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HomeMy WebLinkAbout11-08-1999 EDA MinutesCITY OF LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MINUTES DATE: Monday, November 8, 1999 MEMBERS PRESENT: K. Sullivan, J. Bergeson, C. Dahl, C. Lyden, A. Neal MEMBERS ABSENT: OTHERS PRESENT: Brian Wessel, Mary Divine, Ron Batty CONSIDERATION OF MINUTES EDA Member Neal moved to approve the minutes from the April 12, 1999 EDA meeting. EDA Member Bergeson seconded the motion. Motion passed unanimously. PUBLIC HEARING: ADOPTION OF BUSINESS SUBSIDY CRITERIA Mr. Batty explained to the EDA that this criteria was a requirement under a legislative change to regulate subsidies. Any entity granting a subsidy must adopt a criteria. The criteria presented tonight are in outline document that provides flexibility. The legislation states that creating tax base cannot be the only criteria for providing subsidies, but that wages and jobs must be created. The legislation also requires that a public hearing be held for any subsidy over $100,000, and the city council must approve the subsidy. This criteria is not contractual, and does not obligate the EDA in any way to providing subsidies. Mr. Batty stated that this criteria calls for jobs being created to be at 110% of the federal minimum wage, plus benefits. There is no requirement for a particular number of jobs or wage. Each subsidy would be subject to negotiation over jobs and wages, and requires EDA and council approval. Mr. Bergeson asked if this was minimally adequate to meet the statute, and what meaning did it have at this minimal requirement. Mr. Batty replied this criteria reflects the intent of the statute and reminds local governments of what touchstones they need to consider when granting subsidies. Most cities are adopting similar criteria. This is a general policy, and the intent is to react to specific subsidy requests based on the goals of the city. Mr. Lyden questioned the true spirit of the law, and why standards are being legislated. Mr. Batty replied that this statute reflects the differing opinions at the legislature over what should be required. No consensus has ever been reached over whether wage and job goals should be mandated. This is a compromise. Since economic development is related to tax base in many cities, the wages are generally an add -on. This legislation asks that cities need to think more broadly. EDA President Sullivan opened the public hearing at 6:19 p.m. George Knotek, 6108 Oakwood Lane, stated this legislation opens the process up for public involvement. He requested the city look at getting the maximum return for investment of public money. He noted that the city of Albert Lea spent public dollars to attract a business with low paying jobs. The wages were too low to attract local residents, and those who took the jobs were in need of public services because they were not paid a living wage. The city needs criteria that also protect existing business and addresses other job -related issues. Mr. Knotek added that businesses shop around for incentives, and Lino Lakes should not assume that it has to pay for business to come. Mr. Knotek presented options to amend the criteria and asked they be included in the record. The proposed amendments included: 1) Change the wage goals to "150% of the federal poverty level for a family of four, or 130% of the federal poverty level for a family of four if employer paid comprehensive health insurance is provided." 2) Adopt an overall goal that city residents hold 60% of the new jobs created each year under the business subsidy policy. 3) Adopt an overall goal that one living wage job be created per $35,000 of assistance granted. Donna Carlson, 6808 East Shadow Lake Drive, suggested the city take time to consider concerns over the wage and job goals. The city needs to ask if the business needs assistance. She doesn't want to cripple economic development, but the city needs to question whether a business needs assistance, if it competes with existing businesses, if it is sensitive to the environment, creates new jobs for local residents, and pays adequate wages and benefits. She cited a study that showed Lino Lakes low on the creation of jobs per amount of subsidy. She stated the city should raise the bar, although she believes most businesses are creating more jobs at higher wages than the report shows. EDA President Sullivan closed the public hearing at 6:37 p.m. Mr. Wessel stated that the city has criteria for selection of companies, although it is appropriate to review it. EDAC is discussing this issue and is looking at incentives at its December 2 meeting. Mr. Knotek was encouraged to come and participate. Ms. Sullivan stated that Lino Lakes has a good TIF policy and uses it conservatively. Companies must meet the "but for" test and other standards. Only industrial projects are granted TIF subsidies. Mr. Lyden said he'd like more public involvement and would like a standard that related the amount of TIF to the number of jobs created. Mr. Bergeson noted this is a requirement from the state to quantify the city's subsidy policy. The policy does not reflect the city's practice. He suggested passing the policy and improving and refining over time. Mr. Batty stated that this criteria is another layer of subsidy regulation and does not replace the city's TIF criteria. The city could labor over a policy, then a great proposal could come to the city and it misses the goals that were set. The city should look to the general goals in this policy and jobs should be dealt with on a case by case basis. In Lino Lakes, job creation has not been the primary reason for business subsidies. Ms. Sullivan noted that the focus is successful businesses, and the city has criteria for business selection. She questioned if continuing this discussion would jeopardize schedules for new business. Ms. Divine stated that a company is seeking site plan review and approval of a development agreement in December. ACTION: Mr. Bergeson moved to adopt Resolution 99-01, adopting Lino Lakes Economic Development Authority Business Subsidy Criteria. Mr. Neal seconded the motion. Motion passed unanimously. CONSIDERATION OF RESOLUTION NO. 99-02 CALLING FOR A PUBLIC HEARING REGARDING A PROPOSED SUBSIDY TO H&L MESABI Ms. Divine explained that this company was seeking TIF assistance for construction of a facility in the Apollo Business Park. The company is a distributor of portable screening plants for sand and gravel. ACTION: Mr. Bergeson moved to adopt Resolution NO. 99-02 calling for a public hearing on the proposed business subsidy to H&L Mesabi at 6 p.m. on Monday, December 13, 1999 in the council chambers. Mr. Neal seconded the motion. Motion passed unanimously. ADJOURNMENT EDA Member Dahl moved to adjourn. EDA Member Neal seconded the motion. Motion passed unanimously. Meeting adjourned at 7 p.m.