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HomeMy WebLinkAbout02-22-22 CITY OF Meeting Location: FARMINGTONFarmington City Hall ® ® 430 Third Street Farmington, MN 55024 ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING AGENDA February 22, 2022 6:00 PM 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA S. CONSENTAGENDA (a) Meeting Minutes (January 18, 2022 Regular Meeting) (b) Monthly Financial Statement 6. DISCUSSION ITEMS (a) Appointment of 2022 Chair and Vice Chair (b) Amendment of EDA By-Laws (c) Business Subsidy Policy--2022 Policy Update 7. DIRECTOR'S REPORT 8. ADJOURN CITY OF O 430 Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 FarmingtonMN.gov TO: Economic Development Authority FROM: Kalley Swift, Community Development Specialist SUBJECT: Meeting Minutes (January 18, 2022 Regular Meeting) DATE: February 22, 2022 INTRODUCTION/DISCUSSION Attached is the draft meeting minutes from the January 18, 2022 Regular EDA Meeting. ACTION REQUESTED Approve the January 18, 2022 Regular EDA Meeting Minutes. ATTACHMENTS: Type Description ❑ Exhibit January 18, 2022 Regular EDA Meeting Minutes CITY OF FARMINGTON ECONOMIC DEVELOPMENT AUTHORITY MINUTES REGULAR MEETING January 18, 2021 1. CALL TO ORDER The meeting was called to order by EDA Chair Wilson at 6:00 p.m. 2. PLEDGE OFALLEGIANCE Chair Wilson led those in attendance in the Pledge of Allegiance. 3. ROLL CALL Members Present: Bernhjelm,Hoyt,Porter,Wilson Members Absent: None Staff Present: David McKnight,City Administrator; Kalley Swift,Community Development Specialist Others Present: Nick Lien; Kara Hildreth,Journalist 4. APPROVEAGENDA MOTION by Hoyt,second by Porter to approve the Agenda.APIF,MOTION CARRIED. 5. CITIZENS COMMENTS 6. CONSENT AGENDA Chair Wilson asked city staff to review the Open To Business program.Specialist Swift outlined that Open To Business is a partnership between the Metropolitan Consortium of Community Developers (MCCD)and the Dakota County Community Development Agency (CDA) and Dakota County cities and townships to offer and provide any business or resident in Dakota County with free business advising.MCCD provides a business advisor to work one-on-one with entrepreneurs and established businesses for developing business plans, finding financial resources,identifying cash flow opportunities or challenges,etc.The EDA pays roughly$5,000 a year out of their annual operating budget to this program. MOTION by Hoyt,second by Bernhjelm to approve the Consent Agenda as follows: a) Open To Business-Joint Powers Agreement b) Monthly Financial Statement c) Meeting Minutes (November 15, 2021 Regular Meeting) APIF,MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) 2022 Redevelopment and Property Reinvestment Program At the November 2021 Regular EDA meeting,the EDA approved allocating$30,000 to a Redevelopment and Property Reinvestment Program for 2022.The EDA is now being asked to review revised guidelines and application process for the program. Economic Development Authority Minutes Page 1 of 2 Regular Meeting January 18,2022 City staff reviewed the pilot year of the Redevelopment and Property Reinvestment Program from 2 02 1.The intent of the program was to spur investment on commercial and industrial properties to foster property improvements,redevelopment growth and increase the productive use of existing infrastructure within the City of Farmington.These projects focused on property,building and code improvements otherwise seen as barriers for reuse and redevelopment of a property. For 2022,the proposed program mimics the updated Facade Improvement Program for better EDA program cohesion.Major changes to the program for 2022 include new hard deadlines and the addition of a scorecard which can be used as a tool when the program has more grant funding requested than grant funding available. Chair Wilson asked the EDA for input on the proposed program. Member Bernhjelm likes how the proposed program is presented and is excited to see what another year of the program will spur in the business community.Member Porter asked clarification questions on the scorecard.City staff clarified that the scorecard is only used as a tool for the EDA when accepting or denying program applications.The EDA has the ability to award a grant to a business or property owner who scores lower on the scorecard than other businesses or property owners who apply to the same program.The EDA grant programs have a history of being over-applied for and the scorecard and hard deadlines are to help add structure and guidance in the grant program process. MOTION by Porter,second by Bernhjelm,to approve the guidelines and application process for the 2022 Redevelopment and Property Reinvestment Program as presented.APIF, MOTION CARRIED. 9. DIRECTOR'S REPORT a) SourceLink Activity Report City staff reviewed the August-December 2021 and November-December 2021 SourceLink Activity Reports.Member Porter inquired about the details of the report and different reports which could give more information.For example,with the top ten categories for the type of assistance requested,is it possible to get a breakdown of who is looking for site location assistance such as the business type,size of property/building they are looking for,etc.City staff said that right now only the highest-level report is pulled for publication in the EDA packet.Staff can go into SourceLink to see what other types of reports can be pulled for future packets which would provide additional details which can also be posted publicly. Discussion was had within the EDA Members about SourceLink as a CRM,it's future use with city staff of adding more users and what its future options looks like.Chair Wilson would like to see actionable items come out of SourceLink and its reports. 10. ADJOURN MOTION by Porter,second by Hoyt to adjourn at 6:38 p.m. APIF,MOTION CARRIED. Respectfully submitted, Kalley Swift Community Development Specialist Economic Development Authority Minutes Page 2 of 2 Regular Meeting January 18,2022 CITY OF O 430 Third St., Farmington, MN 55024 FARMINGTON 651-280-6800 ® O Farmington MN.gov TO: Economic Development Authority FROM: Samantha DiMaggio, Executive Director SUBJECT: Monthly Financial Statement DATE: February 22, 2022 INTRODUCTION/DISCUSSION Attached is the monthly financial statement of the EDA. ACTION REQUESTED Acknowledge the monthly financial statement and ask any questions you may have. ATTACHMENTS: Type Description D Backup Material Current Financial Statement More Robust Financial Report Business Object Account Cumulative 12 Cumulative 12 Unit Account Description Actual Budget 2022 2022 2000-HRA/ECONOMIC DEVELOPME 1010 CASH 211,829.42 2000-HRA/ECONOMIC DEVELOPME 1010 CASH-LGA ASSMNT RELIEF 35,000.00 2000-HRA/ECONOMIC DEVELOPME 1505 PREPAID EXPENSES 1,365.00 2000-HRA/ECONOMIC DEVELOPME 3510 UNRESERVED FUND BALANCE 201,846.92 2000-HRA/ECONOMIC DEVELOPME 4955 INTEREST ON INVESTMENTS 0.00 -2,400.00 2000-HRA/ECONOMIC DEVELOPME 5205 OPERATING TRANSFERS -4,166.67 -50,000.00 2000-HRA/ECONOMIC DEVELOPME 5360 REFUNDS&REIMBRSMNT-DBB 0.00 -183,465.00 2000-HRA/ECONOMIC DEVELOPME 6110 FULL TIME SALARIES 0.00 134,160.00 2000-HRA/ECONOMIC DEVELOPME 6152 FICA/MEDICARE 0.00 10,579.00' 2000-HRA/ECONOMIC DEVELOPME 6154 PERA 0.00 10,638.00 2000-HRA/ECONOMIC DEVELOPME 6158 EMPLOYEE BENEFITS 0.00 21,465.00 2000-HRA/ECONOMIC DEVELOPME 6159 WORKERS COMP 0.00 833.00 2000-HRA/ECONOMIC DEVELOPME 6401 PROFESSIONAL SERVICES 0.00 11,650.00 2000-HRA/ECONOMIC DEVELOPME 6403 LEGAL 0.00 2,000.00 2000-HRA/ECONOMIC DEVELOPME 6404 IT SERVICES 943.00 11,316.00 2000-HRA/ECONOMIC DEVELOPME 6404 IT SERVICES-DBB 1,800.00 2000-HRA/ECONOMIC DEVELOPME 6412 CELLULAR SERVICES-DBB 0.00 540.00 2000-HRA/ECONOMIC DEVELOPME 6426 INSURANCE 45.83 550.00 2000-HRA/ECONOMIC DEVELOPME 6450 OUTSIDE PRINTING 0.00 500.00 2000-HRA/ECONOMIC DEVELOPME 6460 MEMBER DUES&LICENSURE 495.00 2,000.00 2000-HRA/ECONOMIC DEVELOPME 6470 TRAINING&SUBSISTANCE 630.00 3,000.00 2000-HRA/ECONOMIC DEVELOPME 6470 TRAINING&SUBSISTANCE-DBB 0.00 5,000.00 2000-HRA/ECONOMIC DEVELOPME 6480 MEETING EXPENSE 15.00 2000-HRA/ECONOMIC DEVELOPME 6485 MILEAGE REIMBURSEMENT 57.12 400.00 2000-HRA/ECONOMIC DEVELOPME 6492 ADVERTISING 0.00 2,500.00 2000-HRA/ECONOMIC DEVELOPME 6505 EQUIPMENT REPAIR/MAINT-DBB 0.00 250.00 2000-HRA/ECONOMIC DEVELOPME 6570 PROGRAMMING EXPENSE 0.00 8,000.00 2000-HRA/ECONOMIC DEVELOPME 7310 OPERATING TRANSFERS 44,366.78 0.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 -8,684.00 0.00 -8,684.00 0.00 -8,684.00 2/17/2022 10:06:29 AM Page 1 of 1 CITY OF O 430 Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 Farmington MN.gov TO: Economic Development Authority FROM: Samantha DiMaggio- EDA Executive Director SUBJECT: Appointment of 2022 Chair and Vice Chair DATE: February 22, 2022 INTRODUCTION/DISCUSSION Per the Economic Development By-Laws, Section 11, Sub. 1: SUBD. 1—The Chairperson shall preside at all meetings of the Authority. In the absence of the Chairperson, the Vice-Chairperson shall preside. In the absence of both, the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. ACTION REQUESTED Staff is requesting nominations and appointments for Chair and Vice-Chair to serve until February 2023. CITY OF O 43o Third St., Farmington, MN 55024 FARMINGTON 651-28o-6800 Farmington M N.gov TO: Economic Development Authority FROM: Samantha DiMaggio- EDA Executive Director SUBJECT: Amendment of EDA By-Laws DATE: February 22, 2022 INTRODUCTION/DISCUSSION Staff has made some minor updates to the EDA's By-Laws. Attached for your review is a red-lined version along with a final version of the updated By-Laws. ACTION REQUESTED The EDA is asked to approve the amended Economic Development Authority By-Laws. ATTACHMENTS: Type Description ❑ Exhibit Red Lined EDA By-Laws ❑ Exhibit EDA By-Laws Updated 2022 20242022 ECONOMIC DEVELOPMENT AUTHORITY BY-LAWS These By-Laws,when adopted,are intended to deal with matters not otherwise covered by State Law, City Ordinance or elsewhere. Section I—Meetines SUBD. 1—Regular meetings of the Economic Development Authority shall be held on the third(3rd) Monday of each month at 6:4"0p.m.Any regular meeting falling upon a holiday shall be held on the following Tuesday at the same time and place.All meetings,including special and adjourned meetings,shall be held in the City Hall unless otherwise designated. SUBD.2—At the fifst;g:: February Authority meeting or the next regular meeting of the EDA 4 each calendar year,the Authority shall(1)acknowledge City Council's designation of the official newspaper;(2)establish the meeting schedule for the year;(3)choose a Chairperson and a Vice- Chairperson,who shall perform the duties of the Chairperson during the Chairpersons disability or absence,and in case of a vacancy in the office of Chairperson,and until a successor has been appointed and qualifies to fulfill the duties of Chairperson,and;(4)staff will serve as the Secretary/ Treasurer. Section II Presidine Officer;Rules of Order SUBD. 1—The Chairperson shall preside at all meetings of the Authority.In the absence of the Chairperson,the Vice-Chairperson shall preside.In the absence of both,the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. SUBD.2—The presiding officer shall preserve order,enforce the rule of procedure herein prescribed, and determine all questions of procedure and order.Except as otherwise provided by statute or by these rules,the proceedings of the Authority shall be conducted in accordance with the following rules of order: A. A motion must be seconded before being considered by the Authority and the presiding officer must recognize mover,as well as the seconder. B. Any motion may be withdrawn by its mover with the consent of his/her second.But a motion,once debated,cannot be withdrawn except by a majority vote of the Authority. C. A motion will not be subject to debate until it has been stated by the presiding officer and he/she has opened it to debate. D. Each member,while speaking,shall confine himself/herself to the question at hand and avoid all personal,indecorous,or sarcastic language. 1 E. Whenever any member of the Authority desires to speak on any question,which affects him/her personally,he/she shall first vacate his/her chair and shall not resume his/her seat until the matter under consideration has been acted upon.He/she shall be allowed to make comments on the question as a private citizen only and while a member of the audience. F. Whenever public hearings are held,the presiding officer shall allow any member of the public,the privilege of speaking. A reasonable time shall be allowed to anyone as long as they are not repeating points already made.The presiding officer shall maintain order and may rule anyone out of order. G. At any meeting,the presiding officer will allow the public to participate as long as there is reason to believe the input is beneficial. SUBD.3—Any member may appeal to the Authority from a ruling of the presiding officer.If the appeal is seconded,the appealing member may speak first on the reason for his/her appeal. General discussion can then take place on the appeal before a vote.The appeal shall be sustained if it is approved by a majority of the members present. Section III—Aaendas SUBD. I—The agenda shall be prepared by the EDA Executive Director and shall be closed at noon on the Thursday preceding the meeting for publication purposes. SUBD.2—Any member may place an item on the agenda by so instructing the Executive Director. SUBD.3—No item shall be placed on the agenda unless the item is expressed in such a way as to clearly show the subject matter involved. SUBD.4—The agenda add-ons are subject to approval by a majority vote of the members present and further such add-on items may be discussed,but no action may be taken if any member objects. 2 Section IV—Order of Business SUBD. 1—Each meeting of the Authority shall convene at the time and place appointed, therefore.Authority business shall be conducted in the following order: 1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Approve Agenda 5) Consent Agenda 6) Public Hearings 7) Discussion Items 8) Director's Report p.Other 9) Adjourn SUBD.2—The order of business may be varied by the presiding officer,except that all public hearings shall be held at the time specified in the notice of hearing. Section V—Minutes SUBD. I—Minutes of each Authority meeting shall be kept by the Executive Director or,in his/her absence,his/her designee.Resolutions need not be recorded in full in the minutes if they appear in other permanent recordsof the Executive Director and can be accurately identified from the description given in the minutes. SUBD.2—Minutes of each meeting shall be reduced to typewritten form.At the next regular Authority meeting,approval of the minutes shall be considered by the Authority.The minutes need not be read aloud,but the presiding officer shall call for any additions or corrections.If there is an objection,the Authority shall vote upon the addition or correction.If there are no additions or corrections,the minutes shall stand approved by motion.If there is an objection,the Authority shall vote upon the addition or correction and approve the minutes by motion as amended. Section VI—Ouorum and Voting SUBD. I—At all meetings a majority of all members shall constitute a quorum for the transaction of business. SUBD.2—The votes of members on any question pending before the EDA shall be by voice votes. Roll call vote can be requested by any member,except for the following agenda items;approval of the agenda;approval of the consent agenda;and the adjournment.The names of those voting for and against the question shall be recorded in the minutes.If any member present does not vote,the minutes shall state:"Abstain:Name". SUBD.3—Except as otherwise provided by statute,a majority vote of the quorum shall prevail. 3 Section VII—Executive Director The Authority may appoint and provide for annual performance review of the Executive Director. Section VIII—Suspension or Amendment of the By-Laws SUBD. 1—These by-laws may be temporarily suspended by a unanimous vote of the members present. SUBD.2—These by-laws shall not be repealed or amended except by a majority vote of the whole Authority after notice has been given at some preceding meeting. Section IX—Effective Date SUBD. 1—These by-laws have been adopted by the Economic Development Authority on the 2e-qday of September 2021 February and become effective --------------------- Fom atted:Superscript immediately. Attest: EDA Executive Director EDA Chairperson Date: Date: 4 ECONOMIC DEVELOPMENT AUTHORITY BY-LAWS Adopted February 22, 2022 These By-Laws, when adopted, are intended to deal with matters not otherwise covered by State Law, City Ordinance or elsewhere. Section I—Meetings SUBD. 1 —Regular meetings of the Economic Development Authority shall be held on the third(3rd) Monday of each month at 6:00p.m. Any regular meeting falling upon a holiday shall be held on the following Tuesday at the same time and place. All meetings, including special and adjourned meetings, shall be held in the City Hall unless otherwise designated. SUBD. 2—At the February Authority meeting or the next regular meeting of the EDA each calendar year,the Authority shall (1) acknowledge City Council's designation of the official newspaper; (2) establish the meeting schedule for the year; (3) choose a Chairperson and a Vice-Chairperson,who shall perform the duties of the Chairperson during the Chairpersons disability or absence, and in case of a vacancy in the office of Chairperson, and until a successor has been appointed and qualifies to fulfill the duties of Chairperson,and; (4) staff will serve as the Secretary/Treasurer. Section II Presiding Officer; Rules of Order SUBD. I —The Chairperson shall preside at all meetings of the Authority. In the absence of the Chairperson,the Vice-Chairperson shall preside. In the absence of both,the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. SUBD. 2—The presiding officer shall preserve order, enforce the rule of procedure herein prescribed, and determine all questions of procedure and order. Except as otherwise provided by statute or by these rules,the proceedings of the Authority shall be conducted in accordance with the following rules of order: A. A motion must be seconded before being considered by the Authority and the presiding officer must recognize mover, as well as the seconder. B. Any motion may be withdrawn by its mover with the consent of his/her second. But a motion, once debated, cannot be withdrawn except by a majority vote of the Authority. C. A motion will not be subject to debate until it has been stated by the presiding officer and he/she has opened it to debate. D. Each member, while speaking, shall confine himself/herself to the question at hand and avoid all personal, indecorous, or sarcastic language. 1 E. Whenever any member of the Authority desires to speak on any question,which affects him/her personally, he/she shall first vacate his/her chair and shall not resume his/her seat until the matter under consideration has been acted upon. He/she shall be allowed to make comments on the question as a private citizen only and while a member of the audience. F. Whenever public hearings are held,the presiding officer shall allow any member of the public,the privilege of speaking. A reasonable time shall be allowed to anyone as long as they are not repeating points already made. The presiding officer shall maintain order and may rule anyone out of order. G. At any meeting,the presiding officer will allow the public to participate as long as there is reason to believe the input is beneficial. SUBD. 3 —Any member may appeal to the Authority from a ruling of the presiding officer. If the appeal is seconded,the appealing member may speak first on the reason for his/her appeal. General discussion can then take place on the appeal before a vote. The appeal shall be sustained if it is approved by a majority of the members present. Section III—Agendas SUBD. 1 —The agenda shall be prepared by the EDA Executive Director and shall be closed at noon on the Thursday preceding the meeting for publication purposes. SUBD. 2—Any member may place an item on the agenda by so instructing the Executive Director. SUBD.3—No item shall be placed on the agenda unless the item is expressed in such a way as to clearly show the subject matter involved. SUBD. 4—The agenda add-ons are subject to approval by a majority vote of the members present and further such add-on items may be discussed, but no action may be taken if any member objects. 2 Section IV—Order of Business SUBD. 1 —Each meeting of the Authority shall convene at the time and place appointed, therefore. Authority business shall be conducted in the following order: 1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Approve Agenda 5) Consent Agenda 6) Public Hearings 7) Discussion Items 8) Director's Report 9) Adjourn SUBD. 2—The order of business may be varied by the presiding officer, except that all public hearings shall be held at the time specified in the notice of hearing. Section V—Minutes SUBD. 1 —Minutes of each Authority meeting shall be kept by the Executive Director or, in his/her absence, his/her designee. Resolutions need not be recorded in full in the minutes if they appear in other permanent recordsof the Executive Director and can be accurately identified from the description given in the minutes. SUBD. 2—Minutes of each meeting shall be reduced to typewritten form.At the next regular Authority meeting, approval of the minutes shall be considered by the Authority. The minutes need not be read aloud, but the presiding officer shall call for any additions or corrections. If there is an objection,the Authority shall vote upon the addition or correction. If there are no additions or corrections,the minutes shall stand approved by motion. If there is an objection,the Authority shall vote upon the addition or correction and approve the minutes by motion as amended. Section VI—Quorum and Voting SUBD. 1 —At all meetings a majority of all members shall constitute a quorum for the transaction of business. SUBD. 2—The votes of members on any question pending before the EDA shall be by voice votes. Roll call vote can be requested by any member, except for the following agenda items; approval of the agenda; approval of the consent agenda; and the adjournment. The names of those voting for and against the question shall be recorded in the minutes. If any member present does not vote,the minutes shall state: "Abstain:Name". SUBD. 3 —Except as otherwise provided by statute, a majority vote of the quorum shall prevail. 3 Section VII—Executive Director The Authority may appoint and provide for annual performance review of the Executive Director. Section VIII—Suspension or Amendment of the By-Laws SUBD. 1 —These by-laws may be temporarily suspended by a unanimous vote of the members present. SUBD. 2—These by-laws shall not be repealed or amended except by a majority vote of the whole Authority after notice has been given at some preceding meeting. Section IX—Effective Date SUBD. 1 —These by-laws have been adopted by the Economic Development Authority on the 22nd day of February 2022 and become effective immediately. Attest: EDA Executive Director EDA Chairperson Date: Date: 4 CITY 4F O 430 Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 IY�i Iu Farmington MN.gov TO: Economic Development Authority FROM: Samantha DiMaggio- EDA Executive Director SUBJECT: Business Subsidy Policy--2022 Policy Update DATE: February 22, 2022 INTRODUCTIONJDISCUSSION The Farmington City Council has established priorities, one of which includes Business Growth (to help provide more amenities to residents and increase and diversify our tax base). One of the primary tools that could help accomplish this goal is a business subsidy.A business subsidy is defined as: A local government agency grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business, and as defined by the Business Subsidy statute M.S. §116J.993-116J.995. MN Statute 1161.994, Sub. 2 requires that prior to awarding a financial subsidy to a business, that a set of criteria needs to be developed. Subd.2.Developing a set of criteria.A business subsidy may not be granted until the grantor has adopted criteria after a public hearing for awarding business subsidies that comply with this section. The criteria may not be adopted on a case-by-case basis. The criteria must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies. The criteria must include a specific wage floor for the wages to be paid for the jobs created. The wage floor may be stated as a specific dollar amount or may be stated as a formula that will generate a specific dollar amount. A grantor may deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the department. The commissioner of employment and economic development may assist local government agencies in developing criteria. A copy of the criteria must be submitted to the Department of Employment and Economic Development along with the first annual report following May 15, 2000, or with the first annual report after it has adopted criteria, whichever is earlier. Notwithstanding section 116J.993, subdivision 3, clauses (1) and (21), for the purpose of this subdivision, "business subsidies" as defined under section 116J.993 includes the following forms of financial assistance: The City of Farmington last updated our Business Subsidy Policy on April 20, 2015. ACTION REQUESTED Staff is now recommending the EDA review the Business Subsidy Policy to ensure that it meets the economic development goals of the City and the requirements of the Business Subsidy Act. ATTACHMENTS: Type Description D Backup Material 116J.993 D Backup Material 116.1.994 D Backup Material 116.1.995 D Exhibit 2015 Business Subsidy Policy © Exhibit Draft BS Policy 2022 I MINNESOTA STATUTES 2021 1161993 116J.993 DEFINITIONS. Subdivision 1. Scope.For the purposes of sections 1161993 to 116J.995,the terms defined in this section have the meanings given them. Subd. 2. Benefit date. "Benefit date" means the date that the recipient receives the business subsidy. If the business subsidy involves the purchase, lease, or donation of physical equipment,then the benefit date begins when the recipient puts the equipment into service. If the business subsidy is for improvements to property,then the benefit date refers to the earliest date of either: (1)when the improvements are finished for the entire project; or (2)when a business occupies the property. If a business occupies the property and the subsidy grantor expects that other businesses will also occupy the same property,the grantor may assign a separate benefit date for each business when it first occupies the property. Subd. 3. Business subsidy. "Business subsidy" or"subsidy" means a state or local government agency grant,contribution of personal property,real property,infrastructure,the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease,or other obligation, or any preferential use of government facilities given to a business. The following forms of financial assistance are not a business subsidy: (1)a business subsidy of less than$150,000; (2)assistance that is generally available to all businesses or to a general class of similar businesses,such as a line of business,size, location,or similar general criteria; (3)public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4)redevelopment property polluted by contaminants as defined in section 116J.552, subdivision 3; (5)assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts,provided that the assistance is equal to or less than 50 percent of the total cost; (6) assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7)assistance for housing; (8) assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under section 469.174, subdivision 23; (9)assistance for energy conservation; (10)tax reductions resulting from conformity with federal tax law; (11)workers'compensation and unemployment insurance; (12)benefits derived from regulation; Official Publication of the State of Minnesota Revisor of Statutes 116J.993 MINNESOTA STATUTES 2021 2 (13)indirect benefits derived from assistance to educational institutions; (14) funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501(c)(3)of the Internal Revenue Code of 1986,as amended through December 31, 1999; (15)assistance for a collaboration between a Minnesota higher education institution and a business; (16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19; (17)redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18)general changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20)funds from dock and wharf bonds issued by a seaway port authority; (21)business loans and loan guarantees of$150,000 or less; (22) federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) property tax abatements granted under section 469.1813 to property that is subject to valuation under Minnesota Rules,chapter 8100. Subd. 4. Grantor. "Grantor" means any state or local government agency with the authority to grant a business subsidy. Subd. 5. Local government agency. "Local government agency" includes a statutory or home rule charter city, housing and redevelopment authority, town, county, port authority, economic development authority, community development agency, nonprofit entity created by a local government agency, or any other entity created by or authorized by a local government with authority to provide business subsidies. Subd. 6. Recipient. "Recipient"means any for-profit or nonprofit business entity that receives a business subsidy. Only nonprofit entities with at least 100 full-time equivalent positions and with a ratio of highest to lowest paid employee,that exceeds ten to one,determined on the basis of full-time equivalent positions, are included in this definition. Subd. 6a.Residence. "Residence" means the place where an individual has established a permanent home from which the individual has no present intention of moving. Subd. 7. State government agency. "State government agency" means any state agency that has the authority to award business subsidies. History: 1999 c 243 art 12 s 1;2000 c 482 s 1;2004 c 206 s 52; 1 Sp2005 c 3 art 7 s 1; 2006 c 259 art 4s 1; 2008 c 366 art 5 s 2 Official Publication of the State of Minnesota Revisor of Statutes I MINNESOTA STATUTES 2021 116J.994 1161994 REGULATING LOCAL AND STATE BUSINESS SUBSIDIES. Subdivision 1.Public purpose.A business subsidy must meet a public purpose which may include,but may not be limited to, increasing the tax base. Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable. Subd. 2. Developing a set of criteria.A business subsidy may not be granted until the grantor has adopted criteria after a public hearing for awarding business subsidies that comply with this section. The criteria may not be adopted on a case-by-case basis. The criteria must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies. The criteria must include a specific wage floor for the wages to be paid for the jobs created. The wage floor may be stated as a specific dollar amount or may be stated as a formula that will generate a specific dollar amount. A grantor may deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the department. The commissioner of employment and economic development may assist local government agencies in developing criteria. A copy of the criteria must be submitted to the Department of Employment and Economic Development along with the first annual report following May 15, 2000, or with the first annual report after it has adopted criteria, whichever is earlier. Notwithstanding section 116J.993, subdivision 3, clauses (1) and(21), for the purpose of this subdivision, "business subsidies"as defined under section 116J.993 includes the following forms of financial assistance: (1)a business subsidy of$25,000 or more;and (2)business loans and guarantees of$75,000 or more. Subd. 3. Subsidy agreement.(a)A recipient must enter into a subsidy agreement with the grantor of the subsidy that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is tax increment financing; (2)a statement of the public purposes for the subsidy; (3)measurable, specific, and tangible goals for the subsidy; (4)a description of the financial obligation of the recipient if the goals are not met; (5)a statement of why the subsidy is needed; (6) a commitment to continue operations in the jurisdiction where the subsidy is used for at least five years after the benefit date; (7)the name and address of the parent corporation of the recipient,if any; and (8)a list of all financial assistance by all grantors for the project. (b) Business subsidies in the form of grants must be structured as forgivable loans. For other types of business subsidies,the agreement must state the fair market value of the subsidy 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 a business subsidy benefits more than one recipient, the grantor must assign a proportion of the business subsidy to each recipient that signs a subsidy agreement.The proportion assessed to each recipient must reflect a reasonable estimate of the recipient's share of the total benefits of the project. Official Publication of the State of Minnesota Revisor of Statutes 116J.994 MINNESOTA STATUTES 2021 2 (d) The state or local government agency and the recipient must both sign the subsidy agreement and, if the grantor is a local government agency,the agreement must be approved by the local elected governing body,except for the St.Paul Port Authority and a seaway port authority. (e)Notwithstanding the provision in paragraph(a), clause (6), a recipient may be authorized to move from the jurisdiction where the subsidy is used within the five-year period after the benefit date if, after a public hearing, the grantor approves the recipient's request to move. For the purpose of this paragraph, if the grantor is a state government agency other than the Department of Iron Range Resources and Rehabilitation, "jurisdiction"means a city or township. Subd.4.Wage and job goals. The subsidy agreement,in addition to any other goals,must include:(1) goals for the number of jobs created, which may include separate goals for the number of part-time or full-time jobs,or,in cases where job loss is specific and demonstrable,goals for the number of jobs retained; (2) wage goals for any jobs created or retained; and (3) wage goals for any jobs to be enhanced through increased wages. After a public hearing, if the creation or retention of jobs is determined not to be a goal, the wage and job goals may be set at zero. The goals for the number of jobs to be created or retained must result in job creation or retention by the recipient within the granting jurisdiction overall. In addition to other specific goal time frames,the wage and job goals must contain specific goals to be attained within two years of the benefit date. Subd. 5. Public notice and hearing.(a)Before granting a business subsidy that exceeds$500,000 for a state government grantor and $150,000 for a local government grantor,the grantor must provide public notice and a hearing on the subsidy. A public hearing and notice under this subdivision is not required if a hearing and notice on the subsidy is otherwise required by law. (b)Public notice of a proposed business subsidy under this subdivision by a state government grantor, other than the commissioner of Iron Range resources and rehabilitation, must be published in the State Register.Public notice of a proposed business subsidy under this subdivision by a local government grantor or the commissioner of Iron Range resources and rehabilitation must be published in a local newspaper of general circulation. The public notice must identify the location at which information about the business subsidy,including a summary of the terms of the subsidy,is available.Published notice should be sufficiently conspicuous in size and placement to distinguish the notice from the surrounding text. The grantor must make the information available in printed paper copies and, if possible, on the Internet. The government agency must provide at least a ten-day notice for the public hearing. (c)The public notice must include the date,time,and place of the hearing, (d)The public hearing by a state government grantor other than the commissioner of Iron Range resources and rehabilitation must be held in St.Paul. (e) If more than one nonstate grantor provides a business subsidy to the same recipient, the nonstate grantors may designate one nonstate grantor to hold a single public hearing regarding the business subsidies provided by all nonstate grantors. For the purposes of this paragraph, "nonstate grantor" includes the commissioner of Iron Range resources and rehabilitation. (f)The public notice of any public meeting about a business subsidy agreement,including those required by this subdivision and by subdivision 4, must include notice that a person with residence in or the owner of taxable property in the granting jurisdiction may file a written complaint with the grantor if the grantor fails to comply with sections 116J.993 to 1161995, and that no action may be filed against the grantor for the failure to comply unless a written complaint is filed. Official Publication of the State of Minnesota Revisor of Statutes 3 MINNESOTA STATUTES 2021 1161994 Subd. 6. Failure to meet goals.(a)The subsidy agreement must specify the recipient's obligation if the recipient does not fulfill the agreement. At a minimum, the agreement must require a recipient failing to meet subsidy agreement goals to pay back the assistance plus interest to the grantor or,at the grantor's option, to the account created under section 116J.551 provided that repayment may be prorated to reflect partial fulfillment of goals. The interest rate must be set at no less than the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the Bureau of Economic Analysis of the United States Department of Commerce for the 12-month period ending March 31 of the previous year. The grantor, after a public hearing, may extend for up to one year the period for meeting the wage and job goals under subdivision 4 provided in a subsidy agreement.A grantor may extend the period for meeting other goals under subdivision 3,paragraph(a),clause(3),by documenting in writing the reason for the extension and attaching a copy of the document to its next annual report to the department. (b)A recipient that fails to meet the terms of a subsidy agreement may not receive a business subsidy from any grantor for a period of five years from the date of failure or until a recipient satisfies its repayment obligation under this subdivision,whichever occurs first. (c)Before a grantor signs a business subsidy agreement,the grantor must check with the compilation and summary report required by this section to determine if the recipient is eligible to receive a business subsidy. Subd. 7. Reports by recipients to grantors.(a)A business subsidy grantor must monitor the progress by the recipient in achieving agreement goals. (b)A recipient must provide information regarding goals and results for two years after the benefit date or until the goals are met,whichever is later.If the goals are not met,the recipient must continue to provide information on the subsidy until the subsidy is repaid. The information must be filed on forms developed by the commissioner in cooperation with representatives of local government.Copies of the completed forms must be sent to the local government agency that provided the subsidy or to the commissioner if the grantor is a state agency. If the commissioner of Iron Range resources and rehabilitation is the grantor,the copies must be sent to the commissioner of Iron Range resources and rehabilitation.The report must include: (1)the type,public purpose,and amount of subsidies and type of district,if the subsidy is tax increment financing; (2)the hourly wage of each job created with separate bands of wages; (3) the sum of the hourly wages and cost of health insurance provided by the employer with separate bands of wages; (4)the date the job and wage goals will be reached; (5)a statement of goals identified in the subsidy agreement and an update on achievement of those goals; (6)the location of the recipient prior to receiving the business subsidy; (7)the number of employees who ceased to be employed by the recipient when the recipient relocated to become eligible for the business subsidy; (8)why the recipient did not complete the project outlined in the subsidy agreement at their previous location, if the recipient was previously located at another site in Minnesota; (9)the name and address of the parent corporation of the recipient,if any; Official Publication of the State of Minnesota Revisor of Statutes 116J.994 MINNESOTA STATUTES 2021 4 (10)a list of all financial assistance by all grantors for the project; and (11)other information the commissioner may request. A report must be filed no later than March 1 of each year for the previous year. The local agency and the commissioner of Iron Range resources and rehabilitation must forward copies of the reports received by recipients to the commissioner by April 1. (c)Financial assistance that is excluded from the definition of"business subsidy" by section I I6J.993, subdivision 3, clauses (4), (5), (8), and (16), is subject to the reporting requirements of this subdivision, except that the report of the recipient must include instead: (1)the type,public purpose,and amount of the financial assistance,and type of district if the assistance is tax increment financing; (2) progress towards meeting goals stated in the assistance agreement and the public purpose of the assistance; (3) if the agreement includes job creation, the hourly wage of each job created with separate bands of wages; (4) if the agreement includes job creation, the sum of the hourly wages and cost of health insurance provided by the employer with separate bands of wages; (5)the location of the recipient prior to receiving the assistance;and (6)other information the grantor requests. (d) If the recipient does not submit its report, the local government agency must mail the recipient a warning within one week of the required filing date.If,after 14 days of the postmarked date of the warning, the recipient fails to provide a report, the recipient must pay to the grantor a penalty of$100 for each subsequent day until the report is filed. The maximum penalty shall not exceed$1,000. Subd. 8. Reports by grantors.(a)Local government agencies of a local government with a population of more than 2,500 and state government agencies, regardless of whether or not they have awarded any business subsidies, must file a report by April 1 of each year with the commissioner. Local government agencies of a local government with a population of 2,500 or less are exempt from filing this report if they have not awarded a business subsidy in the past five years. The report must include a list of recipients that did not complete the recipient report required under subdivision 7 and a list of recipients that have not met their job and wage goals within two years and the steps being taken to bring them into compliance or to recoup the subsidy. If the commissioner has not received the report by April 1 from an entity required to report, the commissioner shall issue a warning to the government agency. If the commissioner has still not received the report by June 1 of that same year from an entity required to report,then that government agency may not award any business subsidies until the report has been filed. (b) The report required under paragraph (a) is also required for financial assistance of$25,000 and greater that is excluded from the definition of"business subsidy"by section I I6J.993,subdivision 3,clause (1),and of$75,000 and greater that is excluded from the definition of"business subsidy"by section 116J.993, subdivision 3, clause(21). The report for the financial assistance under this paragraph must be completed within one year of the granting of the financial assistance.The report required for financial assistance under this paragraph must include: Official Publication of the State of Minnesota Revisor of Statutes 5 MINNESOTA STATUTES 2021 116J.994 (1) the name of the recipient, its organizational structure, its address and contact information, and its industry sector; (2)a description of the amount and use of the financial assistance and the total project budget,including a list of all financial assistance by all grantors for the project and the private sources of financial assistance; (3)the public purpose of the financial assistance,the job goals associated with both the financial assistance and the total project in which the financial assistance is included,the hourly wage of each job created,and the cost of health insurance provided by the employer; (4)the date the project will be completed; (5)the name and address of the parent corporation of the recipient, if any;and (6)any other information the commissioner may request. (c)Within one year of completing a report under paragraph(b),the local government agency must report to the commissioner on progress in achieving the purposes and goals under paragraph(b),clause(3). (d)The commissioner of employment and economic development must provide information on reporting requirements to state and local government agencies. Subd. 9. Compilation and summary report.The Department of Employment and Economic Development must publish a compilation and summary of the results of the reports for the previous two calendar years by December 1 of 2004 and every other year thereafter. The reports of the government agencies to the department and the compilation and summary report of the department must be made available to the public. The commissioner must make copies of all business subsidy reports submitted by local and state granting agencies available on the department's website by October 1 of the year in which they were submitted. The commissioner must coordinate the production of reports so that useful comparisons across time periods and across grantors can be made. The commissioner may add other information to the report as the commissioner deems necessary to evaluate business subsidies.Among the information in the summary and compilation report,the commissioner must include: (1)total amount of subsidies awarded in each development region of the state; (2)distribution of business subsidy amounts by size of the business subsidy; (3)distribution of business subsidy amounts by time category; (4)distribution of subsidies by type and by public purpose; (5)percent of all business subsidies that reached their goals; (6)percent of business subsidies that did not reach their goals by two years from the benefit date; (7)total dollar amount of business subsidies that did not meet their goals after two years from the benefit date; (8)percent of subsidies that did not meet their goals and that did not receive repayment; (9)list of recipients that have failed to meet the terms of a subsidy agreement in the past five years and have not satisfied their repayment obligations; Official Publication of the State of Minnesota Revisor of Statutes 116J.994 MINNESOTA STATUTES 2021 6 (10) number of part-time and full-time jobs within separate bands of wages for the entire state and for each development region of the state; (11)benefits paid within separate bands of wages for the entire state and for each development region of the state; and (12)number of employees in the entire state and in each development region of the state who ceased to be employed because their employers relocated to become eligible for a business subsidy. Subd. 10. Compilation.The Department of Employment and Economic Development must publish a compilation of granting agencies'criteria policies adopted in the previous two calendar years by December 1 of 2004 and every other year thereafter. Subd. 11. Enforcement. (a)A person with residence in or an owner of taxable property located in the jurisdiction of the grantor may bring an action for equitable relief arising out of the failure of the grantor to comply with sections I I6J.993 to 1161995. The court may award a prevailing party in an action under this subdivision costs and reasonable attorney fees. (b)Prior to bringing an action,the party must file a written complaint with the grantor stating the alleged violation and proposing a remedy. The grantor has up to 30 days to reply to the complaint in writing and may take action to comply with sections 116J.993 to 116J.995. (c)The written complaint under this subdivision for failure to comply with subdivisions 1 to 5,must be filed with the grantor within 180 days after approval of the subsidy agreement under subdivision 3,paragraph (d).An action under this subdivision must be commenced within 30 days following receipt of the grantor's reply, or within 180 days after approval of the subsidy agreement under subdivision 3, paragraph (d), whichever is later. History: 1999 c 243 art 12 s 2; 2000 c 482 s 2-11;2001 c 7 s 28; 2003 c 128 art 13 s 24-26; 1 Sp2003 c 4 s 1;2004 c 206 s 24,25; 1 Sp2005 c 1 art 4 s 23,24; 1 Sp2005 c 3 art 7 s 2-5;2008 C 366 art 5 s 3-5;2017 c 94 art 7 s 11-13 Official Publication of the State of Minnesota Revisor of Statutes I MINNESOTA STATUTES 2021 1161995 1161995 ECONOMIC GRANTS. An appropriation rider in an appropriation to the Department of Employment and Economic Development that specifies that the appropriation be granted to a particular business or class of businesses must contain a statement of the expected benefits associated with the grant. At a minimum, the statement must include goals for the number of jobs created or enhanced,wages paid,and the tax revenue increases due to the grant. The wage and job goals must contain specific goals to be attained within two years of the benefit date. The statement must specify the recipient's obligation if the recipient does not attain the goals. At a minimum, the statement must require a recipient failing to meet the job and wage goals to pay back the assistance plus interest to the Department of Employment and Economic Development provided that repayment may be prorated to reflect partial fulfillment of goals. The interest rate must be set at no less than the implicit price deflator as defined under section 116J.994,subdivision 6.The legislature,after a public hearing,may extend for up to one year the period for meeting the goals provided in the statement. History: 1999 e 243 art 12 s 3; 2000 c 482 s 12; 2001 c 7 s 29; 2003 c 128 art 13 s 27; 1 Sp2003 c 4 s I Official Publication of the State of Minnesota Revisor of Statutes FARMINGTON BUSINESS SUBSIDY POLICY 1.0 PURPOSE 1.01 This Policy is adopted for purposes of the Business Subsidies Act(the "Act"),Minnesota Statues, Sections 116J.993 through 116J.995. Terms used in this Policy are intended to have the same meanings as if used in the Act, and this Policy shall apply only with respect to "subsidies" as defined by the Act if and to the extend required thereby. 2.00 POLICY 2.01 The City of Farmington and the Farmington Economic Development Authority maintain several policy documents which speak to the general goals and objectives for the provision of public assistance for private development or redevelopment activities. These documents include, but are not limited to the current Strategic Plan for Economic Development and the Comprehensive Land Use Plan. 2.02 The City of Farmington has determined that in order for any project to be considered for financial assistance, a finding is needed that determines that, "but for"the City's assistance, this project will not occur or will not occur within a reasonable amount of time. The City will also need to demonstrate a return on its investment based on one or more of the public benefit categories listed in this Policy. 2.03 Because projects vary greatly in structure and public benefit derived, each project will be considered on its own merits. Consideration will be given to projects providing public benefits in one or more of the following categories: a. The creation of new jobs/increase in total payroll. In the case of new job creation, new jobs must pay an average wage equal to the minimum wage level for business assistance programs administered by the Minnesota Department of Employment and Economic Development for cities located in the seven county metropolitan area in place at the time of an application by any business seeking a subsidy. Preference will be given to higher paying jobs that also provide benefits such as health care coverage. b. Projects that provide value in the forms of needed transportation and other utility infrastructure improvements including regional infrastructure in the community that would be completed in conjunction with the project. C. Redevelopment projects that result in the stabilization of business districts or neighborhoods by elimination of blighting conditions. d. Projects that enhance or increase the economic diversity of the community by attracting businesses or industries not currently located in the City. New job wage requirements will apply to any new jobs created. Farmington Business Subsidy Policy rev.4.20.15 e. Projects that result in the development of affordable senior or workforce housing. f. Quality of Life based on business/projects. Those business/entities that provide a desirable good or service and address an unmet demand in the community will be considered. New job wage requirements will apply to any new jobs created. g. Retention of existing jobs. To be considered under this category, it must be demonstrated—to the satisfaction of the City- that the loss of jobs is specific and can be demonstrated. 2.04 If a particular project does not involve the creation of jobs, but is nonetheless found to meet another public purpose of the City it may be considered without any specific job wage goals, as permitted by Minnesota Statutes. This public purpose has to be something other than an increase to the City's tax base. Other measurable, specific and tangible goals must be established. Examples of tangible goals may include redevelopment or clean-up of a contaminated site or increased tourism. 2.05 Each project shall not only be evaluated against the Business Subsidy Policy but also against other applicable City of Farmington or Economic Development Authority policies, including the Comprehensive Land Use Plan, current Strategic Plan for Economic Development. The level of assistance to be provided for any project is at the discretion of City of Farmington. 2.06 Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the governing body must retain the right in its discretion to approve projects and subsidies which may vary from the principles and criteria of this Policy. The burden will be on the applicant to demonstrate,to the satisfaction of the City of Farmington,that the public benefit justifies the requested subsidy. 2.07 In all cases of business subsidy, where the subsidy is equal to or greater than the threshold prescribed in Minnesota Statutes, a subsidy agreement will be entered into between the City and the recipient. This agreement will delineate the subsidy structure and amount, as well as the expected public benefit. The agreement will include provisions for repayment and other resolution options if the expected public benefit is not achieved. Upon completion of the project, the actual costs of the elements of the project eligible for the business subsidy will be verified. All business subsidies will be subject to the criteria outlined in Minnesota Statutes, Section 116J.933 through Section 116J.955 except those subsidies as exempted by same. Farmington Business Subsidy Policy rev.4.20.15 CITY of Exhibit A FARMINGTON Amended: TBD Last Amended: April 20, 2015 Business Subsidy Policy I. Purpose The purpose of the Farmington Business Subsidy Policy is to establish criteria for the granting of business subsidies, including assistance through Tax Increment Financing (TIF), Tax Abatement, and other incentive and assistance programs that may become available through the City. For the purposes of this document, the term "City"includes the Farmington City Council, the Farmington Economic Development Authority(EDA), City staff, financial consultants, and legal counsel. This policy will be used as criteria for providing subsidies, in addition to the requirements and limitations set forth by provision of Minnesota Statutes Section 116J.993 through 116J.995, as amended (the"Business Subsidy Act"). The criteria set forth in this Business Subsidy Policy shall be used as a guide in processing and reviewing an application requesting a business subsidy and shall be used in conjunction with other relevant policies of the City. The City may amend this Business Subsidy Plan at any time. Amendments to this Plan are subject to public hearing requirements contained in the Business Subsidy Act. The City reserves the right to approve or reject projects on a case-by-case basis, taking into consideration established polices, project criteria, and demand on City services in relation to the potential benefits form the project. Meeting this policy criteria does not guarantee the award of business assistance for the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. The City has the right to deviate from this policy. Any applicant who is not in good standing with the City regarding licenses, fees, code violations, or other City issues will not be considered for a business subsidy. II. Business Subsidy Criteria The following criteria shall be utilized in evaluating a request for a business subsidy. 1. Public Purpose. A business subsidy must meet a public purpose which may include, but may not be limited to, increasing the tax base. Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable. 1 2. Increase Tax Base. The Act provides that an increase in tax base cannot be the sole basis for generating a business subsidy. However, the City considers an increase in tax base to be a critical factor in granting a business subsidy. 3. Wage &Job Creation. The project provided a business subsidy must create at least one full-time equivalent job paying at least 200% of the State minimum wage in effect at the time the subsidy is granted. The maximum amount of subsidy per job created will be equal to the annual salary of the job(s) being created that comply with the wage requirement. If, after a public hearing, the City determines that the creation or retention of jobs is not a goal of the project, the job creation goal may be set at zero (0). 4. "But-For"Test. When there is a substantial likelihood that the project would not go forward or would not go forward in the same capacity without the business subsidy. This criterion may be met based solely on representationof the recipient of the business subsidy. 5. Other Economic or Redevelopment Goals. If creation of jobs is determined not to be a goal of a project (and by extension wages) the proposed business subsidy must achieve specific, tangible, and measurable goals related to one or more of the following: a. To encourage additional unsubsidized private development in the area, either directly or indirectly through "spin off' development. b. To remove blight and/or encourage development of commercial and industrial areas in the city that result in higher quality development and private investment. c. To support a project that will improve the quality of life in the city by providing a desirable good or service and addressing an unmet demand in the community. d. To promote revitalization and redevelopment within the city but especially in the Downtown and HWY 3 Corridor. e. Focus on the creation of wealth through "high value investment" rather than on the number of jobs created. In granting business subsidies, the City may deviate from the criteria outlined above if a)the reason for the deviation is documented in writing, and b) reported to the Minnesota Department of Employment and Economic Development(DEED) pursuant to the Act. III. APPLICATION PROCESS The applicant will complete and submit the City's Application for Business Subsidy along with the required application fee (refer to the current year's adopted fee schedule). The application fee covers the City's outside financial analysis costs and the development of a business subsidy agreement by legal counsel. The applicant will also provide any additional information requested by the city. The applicant will be liable for any additional costs beyond the initial deposit. All materials submitted to the City in connection with a business subsidy application shall become the property of the City and is subject to data privacy law. The review process shall involve at least the following: 1. Staff shall review the application materials and make a preliminary recommendation to the City regarding: 2 a. The completeness of the application, and b. Whether the application meets the goals and criteria of this policy. 2. If the City concurs with the recommendation, a public hearing will be set. 3. At the time of the scheduled public hearing, staff will make a final recommendation to the City regarding the approval or denial of the subsidy application. This recommendation will be based on: a. Applicable credit analysis. b. Financial structure of the proposed project/application. c. Legal compliance of the project/application. 4. The City will conduct the public hearing, during which they will take citizen comment on issuing the subsidy. After the public hearing is closed, the City will either approve or deny the Business Subsidy request. If the subsidy is approved, the business and the City will enter into a Business Subsidy Agreement. IV. BUSINESS SUBSIDY AGREEMENT The following terms are specified under MN Statute 116J.994, Subd.3 Subsidy Agreement: 1. A recipient must enter into a subsidy agreement with the grantor of the subsidy that includes: a. A description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is tax increment financing. b. A statement of the public purposes for the subsidy. c. Measurable, specific, and tangible goals for the subsidy. d. A description of the financial obligation of the recipient if the goals are not met. e. A statement of why the subsidy is needed. f. A commitment to continue operations in the jurisdiction where the subsidy is used for at least five years after the benefit date. g. The name and address of the parent corporation of the recipient, if any. h. A list of all financial assistance by all grantors for the project. 2. A business subsidy in the form of grants must be structured as forgivable loans. For other types of business subsidies, the agreement must state the fair market value of the subsidy to the recipient, including the value of conveying property at less than a fair market price, or other in-kind benefits to the recipient. 3. If a business subsidy benefits more than one recipient, the grantor must assign a proportion of the business subsidy to each recipient that signs a subsidy agreement. The proportion assessed to each recipient must reflect a reasonable estimate of the recipient's share of the total benefits of the project. 4. The state or local government agency and the recipient must both sign the subsidy agreement and, if the grantor is a local government agency, the agreement must be approved by the local elected governing body. 3 5. Notwithstanding the provision in paragraph (a), clause (f) of this agreement which states; f. A commitment to continue operations in the jurisdiction where the subsidy is used for at least five years after the benefit date A recipient may be authorized to move from the jurisdiction where the subsidy is used within the five-year period after the benefit date if, after a public hearing, the grantor approves the recipient's request to move. V. Compliance and Reporting 1. Any assistance that does not meet the definition of a "business subsidy"will be excluded from the requirement of holding a public hearing prior to granting a business subsidy. All assistance that meets the definition shall be subject to the requirement of a public hearing. 2. Every recipient of a business subsidy must enter into a business subsidy agreement with the City. This agreement must fulfill the requirements of the Business Subsidy Act. 3. Both the recipient and the City must comply with the business subsidy reporting and monitoring requirements of the Business Subsidy Act. 4. In the event that a recipient fails within two (2) years of the benefit date as defined in the Business Subsidy Act to meet the job and wage goals set forth in the business subsidy agreement, the recipient or its successors and assigns shall be liable to repay to the City the assistanceplus interest. The City may prorate repayment to reflect partial fulfillment of the goals setforth in the business subsidy agreement. The rate of interest charged must be set at no less than the implicit price deflator for government consumption expenditures and grossinvestment for local governments prepared by the Bureau of Economic Analysis of the United States Department of Commerce. 5. The City may, after holding a public hearing, extend the time for compliance with the business subsidy agreement job and wage goals by up to one (1) year. VI. Definitions "Benefit date" means the date that the recipient receives the business subsidy. If the business subsidy involves the purchase, lease, or donation of physical equipment, then the benefit date begins when the recipient puts the equipment into service. If the business subsidy is for improvements to property, then the benefit date refers to the earliest date of either: 1. When the improvements are finished for the entire project; or 2. When a business occupies the property. If a business occupies the property and the subsidy grantor expects that other businesses will also occupy the same property, the grantor may assign a separate benefit date for each business when it first occupies the property. "Business Subsidy" or "Subsidy" means a state or local government agency grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business. 4 "Business Subsidy Act" Minnesota Statutes Section 116J.993 through 116J.995, as amended. "Business Subsidy Report" means the annual reports submitted each year for each business receiving a business subsidy in the community. The report is submitted by the local government unit in order to comply with M.S. §116J.994 Subd. 7. (b). "Criteria" means the equitably applied, uniform standards by which the City bases its decision to award any business subsidy to a private business or development project establishing a business and creating jobs in the City of Farmington. "DEED" means Minnesota Department of Employment and Economic Development. "Full-Time Equivalent Job" The number does not reflect headcount, but rather all annual hours recorded by the employer divided by 40 hours per week. "Grantor" means the city department, city attorney, local or regional economic development agency or other authorized entity that is empowered to solicit, negotiate, and form business subsidy agreements on behalf of the City of Farmington. "High Value Investment" will create jobs for highly skilled workers to operate the facility and often includes expensive equipment that is very difficult and costly to move and often requires customized buildings. "Local Government Agency": Includes a statutory or home rule charter city, housing and redevelopment authority, town, county, port authority, economic development authority, community development agency, nonprofit entity created by a local government agency, or any other entity created by or authorized by a local government with authority to provide business subsidies "Public Purpose" A business subsidy must meet a public purpose which may include, but may not be limited to, increasing the tax base. Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable. "Recipient" means any for-profit or nonprofit business entity that receives a business subsidy. Only nonprofit entities with at least 100 full-time equivalent positions and with a ratio of highest to lowest paid employee, that exceeds ten to one, determined on the basis of full-time equivalent positions, are included in this definition. VII. FINANCIAL ASSISTANCE NOT CONSIDERED A BUSINESS SUBSIDY: The following forms of financial assistance are not considered business subsidy under MN Statute 116J.993, Subd.3 Business Subsidy: 1. A business subsidy of less than $150,000. 2. Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria. 3. Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group 5 of businesses at the time the improvements are made. 4. Redevelopment property polluted by contaminants as defined in 116J.552, subdivision 3. 5. Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50 percent of the total cost. 6. Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services. 7. Assistance for housing. 8. Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance sub-district as defined under M.S. §469.174, subdivision 23; 9. Assistance for energy conservation. 10. Tax reductions resulting from conformity with federal tax law. 11. Workers' compensation and unemployment insurance. 12. Benefits derived from regulation. 13. Indirect benefits derived from assistance to educational institutions. 14. Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999. 15. Assistance for a collaboration between a Minnesota higher education institution and a business. 16. Assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19. 17. Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current years estimated market value. 18. General changes in tax increment financing law and other general tax law changes of a principally technical nature. 19. Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency. 20. Funds from dock and wharf bonds issued by a seaway port authority. 21. Business loans and loan guarantees of$150,000 or less. 22. Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. 23. Property tax abatements granted under M.S. §469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100 6