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East Grand Forks council creates $61,143.38 discretionary loan account from EDA revolving‑loan interest
Summary
The East Grand Forks City Council on May 20 adopted Resolution No. 25-05-40 to move accrued interest from EDA revolving‑loan funds into a new discretionary loan account beginning with $61,143.38; staff said principal loan funds remain intact and the EDA will review lending policies and hold a public hearing.
The East Grand Forks City Council voted May 20 to move accrued interest from its EDA revolving‑loan funds into a newly established discretionary loan account, starting with a balance of $61,143.38 under Resolution No. 25-05-40.
City staff member Maggie, speaking during the discussion, said the city manages four revolving loan funds. "The balances range from, let's see, a $176,000 up to $1,800,000, and they're currently getting a little bit over 2% interest," she said, adding that the annual interest generated across the funds currently runs "between $4,200 to $39,000." Maggie said one large fund (the Minnesota Investment Fund, account 626) came from the state and is re‑lent to industrial borrowers at higher rates.
Council members asked whether reallocating interest would reduce the funds available for future lending. "I just don't wanna be 5 years down the road and going, oh, we shouldn't have done this," one council member said. Maggie replied that the principal for existing loans remains intact and that the EDA can apply for Minnesota Investment Fund (MIF) support on a project‑by‑project basis; she also said the move is intended to create a discretionary pot for uses outside the restrictions of the existing loan accounts. She described the agenda item as the first step; the EDA will review lending criteria, and both the EDA and council will hold a public hearing before finalizing lending policies and any power‑sharing arrangements between council and the EDA.
The motion to adopt Resolution No. 25-05-40 was moved by Dale Helms and seconded by Tammy Schumacher; the council approved the resolution by roll call. The resolution directs interest accrued from the EDA revolving‑loan funds to a separate discretionary loan account and specifies that future accrued interest will be allocated to that account.
Next steps include EDA review of detailed lending criteria and a public hearing on proposed policies; the council did not adopt lending rules at this meeting but approved moving the interest into the new account so staff and the EDA can develop the criteria.
