A review and update of the City of Minot’s MAGIC Fund guidelines is a good idea in the minds of more than just one resident who requested that action at this past week’s city council meeting.

Brekka Kramer, president of Minot Area Chamber EDC, said her organization also believes it is time.

“We should be reviewing them every year,” Kramer said. “It’s always the best practice to review all guidelines annually. I think it’s smart to do that. I have already made inquiry to the city to look at the guidelines and have the discussion.”

MACEDC, which absorbed Minot Area Development Corp. in a merger a year and a half ago, now works with applicants seeking economic development assistance through the MAGIC Fund.

Minot Mayor Tom Ross said he supports a guidelines review that also looks at conflict-of-interest concerns raised by Minot resident Leif Snyder at Tuesday’s meeting. Although he trusts that agencies that work with the MAGIC Fund have adequate conflict-of-interest policies in place, he said it is good to establish assurances that policies are operating as intended.

Snyder of Minot asked the city council to rewrite the MAGIC Fund guidelines, last updated in 2018.

He cited a provision of the guidelines that provides that no officer, director, member or employee of the MAGIC Fund Screening Committee, Minot Area Development Corp. (now Minot Area Chamber EDC), or the City of Minot may have an ownership position or financial interest in a business funded by the MAGIC Fund. Anyone in those positions would have to wait a year after leaving the positions to be eligible to have an application to the fund considered.

Snyder noted the city granted Souris Basin Planning Council $500,000 in each 2019 and 2020 to start a Business Accelerator Fund, which provides the local loans necessary for businesses to access Bank of North Dakota programs. The city council voted last May to add another $780,000 to the fund.

From the initial grants, SBPC approved nine businesses for loans, including Aksel Group, Creedence Energy and renovation and Whiskey Nine, which have downtown projects.

Ryan Ackerman, an owner of Aksel Group, was serving on the MADC board in 2019 and has been a member of the MACEDC board in 2021 and 2022. Kevin Black, owner of Creedence Energy and a partner in Whiskey Nine, also was a member of the 2019 and 2020 MADC boards and has been a member of the MACEDC board in 2021 and 2022.

Black was a member of the Souris Basin Loan Review Committee, joining in 2016 and resigning in October 2020, SBPC Executive Director Briselda Hernandez said. Black’s name did not appear on a loan application until June 2021, and the loan wasn’t approved until August 2021.

Hernandez said SBPC bars board members from seeking loans while in office. They are barred from seeking loans from a Souris Basin Revolving Loan Fund for two years after leaving the board because that is a requirement of the Economic Development Administration, which supports that particular fund.

Hernandez said the two-year rule wasn’t extended to other programs because it could eliminate otherwise qualified and desirable projects or dissuade business owners from participating on the committee.

“We want good committee members who have knowledge of the industry and can provide good guidance when making approvals,” she said.

She noted MACEDC has no involvement in the Business Accelerator Fund that would disqualify its board members from applying for loans. Kramer echoed that MACEDC has no oversight over SBPC programs.

“The Chamber EDC is our partner, and they helped us with that application process to the MAGIC Fund,” Hernandez said, “but in the end, they understand that we have a purpose, they have a purpose and it’s good to have that separation between the two. Really, the goal in the end is just to support our business community.”

Snyder asked the council to renegotiate its agreement with SBPC to require the SBPC board, which has a City of Minot representative, to take final action on Business Accelerator Fund loans. The SBPC board had changed its procedures in 2020 to give final authority to its loan review board.

Hernandez explained final authority was given to the review board to shorten the loan process following feedback from borrowers and their private lenders that the process was too lengthy. Final action by review boards is common with other regional councils, she added. The city council had approved that change in adopting its current agreement with SBPC.

Snyder said he would like the guidelines review to address the appropriateness of Business Accelerator loans to MACEDC board members. He also is asking that any nonprofit or association seeking city tax dollars be required to disclose the names of individuals on their boards of directors and that SBPC report to council regarding any loans it approves or denies.

“I want to have transparency about that,” Snyder said. “I just want things done in a just manner. I want to make sure that everybody has access to the same funds.”

Hernandez said SBPC welcomes a review of the guidelines and would be interested in sharing its feedback as an entity that went through the application process.

Perry Olson, outgoing chairman of the MAGIC Fund Screening Committee, also supports a guidelines review.

“It’s probably a good time to review and make sure everything is being done properly,” he said. “Anytime there are tax dollars involved, we want to be as transparent as possible.”

Nor is there apparent objection from city council members.

“I am surprised there isn’t an ongoing review process. There should be,” council member Stephan Podrygula said.

“Certainly, if there are things that are not working well, we need to review it and make the necessary changes,” council member Lisa Olson said.

Council member Mark Jantzer, who was involved in the last rewrite, said circumstances have changed since 2018, prompting a need for another look and possible clarifications to ensure the document reflects intentions.

Council member Carrie Evans also said economic times warrant another look, and that look should include public input.

“There’s absolutely a lot of merit to sitting down and looking at it with the stakeholders and seeing if it’s still working and how we can make it an even better fund for the community,” she said.