The Crookston Housing & Economic Development Authority (CHEDA) met on Tuesday for a regular meeting at noon 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 August 9 and 22, which it did 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. It then went into Payable Bills, where they would pay for a total of $21,691.90. The final item on the Consent Agenda was to approve the Financials, Building Occupancy, and Expended Business Incubation of Valley Technology Park. The board approved the agenda unanimously.
CHEDA FORENSIC AUDIT
The board then received a presentation from Abdo about a Forensic Audit. Tyler See of Abdo Certified Public Accountants said they had been hired to overview the audits for CHEDA and gave their findings and procedures for each of them. The first procedure was a summary of their cash balances from December 31, 2019, to December 31, 2021. They found the investments were accurate for 2019-2020, and after looking at a sample of five loans CHEDA had given out. They learned as per CHEDA’s loan applications, they should not exceed 33% of a project cost and found that there was no policy in place for CHEDA loans.
There were no policies in place for the giving of loans. There were no criteria or basis for giving loans and recommended that CHEDA implement policies regarding the giving of loans.”One example See pointed to was that CHEDA had given a loan to a project by Total Lawn Care that cost $80,000 but they had requested $60,000, which was over the loan limit at 75%.
See said they had overseen a group of grants CHEDA had awarded but again found no official policy for the grants or follow-ups with the grants and recommended a policy be created for them and applied to all applicants. See then reviewed the board packets and gave some recommendations on trial balances. He found that a lot of the information on them wasn’t very detailed but accurate information. See recommended adding a brief description of their recommendations and payments to help clarify the payments.
Theresa Tahran noted they aim to do it at least every quarter of a year and would try to make it more consistent. The last review they did was of a few credit card statements and reviewed their usage. See noted that they found that there was limited credit card usage by the previous director, with there being multiple months of either no usage of the cards or one use a month. A major point See found was that numerous internal activities with the former board or Executive Director were unusual or not in compliance with previous board policies. To ensure these don’t happen with the current or future boards, See made recommendations about some processes and procedures the present board could undertake to give a greater degree of certainty that board policies would be followed and not create any detriment to CHEDA.
See noted that the money and loans had nothing wrong with them but that there needed to be more official policies for everything and recommended creating them to clarify them and make things easier for them with everything going forward, which Corky Reynolds said he had received from them, “I have received a sample of the recommended policies and procedures for giving loans or grants by Economic Development Authorities. I reached out to Abdo, and they had some available, and they provided them to me,” Reynolds explained. “We will now be drafting those policies and procedures and asking the CHEDA board to implement those that they think are most appropriate for the further conduct of their duties and business as CHEDA board members and for the benefit of CHEDA and the citizens of Crookston.” Reynolds said that he would work on creating and adding these policies with the new Community Director when she would begin but noted that these would stop some loans and grants for a short time while they would be put in place.
HOUSING REPORT: TAHRAN
The board then heard from Administrative Assistant Theresa Tahran on a Public Housing Report, with her first giving an update on the Lead the Way Training, saying that no one had completed it since last time. Tahran said she would email a date for the people yet to complete it to come in and finish it.
Public Housing Report
Tahran then gave a Public Housing Report on the Oak Court Apartments, saying they planned to add key access for four entries and additional cameras with their current company or go with a new company for security cameras to give better views of the parking lot and outside of the buildings.
Oak Court HUD Security Grant Application
The board then began a discussion to approve an application for a HUD Security Grant for the Oak Court Apartments. Theresa Tahran said she had asked their HUD Field Office Representative if there were any Security Grants they could apply for to cover the additional security cameras and other security around the building. The board approved authorization to apply for the grant unanimously.
Tahran said she had received a report from the Police Department about the number of calls from the building, and just from August 2021 to August 2022, they had received about 128 calls, with seven being about drug use, but others were about numerous miscellaneous incident calls.
Section 8
Tahran then gave an update on Section 8, saying they had 135 vouchers, with five being issued and currently looking, and selections are being done every two weeks. She noted that there was a possibility of issuing eight more with pending paperwork.
OLD BUSINESS
The board then heard from Interim City Administrator Charles “Corky” Reynolds on an update on the Colborn Property Infrastructure, but he noted no updates at the time.
Epitome Energy
Reynolds then went into a report about Epitome Energy, saying they had an option agreement with Epitome with the due date coming up with a loan agreement for $250,000 set for September 30. Dennis Egan said two of the requirements for the loan were to obtain the necessary permits and believed they would see an end date soon on the project. However, even with them receiving the air permit, it would be a draft permit and have to go to public comment before it could be enacted. He did not know how long this would take to complete and asked for an extension of the purchase of the land to July 31, 2023, and on the loan to ensure the permit was complete and finish the project by next year. Mayor Dale Stainbrook recommended that it be extended to September 30, 2023, which the board agreed with and passed unanimously.
Prairie Skyline
The board began a discussion on the Prairie Skyline, with Tahran reporting she had received an email that the state approved the check on August 31 and would receive it by September 30.
Chickadee Coffee/Snow Loan Status
The board then heard an update on the Chickadee Coffee and Snow Loan Status, in which Reynolds reported that court summons and complaints were prepared for Mr. Snow to repay the sums loaned to him. “We had a location of him. We sent the documents for service by the Polk County Sheriff’s Department to be served upon Mr. Snow,” Reynolds explained. “Attempting to obtain service, we found that Mr. Snow was no longer at that location, and we were given information that he may be residing in a different county. So we have sent the papers to that county to attempt service upon Mr. Snow regarding the Chickadee Coffee loan.”
APG- Elliot Steinbrink
The board then heard from Reynolds on the status of the APG Development legal entity, saying he had reached out to him since the last meeting and finally received a message on August 31, saying he intended to break ground in the spring for the development. However, this did not answer their questions of who their legal entity is, so Reynolds will continue to reach out to him to have those questions answered.
MAIN AGENDA
The board then opened the discussion to approve an application for Technical Assistance Grant for the MN Housing Partnership’s Strengthening Rural Communities Program. The board approved the motion unanimously.
Valley Technology Park Vertical Malt Solicit Bids
The final item on the agenda was a resolution to approve solicit bids for Vertical Malt at the Valley Technology Park. Reynolds explained that Vertical Malt requested to expand to solicit bids to add additions to the rooms in the building to increase dryer size and add concrete cement slabs for the use in his processes. However, due to a lack of a second motion, the resolution was not passed.
OTHER BUSINESS
The final item for the meeting was Chair Dylane Klatt opening a discussion on changing the starting time of the meeting. He recommended 7:00 a.m. on Tuesdays or 5:30 to 6:00 p.m. on Wednesdays. After some discussion, the board chose to now have their regular meetings on Wednesday, October 12, at 5:30 p.m.
The next CHEDA meeting will take place on Monday, September 26, at 6:35 p.m. in the Crookston City Hall Council Chambers.
