The Crookston Housing & Economic Development Authority (CHEDA) met on Tuesday night to discuss their 2023 preliminary budget and other consistent subjects. The full story can be seen below while we continue to try and update our website, we apologize for the inconvenience.
The Crookston Housing & Economic Development Authority (CHEDA) met on Tuesday night for a regular meeting at 5:00 p.m. at the Valley Technology Park. After the Call to Order, the meeting began with the board approving their meeting minutes from their last meetings on September 13 and 26, which they approved unanimously.
CONSENT AGENDA
The Consent Agenda included approving the EDA Financials and the Crookston Jobs Loan Status and Financials. It also included the approval of the B3 Grants and Financials, the Financials for Prairie Skyline, and the Financials for Epitome Energy. Next, it resolved a Revolving Loan Fund for Crookston Jobs and Loan Status and Financials. It also resolved Financials for Oak Court Public Housing, Housing Choice Voucher, Workforce Housing, and Rehab Housing. The final item on the Consent Agenda was to approve the Financials, Building Occupancy, and Expended Business Incubation of Valley Technology Park.
HOUSING REPORT: TAHRAN
The board then heard from Administrative Assistant Theresa Tahran on a Public Housing Report on the Oak Court Apartments, saying that they currently have seven vacancies and have made selections and heard a few responses on them. They also had recently installed a part for their HVAC system to fix the heating in their apartments.
Section 8
Tahran then gave an update on Section 8, who reported they had 138 current vouchers and are continuing to pull them every two weeks.
Workforce Housing
City Administrator Charles “Corky” Reynolds then gave an update on the Housing project at 1410 Eickhof Boulevard. They had put out an RFP to Jeff Fagerstrom of the Northwest Minnesota Housing Cooperative, the only person that has bid for the property, and is currently trying to complete the groundwork on the house before the end of the year. The board chose to approve the grant unanimously.
OLD BUSINESS
The board then heard an update on the Colborn Property Infrastructure from Reynolds. He reported that they had received an $895,000 grant from the state for the construction of a 10-ton road for the Ag Innovation Campus. Reynolds also noted that they would begin bidding for the project in the spring and would begin construction once a bidder has been chosen.
Epitome Energy
Reynolds then went into a report about Epitome Energy. Reynolds said that he had spoken with CHEDA Attorney Tanner Holten about creating the legal documents for the loan extension that was approved at their last meeting, and he was waiting for them to come in.
Prairie Skyline
The board began a discussion on the Prairie Skyline with Reynolds reporting about their outstanding loan with them has principal and interest due for $43,968. He explained that Prairie Skyline had a draft to pay it back, but it is about $25,000 short of her loan. Skyline requested that the interest of the loan be forgiven as it would continue to increase the amount she owed them and would drop the amount to $41,321. The board agreed to forgive the interest and give them a deadline of October 31 to pay the loan.
Chickadee Coffee/Snow Loan Status
The board then heard an update on the Chickadee Coffee and Snow Loan Status. Reynolds reported that they had gotten the owner the papers served by the Bemidji Sheriff’s Department, but they had not heard any response from him over 20 days. “We’ve been searching out where he is, and lawsuit papers have been commenced in an attempt to collect that debt,” Reynolds explained. “He was finally served, and his time to answer has expired, so Tanner Holten of Harbott Law Firm is drawing up the papers as CHEDA’s attorney to enter into a default judgment against him for the amount that we claim he owes us.” Reynolds explained that if the judgment were granted, this would allow them to pursue the owner in any assets he has in an attempt to collect the money that was borrowed from CHEDA.
APG- Elliot Steinbrink
The board then heard from Reynolds on the status of the APG Development legal entity. Reynolds had no further information from the September meeting but that APG plans to begin construction in the spring.
MAIN AGENDA
The board then welcomed Brian Opsahl of Brady Martz for a report on their 2021 Audit. Opsahl noted that overall, the board did well in making sure things like their cash flow breaking even for the year, which gave them $1.5 million at the end of 2021, but noted they could do more to ensure that financial tasks are correct. “We need to have more of a backup, so our employees who are performing financial tasks are able to have their work reviewed, so when it comes to the board, the board can see that two people reviewed financial transactions, or two people performed certain duties that CHEDA employees are supposed to do,” Reynolds explained. “It’s checks and balances, but other than that, the audit went very well.”
Vertical Malt-VTP
The board then began a discussion on the Vertical Malt for the Valley Technology Park. CHEDA Executive Director Karie Kirschbaum reported that she had met with the owner, who now wished to grow his business. This will cause Vertical Malt to enter a new lease with Valley Technology Park, which includes increasing his rent and paying for some of the building’s utilities. However, he requested $87-100,000 to expand the building and repair the parking lots in the back of the building. Kirschbaum requested the board to approve a cap of $20,000 to expand and repair the parking lot and enter the agreement for up to $100,000 to expand the building to suit the needs of Vertical Malt, which the board approved.
2023 Preliminary Budget
The board then began a discussion on their Preliminary Budget for 2023. Kirschbaum reported that the biggest changes were their tenant billing had risen to $375,264 from last year, as they had a plumbing issue they had to repair. “We’ve had some increase in expenses, predominantly in utilities. With the city and CHEDA preliminarily, we were thinking of a 40% increase in utilities. Theresa Tehran of CHEDA has done an analysis from September 2021 to 2022 and found that a 40% increase is actually too little, and the utility costs have increased more, so we had to alter the budget there. We will be doing some additional spending and loaning, and there will be some increases there, always to facilitate the expansion or initiation of businesses for Crookston.” Kirschbaum reported that the EDA’s Net Income was $10,000, $12,086 for the Public Housing Department, and $2,098.46 for Section 8 housing. This gave CHEDA a net total of $27,166.16, which was an increase from their 2022 budget of $8,073.85. However, more decisions and changes will be made before the deadline for their preliminary budget by November.
Resolution 1-10-2022 Flat Rent
The board finished the meeting with a resolution to move their flat rent to November due to Tahran being away for a conference for the rest of the month and them needing more information as to which rent level is most effective for their residents and clients and chose to table the motion until their next meeting.
The next CHEDA meeting will take place on Monday, October 24, at 6:35 p.m. in the Crookston City Hall Council Chambers.
