2024.06.24 EDA Meeting MinutesECONOMIC DEVELOPMENT AUTHORITY MEETING
MONDAY, JUNE 241 2024
5:30 PM
OTSEGO PRAIRIE CENTER
Call to Order:
President Stockamp called the EDA meeting to order at 5630 PM.
1. Roll Call:
President Jessica Stockamp and Commissioners: Brittany Moores, Tina Goede, Jeff Dahl, and
Ryan Dunlap. Executive Director Adam Flaherty; Emergency Services Director Daryl Rausch, City
Planner Daniel Licht, and Secretary Audra Etzel.
2. Consider approval of Minutes:
2.1 January 13, 2020 EDA Minutes.
Commissioner Dahl motioned to approve the January 13, 2020 EDA minutes, seconded by
Commissioner Goede. All in favor. Motion carried 5-0.
3. Bills and Communications.
Executive Director Flaherty noted there are no bills to approve.
4. New Business:
4.1 Officers.
A. Presentation by Executive Director
B. Consider Election of Officers
Commissioner Dahl nominated the following as officers of the City of Otsego Economic
Development Authority:
President
Vice President
Treasurer
Assistant Treasurer
Secretary
Jessica Stockamp
Tina Goede
Ryan Dunlap
Brittany Moores
Audra Etzel
Seconded by Commissioner Goede. All in favor. Motion carried 5-0.
4.2 Official Newspaper.
A. Presentation by Executive Director
B. Consider Resolution 2024-01 Desi�natin� an Official Newspaper.
Commissioner Goede motioned to adopt Resolution 2024-01 Designating an Official
Newspaper, seconded by Commissioner Dahl.
Commissioner Moores clarified the newspaper is the Star News.
All in favor. Motion carried 5-0.
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MINUTES OF THE CITY OF OTSEGO ECONOMIC DEVELOPMENT AUTHORITY MEETING JUNE 24, 2024
4.3 Economic Development District,
A. Presentation by Northland Securities.
B. Consider Resolution 2024-04 Calling a Public Hearing on the Proposed
Development District.
Jessica Green of Northland Secures reviewed the staff report.
Commissioner Dunlap asked about the definition of an EDA Development District. Ms. Green
referenced MN Statue 469.101, and noted the EDA development district is an area or boundary
giving the EDA the ability to utilize statutory defined authority.
Commissioner Dunlap noted the memo from Taft states the City will have rights under the lease
and a future City Council could decide to stop making payments. Ms. Green said if the city
would default there would be considerable impacts to the city for many years into the future.
Commissioner Moores asked why a city would default. Ms. Green provided two examples, both
defaulted on a lease revenue bond. Ms. Green said a bond cannot be cancelled, it can be called
at the time of redemption date or any date after. President Stockamp asked if the bonds could
be restructured. Ms. Green said yes, those bonds can be called and refunded. Commissioner
Dunlap asked about the cost to call early. Ms. Green said she cannot provide an accurate
estimate because of the daily market variables. Commissioner Moores asked what happens if a
city defaults? Ms. Green said the credit rating would be ruined; current rating is AA+. Ms.
Green noted if the City did not honor its obligations, the poor credit rating would have impacts.
Investors would know the history and it is possible creditors would not get the same bid ratings
on future projects. Moores asked how long it would take to rebuild the credit rating. Green
said it would take decades to rebuild the city's rating.
Commissioner Dunlap asked about the City's credit rating regarding an EDA loan. Green said
the city doesn't have a credit rating, the City's outstanding debt has a credit rating; ultimately
both the City and EDA would be affected by a default.
Commissioner Dunlap feels the EDA was created to form and encourage business development;
and does not feel this is a good path. Stoclamp noted the EDA used funds to buy land and
build Prairie Center and the current City Hall/Public Works Buildings; these are essential
services.
Commissioner Dahl asked if residents could sue the city for misapproiation of funds? City
Attorney Kendall said he is not bond counsel, but this would be a very bad idea to use the appropriation clause clause and harmful for the well-being of the City. Ms. Green said the two
examples given; investors may seek action. City Attorney Kendall said investors most likely
could sue for default on the bonds and most likely would.
Commissioner Moores motioned to adopt Resolution 2024-02 Calling for a Public Hearing on
the Proposed Establishment of Economic Development District No. 2 on July 22, 2024, at
5:30PM to be held at the Otsego Prairie Center, seconded by Commissioner Goede
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MINUTES OF THE CITY OF OTSEGO ECONOMIC DEVELOPMENT AUTHORITY MEETING JUNE 24, 2024
Commissioner Dunlap will not support the motion and feels the CIP Bond is a cheaper option.
Dunlap feels the Council is trying to avoid a petition. Commissioner Moores feels this is
important for the residents as a whole to provide public safety. Commissioner Dunlap does not
feel this is improving the economics of the business and residents, buy using the more
expensive option through the EDA. Commissioner Goede said the response times within the
City will improve. Commissioner Dahl noted the possibility of ambulance services using the
future Fire Department and the subsidizing of surrounding Fire Departments.
Voting in favor; Stockamp, Dahl, Goede, and Moores. Voting against; Dunlap. Motion carried
5. Old Business:
Executive Director Flaherty noted past items the EDA were working on: broker agreements for
three City owned lots, EDA strategies and priorities policy, revolving loan programs — housing
aid, and by-law reviews.
The Commissioners agreed to have these items reviewed at a future meeting.
6. Reports:
Executive Director Flaherty said there is a possible business expansion and purchase of City
owned lot.
Commissioner Dunlap said the EDA hasn't met in four years and he has an issue with the EDA
not having a budget that is approved by the City Council. Executive Director Flaherty said the
cost for professional services is not incurred until a bond is potentially issued, this would be
part of the closing costs. Additionally, the City historically has not adopted a specific EDA
budget, the EDA does have the authority to levy the taxes. The EDA is a separate component of
the City financial statements in accordance with accounting principles, with authority as
describe by Statute, but not formed without the City. Commissioner Dunlap listed all the EDA
requirements and feels this a loophole. Executive Director Flaherty said this is not a loophole,
the City has the authority and meets the criteria; the public hearing is the next step. Executive
Director Flaherty said the City Council can appropriate funds within the General Fund to pay the
meeting stipends and in the future a line -item budget can be created if requested by the EDA or
the City Council.
Commissioner Dunlap said the EDA budget is supposed to be included in the annual budget and
he is concerned this was not included and wants to allow for public comment. Executive
Director Flaherty said the EDA finances are blended component into the City's financial
statements and would be part of the General Fund,
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MINUTES OF THE CITY OF OTSEGO ECONOMIC DEVELOPMENT AUTHORITY MEETING JUNE 24, 2024
7. Adjourn.
Commissioner Goede motioned to adjourn at 6:21 PM, seconded by Commissioner Moores.
All in favor. Motion carried 5-0.
ATTEST: i
Audra Etzel, Secretary
City of Otsego:
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