Committee Minutes

MINUTES/GROWTH FUND AUTHORITY (JDA)
Monday, July 23, 2001 - 6:45 p.m._______________

The city council of the City of Grand Forks sitting as the Growth Fund Authority met in the council chambers in City Hall on Monday, July 23, 2001 at the hour of 6:45 p.m. with President Gershman presiding. Present at roll call were Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Christensen, Kerian, Kreun, Gershman, Mayor Brown - 11; absent: Council Members Lunak, Klave, Bakken, Martinson - 4.

HOLD PUBLIC HEARING AND APPROVE REQUEST FOR
LOANS FOR WEBSMART TELESERVICES GROUP, INC.

President Gershman reported we have before us the public hearing for WebSmart Teleservices Group, Inc. submitted by the staff of the Growth Fund with a recommended action to approve the Growth Fund Committee’s recommendation for funding as outlined in their project summary, and opened the public hearing. There were no comments and the public hearing was closed.

It was moved by Council Member Burke and seconded by Council Member Hamerlik for approval of the following funding for WebSmart Teleservices Group, Inc.: 1) approval of a loan in the amount of $260,000 amortized over 4 years at 5.00% interest starting August 1, 2002 with repayment over a term of 36 months beginning September 1, 2002. The City would agree to subordinate the loan to WebSmart’s bank financing and the purpose of the loan would be for working capital at the Grand Forks facility; and 2) approval of a loan in an amount up to $125,000 amortized at 5.00% interest for one year, for the purpose of capital purchases/leasing to improve the Grand Forks facility, pending the acquisition of the recent inbound telemarketing project discussed at the meeting. Repayment of principal and interest would be due in full one year from date of issue. Both loans would require personal guarantees and security agreements along with the required documents for Growth Fund and EDA funding.

Council Member Glassheim questioned the number of jobs or additional jobs and wage rates. Council Member Christensen stated they hoped to preserve 50 jobs and 100 jobs will be created between now and October 1, wages are $7.50 to $8.50/hour but people are incented with bonuses and can make up to $17.00/hour; that this is a loan with personal guarantees.

Mark Krausneck, Grand Forks Economic Development, stated it will entail eventual capital improve-ments to the facility to make it more of a state of the art facility, that it’s not only a retention but a strengthening of the business model, that 100 jobs conservative and likely to be 100 new full-time and about 70 to 80 part-time in addition.

Upon roll call the following voted “aye”: Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Christensen, Kerian, Kreun, Gershman, Mayor Brown - 10; voting “nay”: Council Member Bjerke - 1. President Gershman declared the motion carried.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Kreun that we do now adjourn. Carried 11 votes affirmative.

Respectfully submitted,


John M. Schmisek, City Auditor