HomeMy WebLinkAbout6. Utilization of Remaining Small Cities Development Program Fnds
b.
City of Shakopee
Memorandum
CONSEt~T
TO: Economic Development Authority
FROM: Kris Wilson, Assistant to the City Administrator
SUBJECT: Utilization of Remaining Small Cities Development Program Funds
DATE: October 26, 2005
Introduction
The City Council is being asked to decide how best to utilize approximately $29,000 in
remaining funds from the now-closed Small Cities Development Program (SCDP).
Background
From approximately 1999 to 2003,Shakopee had a Small Cities Development Program
(SCDP) grant from the state that it used to make deferred loans to residential and
commercial properties inthe downtown area. The program required that the loans be
repaid only if the property owner sold the property within seven years of receiving the
loan.
As a result of this repayment requirement, the city has a balance of$29,038.64 in
program funds and there is the potential to receive additional repayments until the last
loans made reach the seven-year point.
The most clear-cut use of these funds would be to make additional deferred loans to
residential or commercial property owners meeting the original criteria. The city recently
received an inquiry from a homeowner in the downtown area interested in applying for a
loan and it is possible that there are other interested property owners out there.
There is the possibility of utilizing the funds for other redevelopment activities - such as
the Downtown Fac;ade Improvement Program. However, we would have to submit a plan
to the Department of Employment and Economic Development (DEED) outlining our
proposal and demonstrating how the proposed alternative use of funds would meet one of
the purposes for which the funds were originally awarded. Additionally, use of the funds
would still be subject to various federal requirements, such as the prevailing wage rates
under the Davis-Bacon Act, thus creating a significant administrative burden.
Recommendation:
Staff recommends that the EDA approve the use of the existing fund balance as well as
any future revenue resulting from loan repayments to make additional deferred loans to
qualifying property owners. The alternative is to direct staff to conduct further research
on permissible uses of the funds and return to the EDA with a proposed plan to be
submitted to DEED.
Action Requested:
If the EDA concurs, it should, by motion, authorize use of the Small Cities Development
Program fund balance to make additional deferred loans to qualifying property owners
under the terms and conditions applied to the original program.
~W~
s Wilson
Assistant to the City Administrator