Local Development Finance Authority Regular Meeting Agenda Monday, June 14, 2010 4:00 p.m., Council Chambers South Haven City Hall City of South Haven 1. Call to Order 2. Roll Call Robert Black, Art Bolt, Thomas Erdmann, Eugen Gawreliuk, Ron Hartgerink, Lynn Kerber, Andrew Klavins, Larry Lewis, Christine Valentine, Janice Varney. 3. Approval of Agenda 4. Approval of Minutes – May 10, 2010 5. Interested Citizens in the Audience Will be Heard on Items Not on the Agenda 6. Financial Report 7. Invoices for Approval LDFA 1 Clark Hill, #380150, 5/20/10, Property consultation $ 54.00 LDFA 3 Clark Hill, #380150, 5/20/10, 2nd Ave Project $ 504.00 Abonmarche, #51221, 4/21/10, 2nd Ave Project $2,500.00 C2AE, #51081, 4/21/10, Edgeworks $ 178.42 8. Strategic Plan 9. Budget 10. Taxable Value Report 11. Economic Development Report SOUTH HAVEN CITY HALL IS BARRIER FREE AND THE CITY OF SOUTH HAVEN WILL PROVIDE THE NECESSARY REASONABLE AUXILIARY AIDS AND SERVICES FOR PERSONS WITH DISABILITIES, SUCH AS SIGNERS FOR THE HEARING IMPAIRED AND AUDIO TAPES OF PRINTED MATERIALS BEING CONSIDERED AT THE MEETING TO INDIVIDUALS WITH DISABILITIES AT THE MEETING UPON SEVEN (7) DAYS NOTICE TO THE SOUTH HAVEN CITY HALL. 1
Transcript
Local Development Finance Authority
Regular Meeting AgendaMonday, June 14, 20104:00 p.m., Council ChambersSouth Haven City Hall
City of South Haven
1. Call to Order
2. Roll Call
Robert Black, Art Bolt, Thomas Erdmann, Eugen Gawreliuk, Ron Hartgerink, Lynn Kerber, Andrew Klavins, Larry Lewis, Christine Valentine, Janice Varney.
3. Approval of Agenda
4. Approval of Minutes – May 10, 2010
5. Interested Citizens in the Audience Will be Heard on Items Not on the Agenda
6. Financial Report
7. Invoices for Approval
LDFA 1Clark Hill, #380150, 5/20/10, Property consultation $ 54.00
SOUTH HAVEN CITY HALL IS BARRIER FREE AND THE CITY OF SOUTH HAVEN WILL PROVIDE THE NECESSARY REASONABLE AUXILIARY AIDS AND SERVICES FOR PERSONS WITH DISABILITIES, SUCH AS SIGNERS FOR THE HEARING IMPAIRED AND AUDIO TAPES OF PRINTED MATERIALS BEING CONSIDERED AT THE MEETING TO INDIVIDUALS WITH DISABILITIES AT THE MEETING UPON SEVEN (7) DAYS NOTICE TO THE SOUTH HAVEN CITY HALL.
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Local Development Finance AuthorityMay 10, 2010 Regular Meeting Agenda
12. General Comments
13. Adjourn
RESPECTFULLY SUBMITTED,Paul VandenBoschSecretary, Local Development Finance Authority
SOUTH HAVEN CITY HALL IS BARRIER FREE AND THE CITY OF SOUTH HAVEN WILL PROVIDE THE NECESSARY REASONABLE AUXILIARY AIDS AND SERVICES FOR PERSONS WITH DISABILITIES, SUCH AS SIGNERS FOR THE HEARING IMPAIRED AND AUDIO TAPES OF PRINTED MATERIALS BEING CONSIDERED AT THE MEETING TO INDIVIDUALS WITH DISABILITIES AT THE MEETING UPON SEVEN (7) DAYS NOTICE TO THE SOUTH HAVEN CITY HALL.
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Local Development Finance Authority
Regular Meeting MinutesMonday, May 10, 20104:00 p.m., Council ChambersSouth Haven City Hall
City of South Haven
1. The meeting was Called to Order by Hartgerink at 4:00 p.m.
2. Roll CallPresent: Black, Bolt, Erdmann, Gawreliuk, Kerber, Klavins, Valentine, Varney, Hartgerink,Absent: Lewis
3. Approval of AgendaMotion by Valentine, second by Erdmann to approve the agenda. All in favor. Motion carried.
4. Approval of Minutes – April 12, 2010Motion by Bolt, second by Valentine to approve the April 12, 2010 minutes. All in favor. Motion carried.
5. Interested Citizens in the Audience Will be Heard on Items Not on the AgendaThere were none.
6. Financial ReportVandenBosch gave an overview of the financial report.Motion by Erdmann, second by Bolt to accept the financial report. All in favor. Motion carried.
Kerber arrived at 4:03 p.m.
7. Invoices for ApprovalJody Warner, photography expense reimbursement, LDFA Brochure $45.00VandenBosch noted this expenditure is for professional photography for our brochure. The photographer was willing to work for expenses, which were $45.00.
Motion by Varney, second by Erdmann to approve the invoice for photography. All in favor. Motion carried.
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8. Economic Development BrochureVandenBosch introduced Monica Hodge who has been working with Lambrix Design to put together the brochure. Hartgerink asked whether Varney had seen the brochure yet, to which Varney noted that she had seen a previous presentation by Hodge. VandenBosch noted that Hodge will be asking the board for approval and suggestions.
Hodge passed around the final mockup, noting that the front cover captures the essence of South Haven with its nautical heritage. Hodge further explained that the brochure states “We have an extraordinary place to do business, situated between Chicago and Detroit.” Hodge noted that the photography is not stock photography but actual photos of people and places in South Haven. Illustrating the business layout, are photographs of a welder from Spencer; a chemist from Albemarle and the grinder from Lovejoy set off with a quote from Bo Brantley stating why we are a good place to do business.
Hodge noted that the next feature is a layout with the South Haven lighthouse and sunset; our City Pride parade and families enjoying the downtown and bustling harbor. Backing up our charming robust standard of living are views of Cottage Home and a swimmer at the Wellness Center.
Hodge stated that the Quality of Life page is enhanced with photographs of the hospital, the Wellness Center, Lake Michigan College, public schools, and the Visitor’s Bureau. A quotation from Lisa Shanley of the Visitor’s Bureau completes this layout. Hodge noted that in that same open flap it speaks of our arts and culture featuring the Michigan Maritime Museum; Friends Good Will, South Haven’s tall ship; the Historical Society and Vintage Baseball.
The statement “We Have Tons of Fun 365 Days a Year” includes information and photos of South Haven through the seasons. Hodge noted that the back folder has a place for inserts and a business card spot. The back of the brochure gives our location and contact information.
Hodges reviewed the various inserts: Lakeside and Countryside; BRACE; moving on with the residential community, showing a wide variety of moderately priced homes including lakeshore and regular older residential communities. The location, “Positioned for Success” highlights how close South Haven is to highways; our regional airport and the distance to major cities from South Haven.
Municipal Services, our electrical, street, water and sewer, and public safety, are featured. Hodges noted that the information that our electric rates are less than those charged by our competitors and response to outages is quicker than surrounding areas is included in this layout.
The Van Buren County pages include an overview of our labor force and rates plus median income. On the back is skilled work force depicting how many establishments we have in the area with focus on photographs from Albemarle, Lovejoy and Spencer Manufacturing. Hodges reiterated that the brochure is not illustrated with stock photos.
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An overview of companies is offset by a quote from Larry Lewis of Albemarle. Economic Development includes contract information for our Economic Development Liaison, and information about our tax abatement program; the LDFA; the exits where we are located and developmental news. On the back of this insert is a map of industrial parks. Kerber suggested including the Brownfield as well as the LDFA as an incentive for businesses.
Hodge explained for Klavins benefit, as a new LDFA member, that the Sterling Heights brochure shows where this design stemmed from. Klavins asked whether McCloughan likes the brochure. McCloughan stated this is his first viewing and he likes what he sees so far. Black asked McCloughan whether this brochure answers the questions he is asked frequently to which McCloughan responded with a yes. Varney asked about the marriage of quality of life with land and amenities and McCloughan said the brochure absolutely covers it, noting that Hodge has discussed this with him while Hodge was developing the brochure. Hartgerink asked Varney whether this brochure would answer questions she gets, to which she responded “Yes, and in turn queried Black, who said most people who ask him question are not interested in the LDFA or Brownfield so much, but are more interested in the quality of life.
Klavins asked whether the developers of the brochure have considered doing a DVD. Hodge said she hasn’t pursued that yet. Kerber suggested making the brochure available on-line through the City’s website. Hartgerink asked where schools are focused upon in the brochure. Hodge stated it is in the brochure under Quality of Life, not on an insert. McCloughan stated that is page six. Hartgerink said schooling is about the second question asked by business developers, so he wants to be sure the City has their best and most honest foot forward.
Hodge asked whether the Authority wants to approve five hundred or one thousand copies. One thousand, Hodge noted, is more economical because of the price-break. Hartgerink asked if there are further questions or the board is ready to move on this. Varney asked if it has been proofed. Hodge said the mockup still needs to be proofed but it has been proofed and re-proofed endlessly along the way. Hodge noted that she enjoyed working on this project; it was very interesting.
Hodge was asked for clarification on the prices. For five hundred (500) the cost is $2,141.68 or $4.28 per folder. At one thousand (1,000) the cost is $2,388.56 or $2.39 per folder and finally at fifteen-hundred (1,500) the cost is $2,602.44 or a per folder price of $1.74. VandenBosch asked if Hodge has heard whether other entities are interested in using the folders. Hodge noted that she has heard that the Chamber of Commerce and the South Haven Hospital are interested. Hartgerink asked what the DDA has approved to help with this project. Hodge stated that they are still debating.
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VandenBosch stated that we approved $15,000, and have paid out $3,000, noting we have not yet received a final invoice from Lambrix Design. Hartgerink wondered whether the brochure can still be reprinted at some point in the future, say five years. Hodge noted that the design allows easy reprinting, especially in replacing the information on the inserts.
Hodge noted that she wouldn’t feel comfortable recommending ordering five hundred (500) because that would not take advantage of the price break. Hodge noted that she would feel better about ordering one thousand (1,000) because it is more economical.
Lewis arrived at 4:26 p.m.
Erdmann asked if McCloughan sees a use for fifteen-hundred (1,500) brochures. McCloughan stated that he has gone through about four thousand (4,000) business cards but feels that is a different tool. Hodge wondered how many he might use at the conferences and conventions he goes to. McCloughan said his attendance varies based on what is available and what conferences or conventions he is notified about. VandenBosch said, Based on the past, if it were just economic development for the city, he would ask for fifteen hundred (1,500) because it is such a small jump in price from one thousand (1,000) to fifteen-hundred (1,500). Hartgerink noted it sounds like you are saying we should order fifteen-hundred (1,500) or more. Hodge noted that she has those prices, and stated that five thousand (5,000) folders are $0.82 each. VandenBosch said we don’t know how many the other entities will be asking for.
Motion by Bolt, second by Kerber to order one thousand-five hundred (1,500) folders and inserts. All in favor. Motion carried.
Varney thanked Hodge for all of her work and appreciation was echoed by several other board members. Hodge responded with thanks for their attention.
9. Strategic Plan and Budget VandenBosch stated that at the last meeting the board asked to see the Strategic Plan and
Budget again, noting that this plan was put together based on voting and this board can change it in any way or at any time. VandenBosch left the percentages in the document again, though he suggests the percentages be removed in any final plan. VandenBosch questioned whether anyone proposed changes or if this is satisfactory.
Erdmann stated that he would like to see Land Acquisition become number 1; Industrial Attraction and Retention become number 2 and Renewable Energy become number 3. Hartgerink will entertain that as a proposal. Gawreliuk said that the Land Acquisition and Industrial Attraction are workable, something we can attack, however Renewable Energy is a wish; we do not have the resources. Bolt thinks reducing electric utility rates is just taking
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up space. Black questions our desire and hunt for industrial, industrial, industrial. A lot of the big industrial things are gone. At one time Parks and Recreation were part of what we thought would attract more people. He thinks that Parks and Recreation have a lot to do with our top priority in our brochure, Quality of Life. Klavins agrees because for outsiders looking in parks and recreation are important, and people are excited about how the roads are being fixed. Klavins feels the parks are a big deal and the Parks Department does not have much money; our playgrounds are all run down. Parents and families seeing improvements to our Parks and new play equipment would be saying this is a pretty great town.
Hartgerink asked for clarification about what LDFA can and cannot do. VandenBosch said he does not believe that the law would allow the use of these funds for the purpose of improving the parks. What we can do is connect our industrial park to a network of bike trails; that might help recreation. Varney asked, “Given that definition, could you use “Business and/or Industrial” instead of just “Industrial”?” VandenBosch said it is processing and manufacturing; it is not distribution so much, although if you repackage or change the state of something it can be considered manufacturing. Hartgerink would like to see information about that definition in the next agenda packet.
Gawreliuk said industry gives steady year-round employment whereas recreation is for four (4) months and then everyone gets laid off. Valentine said if we want to help with Parks, we need to create something that supports the Park. Gawreliuk said, “Get good year-round employment and you will have the money to support recreation.” Erdmann is in favor of jobs, seasonal or non-seasonal. The State needs to set up something new to handle recreation; there is no reason why we couldn’t have a TIF district that encourages recreation. VandenBosch said the Visitor’s Bureau is funded by a tax on hotel rooms to which Erdmann responded that the Visitor’s Bureau’s focus is on getting heads in beds. Erdmann stated that we need to have a different focus for the future and industry cannot be the majority of it as it was for fifty years. Erdmann said that we need to look for ways to help our area and our State; we need a different set of priorities. Hartgerink said, “Let us look broadly at this again with the law in front of us.” Hartgerink noted that he likes the specific order change suggested by Erdmann.
Motion by Erdmann, second by Gawreliuk to change the order of the first three priorities in the Strategic Plan to the following order:
#1. Land Acquisition#2. Industrial Attraction and Retention, Economic Development Liaison, Administration#3. Renewable Energy
VandenBosch stated that staff were still working on preparing an explanation for the reduction in estimated revenues for the Budget. The budget has been amended to reflect lower administrative transfers to the General Fund. Also, VandenBosch noted, personal property taxes have actually increased, although VandenBosch does not yet have a good explanation for why this happened, noting that these numbers come from the Board of Review tax roll evaluation. The projections in the Budget carry out into the future, VandenBosch stated, but staff does not really know which way the economy is going to go, so the revenues are projected at the same level through 2016. VandenBosch noted that there is a lift station loan of $250,000 from LDFA 1 for the Indian Grove lift station repair; $400,000 has been included and maintained in the Budget as an expense for Land Acquisition and the estimated end-of-year fund balance of about $400,000 has been
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maintained into the future so we have the ability for a rapid response if a business would come in. VandenBosch noted that by reducing the transfer to the General Fund the LDFA can maintain the projects and priorities set previously.
VandenBosch stated that page 12 of the agenda packet shows the LDFA 1 Infrastructure Improvement Plan which is part of the Twenty Year Road Reconstruction strategy. That has been reduced to $50,000 per year in reaction to the loss of revenue we have experienced. The only project proposed right now, VandenBosch explained, is the Indian Grove lift station project, pointing out that the LDFA 1 payment is an outright payment, not a loan. VandenBosch also noted that project is much larger than that portion for which the LDFA is paying; it is in the millions and goes from near Hope Reformed Church, down Lovejoy, and to a lift station on Kalamazoo Street; it is actually a very large project.
Erdmann asked about the 2010 current year Budget line item which is at $50,000 and the $100,000 expense to which VandenBosch responded that he needs to check into that.
Kerber noted that she was gone for the last meeting, but asked about what was discussed at the meeting before last regarding Land Acquisition. VandenBosch said we are looking into that and have put a reserve for Land Acquisition into the accounting system. VandenBosch stated that this Budget shows expenses and it is kind of scattered, but the goal is to create a budget line for Land Acquisition. Kerber asked if there has been an amount set or is it up for discussion. VandenBosch pointed to page 19 of the agenda packet which shows the LDFA Funding for Land Acquisition, broken down to what is actually being shown as actual expenses, going into that fund that is being created. This money is available next year, VandenBosch stated, and if not spent next year, will continue to be available.
VandenBosch directed the board’s attention back to page 13, LDFA 2, noting the reduction in the administration transfer and pointing out that about halfway down there is a Renewable Energy project and 8th Avenue Improvements. VandenBosch has placed $80,000 in each fund. The Renewable Energy is for this year and the 8th Avenue is for next year. But the LDFA can only fund part of this and would have to partner with another entity to do the projects, which are open to change. Erdmann asked if the 8th Avenue project would be a Road Commission project, noting that the Road Commission tends to plan things out two or three years, his point being that they knew we had some money available toward the project they might do something in 2013. VandenBosch noted that the fund balance is currently at $133,000; goes down to $24,000 over the years and then grows again to the end of the projection.
Kerber wonders if the Land Acquisition fund can be used for site improvements or developments. VandenBosch said that is really up to this board, noting that there is no money budgeted for improvements except in LDFA 3. VandenBosch stated that the LDFA probably needs to look for land that is very easily developed, noting that in the past grants and loans were more readily available than they are now, which is a real problem. Black asked what Building Authority #2 is, to which VandenBosch responded that is near Do-It, the old Canonie site, 8th Avenue near M-43 and Blue Star Highway. VandenBosch said there is really no project going on, but we have some businesses there. Black asked what kind of expenses we would have for that and VandenBosch stated it would be road maintenance.
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Hartgerink said in this kind of dramatic fall of revenue, if we are going to do anything we may have to gather the resources into fewer places. Hartgerink states he is saying that anyway; this means that property values are falling. VandenBosch said most of the property value loss in South Haven has occurred in industrial parks and LDFAs. Hartgerink said we may find that the two biggest move-outs caused this drop in property values, both being Noble facilities. Erdmann asked about the freezer storage project, wondering if all our numbers will change dramatically if that goes through VandenBosch said we are looking two years out before we see revenue on that project, if it happens.
VandenBosch suggesting moving to LDFA 3 on page 14 of the agenda packet, noting that this is where the real and personal property tax drop has been the biggest. The current year budget was $80,000 and it dropped to $34,000. Personal property was $84,000 and we are looking at 11,793. VandenBosch noted that this is where most of the reduction in revenue is coming from, then pointed to the Noble claw-back as a positive, coming from the other creditors from the Noble bankruptcy. It is not coming from Noble; all of their assets are held by the court, which is giving them to the entities they owed money to. We were able to get a settlement based on unpaid taxes. As far as projects, VandenBosch pointed the board to the line items under Expenses starting with Land Acquisition. The Dewey Water Main Loop is a water main project to improve fire flows to the fire hydrants; the Engineers were going to do it in the right-of-way off the road, but there is too much telephone cabling there so it has to be put under the roadway. The Engineering Department contacted the Road Commission and was able to coordinate with them. “The benefit for us,” VandenBosch explained, “is that we don’t have to pay for reconstructing the pavement. The Road Commission wants to improve that intersection, and provide access from Dewey Lane to 71 ½ Street.“ VandenBosch further explained that the issue is that some of the property owners, including Ray VanderZee, do not want to see that cul-de-sac punched through. Elbe & Sohn does not want to see it opened up. The hotels are very much in favor. Riveer were neutral to opposed; they didn’t really want to see more traffic there, but they are less affected since they are located right on Veteran’s Boulevard. VandenBosch also noted that while we have an issue with the property owners; the final decision lies with the City Council and Council will ask this board for a recommendation. VandenBosch stated that If the project doesn’t get done now, it may be years before it is done.
Bolt asked if the water main and the street are separate issues, noting that the Road Commission is going to rebuild the intersection so we can do the water main in conjunction with them. Bolt asked if adding the punch-through was extra. VandenBosch stated that the Road Commission was going to fund the punch-through. Bolt said it could cost more than our $60,000. Bolt asked if the street continuation would necessitate moving the telephone exchange. VandenBosch doesn’t know what the cost would be to the road commission, or exactly how it would affect the telephone exchange. Black said there is opposition to extending the street, not so much to the $60,000 for the water main. VandenBosch said we need the water main extension either way, and it is just that I’m letting you know that there is this issue we probably don’t want to be caught up in, but if we think it is a good idea based on traffic flow, we could recommend it to the Council.
Bolt asked where the water main goes and VandenBosch said it goes to Phoenix where it forms a loop. Hartgerink noted that loops are an essential part of a good water system. VandenBosch agreed and said it would also help the flow of the fire hydrants. Varney said she doesn’t understand the reasoning behind businesses not wanting the road punched
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through.. Erdmann said VanderZee wants to get access through from Phoenix Street so he opposes this alternative. Erdmann pointed out that the punch-through is the solution that all of the engineers have recommended in all the studies VanderZee has had done.
Bolt asked about the old agreement with the township not to have access to 71-1/2 Street. VandenBosch said he feels there would be very little opposition from the township. Bolt said when that whole area was acquired by the City there was a lot of discussion that people who lived on 71 ½ Street didn’t want the traffic on that road. Bolt further noted that the township was initially going to keep a twenty-five foot strip along the 71 ½ Street to prevent any such punch-through from happening. Bolt says “We own it and we agreed not to punch that road through when we annexed it to the City.” Erdmann said we agreed to do that when it was thought it was going to be more industrial than it is. VandenBosch said the City or LDFA owns a 20’ strip from Dewey Lane all the way to 2nd Avenue. We control any curb cut or access to 71 ½ Street.
Varney asked if the Road Commission would help with this, a one-time opportunity to punch through. VandenBosch said that is correct; it is a proposal by the Road Commission to punch through, noting that the Road Commission is working on a grant and we probably have to make a decision soon. VandenBosch explained that the LDFA’s $60,000 worth of work would be a match and helps the Commission use the grant. Hartgerink asked if the water line would help the Road Commission get a grant for the road. Hartgerink asked for clarification on the numbers. VandenBosch said the City’s numbers are $60,000 for construction and 8,000 for design, in addition to the County match. Hartgerink asked if VandenBosch has a recommendation.
VandenBosch stated it is not an easy decision. Hartgerink noted that the decision could be to fund the $60,000 for the water main and not comment on punching the road through. Let the City Council make the decision about the punch through, as they would be making that decision anyway. Hartgerink also said that we don’t seem to think the road is key to functioning. VandenBosch said he thinks some people think the road is important. Hartgerink suggested that perhaps we need to move on to the closed session to have a full group for discussion. Erdmann is the only person who has to leave so Hartgerink noted we can continue with the agenda.
Hartgerink asked what it would cost to agree to do the road and the water. VandenBosch said $68,000 because we aren’t paying for the punch-through. Hartgerink said this board has the money and they want to know if they can start. Bolt asked why the LDFA is paying for the water main instead of the water utility, noting that he sees no benefit or return. VandenBosch said that the LDFA is being requested to fund the water main loop, and the LDFA has funded all of the utility infrastructure in the industrial park. The water main loop is a project we had planned to do for a very long time, and in order to give adequate water service we need to do it.
Hartgerink asked about a motion that says the LDFA wants to put the water in as soon as possible and supports the concept of putting Dewey Lane through to 71 ½ Street. Kerber asked if the water expenditure is only in the event that the road is developed and wonders what would happen if the Road Commission did not go forward for whatever reason,
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VandenBosch said that the LDFA would have to regroup and figure something else out, noting that the Road Commission has been actively working to get the project started.
Motion by Bolt, second by Lewis to fund the water main at the cost of $68,000. Black asked whether that would include the punch-through. Bolt said no, the motion does not speak to the punch through. The Road Commission will fix the intersection and the city will do the water main extension. Yeas: Black, Bolt, Erdmann, Kerber, Klavins, Lewis, Valentine, Varney, Hartgerink. Nays: Gawreliuk Motion carried.
VandenBosch stated that he has a pressing request to extend the bike path across the highway to Veteran’s Boulevard. The Engineering Department is requesting $8,000 for engineering expenses plus $22,000 for construction; we have a grant for $87,000 if we approve a local match.
Motion by Gawreliuk, second by Varney to approve the extension of the bike path. All in favor. Motion carried.
Erdmann had to leave at 5:30 p.m.
Hartgerink suggested waiting to vote on the Budget until the end of the next meeting.
Bolt asked where the 76th Street lift station is. VandenBosch stated that it is down Monroe Boulevard at the creek toward Blue Star Highway, in the township.
10. Executive Session to Consider Purchase of Real PropertyThe Local Development Finance Authority will enter into a closed session under the Open Meetings Act, Section 8(d): To consider the purchase or lease of real property up to the time an option to purchase or lease that real property is obtained. No decision may be made in the closed session.
The Open Meetings Act, Section 7(1) requires a roll call vote of 2/3 of the members to enter a closed session for this purpose.
Motion by Bolt, second by Valentine to enter into a closed session. A roll call vote was taken: Ayes: Varney, Black, Bolt, Gawreliuk, Kerber, Klavins, Lewis, Valentine, Hartgerink.
Nays: None:
Motion by Gawreliuk, second by Kerber to close the closed session. All in favor. Motion carried.
11. Economic Development ReportJack McCloughan reported on economic development.
12. General Comments There were none.
13. Adjourn
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Motion by Bolt, second by Black to adjourn at 6:08 p.m.
RESPECTFULLY SUBMITTED,
Marsha RansomRecording Secretary
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City of South HavenLocal Development Finance AuthorityFinancial Report April 2010
ExpendituresEconomic Liason 23,256 15,526 Administrative Costs - - Professional Fees 5,872 - Contractual Services 1,917 1,044 18,078 Capital Projects 3,296 General Fund Administration 54,167 5,000 27,500 Transfer to Building Authority Debt Service 13,768 MEDC Loan Payments 20,406 Transfer to St. Joe Project Debt Service 120,000 Interfund Loan Repayment to LDFA #1 75,000
Total Expenditures 208,508 19,812 156,510
Year-to-Date Fund Gain/(Loss) 83,555 21,887 15,807
Cash/InvestmentsCash 346,624 374 224,389 Infrastucture Reserve Cash 200,000 Certificates of Deposit 205,504 48,000 100,000 Other Financial Investments 510,963 104,545 353,058
Total 1,263,091 152,919 677,447
Land Assets - Four Star & Du-Wel Parcels 6.73 Acres 90,855$ Market value according to assessor
LDFA Debt ObligationsSt. Joe Projects Bonds - Final Maturity - May 2027 $120,000/YearDPW Relocation Bonds - Final Maturity - Nov. 2022 $13,990 Average/YearMEDC Loan - 0% interest - Final Payment - April 2016 $27,208/Year
Draft Strategic Plan with changes from May meeting
Local Development Finance Authority
Mission Statement
The LDFA encourages local industrial and community development, aids in the creation and retention of jobs and promotes economic growth in defined areas of the City of South Haven that is consistent with the Municipal Plan.
Action Plan
During the next 5 years the LDFA will focus its attention and actions in the following manner:
LDFA Authority Wide Action Items
1. Land Acquisition
Purchase land for development of industrial parks and sitesDevelop land with infrastructure to sell to industrial business
2. Industrial Attraction and Retention, Economic Development Liaison, Administration
Continue with Economic Development Liaison activities
3. Renewable Energy
Cooperate with other institutions to enable development of renewable energyPromote renewable energy projects in industrial parksEncourage land use regulation and utility policies which enable renewable energy projectsFinance and construct renewable energy installations Purchase or use LDFA District land for renewable energy installations
4. Environmental Clean Up
Respond to environmental issues on properties in the LDFA as we become aware of them
5. Reduce Electric Utility Rates
Encourage a reduction in electric utility rates
6. Collaborate with other Institutions
Work together with other institutions to promote industrial economic development
7. Entrepreneurial Small Business Development
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Draft Strategic Plan with changes from May meeting
Support programs which assist startup businesses
8. Landscaping and Walkable Design
Improve industrial areas by enhancing landscaping in right of waysImprove pedestrian and bicycle access in LDFA districts by constructing sidewalks and pathways
9. Encourage Industrial Recycling
Find ways to enable recycling and reuse of waste produced by local businesses
10. Encourage Energy Conservation
Promote energy audits and investment in energy efficient technology
11. Wastewater Plant Improvements
Fund wastewater plant improvements as identified by the Wastewater Plant Study
12. Funding for New Business Infrastructure
Maintain a fund reserve to be able to assist new business with infrastructure improvements needed to encourage business to locate in South Haven
LDFA District 1 Action Items
13. Clean Up Du-Wel Site
Perform environmental remediation to bring the Du-Wel Site to a condition in which it could be sold or used
14. Water Tower Maintenance
Assist in funding the maintenance of the water tower to ensure its long term viability.
15. Kalamazoo Street Resurfacing
Fund the repaving of Kalamazoo Street on an as needed basis
16. Infrastructure Improvement Plan
Continue funding the Infrastructure Improvement Plan to maintain streets and utilities in LDFA District 1.
LDFA District 2 Action Items
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Draft Strategic Plan with changes from May meeting
17. Renewable Energy Project
Partner with the Public Works Department to investigate the feasibility of constructing a wind turbine at the Public Works building as a demonstration project.
18. Close Out LDFA 2
Close out LDFA 2 when funds are available to pay obligations and complete all projects identified in the strategic plan.
19. Reconstruct 8th Avenue
Provide funding to the Van Buren County Road Commission to improve 8th Avenue to industrial standards.
LDFA District 3 Action Items
20. Dewey Ct Extension
In partnership with the Van Buren County Road Commission and the City Public Works Department, construct a road connection between the east end of Dewey Court and 71-1/2 Street, including a water main loop.
21. Extend Veterans Blvd
Identify a lot configuration, street design and utility plan to create a number of industrial development sites north of 2nd Avenue.
22. Pathways and Walkways
Install pathways and sidewalks throughout the I-196 Industrial Park, and assist in funding sidewalk and pathway connection with existing trails outside of LDFA 3.
23. East Berm Beautification
Plant grasses and ground cover to improve the appearance of the berms and drainage ditches along 71-1/2 Street.
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February 12, 2010
TO: Local Development Finance Authority
FR: Paul VandenBosch
RE: LDFA Eligible Property Types
At its last meeting, there was a question regarding the types of business which the LDFA may benefit.
The powers of the LDFA board are laid out in MCL 125.2157. Among those powers are:
Taxes may be captured from Eligible PropertyLand may be acquired for development of eligible propertyPublic facilities may be constructed to benefit eligible property
While not all of LDFA activities are limited to eligible property, the concept is very important in understanding the purpose and focus of the LDFA. Following are excerpts from the Local Development Financing Act, MCL 125.2152 Definitions:
(p) "Eligible property" means land improvements, buildings, structures, and other real property, andmachinery, equipment, furniture, and fixtures, or any part or accessory thereof whether completed or in theprocess of construction comprising an integrated whole, located within an authority district, of which theprimary purpose and use is or will be 1 of the following:(i) The manufacture of goods or materials or the processing of goods or materials by physical or chemicalchange.(ii) Agricultural processing.(iii) A high technology activity.(iv) The production of energy by the processing of goods or materials by physical or chemical change by asmall power production facility as defined by the federal energy regulatory commission pursuant to the publicutility regulatory policies act of 1978, Public Law 95-617, which facility is fueled primarily by biomass orwood waste. This act does not affect a person's rights or liabilities under law with respect to groundwatercontamination described in this subparagraph. This subparagraph applies only if all of the followingrequirements are met:(A) Tax increment revenues captured from the eligible property will be used to finance, or will be pledgedfor debt service on tax increment bonds used to finance, a public facility in or near the authority districtdesigned to reduce, eliminate, or prevent the spread of identified soil and groundwater contamination,pursuant to law.(B) The board of the authority exercising powers within the authority district where the eligible property islocated adopted an initial tax increment financing plan between January 1, 1991 and May 1, 1991.(C) The municipality that created the authority establishes a special assessment district whereby not lessthan 50% of the operating expenses of the public facility described in this subparagraph will be paid for byspecial assessments. Not less than 50% of the amount specially assessed against all parcels in the specialassessment district shall be assessed against parcels owned by parties potentially responsible for the identifiedgroundwater contamination pursuant to law.(v) A business incubator.
(s) "High technology activity" means that term as defined in section 3 of the Michigan economic growthauthority act, 1995 PA 24, MCL 207.803.
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MCL 207.803 (l) "High-technology activity" means 1 or more of the following:(i) Advanced computing, which is any technology used in the design and development of any of thefollowing:(A) Computer hardware and software.(B) Data communications.(C) Information technologies.(D) Film and digital media production.(ii) Advanced materials, which are materials with engineered properties created through the developmentof specialized process and synthesis technology.(iii) Biotechnology, which is any technology that uses living organisms, cells, macromolecules,microorganisms, or substances from living organisms to make or modify a product, improve plants oranimals, or develop microorganisms for useful purposes. Biotechnology does not include human cloning asdefined in section 16274 of the public health code, 1978 PA 368, MCL 333.16274, or stem cell research withembryonic tissue.(iv) Electronic device technology, which is any technology that involves microelectronics, semiconductors,electronic equipment, and instrumentation, radio frequency, microwave, and millimeter electronics, andoptical and optic-electrical devices, or data and digital communications and imaging devices.(v) Engineering or laboratory testing related to the development of a product.(vi) Technology that assists in the assessment or prevention of threats or damage to human health or theenvironment, including, but not limited to, environmental cleanup technology, pollution preventiontechnology, or development of alternative energy sources.(vii) Medical device technology, which is any technology that involves medical equipment or productsother than a pharmaceutical product that has therapeutic or diagnostic value and is regulated.(viii) Product research and development.(ix) Advanced vehicles technology, which is any technology that involves electric vehicles, hybridvehicles, or alternative fuel vehicles, or components used in the construction of electric vehicles, hybridvehicles, or alternative fuel vehicles. For purposes of this act:(A) "Electric vehicle" means a road vehicle that draws propulsion energy only from an on-board source ofelectrical energy.(B) "Hybrid vehicle" means a road vehicle that can draw propulsion energy from both a consumable fueland a rechargeable energy storage system.(x) Tool and die manufacturing.(xi) Competitive edge technology as defined in section 88a of the Michigan strategic fund act, 1984 PA270, MCL 125.2088a.(xii) Digital media, including internet publishing and broadcasting, video gaming, web development, andentertainment technology.(xiii) Music production, including record production and development, sound recording studios, andintegrated high-technology record production and distribution.(xiv) Film and video, including motion picture and video production and distribution, postproductionservices, and teleproduction and production services.
(g) "Business incubator" means real and personal property that meets all of the following requirements:(i) Is located in a certified technology park.(ii) Is subject to an agreement under section 12a.(iii) Is developed for the primary purpose of attracting 1 or more owners or tenants who will engage inactivities that would each separately qualify the property as eligible property under subdivision (p)(iii).
(j) "Certified technology park" means that portion of the authority district designated by a writtenagreement entered into pursuant to section 12a between the authority, the municipality, and the Michiganeconomic development corporation.
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February 2010 DraftLDFA 1 2010-2011 Budget
2009 2010 2011 2012 2013 2014 2015 2016Revenues Prior Year Current Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Administrative Fees General Fund 20,000 20,000 0 0 0 0 0 0General Fund Transfer 37,500 37,500 30,000 30,000 30,000 30,000 30,000 30,000
St Joseph Street Project Bond 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000Infrastructure Improvement Plan Reserve 100,000 100,000 50,000 50,000 50,000 50,000 50,000 50,000
175,796 deleted(350,000)225,000
Indian Grove Lift Station Loan deleted(250,000) 250,000Land Acquisition Deleted(400,000) 400,000
Water Tower MaintenanceEntrepreneurial Development
Landscaping and Walkable Design
Total Expenses 731,846 329,052 887,083 237,625 238,177 238,741 239,316 239,902
Estimated End of Year Fund Balance 1,154,406 1,119,273 414,854 414,565 413,718 412,291 410,260 407,603Actual Budgeted Budgeted Projected Projected Projected Projected Projected
General Fund transfers have been reduced for LDFA 1, but overall LDFA to GF transfers remain at $90,000. 2010 marks the last payment from LDFA3 to LDFA1 for the loan to construct LDFA3 infrastructure.Economic Development Liaison expenses are budgeted 60% from LDFA1 and 40% from LDFA3.
Professional Consulting Fees are legal fees, environmental engineering fees, other consulting type fees.
Infrastructure Improvement Plan has been reduced to $50,000 due to decrease revenues in LDFA 1 The St Joseph Street Project Bond extends to 2027.
Aylworth AvenueTextron Budget Amendment
DuWel project is paid from the 1421 Kalamazoo Street brownfield plan and is not expected to be an LDFA 1 expense.
Other Contractual Services are either small projects or other uncategorized expenses.
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February 2010 DraftLDFA 1 Infrastructure Improvement Plan 2010-2011 Budget
2009 2010 2011 2012 2013 2014 2015 2016Revenues Prior Year Current Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Actual Budget Proposed Budget Projection Projection Projection Projection ProjectionInfrastructure Improvement Plan Transfer 100,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
Total Revenue 100,000 100,000 50,000 50,000 50,000 50,000 50,000 50,000
2009 2010 2011 2012 2013 2014 2015 2016Expenses Prior Year Current Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Actual Budget Proposed Budget Projection Projection Projection Projection ProjectionIndian Grove Lift Station Payment 0 0 200,000 50,000 0 0 0 0
Total Expenditures 206,494$ 231,022$ 631,845$ 979,052$ 202,218$ 315,458$ 883,159$
Percentage Change 11.9% 173.5% -50.1% -9.8%
Excess (Deficiency) of Revenues Over Expenditures 230,536$ 185,306$ (248,033)$ (685,133)$ 13,053$ (99,244)$ (700,495)$
Net Assets - Beginning of Year 1,086,596$ 1,317,132$ 1,502,439$ 1,254,406$ 1,155,162$
Net Assets - End of Year 1,317,132$ 1,502,439$ 1,254,406$ 1,155,162$ 454,667$
City of South HavenLDFA #1 - Fund 251
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
2006-07Actual
2007-08Actual
2008-09Actual
2009-10Projected
2010-11Proposed Budget
Total Revenues Total Expenditures
The Local Development Finance Authority’s (LDFA) primary source of funds is through the “capture” of taxes generated by growth within the LDFA districts. Captured revenues can used to further development within their districts. LDFA #1 funds are used for ongoing projects as funds allow. This fund has committed to pay a percentage of the Capital Improvement Bonds and will continue to make significant road improvements that benefit the district.
Total Expenditures 18,564$ 18,578$ 21,068$ 98,768$ 19,812$ 20,768$ 98,703$
Percentage Change 0.1% 13.4% -1.4% -0.1%
Excess (Deficiency) of Revenues Over Expenditures 18,117$ 19,124$ 16,772$ (57,225)$ 21,754$ 21,264$ (66,101)$
Net Assets - Beginning of Year 135,311$ 153,428$ 172,552$ 189,324$ 210,588$
Net Assets - End of Year 153,428$ 172,552$ 189,324$ 210,588$ 144,487$
City of South HavenLDFA #2 - Fund 252
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2006-07Actual
2007-08Actual
2008-09Actual
2009-10Projected
2010-11Proposed Budget
Total Revenues Total Expenditures
The Local Development Finance Authority’s (LDFA) primary source of funds is through the “capture” of taxes generated by growth within the LDFA districts. Captured revenues can used to further the development within their districts. LDFA #2 funds pay a portion of the bond payments for the 2001 Building Authority Bonds.
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Revenues:2006-07Actual
2007-08Actual
2008-09Actual
2009-10Budget
YTD (at 3/31/2010)
2009-10Projected
2010-11Proposed Budget
Property Taxes 242,334$ 187,683$ 116,603$ 165,484$ 165,924$ 165,924$ 45,933$ Federal Grant -$ -$ Interest and Rents 24,491$ 18,563$ 8,964$ 2,000$ 5,951$ 7,000$ 4,000$ Other Revenue 3,720$ -$ 25,000$ -$ -$ -$ -$
Total Revenues 270,545$ 206,245$ 150,568$ 167,484$ 171,875$ 172,924$ 49,933$
Total Expenditures 119,870$ 73,587$ 78,376$ 768,207$ 79,894$ 147,971$ 692,367$
Percentage Change -38.6% 6.5% 88.8% -9.9%
Excess (Deficiency) of Revenues Over Expenditures 150,675$ 132,658$ 72,191$ (600,723)$ 91,981$ 24,953$ (642,434)$
Net Assets - Beginning of Year 101,827$ 252,502$ 385,160$ 457,352$ 482,305$
Net Assets - End of Year 252,502$ 385,160$ 457,352$ 482,305$ (160,129)$
City of South HavenLDFA #3 - Fund 253
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2006-07Actual
2007-08Actual
2008-09Actual
2009-10Projected
2010-11Proposed Budget
Total Revenues Total Expenditures
The Local Development Finance Authority’s (LDFA) primary source of funds is through the “capture” of taxes generated by growth within the LDFA districts. Captured revenues can used to further the development within their districts. LDFA #3 funds are used for ongoing projects as funds allow.
