HEDA

HERMANTOWN ECONOMIC DEVELOPMENT AUTHORITY AGENDA Thursday, July 16th 2026 at 5:30 p.m. Council Chambers Governmental Services Building 1. ROLL CALL 2. MINUTES – Approval or correction 2.1 May 21, 2026 HEDA Minutes 3. MOTIONS 3.1 Motion to establish the amount of bond at $300,000 required to be provided by the Treasurer 3.2 Motion to approve Annual Report to the City 3.3 Motion to approve for submission to the City Council a budget for 2027 3.4 Motion to approve a report to the City Council on the Enabling Resolution 3.5 Motion to approve an audit to submit to the City Council 4. PUBLIC HEARING 5. RESOLUTIONS 6. WORK SESSION 7. RECESS CITY OF HERMANTOWN HERMANTOWN ECONOMIC DEVELOPMENT AUTHORITY Thursday, May 21, 2026 at 5:30 PM Central Council Chambers, City Hall – Hermantown Governmental Services Building Mayor Wayne Boucher: Present Councilor John Geissler: Present Councilor Andy Hjelle: Present Councilor Joe Peterson: Present Councilor Brian LeBlanc: Absent Karen Pionk: Present Rob Unzen: Absent CITY STAFF: Chad Ronchetti, Executive Director; Mia Thibodeau, HEDA Attorney; 1. ROLL CALL 2. MINUTES 2.1 Approve March 26, 2026 HEDA Minutes Motion to approve minutes as presented. This motion, made by, Geissler and seconded by Peterson, Carried. Mayor Wayne Boucher: Yea Councilor John Geissler: Yea Councilor Andy Hjelle: Yea Councilor Joe Peterson: Yea Councilor Brian LeBlanc: Absent Karen Pionk: Yea Rob Unzen: Absent Yea: 5, Nay: 0, Absent: 2 3. MOTIONS 3.1 Motion to Cancel November 19, 2026 HEDA Meeting Motion to cancel of the November 19, 2026 HEDA meeting due to scheduling conflicts. This motion, made by, Geissler and seconded by Hjelle, Carried. Mayor Wayne Boucher: Yea Councilor John Geissler: Yea Councilor Andy Hjelle: Yea Councilor Joe Peterson: Yea Councilor Brian LeBlanc: Absent Karen Pionk: Yea Rob Unzen: Absent Yea: 5, Nay: 0, Absent: 2 4. RESOLUTIONS 4.1 2026-01H Resolution Authorizing And Directing President And Secretary To Execute An Acceptance of Easement Agreements For Parcels 395-0092-00160, 395-0092-00090, 395-0092-00160 To City Of Hermantown From The Hermantown Economic Development Authority For The Lightning Drive Utility And Trail Project Motion to approve 2026-01H Resolution Authorizing And Directing President And Secretary To Execute An Acceptance of Easement Agreements For Parcels 395-0092- 00160, 395-0092-00090, 395-0092-00160 To City Of Hermantown From The Hermantown Economic Development Authority For The Lightning Drive Utility And Trail Project. This motion, made by, Hjelle and seconded by Pionk, Carried. Mayor Wayne Boucher: Yea Councilor John Geissler: Yea Councilor Andy Hjelle: Yea Councilor Joe Peterson: Yea Councilor Brian LeBlanc: Absent Karen Pionk: Yea Rob Unzen: Absent Yea: 5, Nay: 0, Absent: 2 5. RECESS Motion to recess at 5:41 p.m. This motion, made by Peterson and seconded by Pionk, Carried. Mayor Wayne Boucher: Yea Councilor John Geissler: Yea Councilor Andy Hjelle: Yea Councilor Joe Peterson: Yea Councilor Brian LeBlanc: Absent Karen Pionk: Yea Rob Unzen: Absent Yea: 5, Nay: 0, Absent: 2 Recorded by: ___________________________ Chad Ronchetti, Executive Director HEDA Agenda Report Page 1 HEDA MEETING DATE: July 16, 2026 TO: HEDA Commissioners FROM: Chad Ronchetti, Economic Development Director SUBJECT: Treasurer’s Bond ☐ RESOLUTION: ☐ WORK SESSION ☒ OTHER: Motion REQUESTED ACTION Motion to establish the amount of bond at $300,000 as required to be provided by the Treasurer required by Section 4.2. BACKGROUND Section 3.1.1. Establish the amount of bond required to be provided by the Treasurer required by Section 4.2. Section 4.2 The Treasurer shall give bond to the state conditioned for the faithful discharge of his/her duties. The bond must be approved as to form and surety by HEDA and filed with the Secretary and must be for twice the amount of money likely to be on hand at any one time as determined at least annually by the HEDA, provided, however, that said bond must not exceed $300,000.00. The Fund balance as of 12/31/2025 was $579,450 It is recommended that the bond be set at $300,000. SOURCE OF FUNDS (if applicable) ATTACHMENTS Hermantown Economic Development Authority HEDA’s mission is to intentionally lead economic growth, creating a vibrant and prosperous community. HEDA Agenda Report Page 1 HEDA MEETING DATE: July 16, 2026 TO: HEDA Commissioners FROM: Chad Ronchetti, Economic Development Director SUBJECT: Annual Report ☐ RESOLUTION: ☐ WORK SESSION ☒ OTHER: Motion REQUESTED ACTION Approve a report to the City as required by Section 4.6. BACKGROUND Section 3.1.2. Consider and approve a report to the City as required by Section 4.6. Section 4.6. HEDA shall, at the annual meeting on a form determined by the City Council of City (“City Council”), approve a written report to the City Council giving a detailed account of its activities and of its receipts and expenditures during the preceding calendar year, together with such additional matters and recommendations it deems advisable for the economic development of the City. The attached report is for the year 2025. SOURCE OF FUNDS (if applicable) ATTACHMENTS 2025 Annual Report Hermantown Economic Development Authority HEDA’s mission is to intentionally lead economic growth, creating a vibrant and prosperous community. HEDA Annual Report 2025 Annual Meeting July 16, 2026 MISSION AND CHARGE CHARGE HEDA was established by the City Council to: Assume primary responsibility for development activities within the City and to preserve and create jobs, enhance tax base, assist with housing initiatives, and promote the general welfare of the people. MISSION To intentionally lead economic growth, creating a vibrant and prosperous community HEDA COMMISSIONERS Mayor Wayne Boucher - President Councilor John Geissler - Vice President Councilor Brian LeBlanc - Secretary & Treasurer Councilor Joe Peterson Councilor Andy Hjelle Rob Unzen Karen Pionk ANNUAL SUMMARY This Annual Report is provided to the City Council to showcase what activities it has undertaken to uphold is charge and mission, and further intended to satisfy the requirements of Section 3.1.2 and Section 4.6 of the HEDA bylaws. Governance Modernization A defining feature of 2025 was a comprehensive modernization of HEDA’s governing documents. HEDA recommended — and the City Council adopted — a new Amended and Restated Enabling Resolution (Resolution 2025-128) on August 4, 2025. HEDA’s updated bylaws followed at the August 2025 meeting. Together, these changes reflect Hermantown’s growth and HEDA’s adaptation into a Economic Development Authority with a broader representation on board more reflective of larger community. Hawkline Business Park (formerly Hwy 53 Business Park): For years, HEDA worked as the steward for the Hawkline Business Park – Funding an Alternative Urban Areawide Review and the pursuit and award of a $2M grant from the Greater Minnesota Public Infrastructure program at the Department of Employment and Economic Development. That work led to the attraction of Scannell Development, resulting in: The construction of a 230,000+ square foot distribution facility for FedEx The creation of 450 new jobs onsite Nearly $7M worth of public infrastructure upgrades Redevelopment of a Federal Superfund Site Creation of an additional lot for future development The success of Hawkline is a prime example of how HEDA proactively assumed primary responsibility for development and intentionally lead economic growth to create a vibrant and prosperous community resulting in job creation and enhancement of tax base. HEDA truly fulfilled its charge and mission. ANNUAL SUMMARY CONTINUED Housing Trust Fund: Policy and First Loan: The Housing Trust Fund (HTF) was established by City Council ordinance in early 2025, and HEDA was appointed as the administrator of the fund. After several months of deliberate policy-setting and analysis by the Commission, the HTF Policy was adopted in October of 2025. The Commission spent several work sessions in August and September discussing and refining the policy framework through: Evaluation of the recently released Duluth housing study, which included Hermantown in its study area. Debate and in-depth discussion on terms The Commission also established income targeting at or below 115% of Area Median Income (AMI) for all lending and conveyance and tied the default interest rate to the Effective Federal Funds Rate to keep the policy flexible over time. HEDA made its first HTF loan to Reliable Properties in October 2025, immediately following the policy’s adoption. The loan provided $100,000 at 0% interest to address structural and fire barrier issues in two multifamily units at 4511 Lavaque Road (Resolution 2025-12H). This loan qualified under the first-priority preservation and rehabilitation category — exactly the kind of “naturally affordable” workforce housing stock the policy was designed to protect. The loan requires units to be rented at or below 80% AMI for the 10-year term, repaid in quarterly installments beginning January 2026. Birch Hills: Throughout the year, HEDA continued deliberating on the Birch Hills Subdivision, a city-owned parcel proposed for workforce housing development. ·In September 2025, the Commissioners discussed design process, construction cost research, and preliminary taxable value analysis. The project envisions a small number of designated workforce units — approximately five — sold at or below 115% AMI. ANNUAL SUMMARY CONTINUED In February 2026, the Commission reviewed a 40% design layout showing lot types, density modeling, grade concepts, and a potential trail extension. The proforma was reviewed with expenditures to date, soft and hard costs, and options for how the project would be financed over time. Debate was focused on: Appropriateness if income range targeted Concerns about the city’s cost exposure The desire to focus density in the eastern part of the city to avoid costly sprawl. The Commission concluded there was not yet full consensus for moving forward. The Commission directed staff to evaluate alternative public-private partnership models, consider land conveyance arrangements that would give the city more control over the full development rather than just five lots, and monitor the broader market before proceeding. Uptown Hermantown: Planning Progress and Recess: The Uptown Hermantown Urban Design Master Plan continued to advance through 2025 before pausing in late 2025. At the July 2025 annual meeting, the community engagement results, base data collection, and concept discussions were presented . At the September 2025 meeting, the Commission was provided survey results and initial design concepts for three organizing elements: Uptown Main Street, Town Center, and Town Green, and the Advisory Committee felt as though community energy was building around Uptown and the opportunity to create something that reflects Hermantown’s identity. In November 2025, a letter was sent to the Advisory Committee announcing a recess in the planning process because another major project in Hermantown was being proposed and considered, which was going to absorb much of the community conversation for the foreseeable future. The project had reached a natural break point having developed initial draft concepts for density, road networks, and uses. GOVERNANCE CHANGES In 2025, HEDA undertook a comprehensive update to its governing documents.. Changes to both the Enabling Resolution and the Bylaws reflect the maturation of the organization and changing best practices for community-representative economic development authorities. Enabling Resolution: 2017 vs. 2025 The City Council adopted Resolution 2025-128 on August 4, 2025, amending and restating the 2017 Enabling Resolution (Resolution No. 2017-69). This followed HEDA’s annual recommendation to the City Council, which included a detailed presentation comparing Hermantown’s board structure to comparable Minnesota cities. The central driver was a recognition that Hermantown’s population has grown from approximately 6,800 (when HEDA was established) to approximately 10,200, and that regional peers with similar populations predominantly use a model with fewer council members and more citizen at- large representatives Bylaws: 2017 vs. 2025 Following the City Council’s adoption of the new Enabling Resolution, HEDA adopted amended and restated bylaws by Resolution 2025-09H at the August 28, 2025 meeting. The bylaw changes were necessitated by the new Enabling Resolution but also incorporated other improvements for consistency and operational clarity. A more detailed breakdown of the changes can be found in the report to City Council on the Enabling Resolution RESOLUTIONS Resolution Meeting Date Title Summary Adopted amended and Resolution Approving restated bylaws following 2025-09H Aug. 28, 2025 Amendments to the the City Council’s adoption HEDA By-Laws of the new Enabling Resolution. Resolution Approving Removed the trail easement an Amendment to requirement in exchange for Development a $50,000 escrow for trail Agreement and 2025-10H Aug. 28, 2025 construction under the Business Subsidy Cottages of Hermantown Agreement with KTJ development agreement as 360, LLC (Pillars of an alternative. Hermantown) Resolution Adopting a Lending Policy for the Established the HTF 2025-11H Oct. 23, 2025 City of Hermantown Lending Policy Housing Trust Fund Resolution First HTF loan to Reliable Authorizing a Loan Hermantown Properties, Agreement from the 2025-12H Oct. 23, 2025 LLC for structural and fire Housing Trust Fund — barrier repairs at 4511 Reliable Properties, Lavaque Road. LLC RESOLUTIONS Resolution Meeting Date Title Summary Resolution Consented to refinancing of Approving a the Pillars of Hermantown Consent Related project. Acknowledged to the collateral assignment of the 2025-13H Oct. 23, 2025 Development development contract to Contract with KTJ the lender while preserving 360, LLC (Pillars of HEDA’s obligations and Hermantown) rights. Resolution Terminated the 2024 Authorizing development contract with Termination of Hawkline Development LLC 2025-14H Dec. 18, 2025 Development and the City of Contract with Hermantown. Part of the Hawkline same Hawkline Business Development LLC Park restructuring Resolution Terminated the 2024 Authorizing development contract with Termination of Bill & Irv’s Properties, Inc. 2025-15H Dec. 18, 2025 Development and the City. Part of the Contract with Bill same Hawkline Business & Irv’s Properties, Park restructuring. Inc. Resolution Authorizing Authorized easement Acceptance of agreements for three Easement 2026-01H May 21, 2026 parcels, conveying Agreements for easements from HEDA to the Lightning the City of Hermantown. Drive Utility and Trail Project Revenues and Expenditures As shown elsewhere, in the audit, the fund balance decreased from a starting balance of $689,618 to and ending balance of $579,450. Revenue and expenditure reports are attached for greater detail. HEDA Agenda Report Page 1 HEDA MEETING DATE: July 16, 2026 TO: HEDA Commissioners FROM: Chad Ronchetti, Economic Development Director SUBJECT: Proposed Budget 2027 ☐ RESOLUTION: ☐ WORK SESSION ☒ OTHER: Motion REQUESTED ACTION Approve for submission to the City Council a budget for the succeeding year of HEDA as required by Section 4.7. BACKGROUND Section 3.1.3. Consider and approve for submission to the City Council a budget for the succeeding year of HEDA as required by Section 4.7. Section 4.7.HEDA, at the annual meeting, approve a budget for the succeeding year and approve for submission to the City Council. The budget must include a detailed written estimate of the amount of money that HEDA expects to need from the City in order for HEDA to conduct HEDA business during the next fiscal year. The needed amount is what is needed in excess of any expected receipts from other sources. The attached budget is proposed for 2027 SOURCE OF FUNDS (if applicable) ATTACHMENTS Proposed Budget 2027 Hermantown Economic Development Authority HEDA’s mission is to intentionally lead economic growth, creating a vibrant and prosperous community. 2026 Budget Book Hermantown TABLE OF CONTENTS Fund Summaries 3 Hermantown Economic Development Fund 4  Table of Contents Funds Summary Overview This section provides a graphic, chart, and table versions of the budget in its totality. 2026 Budget Book | Hermantown Page 3  Table of Contents Hermantown Economic Development Fund The Hermantown Economic Development Authority (HEDA) was established on April 6, 1992 by Resolution 92-29. HEDA is governed by a board of commissioners with seven members. All the members of the City Council are board members plus two public members. The City is financially accountable for HEDA because the City Council approves the budget for HEDA, levies taxes (if necessary), and must approve any debt issuances. HEDA sponsors projects involving tax-exempt financing (“conduit financing”) for the benefit of outside entities. For this reason, HEDA is reported as a discretely presented component unit. HEDA has no employees, but has contracted with the City for administrative services. Board members do receive pay for each meeting they attend. To learn more about HEDA and its projects click here. Summary Revenues vs Expenditures Summary $300K $250K $200K $150K $100K $50K 0 2022 2023 2024 2025 2026 Revenue Actual Revenue Surplus Revenue Budgeted Expenditures Actual Expenditures Over Budget Expenditures Budgeted In the 2026 budget for the Hermantown Economic Development Fund, budgeted expenditures increased to $181,637, representing a 3.31% rise from the previous year's $175,822. This continues the upward trend in expenditures, though at a slower rate compared to the prior year's 6.77% increase. Budgeted revenues for 2026 also grew, reaching $177,731, which is a 4.93% increase from the 2025 budgeted revenue of $169,376. This growth in revenue is slightly lower than the 5.54% increase seen in the previous year. Overall, both revenues and expenditures are budgeted to increase in 2026, with expenditures remaining the largest category. The gap between budgeted expenditures and revenues narrows slightly compared to 2025, indicating a closer alignment between the two categories in the target year. 2026 Budget Book | Hermantown Page 4  Table of Contents Comprehensive Fund Summary Comprehensive Fund Summary FY 2025 Budgeted vs. FY 2024 FY 2025 FY 2026 Category FY 2026 Actual Budgeted Budgeted Budgeted (% Change) Beginning Fund Balance $689,802.00 $685,611.00 - -100.00% Revenues Current Year Taxes $156,837.00 $157,106.00 $164,961.00 5.00% Delinquent Taxes $460.00 - - - Investment Interest $23,582.00 $9,500.00 $10,000.00 5.26% Gain (Loss) on Sale of Investments $7,984.00 - - - Conduit Financing Fees $2,770.00 $2,770.00 $2,770.00 - Total Revenues $191,633.00 $169,376.00 $177,731.00 4.93% Expenditures Personnel Services $51,232.00 $94,476.00 $100,337.00 6.20% Supplies $229.00 $325.00 $300.00 -7.69% Services $81,131.00 $76,121.00 $77,600.00 1.94% Maintenance $3,828.00 $4,900.00 $3,400.00 -30.61% Other Financing Uses $55,399.00 - - - Total Expenditures $191,819.00 $175,822.00 $181,637.00 3.31% Total Revenues Less Expenditures -$186.00 -$6,446.00 -$3,906.00 -39.40% Ending Fund Balance $689,616.00 $679,165.00 -$3,906.00 -100.58% Revenues by Revenue Grouping Historical Revenue by Revenue Grouping $300K ​$253K ​$184K ​$192K ​$178K $200K ​$169K $100K 0 -$100K FY2022 FY2023 FY2024 FY2025 FY2026 Miscellaneous Charges for Services Investment Income Intergovernmental Taxes The Hermantown Economic Development Fund's total revenue for FY2026 is $177,731, reflecting a 4.93% increase from the previous year's total of $169,376. Taxes remain the largest revenue category, accounting for 92.81% of the total with $164,961, which is a $7,855 increase or 5% growth compared to the prior year. 2026 Budget Book | Hermantown Page 5  Table of Contents Investment Income is the second-largest category, contributing $10,000 or 5.63% of total revenue. This represents a $500 increase, or 5.26%, from the previous year's $9,500. Charges for Services remain steady at $2,770, making up 1.56% of the total revenue with no change from the prior year. Intergovernmental and Miscellaneous revenues continue to have no contribution, remaining at $0. Overall, the fund shows growth primarily driven by increases in Taxes and Investment Income, while other categories remain stable or unchanged. FY26 Revenues by Revenue Grouping 178K Taxes $164,961 92.81% Investment Income $10,000 5.63% Charges for Services $2,770 1.56% For the Hermantown Economic Development Fund's Fiscal Year Revenue by Revenue Grouping, Taxes constitute the largest portion at $164,961, representing 92.81% of the total revenue. Investment Income follows with $10,000, accounting for 5.63%. Charges for Services contribute $2,770, making up 1.56% of the revenue. Revenues by Revenue Grouping FY 2025 Budgeted vs. FY 2026 Category FY 2024 Actual FY 2025 Budgeted FY 2026 Budgeted Budgeted (% Change) Taxes $157,297.00 $157,106.00 $164,961.00 5.00% Charges for Services $2,770.00 $2,770.00 $2,770.00 - Investment Income $31,566.00 $9,500.00 $10,000.00 5.26% Total Revenues $191,633.00 $169,376.00 $177,731.00 4.93% 2026 Budget Book | Hermantown Page 6  Table of Contents Expenditures by Object Summary Historical Expenditures by Object Summary $300K ​$245K ​$242K $200K ​$192K ​$182K ​$176K $100K 0 FY2022 FY2023 FY2024 FY2025 FY2026 Supplies Maintenance Other Financing Uses Personnel Services Services In FY2026, the Hermantown Economic Development Fund's total expenditures increased by 3.31% to $181,637 compared to the previous year. Personnel Services remained the largest expenditure category, rising by 6.2% to $100,337, which now represents 55.24% of the total budget, up from 53.73%. Services also saw an increase of 1.94%, reaching $77,600 and accounting for 42.72% of total expenditures. Conversely, maintenance expenses decreased by 30.61% to $3,400, reducing its share to 1.87% of the total budget. Supplies also declined slightly by 7.69% to $300, now making up 0.17% of expenditures. Other Financing Uses remained at $0, consistent with the previous year. Overall, the budget shows moderate growth in Personnel Services and Services, which together constitute the vast majority of expenditures, while Maintenance and Supplies experienced notable decreases in FY2026. FY26 Expenditures by Object Summary 182K Personnel Services $100,337 55.24% Services $77,600 42.72% Maintenance $3,400 1.87% Supplies $300 0.17% For the Hermantown Economic Development Fund's Fiscal Year Expenditures by Object Summary, Personnel Services account for $100,337, representing 55.24% of the total expenditures. Services follow with $77,600, making up 42.72%. Maintenance expenses are $3,400, which is 1.87%, and Supplies are $300, comprising 0.17% of the expenditures. 2026 Budget Book | Hermantown Page 7  Table of Contents Expenditures by Object Summary FY 2025 Budgeted vs. FY 2026 Category FY 2024 Actual FY 2025 Budgeted FY 2026 Budgeted Budgeted (% Change) Personnel Services $51,232.00 $94,476.00 $100,337.00 6.20% Supplies $229.00 $325.00 $300.00 -7.69% Services $81,131.00 $76,121.00 $77,600.00 1.94% Maintenance $3,828.00 $4,900.00 $3,400.00 -30.61% Other Financing Uses $55,399.00 - - - Total Expenditures $191,819.00 $175,822.00 $181,637.00 3.31% Fund Balance Fund Balance Projections $750K ​$679K ​$690K ​$686K $500K $250K 0 FY2022 FY2023 FY2024 Committed Nonspendable 2026 Budget Book | Hermantown Page 8 Fund Account Object Object Description 2025 Actual 2026 Budget 2027 Budget 230 465100 201 Office Supplies 47.32 $ 100.00 $ 200.00 230 465100 202 Printing Supplies - $ 200.00 $ 100.00 230 465100 305 Engineer Fees 116,117.84 $ 3,000.00 $ 2,000.00 230 465100 308 Legal Fees 48,462.50 $ 24,000.00 $ 24,000.00 230 465100 315 School & Conference 2,474.00 $ 1,600.00 $ 1,600.00 230 465100 319 Contracted Services 218,922.32 $ 43,600.00 $ 43,600.00 230 465100 321 Telephone 778.64 230 465100 325 Postage 3.84 230 465100 331 Travel Expense 4,185.94 $ 3,000.00 $ 2,000.00 230 465100 343 Community Relations 10,719.29 $ 2,000.00 $ 2,000.00 230 465100 351 Legal Notices Publishing 198.00 $ 400.00 $ 400.00 230 465100 381 Electricity 12.76 230 465100 451 Dues & Subscriptions 3,565.00 $ 3,200.00 $ 3,200.00 230 465100 460 Permits & Licenses - $ - 230 465100 499 Miscellaneous - $ 200.00 $ 200.00 405,487.45 81,300.00 79,300.00 HEDA Agenda Report Page 1 HEDA MEETING DATE: July 16, 2026 TO: HEDA Commissioners FROM: Chad Ronchetti, Economic Development Director SUBJECT: Enabling Resolution Report ☐ RESOLUTION: ☐ WORK SESSION ☒ OTHER: Motion REQUESTED ACTION Consider and approve a report to the City Council on the Enabling Resolution as required by Section 4.15. BACKGROUND Section 3.1.4. Consider and approve a report to the City Council on the Enabling Resolution as required by Section 4.15. Section 4.15. Without limiting the right of HEDA to request the City Council at any time, each year at the annual meeting HEDA shall consider and approve for submission to the City Council a report stating whether and how the Enabling Resolution should be modified. Within thirty (30) days of receipt of the recommendation, the City Council shall review the Enabling Resolution, consider the recommendations of HEDA, and make any modifications it considers appropriate. Modifications must be made in accordance with the procedures required by Minnesota Statutes Section 469.093. As adopted by City Council in 2025, major governance changes were made via an Enabling Resolution amendment. The report to City Council reports on the key changes to the Enabling Resolution SOURCE OF FUNDS (if applicable) ATTACHMENTS Enabling Resolution Report Amended and Restated Enabling Resolution Hermantown Economic Development Authority HEDA’s mission is to intentionally lead economic growth, creating a vibrant and prosperous community. HEDA Enabling Resolution Report 2025 Annual Meeting July 16, 2026 GOVERNANCE CHANGES In 2025, HEDA undertook a comprehensive update to its governing documents.. Changes to both the Enabling Resolution and the Bylaws reflect the maturation of the organization and changing best practices for community-representative economic development authorities. Enabling Resolution: 2017 vs. 2025 The City Council adopted Resolution 2025-128 on August 4, 2025, amending and restating the 2017 Enabling Resolution (Resolution No. 2017-69). This followed HEDA’s annual recommendation to the City Council, which included a detailed presentation comparing Hermantown’s board structure to comparable Minnesota cities. The central driver was a recognition that Hermantown’s population has grown from approximately 6,800 (when HEDA was established) to approximately 10,200, and that regional peers with similar populations predominantly use a model with fewer council members and more citizen at- large representatives Bylaws: 2017 vs. 2025 Following the City Council’s adoption of the new Enabling Resolution, HEDA adopted amended and restated bylaws by Resolution 2025-09H at the August 28, 2025 meeting. The bylaw changes were necessitated by the new Enabling Resolution but also incorporated other improvements for consistency and operational clarity. GOVERNANCE CHANGES Enabling Resolution: 2017 vs. 2025 Topic 2017 Enabling Resolution 2025 Enabling Resolution 7 members: 2 must be City 7 members: Mayor + all 4 Councilors; all 7 appointed by City Councilors Mayor and approved by Board Composition (automatic) + 2 at-large majority vote of City Council. appointed by Mayor with No longer requires all Council approval. councilors. Non-council Commissioners may not hold elected office OR No restrictions stated be a member of the Planning At-Large Eligibility beyond not holding and Zoning Commission, Utility elected office. Commission, Parks Board, or Board of Appeals. Upon expiration of term, Two-year reappointment a person shall not be restriction removed entirely to Reappointment eligible for align with state statute (which Restriction reappointment for at does not require it) and regional least two (2) years. best practice. "The City Administrator "The Board may employ an shall, at the direction and Executive Director." The City pleasure of HEDA, provides staff who report to the Executive Director perform staff duties." No Executive Director. Explicitly specific Executive separates the Executive Director authority Director role from the City granted. Administrator. GOVERNANCE CHANGES Bylaws: 2017 vs. 2025 Section 2017 Bylaws 2025 Amended Bylaws "The Mayor of the City of Hermantown shall be the Any Commissioner could President of HEDA." in principle serve as Sec. 2.2 — President Mayor was automatically President if the Mayor is on HEDA and not a member. automatically President. "The City Administrator of The Economic the City shall be the Development Director of Sec. 2.8 — Executive Executive Director of the the City shall be the Director HEDA, shall be the chief Executive Director of the appointed executive HEDA. officer of HEDA." Board meets at 5:00 p.m. Board meets at 5:30 p.m. Sec. 3.1 — Annual Meeting on the second Thursday on the third Thursday of of July. July. Regular meetings on the Regular meetings on the Sec. 3.2 — Regular third Thursday of each second Thursday of each Meetings month commencing at month at 5:00 p.m. 5:30 p.m. Officc of City Clcrk I{ermantown, MN Alissa McClurc, City Clerk RESOLUTION NO. 2025- 128 Amended And Restated Rcsolution llstablishing ' I'hc Ilermantown Uconomic DevelopmentAuthority Motion made by Councilor I1jelle, scconded I, Alissa McClurc, City Clcrk of the City by Councilor Pcterson to adopt 2025- 128 Amended And Restated of Hcrmantown, Minnesota, do hcrcby Resolution Establishing The Hermantown Economic ccrtily that I havc comparcd thc anncxcd Development Authority. copy of Rcsolution passed by thc City Roll Call: Councilors Hjelle, Gcisslcr, LeBlanc, pcterson, and Council of thc City of Flermantown on Mayor Boucher, aye. Motion carried. thc 4'r' day of August 2025, with thc original in my custody as City Clcrk of said Cily, and that thc samc is a truc and corrcct transcript thcrcfrom. ln Witncss Whercof, I havc hereunlo sct my hand and affixcd thc corporatc scal of said City of Flcrmantown, the 5,r, day of August 2025. Alissa McClure, City Clerk lli,lluutt- Ilv City of IJcrmantown, MN l"t ,,,,,,. c'.11.1.".i ll a-' l'.S o0'...-....... J L. ur. Resolution No. 2025- 12tt Amended And Re Resolution Establishins 1'he Ilermantown onomic Development Authoritv WHEREAS, Minnesota Statutes, Sections 469.090 to 469. 1 08 (the " EDA Act"), authorizes cities to establish E, conomic Development Authorities (" lrDA") with specified powers and obligations to promote and to provide inccntives for economic development; and WHERIIAS, the Ilermantown City Council (" City Council"), by Itesolution No. 92- 29, established the Hermantown Economic Development Authority; and WHEREAS, Resolution No. 92-29 has been amended by Resolution No. 92-46 and Resolution No. 93- 51; and WHEREAS, Resolution Nos. 92-29,92-46 and 93- 51 are hereinafter referred to as the lnitial Enabling Resolution"; and WHEREAS, the " lnitial Enabling Resolution" has becn amended by Resolution No. 2017- 69; and WHEREAS, Resolution Nos. 92-29,92-46,93-51 and 2017- 69 are hereinafter referred to as the " 2017 HEDA Enabling Resolution"; and WHEREAS, the City Council desires to make certain amendments to the 2017 HEDA Enabling Resolution and to amend and restate the 2017 IIIIDA Enabling Resolution by this Resolution; and WHEREAS, the City Council has determined it is in the- best interest of the City of that Hermantown, Minnesota ( the " City") to continue IIIIDA in order to preserve and create jobs, enhance its tax base, assist certain housing initiatives, promote the general welfare of the people of the city and to assume primary responsibility for devclopmcnt activities within the City; and WHEREAS, the City Council provided public notice by publication and conducted a public hearing on August 4,2025 concerning the adoption of this I{csolution and has fulfilled all other legal requirements for the continuation of I IEDA. NOW, I'IIEREFORII, Illl I'f RESOI- VED BY' fllll CITY COUNCIL OF THE CII'Y OF HERMANTOWN ' fl{A]' 1'1111 2017 IIEDA ENABI-ING I{IISOLU' IION IS HEI{ I1BY AMENDED AND ItES' l'A1' t1D IN I'fS EN' flltEI' Y'fO I{EAD AS ITOI. LOWS: l. ' l'he I'Iermantown Economic Development Authority (" HEDA") is hereby continued pursuant to Minnesota Statutcs Sections 469. 091, subdivision 1, and Section 469. 093, subdivisions I and 2.  2. IIEDA shall have all of the powers, rights, duties and obligations conferred on e conomic devclopment authorities by Section 469. O90 to 469.1081 of thc Minnesota Statute s, including the powers of a city granted by Minnesota Stalutes, Sections 469. I 24 to 469. I 34 and the powcrs ofhousing and redcvclopment authorities grantcd by Minnesota statutes, Sections 469. 001 to 469.047 . 3. Notwithstanding the provisions ofSection 2 abovc, the grant of powers contained in said section shall not be deemed to affcct thc authorily of the Oity or any housing and rcdcvclopment authority hereinafter crcatcd, in and for thc City to exercise the devclopment powers authorized to or exercised by said bodies under Minncsota statutes. 4. FlllDA shall be govemcd by a Board of Commissioners (" Iloard") comprised of seven ( 7) mcmbcrs (" Commissioners"), two ( 2) of whom shall be members of thc City Council. All mcmbcrs shall be appointcd by thc Mayor and approved by a majority votc of thc City Council. The appointment olthe Council Commissioners shall expire with thcir terms of office as membcrs of the Council and a vacancy shall be created. ' l'he term of thc appointments of the non- council Commissioncrs shall be govemed by Minnesota Statutcs, Scction 469.095, subdivision 2(c). Exccpt for the Mayor or a member of thc City Council, no pcrson shall servc as a Commissioner while such person holds an clcctcd olficc or is a mcmber of any of thc following enlities: City lanning and Zoning Commission, Utility Commission, l'arks Board, or Board of Appeals. 5. In accordancc with Minnesota Statutcs Section 469. 100, subdivision 2, the Board shall annually submit its budget to the City Council for approval by the City Council. In addition, upon submittal of its proposed annual budget to the City Council, the Iloard shall providc the City Council an accounting of its rcccipts and cxpenditurcs as requircd by Minncsota Statutes Section 469. I 00, subdivision 4. 6. The Board may employ an Ilxecutive Director 7. ' l'he City shall provide such staff to thc I IEDA as the Board may requesl who, whcn acting in such capacity, shall rcport to the llxecutive Direclor; providcd that thc City may require rcasonablc rcimburscmcnt of the Cily by IIEDA lor costs associated with the provision of such staff; and provided further that nothing in this Scction shall prcclude the Iloard from hiring such pcrsonnel or third-party contractors as thc Board may from time to time determine. 8. Each year, the Board will consider and approvc for submission to the Council a report regarding modification of this Rcsolution as provided in Section Minnesota Statutes 469.093,subdivision 2. 9. All financial books, rccords, accounts and rcports ol IlllDA shall be prepared, presented and rctaincd by the Chief l.'inancial Officer of thc City, which office shall have the rcsponsibility for administcring the finances of IIDDA as hc/ shc does the f,rnances of the City; provided that City may require reasonable reimbursemcnt by the Board to the City for costs associaled with the provision of such financial scrviccs.  10. City officials and staff arc hereby authorized and directed to cxecute such assignments, requisitions, directives and agreements as may bc necessary and appropriate to carry out the terms, conditions and intcntions ofthis Resolution. I l. Each Commissioner shall be paid for attcnding regular and special mectings and reimbursed for expenses in accordancc with thc provisions of Minnesota Statute 469. 095, subdivision 4, and as the same be made from time to time amcnded. 12. ' l'he Board may rcqucst thc City Council levy a tax in the City for thc bcnefit of I-IEDA as specifically set forth in Minncsota Statutes Section 469. 107. 13. Nothing shall prevent the City Council lrom modifying this Rcsolulion to impose, restrict or cxpand limits on the powers of IIIJDA or provide for other matters as authorized by law. 14. HEDA shall not exercise the power of eminent domain without the prior approval of the City Council. 15. This Resolution shall be referred to as the 2025 HEDA Enabling Resolution. Councilor Hjelle introduced the foregoing resolution and moved its adoption. fhe motion for the adoption of such resolution was seconded by Councilor Peterson and, upon a vote being taken thereon, the following voted in favor thereof: Councilors Hjelle, Geissler, LeBlanc, Peterson, and Mayor Boucher, aye. and the following voted in opposition thereto: None. WHEREUPON, such resolution was declared duly passed and adopted on August 4, 2025. HEDA Agenda Report Page 1 HEDA MEETING DATE: July 16, 2026 TO: HEDA Commissioners FROM: Chad Ronchetti, Economic Development Director SUBJECT: Audit Report ☐ RESOLUTION: ☐ WORK SESSION ☒ OTHER: Motion REQUESTED ACTION Consider and approve an audit to submit to the City Council pursuant to Section 4.17. BACKGROUND Section 3.1.6. Consider and approve an audit to submit to the City Council pursuant to Section 4.17. Section 4. 17 of the bylaws states, “The financial statements of HEDA must be prepared, audited, filed and published or posted in the manner required for the financial statements of the City. The financial statements must permit comparison and reconciliation with the City’s accounts and financial reports. The audit shall be considered by the Board at the annual meeting and approve for submission to the City Council. The audit shall be filed with the State Auditor in accordance with applicable law.” The financial statements of HEDA are prepared by the City’s Finance Department and are audited as part of the overall City Audit. The City Audit is available on the City of Hermantown website. SOURCE OF FUNDS (if applicable) ATTACHMENTS Hermantown Economic Development Authority HEDA’s mission is to intentionally lead economic growth, creating a vibrant and prosperous community.