consultants are sandburs

Sunday, July 13, 2014

RAMSEY - AUTHORITIES. Ramsey currently has an EDA (Economic Development Authority) and an HRA (Housing and Redevelopment Authority). It has no Port Authority and should never have one. It has no Port. And the term "Pork Authority" has been used with cause in the past, about the St. Paul Port Autority.

The council before the last election used HRA operation quite a bit, including the Flaherty adventure, with the faces at the table for the HRA being in one-to-one correspondence with those on council.

Authorities presently are not mentioned in Ramsey's Charter, making their use subject to whatever powers and limitations state law has created.

The EDA has some overlap at present with the council.

Council members are: Mayor Strommen, and council members Backous, LeTourneau, at large, and Ward 1 Rep. Johns, Ward 2 Rep. Kuzma, Ward 3 Rep. Tossey, Ward 4 Rep. Riley.

EDA members are:
Jim Steffen, Chair
Wayne Skaff, Vice-Chair
Phillip Brunt
Glen Hardin (a former Ramsey mayor)
Kristine Williams
John LeTourneau, Council
Chris Riley, Council

EDA member Williams presently is one of four candidates seeking the single at-large seat in the primary election, with two of the four who end up as leading primary vote-getters to continue to the fall general election. Were Williams elected and to stay on the EDA, there would be an even greater council-EDA overlap than at present. Both LeTourneau and Riley were EDA members before being elected to council, and each has remained an EDA member.

EDAs, HRAs, and even Port Authorities are creatures of statute, having been authorized by the Minnesota legislature, with powers and functions set out in Minn. Stat. Chapter 469, online here, with that statutory chapter also covering joint powers stuff.

TIF and other things are grist for the EDA mill, and presently the EDA has a separate levy. My understanding is they can act in some ways independent of securing council approvals at televised meetings, (by recorded council votes upon resolutions or ordinances, which is how the council conducts official business). That is a point I need to have confirmed. An understanding is also that proposed "business subsidy" items vetted by EDA do appear from time to time as council consent agenda items.

My understanding is that while the EDA has a separate levy, the combination of EDA and the general levy are together subject to state imposed levy limits. If the one hand takes more, then if pushing levy limits, the other hand must take less. Exactly how such levy balancing is handled is unclear to me, with my understanding being that current budgeting [in total] is roughly half a million dollars short of hitting the levy limit so that apportioning slices of the pie appears to be non-problematic, at present.

The staff person now primarily responsible for interfacing with EDA is:

Ted LaFrance
Economic Development Manager
7550 Sunwood Drive NW
Ramsey, MN 55303

Interested readers might find helpful information in Ch. 15 of the League of Minnesota Cities [LMC] handbook.

Mike Mulrooney has been a long-time retained city consultant. (Back during Town Center's genesis days in the first decade of this millennium Mulrooney was scheduled to be at one council meeting to report about what he'd found out concerning the financial wherewithal of Bruce Nedegaard, who was then seeking to enter the project via a master development LLC position; however, at the meeting on record, Mayor Gamec said Mr. Mulrooney "was ill" and would not attend. Given Bruce Nedegaard's subsequent difficulties, Mulrooney's attendance and reporting to the public at that early stage would have been helpful.)

Mike Mulrooney is considered expert in North Metro "business, financing, and real estate," e.g., this screen capture [links in original are inactive within screen captures]:

That item identifies Mulrooney as "President" of "CMDC Business Financing in Andover." Mulrooney has a brief online bio on a CMDC contact page, and a LinkedIn page. CMDC has a "news" link.

Given his SBA lending ties, Mulrooney's continuing consulting can be viewed as having pluses and minuses.

A plus is that in the course of consulting Mulrooney remains aware of business financing needs in Ramsey and can report on general North Metro financing and business growth, while a minus is that SBA loans negotiated via Mulrooney's CMDC business are given not only in Ramsey but in other North Metro communities, which communities likely have business expansion objectives conflicting with Ramsey's. Conflicting interests can arise and if they do past experience suggests they can be quite problematic.

Before the City's hiring of Ted LaFrance, Mulrooney frequently attended EDA meetings, e.g., this minutes page showing Mulrooney's having advisory comments at an Aug. 2, 2012, EDA meeting.

Also, e.g., these October 2012 minutes pages:

I am unaware of Mr. Mulrooney's current consulting status, the written contract terms and conditions, etc. Those minutes pages date to before the current council was elected and seated in its present make-up, as well as before the LaFrance hiring. Presumably with much function transfer from consultancy to a staff person Mulrooney's involvement would be lessened. There would be economic advantage to substituting one for the other, rather than having parallel salary and consutancy costs added together. With CBRE now the official city's real estate brokerage, it again would be interesting to see if Mulrooney's role [and billings] have lessened.

Of interest regarding EDA and "business subsidy," and the LaFrance hiring, there has been ongoing ABC Newspapers coverage, here, here and here. Interestingly, none of the three items mention Mr. Mulrooney's consulting arrangements or his EDA participation record.

In response to a data request Ted LaFrance provided items I still am reviewing. They can be the subject of a later post, but the lead page of one item is presented below, for purposes of example:

That item gives a flavor of earlier items in this post, in a Developer/Business entrepreneur fact sheet format; with mention of SBA lending, and TIF, for example. Also helpful as background, this LMC sample form document, prepared for LMC by Ehlers & Associates, as a pro forma outline for required municipal filings with DEED.

For those interested in the earlier meeting page examples of deliberations Mr. Mulrooey participated in about a data center use possibility for the former city hall site on Nowthen Blvd (by the school), there was a community meeting and community task force that met over several months, with the matter ultimately reaching the council recently, for a vote. With neighborhood concerns and opposition over such a use, as things are understood to stand, the council voted that the site, if rezoned or changed in the comprehensive plan, to be designated as "residential." And so the data center concept apparently died. Yet the process for reaching an outcome seems a good model, for any future major land use thinking. Indeed, as to major land use decision making, many still believe moving city hall at very great cost from Nowthen Blvd to its present Town Center "catalyst" spot should never have been done short of referendum approval by the voting public (who are still paying bond debt service for that decision during the Gamec-mayor, Norman-Administrator days).

Last, for those wondering about the mystery called TIF, two online items (one from another town) are here and here.

Clearly they are introductory, and not exhaustive treatments of the subject. Presently I remain still low on my own TIF learning curve. Probably we all do, with only a chosen few having a leveling off learning curve, that subject.

As anticipated, concern about EDA consultancy relationships does appear moot now that a permanent staff person has been hired and with CBRE providing brokerage services to Ramsey.

My understanding is Mike Mulrooney's consultancy services for Ramsey began in the late 1990's. Always on a limited as-required basis.

Consulting use of Mr. Mulrooney's services has not been a factor for about a year.

And this apparently is nowhere near a Landform scale of things. My understanding is that since the beginning of 2011 to the present roughly $40,000 has been expended on his services. In total, since end of 2010. Nowhere near the seven figure cash flow from city coffers that happened with Landform during the Bob Ramsey mayoralty, and while McGlone was chairing or exerting strong influence over Ramsey's HRA.

Most recently when utilized, services were billed at a reasonable rate [under $200/hr for one who has broad experience in state government and is knowledgeable of SBA practices, is well respected in his profession, and offers judgment and advice based on decades of experience].

Again not Darren and Landform, not somebody Mike Jungbauer introduced to Matt Look and Bob Ramsey, or however Darren was first noticed; no Cronk or Flaherty or other out-of-state loyalties or attachments.

The one incident noted earlier, regarding Mulrooney missing a meeting where impressions and information concerning the Nedegaard fiscal strength to handle a major development was to be reported, Mulrooney's failure to attend and publicly discuss things likely was due more to a failing of local officials in their choices than to any failing of Mulrooney. And Nedegaard was able to borrow from an institutional lender to cover the entire multimillion dollar cost of his land purchases and beginning operations, unlike Flaherty's requiring asking for and getting a favorable multi-million dollar loan of city wealth.

Later, bank irregularities surfaced regarding loans to Nedegaard, but at the time credibility at the bank was shown. Clout at a bank for an eight figure amount with letters of credit to Ramsey's benefit is no small proposition.

In sum, the Mulrooney consultancy, to whatever small extent it may in the future be used, presuming it will be used only at a small level, is a non-issue. The man appears worth his hourly charge, and with a staff person now on board EDA reliance on consulting from Mulrooney is lessened. Ehlers & Associates continues to be used, by the City and not specifically the EDA, and the expertise there is separate from that which Mulrooney offers.

Last, Mulrooney does not consult as a business proprietor or in partnership. Advance Consulting Group, Inc., in business in Minnesota continuously since 1977, has been the vehicle he has used when invoicing the city.

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