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Baxter City Council: Tables vote on unified fund

BAXTER--Without a full council present and with reservations expressed regarding a unified fund, Baxter City Council members voted to table a vote for a public hearing on the issue.

BAXTER-Without a full council present and with reservations expressed regarding a unified fund, Baxter City Council members voted to table a vote for a public hearing on the issue.

This fall, the council heard a presentation by Sheila Haverkamp, executive director of the Brainerd Lakes Area Economic Development Corp. about establishing a unified fund.

The idea is to pool the money, revolving loan funds, now in separate governmental units into a single fund of nearly $4 million. Revolving loan funds can be an important link for businesses looking for gap funding as they work with lenders for projects. Business owners said accessing the funds can be daunting and those with federal dollars have additional requirements before the money can be put to use.

Baxter's revolving loan fund came from federal dollars but with restrictions-such as wage requirements-and after the initial loan the money could go to a de-federalized process making it easier to work with companies in the future after the first loan through the unified fund is repaid.

A public hearing would be required before action to adopt such an agreement and was proposed for Nov. 7. Whether to set the public hearing was the agenda item before the council at its last session. With Mayor Darrel Olson and council member Steve Barrows absent, council members Todd Holman, Mark Cross and Quinn Nystrom voted to table the topic.

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Presiding at the meeting, Holman noted the public hearing could take place and the council could still vote no on joining the unified fund with BLAEDC. The topic was part of two previous council workshops and involved about $435,000 in Baxter's revolving loan fund.

Cross said he was personally uncomfortable going with the unified fund at this moment and wanted to see control of the fund stay with the city so it benefits Baxter's industrial park and businesses that want to come to Baxter.

Nystrom said she agreed with Cross on wanting to make sure the funds benefit Baxter. She asked how many seats Baxter would have on the unified fund board. With a unified fund, the city of Baxter would have a single seat on the united fund board making loan decisions. Loans of $300,000 or more would also go before BLAEDC to put another set of eyes on the loan transaction for a project of that size. Baxter City Administrator Brad Chapulis said Baxter would have one seat on the nine-member board. Nystrom said she didn't want to make a decision without the full council.

Holman, who was Baxter's city planner for five years from 1999 to 2004 before he joined the council in 2007, noted weekends find mountain bikes with the tell-tale red dirt from the Cuyuna mountain bike trails in Baxter benefiting the city. He noted Baxter's role as the area micropolitan's downtown drawing people from the region. Holman said he was a big proponent of the unified fund concept and the flexibility with BLAEDC benefits Baxter as the city hasn't been able to put the money to use.

"I'm a proponent of keeping the conversation moving forward," Holman said.

He noted a number of concerns he is looking for more details on, including the criteria for making loan decisions. Holman said he hasn't heard a clear answer regarding how projects would be distinguished from each other if several came forward. He questioned if that might be types of jobs or average wages but said he hasn't been comfortable with the answer thus far.

Holman was also concerned about the transparency of loan decisions to the public. Holman was looking for more information on whether funds would be used for operational costs or capital improvement wondering if the money would be used to really build businesses and create jobs or solve operational issues. What if the next council wants a more active role, Holman asked, noting it looks as though the decision to be part of the unified fund, once made, is final.

Holman said it wasn't a light-weight decision and he doesn't think they've heard enough answers.

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Holman said he thinks his questions can be answered and they can move forward but he agreed the full council should be present. The answers needed to come before a public hearing, Cross said.

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