HRA Minutes 04-06-2005
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, April 6, 2005 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners Present:
Viee Chair Darrin Lahr, Steve Andrews, Dan Frie, and Brad Barger.
Commissioner Absent:
Chair William Fair.
Council Liaison Present:
Wayne Mayer.
StalTPresent: Rick Wolfsteller and Ollie Koropchak.
Guests: Ron Welle, Liberty Savings Bank
Richard Fair and Jacquelyn Peterson
1. Call to Order.
Vice Chair Lahr called the HRA meeting to order at 6:00 p.m. declaring a quorum.
2.
Consideration to aoorove the February 2. 2005. February 15. 2005. and March 29. 2005
HRA minutes.
Brad Barger made a motion to approve the Fehruary 2, 2005,F'ehruary 15, 2005, and
March 29, 2005 lIRA minutes. .')'teve Andrews seconded the motion and with no
corrections or additions, the minutes were approved as written.
3. Consideration of adding or removing items from the agenda.
No items to add or remove.
4. Consent Agenda.
No consent agenda.
5. A. Consideration of a nrogress report from Brad Johnson or Barry Fluth relative to Phase II of
Landmark Square and authorization to begin process for establishment of a Redevelopment
Tlf District if so determined.
No representative from Landmark Square II was present, therefore, no action required.
B. Rec]uest to discuss tax increment payment fix Cub Proieet per Redevelopment Contract.
U sing an example of the Cub redevelopment property, Koropehak explained how the class rate
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HRA Minutes - 04/06/05
compression beginning in 1998 affected commercial property taxes and tax increment.
Secondly, within the last few years, the Legislators added a State tax rate which increased the
property taxes but did not increase the tax increment. A school tax rate was also added which
in comparison to the state tax rate has very little impact. Lastly, tax increment is figured using
the local jurisdiction tax rate of the year the TIF District was created. The example given
estimates an annual property tax of about $123,705 and tax increment of about $60,751.
According to the Redevelopment Contract, the Authority retains 90% ofthe annual tax
increment and the first $45,000 of the annual available tax increment. This amount is pledged
to the TIF District No. 1-22 Bond. No action necessary, for discussion and information
purposes only.
6.
Consideration of a request to further define sweat eClUitv within Transformation Home Loan
ProQ.ram.
Jacquelyn Peterson and her husband recently closed on the property located at 1023 West
Broadway through the Liberty Savings Bank, purchase price $150,000. They have submitted
an application for the Transformation Home Loan Program for renovation and expansion of the
home. The property lies within the boundary lines ofthe program and the 2004 market value
was $110,000. A sketch of the improvements were presented to the HRA. Estimated
improvemcnt costs are $75,000. The commissioners were asked to define or elarify thc
application of "sweat equity." Commissioner [rie explained sweat equity was meant to help
individuals reach the liRA's minimum improvement threshold of $50,000. Sweat equity is
applied toward (up to 20%) of the hard costs associated with improvements after submission of
a final sworn construction statement and receipts. Using an example: Of the $75,000 estimate,
the hard costs are $50,000, the HRA will only finance 20% or $10,000. Given the father,
Richard Fair, was going to provide a line-of-credit for the improvement costs, the liRA agreed
to reserve the Transformation dollars until completion of the improvements and submission of
evidence. Ron Welle, Liberty Savings Bank, asked if the liRA was acceptable to a third
position upon refinancing. The HRA did not agree to a second position. The commissioner
expressed this type of improvement project was exactly what they were looking for.
Koropchak noted the need for the Building Official to assess the property to meet the required
substandard qualifications.
Dan Frie made a motion to approve the Transfewmation Home Loan Application ()f Keith
B. Peterson and Jacquelyn J Peterson for the property located at 102] West Broadway,
Monticello, subject to meeting the program criteria. With the improvement costs
estimated at $75.000, the Transformation Loan amount estimated at $15.000 or up to
20% ()f the hard costs and to he held in reserve. Seconded hy Steve Andrews and with no
fZ1rther discussion, the motion carried.
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BRA Minutes - 04/06/05
7.
Consideration to approve the election of BRA officers for 2005 and approve the appointment
of commissioncrs to committees.
Steve Andrews made a motion to nominate and elect Darrin Lahr as Chair and Dan Frie
as Vice Chair of the HRA for 2005, and to appoint Rick WolfsteUer as Secretary-
Treasurer and to delegate the recording of minutes to Angela Schumann. Brad Barger
seconded the motion and with no further discussion, the motion carried.
Dan Frie made a motion to appoint Dan Frie to the S'mal/Industrial Group, and Darrin
Lahr and Brad Barger to the Marketing Committee. Steve Andrews seconded the motion
and with no/urther discussion, the motion carried.
8.
Consideration to review for amending the lIRA Business Subsidy Criteria and HRA Bylaws for
possible amendment and to call for a public hearing if determined.
In review of the HRA Business Subsidy Criteria, Koropchak noted the HRA had increased thc
Pre- TIF deposit from $5,000 to $7,500 last year. She also noted that Ehlers has increased
their fees for cstablishmcnt of a ncw district from $4,500 to $5,000 since last year. Thc
commissioners agreed to keep the deposit at $7,500 to eliminate an image of discouraging
redevelopment and economic development or to prevent scaring off developers. The
commissioners found no need to amend the HRA Business Subsidy Criteria.
In review of the HRA Bylaws, the commissioners found no need to amend the Bylaws.
9. Consideration to review and accept the year-cnd financial reports for the HRA General fund
and TIf Fund as prepared by BRA Treasurer Wolfsteller.
HRA Treasurer Wolfsteller reviewed the 2004 HRA Summary (including debt service funds).
He noted that investment earnings of between $75,000 to $100,000 are not included in this
summary. In the future, the HRA will receive an adjusted report. Noting the disbursement of
the $500,000 for purchase of the industrial land (Otter Creck) in Dccember and the property
tax revenues from the decertified/closed TIf Districts, the balance of the BRA General fund is
$453,424 and the balance of the combined TIf Districts is $1,724,317. Koropchak noted the
balances of Redevelopment District Nos. 5 and 6 and its use as non-restrictive funds for
purpose of redevelopment.
Brad Barger made a motion to accept the 2004financial reports oj'the HRA General
Fund and TlF Districts Fund. Dan Frie seconded the motion and with no further
discussion, the motion carried.
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HRA Minutes - 04/06/05
10.
Consideration to authorize payment ofHRA bills.
,)'teve Andrews made a motion to authorize payment of the monthly HRA bills. Brad
Barger seconded the motion and with no further discussion, the motion carried.
11. Consideration of Executive Director's Report.
The commissioners accepted the written report of the Executive Director. Council Liaison
Mayer informed the HRA of the IDe's recommendation for the Council to authorize moving
forward to research tIber optic service options for Monticello. This to be on the Council
agenda of April 11,2005. He suggested the City provide the backbone, foresees fiber optics
as a marketing tool for recruiting of high-end paying jobs and an opportune time to install with
the extension/installation of the storm sewer line. The HRA members agreed fiber optics would
set Monticello apart from other cities or be unique.
12.
Committee Reports.
Koropchak reported a Billboard Contract is in place. One billboard for llve months beginning
in July through November rotating in three locations along the right side, east bound 1-94
between Maple Grove and Rogers. Additionally, the Marketing Committee has leased a
booth at the Minneapolis Convention Center for May 3-5 to participate in the Expo of the
Society of Manufacturing Engineers.
13.
Other Business.
A. Update of Public Auction:
Frie reported on the public auction attended by Commissioner Fair and himself on March 30.
'fhe HRA did not purchase the Wurm 8-plex at the auction. There were a great number of
bidders in attendance as more than one property was to be auctioned. The bid started at
$300,000 and the HRA and another individual were the last bidders. With the I-IRA's
authorized top bid of $550,000, the developer (Sam Johnson) was the highest bidder at
$575,000. Frie was unsure as to the intent of the purchaser for the property
14. Adjournment.
With no further business, the HRA meeting adjourned at 7:45 p.m.
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Executive Director
ice Chair
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