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MINUTES/GROWTH FUND AUTHORITY
Monday, August 17, 1998 - 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, August 17, 1998 at the hour of 7:00 p.m. with Chairman Carpenter presiding. Present at roll call were Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, and Mayor Owens - 14; absent: Council Member Martinson - 1.

HOLD PUBLIC HEARING ON APPLICATION FROM
TOOL CRIB OF THE NORTH CATALOG DIVISION

a) Tool Crib of the North Catalog Division

Chairman Carpenter read the recommendation from the Growth Fund Subcommittee to recommend approval of a PACE interest subsidy loan buydown in an amount of up to $134,600, the assistance will be in the form a zero (0.00%) interest loan to be repaid, starting at the time the PACE loan is paid in full at the same payment rate as the PACE loan, until the balance of the Growth loan is paid in full

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

The city auditor read the recommendation made by Ken Polovitz and Mike Porter of the Growth Fund as follows: to authorize a PACE interest subsidy loan buydown in an amount up to $134,600, the assistance will be in the form of a zero (0.00%) interest loan to be repaid, starting at the time the PACE loan is paid in full at the same payment rate as the PACE loan, until the balance of the Growth Fund loan is paid in full.

It was moved by Council Member Polovitz and seconded by Council Member Hamerlik that the recommendation be approved.

Council Member Lucke asked if this is the type of loan that we typically get involved with, that it would seem to him that it's a real strong corporate neighbor in town and doubt if they need this loan, and asked if there were an abundance of money in the Growth Fund and trying to put on the street. He asked if bankers complain about us being in competition with them and that there's a bank in town that's being deprived of a good loan.

Chairman Carpenter reported that there is a bank involved in this and they did bring it forward, they are supportive of the application, and all PACE loans require a local financial institution to be involved, and that this is basically a buydown through the State programs so the full loan is coming from the local bank and they are being paid a fair market interest rate but being bought down by the State and by local participation. He stated Council Member Lucke's point has been a subject of debate over the years on entities that may be able to afford and

MINUTES/GROWTH FUND AUTHORITY
August 17, 1998 - Page 2

not need the assistance, the argument that's been made and why in the past have generally supported these types of applications, is that if this company was located in another community, we would be willing to assist them to attract them here, so in effect rewarding this company for staying and creating new jobs in the community, and they meet all the criteria of the PACE program and bringing in new wealth to the community.

Upon call for the question and roll call vote, the following voted "aye": Council Members Brooks, Polovitz, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, and Mayor Owens - 13; voting "nay": Council Member Lucke - 1. Chairman Carpenter declared the motion carried.

HOLD PUBLIC HEARING ON APPLICATION FROM
CHEYENNE VALVE AND MACHINE OF ND., INC.

b) Cheyenne Valve and Machine of ND, Inc.

The city auditor read the motion by Council Members Glassheim and Polovitz that the Growth Fund Committee recommend the following for approval contingent upon the Company securing bank participation for the additional project cost: approval of a loan of up to $15,000 for five (5) years at 0.0% to be used for building leasehold improvements, and approval of a loan in the amount of $35,000 for seven (7) years at 4.5% for the purchase of equipment.
Chairman Carpenter called for the public hearing. There were no comments and the public hearing was closed.

Upon call for the question and upon roll call vote, the following voted "aye": Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, and Mayor Owens - 14; voting "nay": none. Chairman Carpenter declared the motion carried.

HOLD PUBLIC HEARING ON APPLICATION FROM MASTER
POTATO

c) Master Potato

The city auditor read the recommendation made by Council Members Glassheim and Beyer that the Growth Fund Committee recommend the following: approval of a loan in the amount of $40,000 for a term of five (5) years at 6.0% for working capital, not intended for refinancing, security for the loan will require a second position on real estate and personal guarantees by the principal owners.

Chairman Carpenter called for the public hearing on the applica-tion; there were no comments and the public hearing was closed.

MINUTES/GROWTH FUND AUTHORITY
August 17, 1998 - Page 3

Council Member Lunak asked if we approve applications for companies which are out of town and if they qualify. Chairman Carpenter reported that they have funded other applications from outside the community of Grand Forks, have done that as a good will gesture, because 1) those residents outside the city do pay city sales tax which helps fund the Growth Fund, and 2) they do their shopping in Grand Forks and feel it's in the best interest of the city to keep those economies out there healthy and that's been the rationale to support and have done several outside the city.

Upon roll call the following voted "aye": Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, and Mayor Owens - 14; voting "nay": none. Chairman Carpenter declared the motion carried.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Bakken that we do now adjourn. Carried 14 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor