistance benefits more than one recipient,the grantor must assign a proportion of the business assistance to each recipient that signs an assistance agreement. The proportion assessed to ea.ch recipient must reflect a reasonable estimate of the share of the total benefits of the project received by that recipient. D. Wage and Job Goals. The Assistance Agreement sha11 include goals for the number of jobs to be created (including full-time and/or part-time). If the public purpose identified is Section 3 D, the retention of jobs,the number of jobs to be reta.ined must be identified and any wage goals for jobs to be enhanced though increased wages should be noted. If, after a public hearing, job creation/retention is not defined as a goal, the wage and job goals ma.y be set at zero. Wage and job goals must be met within two years of the benefit date. E. City and/or State Government Agency and recipients must be authorized to execute the assistance agreement and the agreement must be executed. Section S: Process Page -2- corcoran susiness Assistance Policy Adopted]0/12/06,Resolution No.2006-58 A. Application. The recipient shall complete an applicarion form, provided by the City, specifying the type of assistance or subsidy requested,along with other information required by the City. B. City Sta.ff-Recipient Meeting. As soon as possible development prospects seeking a business assistance should meet with City staff inembers and committee members as determined by the City, to discuss the project, the public purpose for the assistance, proposed uses of the assistance, why the assistance is needed, goals for the assistance issuance and materials required to process the request for assistance (e.g. historical and projected financial reports, proposed project financing including a demonstrable gap, evidence of ownership of property where applicable, appraisals, site information, the ability of the recipient to repay the assistance if goals are not achieved and other information deemed necessary to process the request). C. Cornmittee Review and Recommendation. The EDA or a subcommittee as identified by the EDA shall evalua.te and make a recommendation to the City Council regazding the request for business assistance. D. Public Hearing Requirements. If the amount of the requested local assistance exceeds $100,000 the City shall hold a public hearing before granting or denying the request. If the assistance is from a state government agency, a public hearing must be held for assistance or subsidies in excess of$500,000. In addition to these requirements, a public heazing may be needed if required by MN Statutes or local ordinances(e.g. tax increment financing). E. Assistance Agreement. The City and the recipient sha11 enter into a Business Assistance Agreement. Section 6: Reports A. Reports by Recipients to the City. A recipient shall report information regazding goals and results for two years after the benefit date or until the goals are met, whichever is later. If goals aze not met, the recipient must continue to provide information on the assistance until the assistance is repaid. The information must be filed on forms provided by the City no later than March 1 st of each year, and within 30 days after the deadline for meeting job and wage goals. If the recipient does not submit its report, the City sha11 mail the recipient a warning within one week of the required filing date. If within 14 days a report is not provided, the recipient sha11 pay the City a penalty of$100 for each subsequent day the report is not filed,to a maximum of$1,000. B. Reports by the City to the State. The City sha11 file a report by April 1 st of each yeaz with the MN Department of Employment and Economic Development,as required by State Statute. Page -3- Corcoran Business Assistm►ce Policy Adopted 10/12/06,Resolution No.2006-58 Ezhibit A 2006 Federal Poverty Guidelines for the 48 Contiguous States and the District of Columbia Poverty 110% of Full- Persons in family unit Guideline Poverty Time Guideline Hourly Equivalency 1................................................... $9,800 $10,780 2................................................... 13,200 $14,520 3................................................... 16,600 $18,260 4................................................... 20,000 $22,000 $10.58 5................................................... 23,400 $25,740 6................................................... 26,800 $29,480 7................................................... 30,200 $33,220 8................................................... 33,600 $36,960 For family units with more than 8 persons, add $3,400 for each additional person. Source: United States Department of Health and Human Services. httpa�aspe.hhs.go�rpo��crt��r06nu��rt�.shtml Page -4- Corcoran Business Assis[ance Policy Adopted 10/12/06,Resolution No.2006-58