Local Development Finance Authority

Name: Local Development Finance Authority — Sterling Heights, MI
Start: 2014-05-27
End: 2014-05-27
Location: Sterling Heights, MI

Regular Meeting

Sterling Heights, MI · May 27, 2014

Agenda Minutes

Minutes

CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Approved MINUTES OF THE REGULAR MEETING May 27, 2014 – 8:30 a.m. 40555 Utica Road, Sterling Heights, MI 48313 586-446-2489 City Council Chambers Phil Hunsberger called the meeting to order at 8:36 a.m. Pledge of Allegiance Members present at roll call: Lori Doughty, Stephanie Eagen, Phillip Hunsberger, Richard Kincaid, John Lamerato, John Lettang, Victor Martin, Jill Tomyn Members absent: Stephen Cassin, David Corba, Paula Sorrell, Orest Zachary Also in attendance: Barry Hicks, Economic Development Manager, Jennifer Varney, Treasurer, City of Sterling Heights Motion to Approve the Agenda Moved by Hunsberger, supported by Lettang, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of March 19, 2014 Regular Meeting Moved by Lamerato, supported by Kincaid, to approve the minutes as presented. Ayes: All Nays: None Motion carried. New Business To adopt the 2014/2015 Fiscal Year Budget for the operation of the Local Development Finance Authority (LDFA). Mr. Corba inquired with the rental income going to OU, what is the offset for the city? Mr. Hicks stated that when the incubator was first started many assumptions were made as far as operating expenses. Initially when the incubator opened operating expenses were going to be covered by rental income. As one of the three partners, with OU and the county, we are fulfilling our financial obligation by giving OU the rent and $50,000 from the MicroLoan program. There will be contributions coming from the other partners as well. We are now starting to see some tax increment financing coming from the Chrysler project now that it is complete. We will gain revenue from that source where we never have before so that is filling in the gaps for us. Mr. Lamerato inquired as to who is actually collecting the rent. Mr. Hicks stated that the city will collect the rent. However, there is an agreement being worked out between the legal councils of the university and the city where Oakland will collect the rent directly. Mr. Lamerato inquired that the proposed revenues total $628,600 for 2014/15. Mr. Hicks confirmed this amount noting that $128,000 is revenue captured for the BAE project that will be passed along to BAE for the completion of their project. We are looking at $500,000 in smartzone capture for operating expenses. This amount includes the $50,000 that we are giving OU from the Micro Loan program and the remaining $450,000 is what we are using for operating expenses, building maintenance and salaries. Mr. Lettang pointed out that we are showing $691,000 in expenditures. Mr. Hicks stated that the $250,000 in miscellaneous capital programs would be diving into some of our savings to redo the parking lot but stated that there is discussion to hold off on that and just do some more patch depending how pricing comes in. Therefore, we may not get up to that $691,000. Mr. Corba asked where does it come from if the expenses exceed the revenue. Mr. Hicks stated that you have a small portion of additional revenue put aside every year and saved for this kind of thing. It is not in the worksheets in front of you. I think it was at the last meeting and shows the fund balance that is remaining for the LDFA. If we go with this budget, I think you have $150,000 in your fund balance and this would go down to $75,000 so that is what the debate is over doing the parking lot. Mr. Kincaid confirmed that the city is collecting the rent but how will we generate revenue. Mr. Hicks said through the tax increment financing with the Chrysler facility we will actually capture over $500,000 in incremental income and we are capped at $500,000 but you will receive that full amount the next fiscal year. Mr. Kincaid said we are living off this Chrysler funding and what if that goes away. Mr. Hicks said there will probably be as much every year. Something is going on and I don’t know the details of it, but Chrysler is challenging what their tax rate is on that facility. If that goes through, we may lose a little of the revenue but I don’t know how much right now. It would depend on what the rate gets set at. If we get any other projects in the future that would be eligible for smartzone activity, I would recommend passing a plan that would allow for additional income to cover when things like the Chrysler plan goes offline. Mr. Kincaid inquired if we have looked into Macomb County to provide some of the services OU provides. Mr. Hicks stated that OU’s role in the partnership is to provide services to the tenants, recruiting, and assistance with grant funding, and the coordination of events. The revenues and Micro Loan transfer are the city’s contribution but there will be additional contributions by the university and Macomb County to support some of those operating expenses. Mr. Lamerato inquired that the county is not reflected in these financials. Mr. Hicks confirmed that it is not and he does not have the county’s budget and what their support is going to be. Mr. Lamerato asked that the county’s contribution is not coming in at all at this time. Mr. Hicks stated not to his knowledge and he does not know what the county’s support will be for the facility but their interest is still there. The economic development corporation has moved some of the defense center to our facility and those expenses for office space are going to be picked up by the county. Mr. Lamerato asked that the $128,000 for property tax is being transferred to BAE. Mr. Hicks confirmed the miscellaneous expense of the $128,000 being transferred to BAE. Mr. Lamerato stated this is not a balanced budget with close to $800,000 in expenditures. Mr. Hicks stated the expenditures are higher than the revenues due to the parking lot issues. We would be going into the fund balance and there would be additional expenditures beyond the $500,000 and I am excluding the $128,000 because it is just a pass through to BAE. Mr. Lamerato stated there should be a line item showing transfer. Mr. Corba stated that it makes sense but could the statements be revised to reflect these changes. Mr. Hicks suggested a fund balance worksheet. Mr. Corba said a fund balance worksheet would be acceptable so the numbers would be there and consolidated. Mr. Lamerato stated that this budget we are reviewing today is going to be amended because the $250,000 is in discussion to be cut back so this is not the final budget. Mr. Hicks stated the $250,000 is our best estimate and is a little high with a cushion for part of the parking lot that needs to be done. The question is do we dip into the fund balance to make the parking lot repairs. Mr. Lamerato stated that our expenses go up as rentals increase to capacity. Mr. Hicks stated that the building is at 91% capacity right now. Mr. Hunsberger stated a proposal to amend showing a transfer line item from savings. Mr. Hicks stated it sounds like the board would like to see the fund balance and a worksheet showing what this budget does to the fund balance. Mr. Lettang stated it would be beneficial to see the balance sheet. Mr. Hicks stated the key component missing is the fund balance. If that were there, it may make more sense. Mr. Corba asked if they will ever see the whole picture, not just the city portion, but the county and OU as well. Mr. Hicks stated he could probably provide that but he needs the cooperation of the partners to provide that. Mr. Hunsberger stated we have the rent piece since it is collected by the city. Mr. Hicks stated that the rent is reflected in here and the rent revenue for next year is zero and it is not included at all in next year’s budget. Moved by Lettang, supported by Kincaid to adopt the 2014/2015 Fiscal Year Budget for the operation of the Local Development Finance Authority (LDFA) Ayes: All Nays: None Motion carried. To approve the Lease Agreement between LogiCoul Solutions, LLC, and the Local Development Finance Authority (LDFA). Moved by Lettang, supported by Kincaid to approve the Lease Agreement between LogiCoul Solutions, LLC and the Local Development Finance Authority (LDFA) Ayes: All Nays: None Motion carried. To approve the Lease Agreement between Mango Tree Capital, LLC, and the Local Development Finance Authority (LDFA). Mr. Hunsberger inquired as to why Mango Tree is renewing their lease with a month-to-month clause. Ms. Quell stated that they are expanding to offices outside of Michigan and still would like to keep a base here in Michigan at the incubator. They are in discussion with OU about the possibility of sharing space with an existing tenant. Mr. Corba asked if Mango Tree provides any financial services to other tenants of the building. Ms. Quell stated she is not aware as to whether they work with any of the tenants. Mr. Hunsberger asked if they do any of the presentations. Ms. Quell stated that they do not and the incubator has executives in residence that give many of the presentations. Mr. Hunsberger asked if we have put any money toward facility renovations for this tenant. Ms. Quell stated that we have not. Moved by Kincaid, supported by Lettang to approve the Lease Agreement between Mango Tree Capital, LLC and the Local Development Finance Authority (LDFA) Ayes: All Nays: None Motion carried. To enter into an agreement for facilities maintenance of the Velocity Center located at 6633 Eighteen Mile Road in Sterling Heights, MI, between TJW Services, LLC and the Local Development Finance Authority (LDFA). Mr. Hicks stated that it is long overdue to have a maintenance person for the building. Tim Wosik, the owner and operator of TJW Services, LLC, is a former city employee. Mr. Hunsberger asked if this is in the budget. Mr. Hicks stated yes it is. Mr. Hunsberger stated the position is for $1500 bi-weekly. Mr. Hicks confirmed that yes; the amount is not to exceed $1500 bi-weekly. Mr. Corba asked if the position was competitively bid. Mr. Hicks stated yes and that one other proposal came in at twice as much money. Moved by Corba, supported by Kincaid to enter into an agreement for facilities maintenance of the Velocity Center located at 6633 Eighteen Mile Road in Sterling Heights, MI, between TJW Services, LLC and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. To approve the amendment of the 2013/2014 fiscal year budget; additionally to approve the transfer of rent revenue collected from January 1, 2014 and to transfer $50,000 from the Microloan Program to Oakland University for operating expenses; additionally to approve the Formal Budget amendments for these transfers between Oakland University and the Local Development Finance Authority (LDFA). Mr. Hicks stated that this is the official motion to transfer rent revenues collected since January 1, 2014 through no expiration date and then to transfer from your current budget the $50,000 from the Micro Loan Program. These transfers will go to Oakland University for operating expenses. Mr. Hunsberger asked if the Micro Loan is funds that have gone out and come back. Mr. Hicks stated this started before his time. Initially an action was taken at some point in time where the LDFA had decided to establish a Micro Loan program managed by Oakland University where you would give small loans out to businesses in the incubator and small businesses in the community. That never came to fruition and probably won’t. It is one of those things that was an idea someone had and has not been seen through. Mr. Hunsberger asked who came up with the initial $50,000. Mr. Hicks stated that the $50,000 is part of the LDFA original budget, part of the $500,000 from smart zone capture. Mr. Hunsberger stated that the $50,000 is city revenues and we are giving it over to Oakland University. Mr. Hicks stated that is correct, it is for operating expenses along with the rent money. All said and done, on an annual basis, next fiscal year, if the building gets filled up, about $140,000 will be transferred to OU. Mr. Hunsberger asked if the $50,000 is a one-time transfer. Mr. Hicks stated that the $50,000 is one- time and for this fiscal year. The same thing will happen next fiscal year. We budgeted for a Micro Loan program because none of these details had been worked out before that budget went to council. It’s clear now that we will transfer the $50,000 on next year’s budget over to Oakland and probably do that in subsequent years although we haven’t talked beyond 2014/2015. Mr. Lettang asked if Oakland would receive $140,000 annually. Mr. Hicks confirmed that, yes, it is $140,000 and this year is closer to $100,000 because they are not receiving all the rent. They are only receiving from January 1, 2014 forward to the end of the fiscal year, which is June 30, 2014. Mr. Corba stated he would like to get greater detail as to Oakland University’s expenses. Moved by Lettang, supported by Corba to approve the amendment of the 2013/2014 fiscal year budget; additionally to approve the transfer of rent revenue collected from January 1, 2014 and to transfer $50,000 from the Microloan Program to Oakland University for operating expenses; additionally to approve the Formal Budget amendments for these transfers between Oakland University and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. Old Business None Board Members Report None Public Comment None Adjournment Moved by Lettang, supported by Kincaid to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 9:14 am KQ Minutes Approved 10/22/2014 John Lettang Secretary

Agenda

CITY OF STERLING HEIGHTS Special Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 40555 UTICA ROAD 586-884-9322 CITY COUNCIL CHAMBERS May 27, 2014 5:30 PM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF March 19, 2014 Regular Meeting NEW BUSINESS 1. To adopt the 2014/2015 Fiscal Year Budget for the operation of the Local Development Finance Authority (LDFA). 2. To approve the Lease Agreement between LogiCoul Solutions, LLC, and the Local Development Finance Authority (LDFA). 3. To approve the Lease Agreement between Mango Tree Capital, LLC, and the Local Development Finance Authority (LDFA). 4. To enter into an agreement for facilities maintenance of the Velocity Center located at 6633 Eighteen Mile Road in Sterling Heights, MI, between TJW Services, LLC and the Local Development Finance Authority (LDFA). 5. To approve the amendment of the 2013/2014 fiscal year budget; additionally to approve the transfer of rent revenue collected from January 1, 2014 and to transfer $50,000 from the Microloan Program to Oakland University for operating expenses; additionally to approve the Formal Budget amendments for these transfers between Oakland University and the Local Development Financing Authority (LDFA). OLD BUSINESS BOARD MEMBERS REPORT PUBLIC COMMENT ADJOURNMENT CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE REGULAR MEETING March 19, 2013 – 5:30 p.m. 40555 Utica Road, Sterling Heights, MI 48313 586-446-2489 City Council Chambers Victor Martin called the meeting to order at 5:36 p.m. Pledge of Allegiance Members present at roll call: David Corba, Lori Doughty, Phillip Hunsberger, John Lamerato, Victor Martin, Jill Tomyn, Orest Zachary Members absent: Stephen Cassin, Stephanie Eagen, Richard Kincaid, John Lettang, Paula Sorrell Also in attendance: Barry Hicks, Economic Development Manager, Julie Gustafson, Director Macomb-OU INCubator Motion to Approve the Agenda Moved by Zachary, supported by Hunsberger, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of November 20, 2013 Regular Meeting Moved by Hunsberger, supported by Zachary, to approve the minutes as presented. Ayes: All Nays: None Motion carried. New Business To approve the lease agreement between The Automation of Things and the Local Development Finance Authority (LDFA). Moved by Hunsberger, supported by Corba to approve lease agreement Ayes: All Nays: None Motion carried. Motion to recommend the 2014/2015 Fiscal Year Budget Mr. Hicks noted that lease rental income will be distributed to Oakland University. In the original agreement between the Local Development Finance Authority (LDFA), the City of Sterling Heights, and Oakland University, rent revenue was to be paid to Oakland University for operating expenses. Mr. Lamerato inquired if, after distributing the rent revenue, is it a balanced budget. Mr. Hunsberger inquired if the budget is in the red. Mr. Hicks responded that the $500,000 TIF capture was speculation of what it would cost to run the building. There are major future capital expenditures to maintain the building such as the parking lot. He also stated that we will stay in the black by approximately $75,000 for this year, earmarking some money toward those future capital projects. Mr. Hicks stated that the TIF cap may be lifted. Ms. Tomyn inquired what does it take to increase the TIF cap. Mr. Hicks stated that it would be determined by the City of Sterling Heights and they would have to re-evaluate raising it. Ms. Tomyn said it would require an act of council. Mr. Hicks stated that once we know the number, he would feel more comfortable providing the number. Mr. Hicks said that once we determine the necessary capital outlay and cost of operations, he can then determine the number. Moved by Hunsberger, supported by Zachary to recommend that City Council approve the 2014/2015 Fiscal Year Budget for the operation of the Local Development Finance Authority (LDFA) Ayes: All Nays: None Motion carried. Election of LDFA officers Chairman – Phil Hunsberger Moved by Martin, supported by Corba Vice-Chairman – Stephen Cassin Moved by Martin, supported by Hunsberger Treasurer – Orest Zachary Moved by Corba, supported by Hunsberger Secretary – John Lettang Moved by Hunsberger, supported by Corba Motion to approve the newly appointed LDFA officers Moved by Doughty, supported by Corba Ayes: All Nays: None Motion carried. Old Business None Board Members Report None Public Comment None Adjournment Moved by Martin, supported by Doughty to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 6:04 pm KQ LDFA Business Sterling Heights, Michigan 5/27/14 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: Adoption of the 2014/2015 Fiscal Year Budget for the operation of the Local Development Financing Authority (LDFA) Submitted By: Barry Hicks, Economic Development Manager 586-884-9327 Executive Summary Pursuant to Public Act 281 of 1986, also known as the Local Development Financing Act, a budget has been prepared for the operation of the authority for the ensuing fiscal year. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to adopt the 2014/2015 Fiscal Year Budget for the operation of the Local Development Financing Authority (LDFA) LDFA Business Sterling Heights, Michigan 5/27/14 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between LogiCoul Solutions, LLC and the Local Development Finance Authority (LDFA) Submitted By: Barry Hicks, Economic Development Manager 586-884-9327 Executive Summary Attached for LDFA review is a June 1, 2014 to May 31, 2015 lease agreement between LogiCoul Solutions, LLC and the LDFA. LogiCoul Solutions, LLC has signed the standard lease agreement for space #3-F in section 3 of the building containing approximately 831 square feet of space. Monthly rent will be $693.00. The attached Executive Summary outlines LogiCoul Solutions, LLC and their business model. . Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement between LogiCoul Solutions, LLC, and the Local Development Finance Authority (LDFA) LogiCoul Solutions LLC, 1924 Klingensmith Road, Suite 72 Bloomfield, MI 48302, phone: 248-798-6369 email: info@logicoul.com website: www.logicoul.com EXECUTIVE SUMMARY LogiCoul Solutions LLC addresses the problem of internal resistance in batteries. Ions need to move around inside batteries in order to work. These ions experience About Us resistance which, like friction in a mechanical system, causes energy to be lost as LogiCoul has a software solution called wasted heat. This resistance causes batteries to overheat, wear out and deliver low Interfacial Process Stimulation (IPS) that amounts of energy for today’s demanding applications. LogiCoul has demonstrated improves performance for batteries. For with its software solution (IPS) that it can lower resistance in a variety of batteries today’s demanding applications it will including lead acid and nickel-based batteries as well as Li-Ion batteries leading to increase runtime by at least 25%. Users more useable energy – ranging from 25% to 45% more - extracted from the battery. will benefit through 2 more hours of talk Business Model – The IPS solution supplements battery charging procedures and time from their smartphones during the requires no modification to the inside of the battery. The IPS hardware platform day or extended range for an electric resides within the control electronics devoted to battery recharging. LogiCoul will co- vehicle from 100 to 125 miles. develop IPS for the battery systems of its customer partners granting licenses to use Application Focus IPS in return for a license fee that will apply to each device sold into the market with Lead Acid batteries for automotive and IPS on-board. The revenue model will also include a component designed to cover industrial applications, Li-Ion batteries some of the development costs during the period prior to license fees from sales into for smartphones and tablets, Li-Ion and the market. Small dedicated teams are a feature of the LogiCoul organization model to NiMH batteries for hybrid and electric ensure that customer focus translates to customer success and highly profitable vehicles. High value delivered relative to results commensurate with other software models without hardware product costs. low cost in these applications will lead to Customer and Market Targets – The global rechargeable battery market will increasing adoption rate and reach $55 billion by 2015. The revenue potential for IPS is significant – perhaps $2 accelerating revenue within 5 years. billion or more – due to its broad applicability across the entire market. LogiCoul has Management Team targeted several major companies serving the segments where it believes early Larry LaFranchi, CEO, experience in adoption is likely and, in addition, where the growth potential is highest for the IPS semiconductors, clean energy and solution. LogiCoul will focus first on companies making lead acid batteries, then turn startups; David Stout, Business its attention to companies serving the wireless segment, and finally to OEMs making Development EVP, experience in hybrid and electric vehicles. LogiCoul’s sales and marketing strategy is based on its automotive and high growth product line successful track record for securing meetings with the key decision makers at management; Victor Stancovski, CTO, companies with very significant market share in these targeted markets. LogiCoul is success with IP, innovation and also actively pursuing Federal and State Agencies for other sources of income. engineering inventions. Primary Accomplishments – (1) $350 thousand invested to date; (2) Proof of Competitive Advantages concept for a wide variety of batteries and chemistries; (3) LogiCoul data on reduced 1) US Patent 8,487,627; other IP resistance and battery balancing presented at 2011, 2012 and 2013 Battery pending Congresses with favorable reception by leading experts; (4) Created general purpose 2) No other competing technology prototype that will permit efficient development of IPS for specific battery identified applications; (5) Established a number of ongoing relationships for market and 3) Chemistry agnostic – IPS works with business development with key collaborators and target customers; (6) Collaboration all types of batteries with two lead acid battery companies focused on vehicle and other niche applications. 4) IPS is synergistic with other battery 7) Favorable State of Michigan funded 3rd party testing demonstrating improved developments, enhancing these charge acceptance in Lead Acid AGM batteries. improvements to still better Exit Strategy – Customer partners will likely have an interest in the IPS technology performance for their exclusive use and will be potential investors as a result. Exit through strategic Asking $5 million acquisition is likely. 1) $750K currently 2) $1.25M in 2014 3) $3.0M in 2015 Contact David Stout ($ in millions) 2014E 2015E 2016E 2017E 2018E (248) 798-6369 cell david@logicoul.com REVENUES --- $0.8 $2.1 $10.8 $31.6 EBITDA $(0.4) $(0.6) $(0.8) $4.6 $15.6 % REVENUE --- (75.0%) (38.1%) 42.6% 49.4% LDFA Business Sterling Heights, Michigan 5/27/14 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between Mango Tree Capital, LLC and the Local Development Finance Authority (LDFA) Submitted By: Barry Hicks, Economic Development Manager 586-884-9327 Executive Summary Attached for LDFA review is a June 1, 2014 to May 31, 2015 lease agreement between Mango Tree Capital, LLC and the LDFA. Mango Tree Capital, LLC has signed the standard lease agreement for space #2-C in section 2 of the building containing approximately 593 square feet of space. Monthly rent will be $544.00. Mango Tree Capital, LLC has been a tenant of the Macomb OU-INCubator since June 18, 2012 and has renewed their lease to occupy the existing space on a month-to-month basis. Their intent is to expand with offices throughout the United States and keep a presence in Michigan. Although a financial services company, President and Portfolio Manager Satish Dharwadkar, has deep roots and experience in technology, having engineering and scientific programming experience in aerodynamic design, CFD and CAD at earlier companies. Mr. Dharwadkar also has a MS in Mechanical Engineering from Worcester Polytechnic Institute and a BE in Mechanical Engineering from MS University of Baroda. The mission of Mango Tree is to provide a stable and enjoyable investment experience by integrating client goals with disciplined portfolio management while maintaining maximum account transparency through client account custody at an independent broker/dealer. Mango Tree Capital, LLC is a Registered Independent Adviser and offers focused advice, portfolio and service through innovative portfolio choices, personalized total portfolio management, client on-boarding through legacy planning and support for estate settlement. . Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Lease Agreement between Mango Tree Capital, LLC, and the Local Development Finance Authority (LDFA) LDFA Business Sterling Heights, Michigan 5/27/14 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: Facilities Maintenance Agreement between TJW Services, LLC and the Local Development Financing Authority (LDFA). Submitted By: Barry Hicks, Economic Development Manager 586-884-9327 Executive Summary In order to properly maintain and manage the facility of the Velocity Incubator, the LDFA and TJW Services, LLC have entered a Facilities Maintenance Agreement, commencing on April 14, 2014, and continuing on a month-to-month basis until terminated by either party as provided in the Agreement. The scope of services is outlined in Exhibit A of the said Agreement. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to enter into an agreement for facilities maintenance of the Velocity Center located at 6633 Eighteen Mile Road in Sterling Heights, MI, between TJW Services, LLC and the Local Development Finance Authority (LDFA) and to authorize the LDFA Chairman to sign the agreement, subject to minor modification by the LDFA’s Attorney for effectuation. LDFA Business Sterling Heights, Michigan 5/27/14 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: Motion to approve the amendment of the 2013/2014 fiscal year LDFA budget to transfer rent revenue collected as of January 1, 2014 to date, and all future rent revenue, to Oakland University; to transfer $50,000 from the existing Micro Loan Account to Oakland University for operating expenses at the Macomb OU INCubator and to approve Formal Budget Amendments for the above two transfers as related to building expenses and incubator operation in compliance with the agreement between the Local Development Financing Authority (LDFA) and Oakland University. Submitted By: Barry Hicks, Economic Development Manager 586-884-9327 Executive Summary In the original agreement between the Local Development Finance Authority (LDFA), the City of Sterling Heights, and Oakland University, rent revenue was to be given to Oakland University for operating expenses. To honor the agreement, all rent revenue that has been collected as of January 1, 2013, and all future rent revenue, will be paid to Oakland University. In addition, $50,000 that was earmarked for Oakland University operating expenses, and is currently in an existing Micro Loan Account will be transferred to Oakland University. Formal budget amendments will occur for the aforementioned transfers. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the amendment of the 2013/2014 fiscal year LDFA budget; additionally to approve the transfer of rent revenue collected from January 1, 2014 and to transfer $50,000 from the Microloan Program to Oakland University for operating expenses; additionally to approve the Formal Budget Amendments for these transfers between Oakland University and the Local Development Financing Authority (LDFA).

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