HomeMy WebLinkAboutCity Council Committees - Economic Development Corporation - 12/09/1983 (3) CORRECTED COPY
ECONOMIC DEVELOPMENT CORPORATION
DECEMBER 9, 1983
The regular meeting of the Economic Development Corporation was called to
order at 8:10 a.m.
Present: Councilmember Tim Leahy, Chairman of the Board
Councilmember Tom Bailey, Board Member
Councilmember Berne Biteman, Board Member
Leo Powers, Board Member
Michael Miller, Vice Chairman
Finance Director Tony McCarthy, Treasurer
City Clerk Marie Jensen, Secretary
City Administrator Richard Cushing
City Attorney Steve DiJulio, General Counsel
William Tonkin of Roberts & Shefelman, Bond Counsel
Jerry Nowlin of Foster and Marshall .
The minutes of the meeting of September 30, 1983 were approved as written.
DiJulio distributed an article from the Wall Street Journal entitled "Growth
of Tax Exempt Financing Stirs Battle on Revenues and Rights."
Powers and Leahy noted that the Seattle Times had had an article about a month
ago which listed some EDC projects in the area, some of which would be
employing as many as 100 people and some as few as 10.
DiJulio stated that he had had some calls about Kent' s EDC and had mailed out
six applications. He distributed copies of a newsletter he had received on
November 4, put out by Preston, Thorgrimson, Ellis, and Holman entitled
"Industrial Revenue Bonds in the State of Washington - Current Developments."
DiJulio noted that Ordinance 2419 authorizing the Charter for Kent's EDC had
been amended by Ordinance 2433 to correct a codification error. Copies of the
new ordinance were distributed.
McCarthy presented Resolution 1983-5 establishing the Corporation's policy
relating to contracts, loans, checks, deposits, and establishing the fiscal
year. McCarthy explained that the funds would be processed through the City's
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accounting system as is now done with several trust funds such as the Firemens
Relief and Pension Fund. It was noted that bonds issued by the Corporation
would not show on the City's financial statements, but would be disclosed in
the financial reports. Resolution 1983-5 was adopted by motion, passing
unanimously.
A memo entitled "Outline of Significant Steps in Industrial Development Bond
Financing Process," prepared by Tonkin, was distributed. Tonkin and Nowlin
led discussion on the following topics outlined in the memo.
1 . Application and determination of eligibility.
2. "Official action" resolution, cost reimbursement agreement.
3. Preparation of basic financing documents.
4. Issuance of bonds.
5. Post issuance IRS filings.
6. Trustee's role under trust indenture following bond issuance.
It was noted that requirements for industrial development bonds were complex
and applicants had found that they had wasted time and money under the
assumption that this would be an easier route than getting a loan. Thorough
-� analysis is needed both from the legal and financial viewpoint. Discussion
followed each item in the outline noting particularly timeframes, compliance
with IRS regulations, meetings of counsel for all parties involved, etc.
The complete outline is on file for the record with the secretary.
It was noted that new legislation is proposed by Congress which would affect
issuance of Industrial Revenue Bonds in all states. Proposed by Don
Rostenkowski , Ways and Means Chairman, HB 7140 would limit the amount of bonds
to be issued in each state. This item, as well as information regarding
elected officials of a city serving on the city's board of directors, is
discussed in Preston, Thorgrimson's newsletter. The newsletter has been made
a part of the record.
Bailey suggested that the City should establish its philosophy before we start
receiving applications for Industrial Revenue Bonds and that this should be
done at the next meeting. Miller suggested we make that decision after we
determine how the Federal legislation will affect us. Cushing noted that when
the City's Economic Development Plan is completed, it would guide the Board in
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deciding what kind of firms should be encouraged and which industries would be
in the best interest of the City. DiJulio suggested that we could ask
Richard T. Schrock, Director of State Office of Commerce and Economic
Development to attend the next meeting.Cushing stated he will ask Puget Sound
Economic Development Council representative Leland Smith or the Assistant
Director to attend.
Cushing suggested that some funds earned by the Corporation could be used to
finance literature promoting Kent as a site for IRB development.
The meeting was adjourned at 10:00 a.m. and the next meeting was set for
8:00 a.m. , Friday, February 3.
w <' 7
Marie Jensen, City Clerk
Secretary of the Board
0745B-95A
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