HRA Agenda 06-14-2004
AGENDA FOR SPECIAL MF:F:TING
MONTICELLO HOUSING ANDREDEVEI..OPMF:NT AUTHORITY
Monday, .June 14,2004 - 6:00 p.m.
505 Walnut Street - Mississippi Room
Comm issioners:
Chair Bill Fair, Darrin Lahr, Dan Frie, Brad Barger, and Steve Andrews.
Council Liaison:
Roger Carlson.
Staff: Rick Wolfsteller, Ollie Koropchak, and Angela Schumann
I . Call to Order.
2. Consideration to approve the June 2,2004 HRA minutes.
3. Consideration of adding or removing items from the agenda.
4. Consideration to approve a Resolution authorizing execution of a Tax Increment Pledge
Agreement with the City of Monticello relating to $945,000 Taxablc G. 0. Tax Incremcnt Bonds,
Series 2004A.
5. Executive Director's Report.
6. Other Business.
7. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, June 2nd, 2004 - 6:00 p.m.
505 Walnut Street - Bridge Room
Chair Bill Fair, Vice Chair Darrin Lahr, Stcve Andrews, Brad Barger, and
Dan Fric
Council Liaison Rogcr Carlson
Rick Wolfsteller, Ollic Koropchak, and Angela Schumann
Commissioners:
Absent:
Staff:
1. Call to Order.
2.
Chair Fair called the meeting to order at 6:00 p.m. and declared a quorum, noting the full
compliment of members and the absence of Council Liaison Roger Carlson.
Consideration to approve the Mav 5th. 2004 HRA minutes.
A MOTION WAS MADE BY BARGER TO APPROVE THE MINUTES OF THE
MA Y 5TH, 2004 HRA MEETING, NOTING A CHANGE TO THE MINUTES TO
SHOW THAT AT THE MAY Sill MEETING, THE HRA HAD APPROVED THE
MINUTES FROM THE REGULAR MEETING HELD APRIL ih.
MOTION SECONDED BY ANDREWS. MOTION CARRIED UNANIMOUSLY.
3. Consideration of adding: or removing: items from the agenda.
None.
4. Consent Agenda.
5.
None.
Continued - Consideration to review a revision to the Contract for Private Redevelopment
between Masters Fifth Avenue and the HRA for Landmark Square Phase n.
The item was tabled due to the expected arrival of Masters Fifth Avenue representatives
Brad Johnson and Barry Fluth. As the developers had not arrived after the completion of
the balance of the agenda, the HRA commenced discussion of the item.
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BRA Minutes 05/05/04
Koropehak stated that she would not ask the HRA to take any action, only ask them to
review the contract as presented. The City's attorney has changed the contract language
to clarify when the letters of credit would be released back to the developers. The
clarification is that when the ccrtification of completion is issued, the letters of credit will
bc releascd.
Fair asked if the dcvelopcrs havc signed the contract. Koropchak indicated that they have
not.
She also provided the HRA with a summary ofrequircments the developers need to mcet
before funds can be disbursed. Koropchak noted that thcre arel5 items the dcvelopers
havc yet to complete bcfore dispersal. The liRA will need to know whether thcse items
can be complcted for bond purposes by June I] tho Thc developers will also need to
provide revised plans addressing planning and engineering comments presentcd during
the Planning Commission meeting by the 10th.
6.
Consideration to discuss for intcrest the establishment of a scattered housing program.
Fair indicated that this itcm had been put on the agenda at his requcst. Fair stated that his
intent was to discuss a program more along the lines of a redcvelopmcnt program than a
scattered housing program.
Pair would like the HRA to discuss thc possibility of instituting a program to reinvigorate
areas of homes with the lowest valucs in the community. As a background for the
discussion, Pair referred to a previous HRA tour of a similar project in Richfield. Fair
proposed offering a low intercst loan program to rchabilitate homes, in addition to thc
opportunity for thc HRA to purchase dcvalued propcrties for demolition and rebuilding.
Fair stated that in looking at the possibility of the HRA having excess funds, he
considered such a projcct an opportunity to utilize those funds to reinvest in the
community.
Koropchak refcrred to areas and homes idcntified for possible redevelopment when the
Community Development Department had donc an invcntory for a scattered housing
project. The identified properties would be candidates f(n the projcet.
Koropchak discussed funding of the project as outlined in the stafTreport. With budget
cuts, redcvelopment grants are non-existcnce or few; however, low to moderatc income
housing programs are still available. Richfield's program continues through the use of
pooling dollars from the Best Buy TIF District. Using a similar model, the Monticello
HRA could use pooling dollars on an annual basis from TIF District No. 1-22 for this
purpose. Koropchak stated that the allowable pooling dollars for a redevelopment district
2
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HRA Minutes 05105/04
is 25% of the tax increment; ten percent for administrative costs and fifteen percent for
the other. However, Koropchak noted that it is not advised to designate the funds but
rather to review on an annual basis as the 15% serves as a reserve for bond payment in
case of a tax increment shortfall. The bond projections assume full expenditure of the
Front Street project and do not reflect the sale of the property to Hans Hagcn I-Iomes.
Attorney Bubul is researching if these dollars ($297,352) are outside the pooling dollars
and available as seed money for a scattered housing program. The second source of funds
would be the revenues from a new TIF District either Redevelopment or Housing District.
A third Source of funds needs further research.
Koropchak indicated that Ehlers has stated that the funds would have to be used for the
purpose of redevelopment. Fair inquired whether the funds could be used for low-interest
loans. Koropchak is unsure if funds could be used lor both purchase/demolition and
rehabilitation. Koropchak will clarify with Ellers.
Andrcws asked Frie if any of the potential properties are around $55,000. Frie indicated
that there were not. Duc to the potential expense involved in the purchase of such
properties for redevelopment, fair stated that he is more interested in the loan program.
A loan program would also be voluntary. Andrews noted that such a program would
require that a distinction be made between small and sub-standard homes.
.
Koropchak reported to the lIRA that a potential developer had come forward on the 4th
Street property. ^ proposal fc)r an BRA/City project for that property had previously
come before the HRA. Koropchak stated that such devclopments are in indication of
progress in terms of Counci I' s desire to allow developers to do their work within the
marketplace.
Fair stated his position that revenue generated from projects should be reinvested in other
community projects.
The HRA members inquired how much funding would be available tor such a program.
Koropchak stated that could be addressed after discussing the next item regarding the
issuance of the temporary bond. Koropchak also indicated that the HRA should know by
the II th what the amount of the bond would be, which would determine funding
availability. It was noted again that funds from the IIans Hagen project and the
investment returns might be potential funding sources.
Barger indicated his interest in researching the loan program. Barger also asked
Koropchak about the City's current fa9ade loan program. Koropchak stated that thus far,
there did not seem to be many properties taking advantage of the program.
.
Fair stated that under the proposed revitalization loan program, there would need to be set
certain criteria. For example, one criteria might be bringing the market value up by a
3
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HRA Minutes 05/05/04
specific amount.
Wolfsteller indicated that the idea was similar to how the HRA has originated, which was
with a grant/loan program that encouraged rehabilitation and depended on how long
residents stayed in a home.
Lahr inquired whether seed money would be land sale proceeds (one-time) and interest on
investments, also one-time. Wolfsteller indicated that once bond proceeds are gone,
interest decreases. Fair stated that he sees the program operating on more of a revolving
fund basis. Koropchak commented that redevelopment distriet could also be set up for
the program, which would require the HRA to establish a new TIF district. The areas
would have to be rcsidential or commercial and considered substandard.
Wolfstellcr provided a scenario for pre-payment of the bonds. fair clarified that if
another use isn't found 1()f an eligible projeet, the bond has to be paid off and ultimately
the district would be decertified sooner. Creating a redevelopment program is an
opportunity to use the TfF gencrated downtown to rc-invest.
.
Andrews inquired how the program would be managed. Koropchak stated that building
department would need to cnter into the management of the program. Koropchak stated
that there would also be a need to market the program.
Fair noted that he is not suggesting the program include rental properties.
Lahr stated that the BRA would have to determine what the ultimate goal of the program.
For example, would the goal be to clean up blighted areas or would it be to truly
redevelop.
A discussion commenced on possible partnership opportunities that may exist for such a
program with other non-proJit entities. Fair inquired how CMHP works as l~ir as entering
into a partncrship to start a program.
Scott Douglas addressed the HRA, commenting that the HRA may want to consider
Kjellberg's park as an area for future revitalization. Fair stated that is an interesting
concept. However, its current status as a commercial property makcs it difficult. Fric
stated that Kjellberg's may prcsent itself at some point as a large TlF project possibi lity.
The} IRA mcmber agreed to defer a discussion on the progranl after discussion relative to
the next agenda item.
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HRA Minutes 05/05/04
7.
Consideration of an update relative to refinancing of the TIF District No. 1-22 Bonds and
to authorize calling for a special BRA meeting.
Koropchak stated that HRA will need to look at bottom line dollar amount in considering
a refinance of the district. Council will needs to know the amount of the bond by the 14th.
Wolfsteller reviewed current bond amounts. WoWiteller stated that the current bond for
District 1-22 is for over $2 million, for which the balloon payment is due July 1,2004. In
reviewing the financial records, $1,762,257 of the bond has been utilized in the
downtown district.
Wolfsteller indicated that the bottom line amount to pre-pay bonds is approximately
$916,000, plus $40,000 for the first half tax settlement. Hence, if the HRA would make
the balloon payment rather than refinance, the new bond would be issued at 1.3 million.
Wolfsteller stated that the result is that the bond would be paid oil sooner, but all that
means is that the district is de-certified sooner and other entities share in tax sooner.
Lahr asked if repayment eomes through captured ineome. Wolfsteller noted that the
reality is that there is an opportunity to borrow $450,000 and pay it back with tax receipts
funds from City, County and School distriet, as opposed to starting a new district with
new borrowed funds with City incurring all costs. Ehlers feels that TIF coverage of debt
obligation is satisfactory, with a cushion also included.
Barger inquired if the Paul Wurm property would qualify for a project such as that
proposed by Fair. Koropchak indicated that it most likely would.
Barger stated he thinks they should reserve the funds and reJinanee the bond. Andrews
agreed. Wolfsteller noted that if income is lower than expected, unspent funds can be
used to make payments if necessary.
Lahr asked if a large share of revenues from the district are coming from one property.
Lahr sought clarification on what properties make up the $186,000 in existing TIF
revenues. Lahr stated that he would like to know if there is enough diversity to cover
expenses.
OK indicated that projections presented are also based on up front TIF and revenues from
Landmark Squarc II.
Koropchak explained that a public meeting notice needs to be determined. Koropchak
stated that the meeting could bc held immediately befc)re the Council mecting on the 14th,
after which the Council would consider authorization of bond issuancc. The HRA would
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10.
lIRA Minutes 05/05/04
pledge to pay back the bond pending authorization to refinance.
MOTION BY BARGER TO CALL FOR A SPECIAL MEETING OF THE HRA AT
6;00 PM ON JUNE 14TH FOR THE PURPOSE OF AUTHORIZING ENTERING INTO
A PLEDGE AGREEMENT BETWEEN THE CITY AND THE HRA RELATIVE TO
THE TIF DISTIRCT NO. 1-22 BONDS.
MOTION SECONDED BY ANDREWS. MOTION CARRIED.
Fair requested that staff clarify any items of concern raised within the meeting, as well as
those staff might identify.
Koropchak indicated that the HRA could also discuss redevelopment with the refinanced
funds during the meeting on the 14th.
8. Consideration to authorize payment of HRA bills.
None.
9.
Consideration of Executive Director's Report.
Koropchak reviewed her report.
Koropchak specifically referred to the spreadsheet provided for the recently completed
wage survey. Koropchak noted in particular that a total payroll statement would also be
helpful as an indicator, as wage levels beyond $22 per hour are not itemized out.
Koropchak also noted that the City had signed a purchase agreement of the Chadwick
parcel. She indicated that earnest money has been paid by the City, with a potential
closing in July. The net land available for development is 85 acres. Frie inquired about
the status of the Moon Motors plat as a result of the sale. Wolfsteller indicated that a
development agreement needs to move forward and that Chadwick is requesting are-zone
to commercial for that strip ofland. Additionally, Chadwick will need to sign a waiver of
public hearing on assessment. The re-zone is potentially slated f()r Planning Commission
in July.
Committee Reports.
6
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....
......
Previously discussed via the Executive Director's Report.
HRA Minutes 05/05/04
11. Other Business
The HRA members discussed the status of the Streeter proposal and the interchange in
relationship to the Planning Commission deeisions made June 1 st.
12. Adjournment.
A MOTION WAS MADE BY ANDREWS TO ADJOURN THE MEETING AT 7;30
P.M.
MOTION SECONDED BY LAHR. MOTION CARRIED lJNANIMOUSL Y.
HRA Chair
Recorder
7
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HRA Agenda - 06/14/04
4.
Consideration to approve a Resolution authorizing execution of a Tax Increment
Pledee Aereement with the Citv of Monticello relatine to $ Taxable General
Obligation Tax Increment Bonds. Series 2004A.
A. Reference and backeround:
As you recall in July, 2001, the City and HRA entered into a Pledgc Agrcemcnt plcdging the
tax increments from TIF District No. 1-22 and TIF District No. 1-23 to pay debt service on
the $2,150,000 G. O. Taxable Temporary Tax Increment Bonds.
With the deadline of the temporary bonds, June 30, 2004, thc City of Monticello has agrecd to
issue its $ Taxable Tax Increment Bonds, Series 2004, to pay at maturity the
~~.~-~,',.~,-~'~',,,_.~,,,,-,_,,_~,.
outstanding principal of and accrued interest on the Temporary Bonds.
The Pledge Agreement simply states that the HRA plcdgcs thc tax increment received from TIt'
District No. 1-22 to the payment of the principal of and intercst on the Bonds in an amount
sufficicnt to pay 105% ofthc principal and interest due.
Since no proceeds were used in connection with TIF District No. 1-23 and no tax increments
from TIF District No. 1-23 were applied to pay interest on the Tcmporary; therefore, said
Pledge Agreement does not apply to TIF District No. 1-23.
At the City Council meeting scheduled for June 14,2004, 7:00 p.m., the Council will consider
approving thc rcsolution awarding the sale of $ Taxable Gcneral Obligation Bonds,
Series 2004A.
B. Alternative Action:
1. A motion to approve a resolution authorizing execution of a Tax Increment Plcdgc
Agrccmcnt with thc City of Monticello relating to $ __".........__. Taxablc Gcncral
Obligation Tax Increment Bonds, Scries 2004A.
2. A motion to deny approval of a resolution authorizing execution of a Tax Increment
Pledge Agreement with the City of Monticello relating to $,_______ Taxable General
Obligation Tax Increment Bonds, Series 2004A.
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liRA Agenda - 06/14/04
c.
Recommendation:
The City Administrator and Executive Director recommend Alternative No. I.
D. Supporting Data:
Resolution for approval and Pledge Agreement.
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2
I'A""'...............
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING EXECUTION OF A
T AX INCREMENT PLEDGE AGREEMENT WITH THE
CITY OF MONTICELLO RELATING TO $ TAXABLE GENERAL
OBLIGA TION TAX INCREMENT BONDS, SERIES 2004A
WHEREAS, The Housing and Redevelopmcnt Authority in and for the City of
Monticello, Minnesota (the "BRA") has established Redevelopment Project No. I (the
"Projcct"), and approvcd a Redevelopmcnt Plan (thc "Plan") for the Project; and
WHEREAS, the HRA and City have establishcd Tax Inerement Financing District No. 1_
22 (the "TIF District") within the Project in accordanee with Minnesota Statutes, Sections
469.174 to 469.179; and
WI IEREAS, pursuant to authority eonferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City previously issued its $2,150,000 Taxable General
Obligation Temporary Tax Increment Bonds, Series 2001 ("Temporary Bonds") to finance
certain public redevelopment costs to be incurred by the I IRA or the City in the Project Area;
and
<-,
WHEREAS, the City has agrecd to issue its $ Taxable General
Obligation Tax Increment Bonds, Scries 2004A (the "Bonds") to pay at maturity the outstanding
principal of and accrued interest on the Temporary Bonds; and
WHEREAS, the liRA has agrced to pledgc certain tax increment revenues to thc City for
the principal and interest on the Bonds; and
WHEREAS, the there has been prescnted to the BRA a Tax Increment Pledge Agreement
between the HRA and the City providing fix the pledge of tax increments from thc TIF District
to payment of principal and interest on the Bonds;
NOW, THEREFORE, BE IT RESOLVED by thc Board of Commissioners (the "Board")
of the HRA, as follows:
1. Thc Chair and Secretary of the HRA are hereby authorized to execute and deli ver
a Tax Increment Pledgc Agrccment with the City of Monticello, Minnesota substantially in the
form on file with the City, providing for thc pledgc of tax incrcment derived from property in the
TI F Districts for thc payment of the principal of: premium, if any, and interest on, the Bonds.
2. This rcsolution shall be cffective as of the date hereof.
...................
SJU-24X76 I v I
MN190-1 n
~ lR./J.SClf..1 \/1
Monticello, MN
$945,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2004A
Sources & Uses
Dated 06/30/2004 I Delivered 06/30/2004
Sources Of Funds
Par Amount of Bonds
1l-'!!!.,s..C::~..!~T_~C::C::<l.S..f!9}l2-?Qg.1.",.1s..!l!!._C::__
.....m...w"'........._..._.____"'''~"......._._._.._"w.~........._...___...-.""...'n.M.M..~__._.__._'".'''R'U..~.~_.__
$945,000.00
m...............______''''..,,_________...'_.''m'.....J.J0~97 ?.cQ.Q.
I"'t,l.l.I,!:'l.l.~J:c:..,s."..,_______
-.-....................-.--------..........-------.."."..~------.."''''..--.----------".........---.--..--..'''''.''''''----..-----...____..'''.....,""-______............"'....__...1~,;~?.~.~!~_
Uses Of Funds
Total Undel'WTiter's Discount (0.258%)
s:..Q~_~..9.,U.~s._l!.~!1S.c::.,.._"______"'..,,,.
Deposit to Current Refunding Fund
8<:!\:'!:!_4.i.l1g..A!!:!.<!l,lIl.t",,,, """...________,.""',,..
2,439.25
.--....."'.."--..------------...."'..."-....--,..,,.......------------ """."----------------"',."...."",-..----------....,,,,,,,,,,,,......"___...___"...""''',,........______________,,....._~?,222
,~9.,,,
2,209,125.00
--------"........."'--------"'.".............------------..."."...------------""..""'-....."'-"'---------"""...,,....-----------------,,--....."'......--.---------".._"..,,"~Qz.L~_!!.l;'l.._
Total Uses
$2,253,975.00
Monticello, MN
$945,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2004A
Debt Service Schedule
Date Principal Coupon Interest Total P+I Fiscal Total
06/30/2004
02/01/2005 70,000.00 3000% 26,206.49 96,206.49 96,206.49
0810 lf2005 21,306.25 21,306.25
02/01/2006 95,000.00 4.000% 21,306.25 116,30625 137,612.50
08/01/2006 19,406.25 ] 9,406.25
0210112007 100,000.00 4.000% 19,406.25 119,406.25 138,812.50
08/0112007 ] 7,406.25 17,40625
0210] /2008 105,000.00 4.500% 17,406.25 ]22,406.25 139,812.50
08/0112008 ]5,043.75 ] 5,043.75
02/01/2009 105,000.00 5.000% 15,043.75 120,043.75 135,087.50
08/0]/2009 12,418.75 ] 2,418.75
02/0 1/2010 1 10,000.00 5_000% 12,4]8.75 122,4] 8.75 134,837.50
08/0 lf20 10 9,668.75 9,668.75
02/01/2011 ] 15,00000 5.250% 9,668.75 124,668_75 134,337.50
08/0lf20] ] 6,650.00 6,650.00
021Olf2012 120,000_00 5.250% 6,650.00 126,650.00 133,300.00
08/01/2012 3,500.00 3,50000
02/0 lf20 13 125,000.00 5.600% 3,500.00 ]28,50000 132,000_00
Total $945,000.00 $237,006.49 $1,182,006.49
Yield Statistics
Bond Year Dollars
_..._~.....................,., ..,,,,..,,,,,.,,,..,,,.,,,,. ........__......_...~..._....~..~.....
Average Life
.Ay~T_~g,e...f,<:>.I,lP?!l.."''''''..,,______________
''''________________''_________________..__""..___........''..'''...''.."''''''''.''''..'''''''..________________________________..............".'''"'"._."_"__________________________________..____".
......,,..,,....'"""',,.._J3_&?)--'_~_~__
4.935 Years
5.08]7505%
..........,~._..._.______.._m._._..m_~..._~w~...,.........,'"".,.y....w.~"'_m'____.__.__._____._...~,..."'"...,.'".""m_......__._._..____._._._.___.__..m.~........~y.."",,.,.".."..".m.----..
)\j~U!:!!~~~!f..9.s..!Q'!..IfL__._.""..,,""'''''''''''
True Interest Cost (T]C)
"!:3..<:>'!:!9,,Xil:'19L'2~_bTbi1!.!l:g_~_!:,l,lrp.<:>.s.~,~
All Inclusive Cost (A]C)
..""________________._____________".______""...."'""."'__",,"',,"""_______________...__..........._......""''''._.._______________''_..''__""""....."''''''''''"....________________1l1~?J...1..'Y.~,,_
5.118]686%
_..________________________-",,____ ",.......",,,"',,..,,,,,,,.."'__"'__.____________________,,........................,.""'__"__________________.._.....",,.,,.. "".""",..___.____________5.0568323.~.
,,
5_6878]22%
IRS Form 8038
.1:;!c::,!...1!:!!~~_~_t...f_<:>.~!____________________"_'_...__"'..".,,"""""''''..""..""____"______________________._.-''".."......"....""...."..,,..,,""""''''_"_____________________...__..........'
'',,..,,.,,''',,__'''_______-----------------------...."..""""'".....,,"',,..-,,--.---------
Weighted Average Maturity
__~J~~J..?~9..?.~'"
4.935 Years
.
City of Monticello
District 1-22 Projections - New Class Rates and 1.12 Frozen Rate
Existing Total
Year TIF Revenue
2003
2004 244,901 - 244,901
2005 244,901 ~ 244,901
2006 244,901 - 244,901
2007 244,901 - 244,901
2008 244,901 - 244,901
2009 244,901 - 244,901
2010 244,901 " 244,901
2011 244,901 - 244,901
2012 244,901 - 244,901
2013
2014
2015
2016
2017
2018
2019
2020
2021
Totals 2,204,112 - - - - - 2,204,112
.
7.5% PAYG for Landmark Portion of Refunding Annual Net
Year Admin Cub Sq. I 04 for Bond Bond Expenses Revenue
0
2003 0 0
2004 18,368 7,515 13,691 40,000 96,206 175,780 69,121
2005 18,368 7,515 13,691 137,613 177,186 67,715
2006 18,368 7,515 13,691 138,813 178,386 66,515
2007 18,368 7,515 13,691 139,813 179,386 65,515
2008 18,368 7,515 13,691 135,088 174,661 70,240
2009 18,368 7,515 13,691 134,838 174,411 70,490
2010 18,368 7,515 13,691 134,338 173,911 70,990
2011 18,368 7,515 13,691 133,300 172,873 72,028
2012 18,368 7,515 13,691 132,000 171,573 73,328
2013
2014
2015
2016
2017
2018
2019
2020
2021
Totals 165,308 67,635 123,218 40,000 1,182,006 1,578,168 625,944
.
$1,797,910 City cash balance for District 1~22 at 12/31104
~59, 125 2/1/04 Interest Payment on Bonds
-297,352 Land sale proceeds from Hans Hagen (can be spent outside of 5 year rule)
-164,000 Interest earnings in District (can be spent outside of 5 year rule)
,,8,458 2004 Administrative Costs
Q Landmark Square" Up-Front Financing
1 ,268,975 Remaining cash balance
40.000 Portion of first 1/2 TIF payment from County
1,308,975 Net available for pre-paying bonds
6/14/2004 update district 22 for refunding bonds 2004 revised
Annual
Coveraae
163%
161%
160%
166%
166%
167%
168%
169%
Ollie Koropchak
.. From:
,ent:
fo:
Cc:
Subject:
Mark Ruff [mark@ehlers-inc.com]
Friday, June 11, 2004 2: 12 PM
Ollie Koropchak; Rick Wolfsteller; sbubul@Kennedy-Graven.com
Todd Hagen
Revised Bond Issue Amount
~:."'...~~."...
1:lu:J
~.'.;!l~
I:J
Based upon the removal of the Landmark Sq. II project, attached
are new runs. Please note that we will be shortening the call date
update district 22 refunding of 01 GO
for refundi... TIF Temp sh..,
Rick,
Also be aware that you will need $l.3M available in cash to call the bonds on June 3D,
2004.
Thanks, Mark
Thi~; email has been scanned for all viruses by the MessageLabs-Em~1.fi--~3ecurity Sy~;tern.
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1
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Monticello, MN
$945,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2004A
Sources & Uses
Dated 06/30/2004 I Delivered 06/30/2004
Sources Of Funds
Par Amount of Bonds
Unused Proceeds from 200 I Issue
$945.000 00
1.308.97500
Total Sources
$2,253,975.00
Uses Of Funds
Total Underwriter's Discount (1.500%)
Costs of Issuance
Deposit to Current Refunding Fund
Rounding Amount
14.175.00
27.000.00
2,209.125.00
3.67500
Total IIses
$2,253,975.00
.
.
refunding of 01 G.O. TIF I SINGLE PURPOSE I 6/11/2004 I 2:08 PM
.
City of Monticello
District 1-22 Projections - New Class Rates and 1.12 Frozen Rate
Existing Total
Year TIF Revenue
2003
2004 244,901 - 244,901
2005 244,901 - 244,901
2006 244,901 - 244,901
2007 244,901 - 244,901
2008 244,901 - 244,901
2009 244,901 - 244,901
2010 244,901 - 244,901
2011 244,901 - 244,901
2012 244,901 - 244,901
2013
2014
2015
2016
2017
2018
2019
2020
2021
Totals 2,204,112 - - - - - 2,204,112
.
7.5% PAYG for Landmark Portion of Refunding Annual Net
Year Admin Cub Sq I 04 for Bond Bond Expenses Revenue
0
2003 0 0
2004 18,368 7,515 13,691 40,000 93,808 173,381 71,520
2005 18,368 7,515 13,691 133,800 173,373 71,528
2006 18,368 7,515 13,691 135,855 175,428 69,473
2007 18,368 7,515 13,691 137,155 176,728 68,173
2008 18,368 7,515 13,691 132,955 172,528 72,373
2009 18,368 7,515 13,691 133,440 173,013 71,888
2010 18,368 7,515 13,691 133,380 172,953 71,948
2011 18,368 7,515 13,691 132,745 172,318 72,583
2012 18,368 7,515 13,691 131,625 171,198 73,703
2013
2014
2015
2016
2017
2018
2019
2020
2021
Totals 165,308 67,635 123,218 40,000 1,164,763 1,560,924 643,188
.
$1,797,910 City cash balance for District 1-22 at 12/31/04
-59,125 2/1/04 I nterest Payment on Bonds
L -297,352 Land sale proceeds from Hans Hagen (can be spent outside of 5 year rule)
-164,000 Interest earnings in District (can be spent outside of 5 year rule)
-8,458 2004 Administrative Costs
Q Landmark Square" Up-Front Financing
1 ,268,975 Remaining cash balance
40,000 Portion of first 1/2 TIF payment from County
1,308,975 Net available for pre-paying bonds
6/14/2004 update district 22 for refunding bonds 2004 revised
Annual
Coveraqe
167%
165%
163%
168%
168%
168%
169%
170%
.
.
.
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING EXECUTION OF A
TAX INCREMENT PLEDGE AGREEMENT WITH THE
CITY OF MONTICELLO RELATING TO $ TAXABLE GENERAL
OBLIGATION TAX INCREMENT BONDS, SERIES 2004A
WHEREAS, The Housing and Redevelopment Authority in and for the City of
Monticello, Minnesota (the "HRA") has established Redevelopment Project No. ] (the
"Project"), and approved a Redevelopment Plan (the "Plan") for the Project; and
WHEREAS, the I-IRA and City have established Tax Increment Financing District No. 1-
22 (the "TIF District") within the Project in accordance with Minnesota Statutes, Sections
469.] 74 to 469.179; and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City previously issued its $2,150,000 Taxable General
Obligation Temporary Tax Increment Bonds, Series 2001 ("Temporary Bonds") to finance
certain public redevelopment costs to be incurred by the HRA or the City in the Project Area;
and
WHEREAS, the City has agreed to issue its f\ Y S, Q 0 C) Taxablc General
Obligation Tax Increment Bonds, Series 2004A (the "Bonds") to pay at maturity the outstanding
principal of and accrued interest on the Temporary Bonds; and
WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for
the principal and interest on the Bonds; and
WHEREAS, the there has been presented to thc BRA a Tax Increment Pledge Agreement
between the BRA and the City providing for the pledge of tax increments from the TIF District
to payment of principal and interest on the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board")
of the HRA, as follows:
1. The Chair and Secretary of the HRA are hereby authorized to execute and deliver
a Tax Increment Pledge Agreement with the City of Monticello, Minnesota substantially in the
form on file with the City, providing for the pledge of tax increment derived from property in the
TIF Districts for the payment of the principal of, premium, if any, and interest on, the Bonds.
2. This resolution shall be effective as of the date hereof.
5J8-248761 vI
MN190-113
.
.
.
TAX INCREMENT PLEDGE AGREEMEN'r
by and between
CITY OF MONTICELLO, MINNESOTA
and
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF MONTICELLO, MINNESOTA
nns AGREEMENT is made and entered into on or as of the 30th day of June, 2004, by
and between the City of Monticello, Minnesota (the "City"), and The lIousing and
Redevelopment Authority in and for the City of Monticello, Minnesota (the "BRA").
WHEREAS, the HRA has established Redevelopmcnt Project No. I (the "Project"), and
approved a Redevelopmcnt Plan (the "Plan") for thc Project Area; and
WHEREAS, the I1RA and City have established Tax Increment financing District No. 1-
22 ("TIF District No. 1-22") and Tax Increment Financing District No. 1-23 ("TIF District No.
1-23") (together, the "TIF Districts") within the Project in accordance with Minnesota Statutes,
Scctions 469.174 to 469.179; and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, in ordcr to finance certain public rcdevelopmcnt costs incurrcd
or to be incurred by the lIRA or the City in the Project Arca, the City issued its $2,150,000
Taxable General Obligation Tcmporary Tax Increment Bonds, Scries 200] ("Temporary
Bonds"); and
WHEREAS, the HRA and City entered into a Tax Incremcnt Pledge Agreemcnt dated
July 23, 200 I ("Prior Pledge Agrccment"), describing the expected usc of procccds of the
Tcmporary Bonds and the pledge of tax increments to pay debt scrvice on the Temporary Bonds;
and
WHEREAS, the City has agreed to issue its $ Taxable Tax Incrcment
Bonds, Series 2004 (thc "Bonds") to pay at maturity the outstanding principal of and accrued
interest on the Temporary Bonds; and
WHEREAS, the HRA has agrecd to pledgc certain tax incremcnt revenucs to the City for
thc principal and interest on the Bonds.
WHEREAS, pursuant to Minnesota Statutcs, Section 469.178, Subdivision 2, any
agreement to pledge tax increment revenucs must bc made by written agreement by and between
the HRA and the City and must be filed with the County Auditor of Wright County;
NOW, THEREFORE, the City and the HRA mutually agree to the following:
(1)
The City will sell the Bonds.
(2)
Notwithstanding anything to the contrary in the Prior Pledge Agreement, a portion
of the procceds of the Temporary Bonds were applied by the HRA to payor
SJH-248761vl
MN190-113
.
(4)
.
reimburse certain public redevelopment costs authorized in the tax increment
financing plan for TIF District No. 1-22, and to pay capitalized interest and costs
of issuance. No proceeds were uscd in connection with TIF District No. 1-23, and
no tax increments from TIF District No. 1-23 were applied to pay interest on the
Temporary Bonds.
(3)
Net proceeds of the Bonds, togcther with the balance of unspent proceeds of the
Temporary Bonds, will bc applied on July 1, 2004 to pay the outstanding
principal and accrued interest on the Temporary Bonds.
(3)
The HRA hereby plcdges the tax increments received by the HRA that are derived
from property in TIF District No. 1-22 to the payment of the principal of and
interest on the Bonds in an amount sufficient to pay 105% of the principal and
interest due on the Bonds from time to time (the "Pledged Tax Increment").
Not less than three (3) business days prior to each debt service payment date for
the Bonds, thcre shall be transferred from the account for TIF District No. 1-22 to
the Debt Service Fund maintained by the City for the payment of the Bonds, an
amount of Pledged Tax Increment which when taken together with amounts
already on deposit in the Debt Service Fund, is equal to the principal of and
interest on the Bonds to beeome due on the subject payment date. Any Pledged
Tax Increment in excess of 105% of the principal and interest due with respect to
the Bonds on any payment date may be retained by the HRA and applied to any
public redevelopment costs of the Project Arca in aecordance with law.
(5) Without regard to anything in this Agreement to the contrary, Pledged Tax
Increment shall be available (at the HRA's option on a parity, superior or
subordinate basis) to pay principal of and interest on both the Bonds and any other
obligations issued by the City, HRA or any other public body to finance public
redevelopment costs paid or incurred by the HRA in the Project Area. The HRA
reserves the right to releasc all or any portion of Pledged Tax Increment from the
pledge undcr this Agreement (including without limitation the releasc of Pledged
Tax Increment from any specific parccl within TIF District No. 1-22) to the extent
permitted by law, provided that in no event may the EDA reduce the pledge such
that Pledgcd Tax Increment is reasonably cxpected to pay less than 20 perccnt of
principal and interest on the Bonds.
(6) An exccuted copy of this Agreemcnt shall bc filed with the County Auditor of
Wright County pursuant to the requirement containcd in Minnesota Statutes,
Section 469.178, Subdivision 2.
S.ll3-248761 v I
MN190-113
. IN WITNESS WHEREOF, the City and the lIRA have caused this Agreement to be duly
executed on their behalf and their seals to be hereunto affixed and such signatures and scals to be
attested, as of the day and ycar first above written.
ATTEST:
CITY OF MONTICELLO, MINNESOTA
By
Mayor
City Administrator
(SEAL)
.
.
sm-24X761 v I
MN190-113
.
.
.
ATTEST:
Secretary
(SEAL)
SJA-248761 v I
MNI90-113
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR TIlE CITY OF
MONTICELLO, MINNESOTA
By
Chair
.
.
.
STATE OF MINNESOTA
COUNTY AUDITOR'S
COUNTY OF WRIGHT
CERTIFICATE
I, the undersigned County Auditor of Wright County, Minnesota, hereby certify that a
'rax Increment Pledge Agreement by and between the City of Monticello, Minnesota and The
Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, dated as of
July 30, 2004, relating to the City's $
Taxable General Obligation Tax Increment
Bonds, Series 2004A, has been filed in my office.
wrrNESS my hand and official seal this _ day of
,2004.
(SEAL)
County Auditor
Wright County, Minnesota
By
Deputy
SJB-24R761vl
MN190-1 I3
.
.
.
HRA Agenda - 06/14/04
5.
Executive Director's Reoort:
a) Proceeds from land sale and tax incrcment earnings - The commissioners were in agreement
to preserve these TIF District I -22 funds (outside of 5-ycar rule) for redevelopment purposes.
The funds can be used for a loan but projects must meet the requiremcnts of a redevelopment
district, the funds can be spend outsidc TIF District No. I -22, and no time frame is attaehed for
purposes of disbursement.
b) TOLD Development - I have meeting schcduled with Bob Cunningham for Friday, June 11,
8:00 a.m. for an update on the proposed Walgreen's.
c) Mastcr's Contract - As of 12:15 p.m., June 10, I'm unaware if Barry will sign the Contract
as is. If the HRA includes the $352,500 in the bonds sale and thc project doesn't go, the HRA
can not call the bonds until 2013; thcrefore, it would cost the II RA.
..! ']
. , .
tzrd""
-.'"---;'- ,- -- ,.. ,'t
- "..". ., , , ".. .
. . "
. , >,' \ \' I!
" I,
' I
June 14, 2004
MONTlCELW
Mr. Barry Fluth
Master's Fifth Avenue, Inc.
204 Locust Street - Suite 209
Monticello, MN 55362
Re: Contract for Private Development by and between Master's Fifth Avenue, Inc. and the
I-Iousing and Redevelopment Authority in and for the City of Monticello
Dear Barry:
.
This is a letter of confirmation relative to the decision by the developer on June 11, 2004, to not
execute the Contract for Private Development by and between Master's Fifth Avenue, Inc. and the
Housing and Redevelopment Authority (HRA) in and for the City of Monticello for Landmark Square
II. The decision of the developer to not enter into the Contract was due to timing and monetary
reasons.
TheHRA executed the fifth and final draft of the said Contract on May 5, 2004. The said Contract
defined the terms and conditions to be met by the developer prior to disbursement of the approved up-
front $352,500 tax increment assistance. The dead-line disbursement date for TIF District No. 1-22
expenditures is June 30, 2004. This date is mandated by the five-year activity rule within the Minnesota
Statutory regulating Tax Increment Financing.
On June 30, 2002, the City on behalf of the HRA sold Temporary Bonds for TIF District No. 1-22
and extended the five-year activity rule from June 30, 2002, to June 30, 2004. During the 2003
Legislative session, the HRA lobbied to introduce a Bill to extend the five-year rule from June 30,
2004, to June 30, 2006. This proposed Bill would have allowed additional time to complete
redevelopment projects within the Downtown or TIF ] -22 District. However, the HRA with the
endorsement of the City and Chamber of Commerce was unsuccessful at getting the proposed Bill
introduced at the House Committee of the House of Representatives. Therefore, the City on behalf of
the HRA on June 14,2004, must authorize awarding the sale of Bonds to pay at maturity (July 1,
2004) the outstanding principal of and accrued interest on the Temporary Bonds.
. The HRA is open to review and work with Master's Fifth Avenue, Inc. on future redevelopment
Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-883] . (763) 295-2711. Fax: (763) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295-3] 70. Fax: (763) 271-3272
.
.
.
~r. Barry Fluth
June 14,2004
Page 2
projects. The creation of a new TIF District is an option providing the requirements for establishment
of a new district can be satisfied and the proposed project meets the redevelopment test.
Sincerely,
lIOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
6\k \<())OCSJ~
Ollie Koropchak
Executive Director
c:
Mayor Bruce Thielen
Administrator Wolfsteller
HRA Attorney Steve Bubul
HRA Chair Bill Fair
TIF District 1-22 Landmark Square Phase II File
.
QUICK TlF 7.0 lNJ'OICE
Thank you for ordering Quick TIF 7.0 Tax Increment Finance Reporting Software.
May 28, 2004
'J \ 2> . l{ ~ ~O ( > ~ 0'1 (
l.,"l-oL.f
~
Ollie Koropchak
City of Monticello
505 Walnut St.
Suite 1
Monticello, MN 55362
Cost Subtotal
1 Copy of Quick TIP 7.0 - Upgrade $250.00 $250.00
. Minnesota State Sales Tax (6.5%) $16.25
Subtotal Due $266.25
Total Paid $0.00
Total Due $266.25
.
Thank you for your prompt payment. Checks may be made payable to Ehlers &
Associates, Inc. and can be sent to:
Ehlers & Associates, Inc.
C/O Quick TIP 7.0
3060 Centre Pointe Drive
Roseville, Minnesota 55113
If you have any questions regarding this invoice, please contact Nikki McDonald at
651-697 -8518 or at nmcdonald(a),ehlers- inc.com.
e
EHLERS
& ASSOCIATES INC
.
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337~9300
Tax 10 No. 41-1225694
June 7, 2004
Statement No. 61759
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
Monticello, MN 55362
Through April 30, 2004
MN190-00111 Landmark Square Phase II (Masters Fifth Ave. Inc.)
1,134.00
.
Total Current Billing:
1,134.00
I declare, under penalty of law, that this
account, claim or demand is just and correct
and that no art of it has been paid.
ri~..( ~~'~,,~~ ~-~~~-...r-..""' ,
,'r-"- IILJ
. I~ JUN 1 4 2004 \\;..
. \
-~!r~:""--'r: f~,~':jC-ELtG J.
~--~-'._---
OK TO PAY? O\\\L
Code: ~ \ ~ ;. ~\ ~ S ~ ~ .~ ~ tJ Y'D
Initial ~
.
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
41-1225694
June 7, 2004
Invoice # 61759
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
MonticellO, MN 55362
MN190~00111
Landmark Square Phase II (Masters Fifth Ave. Inc.)
Through April 30, 2004
For All Legal Services As Follows: Hours Amount
4/1/2004 SJB Phone call with 0 Koropchak re Fluth requests 0.50 90.00
4/9/2004 SJB Phone call with 0 Koropchak; revise contract 0.75 135.00
4/13/2004 SJB Phone call with Ruff, Wolfsteller re timing for permanent 0.25 45.00
. bonds
4/14/2004 SJB Research TIF refunding schedule; research relo questions; 0.75 135.00
phone message from 0 Koropchak, B Johnson
4/15/2004 SJB Draft memo re: refunding bond proposals 1.75 315.00
4/19/2004 SJB Phone call with B Johnson re PA's, qualified costs 0.50 90.00
4/27/2004 SJB Phone call with B Johnson re purchase agreements 0.30 54.00
4/29/2004 SJB Phone call with 0 Koropchak, B Johnson re land 0.75 135.00
acquisition; review HRA minutes; revise contract
4/30/2004 SJB Finalize contract revisions; emails to/from 0 Koropchak re 0.75 135.00
same
Total Services: $ 1,134.00
Total Services and Disbursements: $
1,134.00
.