Committee reviews Minot ‘Magic Fund’ allocations, balances and constraints; members consider community facilities and special-assessment options

The Economic Development Plan Review Committee spent the bulk of its Jan. 24 meeting reviewing how Minot’s economic development sales tax revenue is allocated and used under the city’s “Magic Fund” guidelines.

David ("Dave"), a city finance presenter, walked members through the ordinance and updated guidelines that carve the sales tax penny into six buckets: program administration; legacy primary sector; state matching funds/program initiatives (used for PACE/FlexPACE and other matching programs); City of Minot economic development projects (for example, façade and wayfinding programs); a small-business carve‑out; and a flood-control bucket.

Dave presented preliminary year‑end balances as of Dec. 31: administration approximately $231,810; the primary‑sector bucket “just a little over $10,000,000”; the state matching funds bucket at a zero balance at year‑end (to be funded as receipts arrive); City economic development projects a little over $1,000,000 (about $700,000 of which is already committed under façade improvement agreements); and zero balances in the remaining buckets at year‑end. He said the city saw a solid final month for sales tax collections—about 5% year‑over‑year—and that the 2025 budget increases the sales tax projection.

Committee members pressed how flexible the buckets are and how funds may move between them. Dave described the intended limits in the guidelines: legacy primary sector funds are restricted (some legacy dollars were collected before guideline changes and are reserved for core primary‑sector uses), and transfers are allowed only along constrained paths (for example, staff noted primary‑sector funds can be transferred to the state‑matching bucket but not further downstream without council action). "Each dollar has a character along the way," Dave said, "you know where it started, so you know what you can do with it."

The committee discussed the state‑matching bucket and the Service Basin Planning Council (a local revolving loan administrator). Dave and committee members outlined that the city’s allocated funding can be used as seed capital or local match for state programs; under the Magic Fund guidelines Service Basin can request up to 25% of that bucket in a single award. Committee members said Service Basin has requested recapitalization in prior years and has had multi‑year loans (historically 5–10 years, more recently 3–5 years), so funds may not revolve back quickly; members urged transparency from Service Basin on outstanding loans, expected repayments and defaults. Dave and members said the City retains a seat on the board that oversees the revolving fund and that Service Basin has provided presentations to council in the past.

Members also debated whether to amend bucket definitions or add a community facilities category (one committee member suggested widening bucket 5, small business, to include community facilities such as sports or civic venues that attract out‑of‑area visitors). The committee discussed examples of prior community facilities investments (MSU Dome seating, a turf project and the Discovery Center) and how events tied to those facilities generate visitor spending. Committee members asked staff to gather historical data on prior community‑facilities grants and examples of how other cities structure such funds.

Special assessments and upfront funding for developer‑supplied infrastructure were another substantive discussion point. Committee members and staff described special assessments as a common municipal tool—options included funding upsized infrastructure with city participation, issuing debt, or using utility/storm funds—while cautioning about the city’s exposure if a development fails and special assessments go unpaid.

A number of members urged a careful, deliberative approach. One said the primary‑sector bucket exists to cover larger, capital‑intensive projects and could be exhausted quickly by a single major request; another noted the state program matching funds bucket is intended to be a revolving source that, over time, will be replenished as loans are repaid. The committee asked staff to return with clarifying materials, Service Basin accounting details and a follow‑up on the Chamber/EDC contract that the committee planned to review at a later meeting.

What was said (selected):

• "Each dollar has a character along the way. Right? I mean, you know where it started, so you know what you can do with it." — Dave (finance presenter).

• "The primary sector bucket is limited to primary‑sector activity; some legacy funds were collected before the ordinance change and are restricted to that purpose." — Dave (finance presenter).

• Committee proposal: consider amending the small‑business bucket to include a community‑facilities stream, and request historical detail on previous community‑facilities grants.

Next steps: staff to provide more detailed slides and historical data, Service Basin to supply accounting and repayment projections, and Chamber/EDC to present its annual contract report at a future meeting. No formal funding changes were made at the meeting.