Committee Minutes

MINUTES/GROWTH FUND AUTHORITY
Monday, November 3, 1997 - 7:00 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, November 3, 1997 at the hour of 7:00 p.m. with Chairman Carpenter presiding. Present at roll call were Council Members Hamerlik, Glassheim, Carpenter, Sande, Beyer, Babinchak, Bakken, Hafner, Hagness, Owens - 10; absent: Council Members Polovitz, Klave - 2.

CONSIDER APPLICATIONS FOR FUNDING

a) PS Doors

COUNCIL MEMBER BEACH REPORTED PRESENT

Chairman Carpenter read the recommendation from the Growth Fund Subcommittee to approve a loan in the amount of $199,284.00 of which $150,000 is to consist in the construction of a new building in the Grand Forks Industrial Park and $49,284.00 which is the balance of the Growth Fund loan, and this loan shall be at 4% for a 20-year term, subject to financing terms meeting EDA requirements.

Chairman Carpenter called for the public hearing. There were no comments and the public hearing was closed.

It was moved by council Member Hagness and seconded by Council Member Beach to approve the recommendation of the Growth Fund. Upon roll call vote the following voted "aye": Council Members
Beach, Glassheim, Carpenter, Sande, Beyer, Babinchak, Bakken Hafner, Hagness, Owens - 11; voting "nay": none. Chairman Carpenter declared the motion carried.

b) Pribbs Steel & Manufacturing, Inc.

Chairman Carpenter read the recommendation from the Growth Fund Subcommittee to approve a loan up to $134,000 for the community's portion of the Bank of North Dakota's PACE interest buydown for the $750,000 request for building construction and the $500,000 request for equipment purchase, with the loan to be repaid, starting at the time the PACE loan is paid in full, at the same payment rate of the PACE loan until the balance of the Growth Fund loan is paid in full

Chairman Carpenter called for the public hearing.

Tim Pribula, CEO and President of Pribbs Steel, 23 Sandy Hills in Grand Forks, stated that before final consideration is given on the loan they would like to add a little information that was inadvertently left out of their application; that besides the PACE buydown they are looking at an additional loan for $350,000 for proposed interest rate and jobs creation credit because some of the discussion that has come out is that the equity put in by the owners of the company and was left out of the application, but
MINUTES/GROWTH FUND AUTHORITY
November 3, 1997 - Page 2

owners are placing approximately $300,000 into the building struc-ture and he can get submit listing of specifics on that; that paint system they are installing is approx. $100,000 and within the building they have a mezzanine system they quoted out at approx. $75,000 which they will do themselves, they will be sheeting entire inside of the facility themselves, including supply and installa-tion, and also doing all carpentry work in the offices; and asked if there was a possibility of reevaluating $350,000 loan applica-tion and splitting it apart from the PACE loan. He reported that Pribbs Steel has just recently been awarded a $6 Million design development contract for the Department of Defense to design and develop a trailer system for 2 1/2 ton trucks and that's the first year of a three-year buy, that they anticipate that the contract could possibly go as high as $20 Million; that part of their con-cern is to try to keep their line of credit open to help finance the start-up costs of that contract which will require a consider-able amount of investment at that point. He stated they had bid contract before started phasing building but hadn't planned on securing the contract and has been real work for the new building, but need to keep credit open. He stated that this is a development contract with testing involved and trailer will be taken to Aberdeen Testing Grounds and tested for six months over 16,000 miles, and until that trailer is approved, any costs incurred are all Pribbs Steels, cannot file for any progress payment or get any payment on any of the product that they produce, but have to be up and running once approval is given you can start production within three months and that is typical for large government contracts.

Mr. Pribula stated they are not under any tight time constraints, that they would like to see PACE loan not be jeopardized, and will move into new building around April. He also added that because of the new contract they are expecting, they are proposing 42 new jobs as result of the new building, but because of new contract see that going up to 50 under two shifts because will have to produce 20,000 lbs. of steel product per day.

Mr. Pribula reported that the total cost of the project would be $1.6 for actual building, and remaining $500,000 for laser system which they are finaling price on now, and robotic welding system. He reported that business owners putting $300,000 into the project.
Chairman Carpenter stated his concern was that project has gone from $1.5 in July to $1.850 when full application first came in and now going higher. Mr. Pribula reported that they are running into higher costs because of the flood and some of the estimations and now actuals coming in are lot higher, did provide actual quotes in application, and do attribute some of that to the flood.

There was some discussion relative to approving portion of this, and perhaps need to consider entire application.

MINUTES/GROWTH FUND AUTHORITY
November 3, 1997 - Page 3

Chairman Carpenter closed the public hearing.

Council Member Babinchak questioned that if they approved PACE buydown now and balance of request didn't happen, would they still move forward with project. Mr. Pribula stated they would try to secure additional financing, would still go ahead with the project.

It was then moved by Council Member Hamerlik and seconded by Council Member Sande to refer this matter to Growth Fund Sub-committee for additional information and reconsideration.

It was noted that the matter would go to Growth Fund Authority by November 17, 1997.

Upon call for the question, the motion carried 11 votes affirma-tive.

ADJOURN

It was moved by Council Members Sande and Hagness that we do now adjourn. Carried 11 votes affirmative.

Respectfully submitted,



Saroj Jerath
Deputy City Auditor