City council adopts new MAGIC Fund guidelines

Uses defined for economic development funds

Updated guidelines for the MAGIC Fund, Minot's economic development fund, will provide more defined uses for city sales tax dollars.

The Minot City Council on Monday approved revised guidelines with a few changes from the recommended document provided by a review committee. The council received the committee's report in November.

The adopted guidelines retain language that allows for flood control as a potential recipient of MAGIC Fund dollars.

Council member Stephan Podrygula, who had qualms about using economic development money for flood control, noted the MAGIC Fund was formed on the premise of supporting economic development and flood control already receives a separate sales tax. However, he added flood control is the lowest priority within the MAGIC Fund's new defined uses and may never be funded.

"I'm not so sure it's worth any fuss over, but I guess I just want to go on record saying I think this really needs to be focused on business development and on our community," he said.

David Lakefield, city finance director, said city ordinance has allowed for MAGIC Fund money to go to flood control, although the fund's guidelines have not previously specified that. He explained the MAGIC Fund had a large cash balance not being used, so the rationale was to make it available for other public good, such as flood control.

"We have sold bonds that rely on our sales tax revenues to service the debt, so I am really leery about making any changes to the underlying ordinance that establishes those uses," Lakefield said.

The guidelines approved by the council create eligibility categories for primary sector companies, small businesses, matching funds for state programs, City of Minot economic development projects such as downtown facade improvements and wayfinding signage, and flood control.

The proposals also set limits for the amount of money in the MAGIC Fund and in each of its buckets.

The Primary Sector Business Program Fund can't exceed $10 million, but if it falls below $3 million, the fund would become the

priority bucket to receive incoming economic development sales tax dollars to bring it back up.

The maximums for other buckets are: $1 million for state program matching funds; $800,000 for city economic development projects and $300,000 for small businesses. Flood control has no minimum or maximum.

The revised guidelines also detail how funds can be moved from one bucket to another upon a supermajority vote of the city council.

The proposed guidelines address conflicts of interest that may arise within the City of Minot, MACEDC, MAGIC Fund Screening Committee or city council. The council strengthened the recommended wording to clarify that members can neither participate in discussion nor vote on matters involving a conflict of interest.

The new guidelines consider businesses that obtain certification through the state Department of Commerce as eligible for assistance as primary sector businesses.