Council discusses dedicating REC sale proceeds to economic development infrastructure fund; staff may add environmental cleanup language

City staff asked the council whether to dedicate proceeds from the sale of renewable energy credits (RECs) to a new economic development infrastructure fund that would hold revenues from the 15‑year sales agreement with Minnesota Municipal Power.

"In that discussion we talked about creating an economic development infrastructure fund to place the proceeds of those sales, over the 15 year term of that sales contract, with the intention that the dollars would be made available for use for economic development improvements whether that be property acquisition, street improvements, utility improvements ... and so forth," Reed Huttman said. Huttman presented draft resolution language and asked for council direction on eligible uses.

Council members discussed whether to explicitly include environmental remediation and private-utility relocation as eligible expenditures. Mayor Mark Olstead suggested listing environmental cleanup and utility relocation as possible eligible uses to avoid later uncertainty for particular sites; Huttman said staff could add a sub‑bullet listing contaminated-soil remediation and utility relocation and that future councils could amend the resolution if desired. Finance staff explained the fund will be a special-revenue account and that borrowing from the general fund to cover timing differences is an accepted accounting practice that auditors record as interfund loans.

The council did not adopt the resolution at the work session but provided direction for staff to include environmental cleanup and relocation language as appropriate and to verify amendment procedures with the city attorney before final presentation.