HRA Agenda 11-09-1998
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, November 9,1998 - 6:00 p.m.
City Hall
MEMBERS:
Chair Steve Andrews, Vice President Bob Murray, Brad Barger,
Darrin Lahr, and Dan Frie.
STAFF:
Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak,
and Recording Secretary Nancy Whalen.
COUNCIL LIAISON:
Brian Stumpf.
CONSULTANTS:
Rusty Fifield and Mark Ruff, Ehlers & Associates
Steve Bubul and Dan Greensweig, Kennedy & Graven
1. Call to Order.
2. Consideration to approve the October 14, 1998 HRA minutes.
3. Consideration of adding agenda items.
4.
Consideration to adopt a resolution awarding the sale of $7,425,000 Public Project
Revenue Bonds, Series 1998.
5. Consideration to accept or deny a counter-offer for purchase of the property located at
218 Front Street.
6. Consideration to hear a concept plan for redevelopment ofthe North Anchor area.
7. Consideration to authorize payment of monthly HRA bills.
8. Consideration of executive director's report.
9. Other Business.
10. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
WEDNESDAY, OCTOBER 14, 1998 - 7:00 P.M.
Members Present:
Chair Steve Andrews, Vice Chair Bob Murray, Brad Barger, Dan Frie, and
Darrin Lahr.
Council Liaison:
Brian Stumpf
Staff Present:
Rick Wolfsteller and Executive Director Ollie Koropchak.
Guest:
Mayor Bill Fair
1. Call to order.
Chair Steve Andrews called the meeting to order at 7:00 p.m.
2.
Consideration to approve the September 23, 1998, Special HRA minutes.
A MOTION WAS MADE BY BRAD BARGER AND SECONDED BY BOB
MURRA Y TO APPROVE THE MINUTES, AS WRITTEN, OF THE SPECIAL HRA
MEETING OF SEPTEMBER 23, 1998. Motion carried unanimously.
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Consideration of adding items to the agenda.
No agenda items added.
4. Consent agenda.
A. Consideration to approve a Subordination Agreement between the
HRA and Firstar Bank of Minnesota.
B. Consideration to ratify execution of the Partial Release of Purchase
And Development Contract and to authorize execution of the
Consent to Easement.
A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY DAN FRIE TO
ACCEPT THE CONSENT AGENDA. Voting in favor: Steve Andrews, Bob Murray,
Darrin Lahr and Dan Frie. Abstaining, Brad Barger. Motion carried.
5.
Consideration of items removed from the consent agenda for discussion.
None
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HRA Minutes - 10/14/98
6.
Consideration to adopt a resolution calling for the sale of the Revenue Bonds.
Ollie Koropchak, Executive Director, introduced Mark Ruff, Ehlers & Associates, to
cover this agenda item. Mr. Ruff explained that the additional $10,000 added to the
original request is the result of revised cost estimates of the bond issuance. The HRA
Lease Revenue Bonds are generally issued at a slightly lower rate than current G.O. rates.
Brad Barger asked how the Monticello Citizens Group's audit request could affect the
sale of the bonds. Mr. Ruff stated that hopefully the audit will be completed before the
bond sale. Construction bids are scheduled to be opened on October 29, 1998.
Rusty Fifield & Mark Ruff will attend the City Council Meeting on November 2, 1998.
At that meeting, the City Council will take action on the bids for the construction of
Community Center. Mr. Ruff suggested that the HRA also attend the November 2 City
Council meeting. The HRA must decide whether or not to proceed with the bond sale if
the audit has not been completed. Mr. Ruff stated that the state auditor has no
enforcement power; however, someone could bring action against the City. If legal
action is pending, it could mean the bonds would not have a tax-exempt status. Mr. Ruff
explained that the ripple effect of the audit could be tremendous.
Chair Andrews asked when the City might expect an answer from the auditor. Mr. Ruff
stated the auditor knows that the bids for the Community Center will be opened on
October 29, 1998. Also, that the sale of the bonds will be November 9, 1998.
Mr. Ruff stated the bidders on the bonds typically make their decision the day before the
sale of the bonds.
The first meeting with the auditors will be on Tuesday, October 20, 1998, and it is
unknown, at this time, what the audit agenda will be. Members of the City staff, state
auditor's office and the citizen's group will be present at the first meeting. Also, it was
stated that the petition for the audit will be a disclosure item on the sale of the bonds.
The date of the sale of the bonds stands.
Mr. Ruff stated that it is possible that someone could request a lawsuit to stop the sale of
the bonds. They would, however, have to post a bond to cover possible financial
damages the City would incur with the delay in issuing the bonds. If the bids received
are acceptable, the HRA can sell the bonds before the state auditor's report is completed.
However, Mr. Ruff stated the HRA might want to make their decision as to whether or
not to proceed with the sale of the bonds before the November 9 HRA meeting. If the
Council were to decide not to award the contract, then the HRA would recommend not to
proceed with the sale of the bonds.
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HRA Minutes - 10/14/98
Mayor Bill Fair stated that on November 2, the City Council will accept the bids and
decide whether to award the contract.
Brad Barger asked if the bids came in low, would the bond sale in turn be less. Mr. Ruff
stated that there are many add-on items and the City would possibly add from this list.
Mr. Barger also thought the original estimate for the HRA bond sale was $6,500,000 with
a project cap at $9.4 million. At that time, the small group had requested that the cost be
reduced $500,000. The question was asked as to why the City Hall square footage
increased as well as the cost.
Darrin Lahr inquired about the HRA' s bond rating. Mr. Ruff stated that the City has a lot
of overlapping debt; school, hospital and water treatment plant. This overlapping debt
affects the bond rating. Mr. Lahr voiced concern the overlapping could possibly affect
future bond sales. Mr. Ruff stated those bond ratings do affect the interest the City pays.
Mr. Ruff, also, stated that the rating agencies do not like rapid growth. They feel that too
fast a growth puts a burden on the City's services. Their rating will also look at what's
happening with the NSP Nuclear Plant. There could possibly be different ratings for each
bond issue.
Executive Director, Ollie Koropchak, stated that the HRA would have to call a special
meeting for November 2, 1998, if more than two members were going to be present.
A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DAN FRIE TO
APPROVE THE RESOLUTION PROVIDING FOR THE SALE OF $6,960,000
PUBLIC PROJECT REVENUE BONDS, SERIES 1998. Motion carried unanimously.
A special HRA meeting was set for November 9, 1998, at 6:00 p.m. to award the sale of
the bonds. Additionally, the HRA agreed to call a special HRA meeting of November 2,
1998, at 5 :00 p.m. in order to be present at the Council meeting for consideration to
award the construction bids for the community center as recommended by Mark Ruff.
7. Consideration of a response to the HRA offer for the property located at 218 Front Street
and authorization thereafter.
Executive Director Ollie Koropchak stated that a letter had been mailed to Ms. Otten on
September 8, 1998, at the HRA direction, offering a purchase price in the amount of
$81,000 with a three-year option at a non-refundable annual fee of$I,OOO, the sum of
which would not be applied to the purchase price. The purchase price would increase 4%
annually at the anniversary date of the option agreement.
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HRA Minutes - 10/14/98
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Deb Otten spoke on behalf of her brother, who owns the property, stating that she thought
the offer of $81 ,000 for the home was too low. She asked the HRA to consider $86,000
and the HRA purchase the property by January 1, 1999. The home is currently being
rented on a month-to-month lease and she will let the renters know the HRA's decision.
Bob Murray asked if the HRA were to give reasonable notice would they still have to pay
relocation costs. Ollie Koropchak stated that if the HRA has rental property, they have to
notify the owners/tenants regarding relocation benefits.
Steve Andrews asked whether or not the HRA would have to pay relocation costs if the
owner terminated the lease agreement. Executive Director Ollie Koropchak will check
with the City Attorney regarding relocation costs. Dan Frie inquired as to whether or not
the house has ever been on the market and Ms. Otten stated that it has not. However, an
investor has expressed an interest in the property. Brad Barger asked whether or not Ms.
Otten would consider a contract for deed. She stated that there are too many headaches
with renters. The option was a good thing, but the money is eaten up by insurance, taxes
and upkeep. Dan Frie asked if the HRA put more money upfront whether that would help
defray these costs.
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Again, Ms. Otten asked for a purchase price of$86,000. Darrin Lahr stated that if Ms.
Otten received a purchase price of $81,000 with an increase of 4% annually, the purchase
price would go up approximately $3,500 the first year. Mr. Frie suggested an amount of
$3,000 upfront and then no further upfront monies.
A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRIN LAHR TO
INCREASE THE BASE PRICE TO $84,000 WITH A ONE TIME UPFRONT FEE OF
$3,000. Bob Murray suggested that the HRA increase the annual option payment to
$2,000 of which $1,000 would be non-refundable and $1,000 would be applied to the
purchase price. DARRIN LAHR AMENDED THE MOTION OF DAN FRIE TO
INCLUDE A PURCHASE PRICE OF $81,000 WITH AN INCREASE ANNUAL
OPTION PAYMENT OF $2,000 OF WHICH $1,000 WOULD BE NON-
REFUNDABLE AND $1,000 WOULD BE APPLIED TO THE PURCHASE PRICE.
MOTION SECONDED BY BOB MURRAY. Motion carried unanimously.
Executive Director Ollie Koropchak will send Ms. Otten a letter stating the HRA current
ofTer.
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8.
HRA Minutes - 10/14/98
Consideration to reschedule the HRA regular meeting of November 11, 1998.
Ollie Koropchak explained that because the next regular HRA meeting of November 11,
1998, is also Veteran's Day, the HRA is asked to reschedule their regularly scheduled
meeting.
A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DAN FRIE TO
RESCHEDULE THE REGULAR HRA MEETING OF NOVEMBER 11 TO
NOVEMBER 9,1998, AT 6:00 P.M. Motion carried unanimously.
9. Consideration ofHRA Commissioners interest to attend the Minnesota NAHRO
Conference.
Brad Barger and Ollie Koropchak expressed an interest in attending the Minnesota
NAHRO.
10.
Consideration to authorize pavment of monthly HRA bills.
A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY BRAD
BARGER TO AUTHORIZE PAYMENT OF THE MONTHLY HRA BILLS AFTER
THE FINANCE DEPARTMENT HAS CHECKED TO INSURE THERE WERE NO
DUPLICATE BILLS.
11.
Consideration of Executive Director's Report.
Executive Director Ollie Koropchak went over the items of her report.
She stated that NSP sent a check in the amount of $8,000 to be applied to the cost of the
marketing brochure.
Ollie Koropchak stated that Ms. Barbara Schlief is interested in leasing the property at
3 Walnut Street as of December 1, 1998. Ms. Koropchak will check Ms. Schlief's
references. If everything checks out, she will proceed with leasing the property.
Darrin Lahr asked Ollie Koropchak to check on whether or not the HRA has spent the
1998 $35,000 from the City for downtown redevelopment.
12.
Consideration of committee reports
MCP - Steve Andrews reports that Ms. Teresa Washburn spoke to the MCP board and
stated that she felt the MCP should work with what the City has at this time and not
pursue a community identity at the present time.
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HRA Minutes - 10/14/98
Marketing - Darrin Lahr showed the HRA a draft copy of the marketing brochure stating
that the final brochure will be unveiled at the October 27, 1998, IDC Banquet. The HRA
was pleased with the draft copy of the brochure.
Executive Director Ollie Koropchak will inform Brad Johnson that the November 9th
meeting will be a short meeting and perhaps he should make his presentation to the Parks
Commission in November and come before the HRA at another time.
13. Other Business
None
14. Adjournment
A MOTION WAS MADE BY STEVE ANDREWS AND SECONDED BY BOB
MURRAY TO ADJOURN THE MEETING AT 8:30 P.M. Motion carried unanimously.
Steve Andrews, Chair HRA
Nancy C. Whalen, Recording Secretary
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HRA Agenda - 11-9-98
4.
Consideration to adopt a resolution awardine: the sale of $7.425.000 Public Proiect
Revenue Bonds. Series 1998.
A. REFERENCE AND BACKGROUND:
The HRA commissioners are being asked to adopt a resolution awarding the sale of
$7,425,000 Public Project Revenue Bonds, Series 1998, for the community center. The
said resolution is attachcd. Please read thc resolution carefully as it defines the agreed
upon actions ofthe HRA such as the lease and ground-lease agreements. HRA Attorneys
Steve Bubul and Dan Greensweig will be present to review the resolution and documents
as well as answcr questions. Additionally, a summary of the documents prepared by
Attorney Bruce Batterson of Kennedy & Graven is attached. Lastly, Financial
Consultants Rusty Fifield and Mark Ruff will be present to review the enclosed bond sale
and debt service information and answer questions.
The following is a recap of resolutions previously adopted by the HRA.
March 4, 1998
Adopted a resolution of official intent to reimburse expcnditures
for the armory project. Maximum principal amount was
$9,400,000. This provided the HRA with the flexibility to issue
bonds in an amount not-to-exceed $9,400,000.
October 14, 1998
Adopted a resolution providing for the sale of $6,960,000 Public
Project Revenue Bonds, Series 1998. Bond amount based on
estimates.
The Official Statemcnt dated October 29, 1998, which was delivered to you earlier noted
an (*) by the $6,960,000. This * denoted the Issuer reserves the right, after bids are
opened and prior to award, to increase the principal amount of the Bonds, etc.
On November 2, 1998, aftcr consideration of base construction bids received and the
alternatives, additions, and subtractions; the City Council approved a motion to accept
and award the community center construction bid to Donlar Contractors as identified
under Option 2 with the inclusion of the operable partition.
With the motion of the Council on November 2, the total project cost including issuance
cost is $10,199,000; thcrefore, the bond sale is $7,425,000. Other enclosed documents
will be revised accordingly prior to execution.
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HRA Agenda - 11-9-98
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B.
ALTERNATIVE ACTION:
1. A motion to adopt the resolution awarding the sale of $7,425,000 Public Project
Revenue Bonds, Series 1998.
2. A motion to deny adoption of the resolution awarding the sale of $7,425,000
Public Project Revenue Bonds, Series 1998.
3. A motion to adopt a resolution awarding the sale of the Public Project Revenue
Bonds, Series 1998, is the amount of
4. A motion to table any action.
C. RECOMMENDATION:
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The City Administrator and HRA Executive Director recommend Alternative No.1.
Alternative No.1 is consistent with the City Council's motion of November 2 and it
provides for the construction of a community center with multi-uses which will
accommodate the cross-section of age groups within our draw area. The selected
materials increase the community center's longevity and controls maintenance. The final
cost of the project compared to the original cost estimates is off-set by the decreased
interest rate on the bonds and other earlier assumptions resulting in a minimal change to
the debt service. The community center is consistent with the City's Comprehensive Plan
and is an implementation of a goal identified in the Downtown/Riverfront Revitalization
Plan. The community center will attract new residents and home-buyers creating an
economic spin-off to the retail, commercial, and industrial businesses.
D. SUPPORTING DATA:
Resolution for adoption and documents relating to bond sale.
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Nov-05-98 15:42 Kennedy&Graven/Batterson 402-791-3061
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Kell~edy
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BRUCE M. BA'I'l'I!..KSON
Attorney l\l Law
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November 5,1998
Olive Koropchak
Economic Development Director
City of Monticello
250 bast Broadway
Monticello, MN 55362
RE: $7,425,000 Housing and Redevelopment Authority in and for the City of
Monticello, M.ilUlcsota Public Project Revenue Bonds, Series 1998
Dear Ollie:
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Attached are the revised Resolutions for consideration by the HRA and the City COlUlcil
Monday evening, The increased principal amounts furnished by Ehlers have been inserted. TIle
remaining blanks are for the interest rates, to be filled in after the bids are received Monday.
The following is a brief description of the transaction and the operative documents. The
City will lease the land on which the Conununity Center is to be built to the HRA purswmt to a
Ground Lease. The HRA will lease the land and the facility back to the City pUT!>uant to a Leasc~
Purchase Agreenlent. Under the Lease, the City is responsible lor construction. operation and
maintenance of the Commwlity Center. Pursuant to a Trust Indenture between the HRA and Firstar
Bank of Minnesohl, N.A., a'i trustee (the "Trustec"), the BRA will issue the Bonds. 'the proceeds
of the Bonds wHl be ust:d to pay a portion of the cost of construction of the Project, and the Bonds
will be payable from Lease payments received from the City under the Lease, Pursuant to an
Assignment and Security Agreement, the HRA will assign 10 the Tll1stee all of the HRA's interest
in the Ground Lease, the Lease and the Lease Pa)1T1ents.
BecalL'ie the Bonds are payable solely from the City's Lease Payments, the HRA has no
obligation or liability on the Bonds. All of the HRA1srigbts and duties (other than the lIRA'5
rights to payment of expenses and indemnification') are transfclTcd to the Trustee in the lndentw-e
iUld the Assignment, and the Trustee is responsible for enforcement ofthe T .ease.
Ihe attachl!d resolutions are the final approvals requil'ed from the City COlmcil and the
HRA prior to issuing the Bonds. No public hearing is required.
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Nov-05-9B 15:42 Kennedy&Graven/Batterson 402-791-3061
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P.os
After due consideration of the proposals, Member
then introduced
and moved the adoption of the following written resolutionl the reading of which had been
dispensed with by wlaniInous consent:
RESOLUITONNO.
A RESOLUTlON A W ARDTNG THE SALE OF $7,425,000
PUBLIC PROJECT REVENUE BONDS, SERJES 1998
BE IT RESOLVED By the Housing and Redevelopment Authority Tn and For the City of
Monticello, Minnesota (the "Authority"), as foHows:
Scction 1.
Recitals,
1.01. The City of Monticello, Minnesota (ilie "City'') is authorized by Minnesota Statutes,
Section 465.71, as amended, to acquire rea! and personal property Wlderleasc-purchase agreements.
1.02. TIle AU1110rity ha.'1 agl'eed with the City that pursuant to a Ground Lease dated as of
December 1, 1998 (the "Ground Lease"), the Authority will acquire certain property from lhe City,
and the Authority wiUlease such property, together with the buildings, structures or improvements
now or hereafter located thereon, to the City pursuant to a Lease-Purchase Agreement dated as of
December J, 1998 (the "Lease").
1.03_ Pursuant to a TnlSt Indenture dated as of December t, 1998 (the "Indentw"e"),
between the Authority and Firstar Bank of Minnesota, N.A., Saint Paul" Minnesota, as trustee (the
"Trustcc"), the Authority will issuc its Public Pr~ject Revclluc Bonds, Series 1998 (the "Series
1998 Bonds") ill an aggregate principal amount of $7,425,000.
} ,04. Under the Indenture, proceeds of the Series 1998 Bonds will be llsed to pay costs of
acquisition, construction and equipping of the Facilities described in the Lease.
I.U5. Pursuant to an Assignment and Security Agreement dated as of December 1, 1998
(the "Assignment"), the Authority will assign to the Trustee all of the Authodty's right, title and
interest in and to the Ground Lease, 1he Lease and the Lease Payments to be made by the City
thereunder (other than certain rights to indemnification and payment of expenses) as security for the
Series 1998 Bonds,
1.06. Forms of the GrOWld Lease, the Lease, the Indenture, the Assigrunent, the Official
Statement for the Series 1998 Bonds and a Continuing Di!itclosure Agreement of the City dOled as
of December 1, 1998, have been prepared and submitted to the Authority and are on file with the
Autbority.
Section 2.
Sale of Series 1998 Bonds,
2.01. The proposal of _. ,_ (the "Purchaser") to
purchase the Scl'ies 1998 Bonds is hereby found and determined to be " reasonable offer and is
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Nov-OS-9B 15:43 Kgnnedy&Graven/Batterson 402-791-3061
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. hereby accepted, the proposal being to pW'Chase the Series 1998 Bonds at a price of $. .. .._ ...n_....
plus accrued interest to dale of delivery, tor Series 1998 Bonds bearing interest as follows;
Year or Interest Year of Interest
Maturity Rate Maturity ~
2000 2010
2001 2011
2002 2012
2003 2013
2004 2014
2005 2015
2006 2016
2007 2017
2008 2018
2009 2019
True interest cost: %
2.02. The Treasurer is directed to retain the good faith check of the Purchaser. pending
completion of the sale of the Series 1998 Bonds, and to deliver the good faith check to the Trustee
upon the issuance ofthe Series 1998 Bonds. The Aulhorily shall return the good faith check~ ofthe
unsuccessful proposers forthwith.
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2.03. The Authority will forthwith issue and sell the Series 1998 Bond'i in the total
principal amoWlt of $7,425,000, originally dated December 1, 1998, in the denomination of $5,000
each or any integral multiple thereot~ l1wl1bered No. R-l, upward, bearing interest as above set
forth, and which mature serially on February I, in the years and amOW'lts as follows (subject to
redemption and prior payment as set tenth in the Indenture):
.:tw 1\lnolJDJ Year Amount
2000 $180,000 2010 $365,000
2001 250,000 2011 385,000
2002 260,000 2012 400,000
2003 275,000 2013 420,000
2004 285,000 2014 440,000
2005 295,000 2015 460,000
2006 310.000 2016 485,000
2007 325,000 2017 510,000
2008 335,000 2018 535,000
2009 350,000 2019 560,000
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2.04. Execution. Authentication aud DclivcI)'. The Series 1998 Bonds, substantially in
the foml provided in the Indenture, will be prepared under the direction of the Authority starr and
executed on behalf of the Authority by the signatures of the Chair and one other oHicer of the
Authority, provided that all signatures may be printed. engraved or lithographed tacsimiles orlhe
originals. Notwithstanding such execution, a Series 1998 Bond will not be valid or obligatory for
allY purpose or entitled. to any security or benefit under this Resolution or the Indenture wlless and
until a certificate of authentication on the Seri.. ~ 998 Bond has been duly executed by the m<Ulual ~/ ~
Nov-05-9a 15:43 Kennedy&Graven/Batterson 402-791-3Q61
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. signature of an authorized representative of the Trustee. When the Series 1998 Bonds have been so
prepared, executcd and authenticated, thc Authority will delivcr the same to The Depository Trust
Company, New York, New York, on behalf of the Purchaser, upon payment of the purchasc price,
and the Purchaser is not obligated to see to the application afthe pw'Cl18SC price.
Section 3. Approval and Execution of Documents. The GroWld Lease, the Lease, the
Indenture, the Assigmnent ilnd the Continuing Disclosure Agreement described in Sectioll ] are
hereby approved. The Chair and one other officer of the Authority are authorized and directed to
execute and deliver the GrowId Lease, the Lease and the Indenture on behalf of the Authority,
substantially in the forms on file, but with all such changes therein as shall be approved by the
ofticors executing the same, which approval shall be conclusively evidenced by the execution
thereof. Copies of all of the transaction docwnellts shall be delivered, filed and recorded as
provided therein. The Chair and other officers of the Authority t\re also authorized and directed to
execute such other instruments as may be: required to give effect to the transactions herein
contemplated.
Section 4. Payment: Security; Pledl::!:es aud Covenants. The Sedes 1998 Bonds are
payable solely from tbe Lease Payments to be made by the City WIder the Lease and from other
moneys realized by the Trustee after default or termination of the Lease by the City as provided
therein. No property or funds of the Authority, other than the property pledged pursuant to thc
hIdenture and assigned to the Tnlstee pursuant to the Assignment, is pledged to the payment ofthc
Series 1998 Bonds.
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Section 5.
Authentication ofTranscriot: Issuance Costs.
5.01. The officers of the Authority are authorized and directed to prepare and fwnish to
the Purchaser and to the attorneys approving the Series 1998 Bonds, certificd copies of proceedings
and records of the Authority relating to the Series 1998 Bonds and such other certificates, affidavits
and transcripts as may be required to show the facts within thcir knowledge or as shown by the
book.s and records in their cLlSLndy and WIder their control, relating to the validity and marketability
ol"the Series 1998 Bonds and such instruments, including any heretofore fumished, may be deemed
representations of the Authority as to the facts stated thereill.
5.02. The preparation and distribution of the Official Statement prepared and circlllated in
connection with the issuance and sale of the Series 1998 Bonds is hereby approved.
5.03. The Authority authorizes the Purchaser to forward the antOlUlt of proceeds of the
Selies 1998 Bond" allocable to the paymcnt of issuance expenses (other than amounts payable to
KClUledy & Gravcn, Chartered as Bond COWlsel) to Resource Bank & Trust CompanYI
Minneapolis, Minne50ta on the closing datc for further distribution as directed by the Authority's
fmancial adviser, Eh.lers and Associates, Inc.
Section 6.
Tax. Covenants.
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6.01. 'llIe Authority covenants and agrees with the holders fTOm time to time of the Series
1998 Bonds that it will not take or permit to be taken by any of its officers, employees or agents allY
action which would Ca1L1e the interest on the Series 1998 Boncll\ to become subject to taxation WIder
the Internal Revenue Code of 1986. as amcnd4ed (the "Codo"), lIIld the Treasury Regulations ~ /S
Nov-05-9S 15:43 Kennedy&Graven/BattBrson 402-791-3061
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promulgated thereWlder, in effect at the time of such actions, and that it will take Uf cau.c;e its
officers, employees or agents to take, all affirmative action within its power that may he necessaIY
to ensure that such interest will not become subject to taxation under the Code and applicable
Treasury Regulations, as preseIltly existing or as hereaHer amended and made applicable Lo the
Series 1998 Bonds.
6.02. Tn order to qualitY the Series 1998 Donds as "qualified tax~exempt obligations"
within the meaning of Section 265(bX3) of the Code, the Authority makes the following factual
statements and representations:
(a) the Series 1998 Donds are not "privaLe activity honds" as defined in Section
141 of the Code;
(b) the Authority hereby designates the Series 1998 Bonds 8S "qualified tax-
exempt obligations" for purposes of Section 265(b)(3) of the Code;
(c) dle ccasonably anticipated amoWl\ of tax-exempt obligations (othcr than any
private activity bonds that are not qualified 501(cX3) bonds) which will be issued by the
Authority (and all subordinate entities uf the City) during calendar year 1998 will not
exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the Authority dwing
calendar year 1998 have been designated for purposes of Section 265(b X3) of the Code.
6.03. The Authority will use its best efforts to comply with any federal procedural
requirements which may apply in order to effectuate the designations made by this section.
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Nov-05-9B 15 to 44 KennBdy&GravBn/Batter,s.on 402-791-3061
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STATE OF MINNESOTA )
)
COUNTY OF WRIGHT ) S8.
)
CJTY OF MONTICELLO )
I, the wuicrsigned, being the duly qualified and acting Secretary of the Housing and
Redevelopment Authority In and For the City of Monticello, Minnesota, do hereby ccrti(y that T
have carefully compared tbe attached and f()Tegoing extract of minutes uf a
.. meeting
of the A uthol'ity held on Novernbt.."r 9. 1998 with the original minutes on file in my uffice and the
extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of
$7.425,000 Public Project Revenue Bonds, Series 1998 of the Authority.
WTTNESS My hand officially as sllch SecretaIy this _... day of December, 1998.
HOUSING AND REDEVELOPMENT AUTIIORITY
IN AND FOR THE CITY OF MONTICELLO,
MINNESOTA
Secretary
7
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Nov-05-9S 15:42 Ksnnsdy&Gravsn/Battgrson 402-791-3061
P.04
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Extraet of Minutes of Meeting
ofthe Housing and Redevelopment Authority In and For the
City of Monticello, Minnesota
Pursuant to due call and notice thereof, a .,.
meeting of the Housing and
Redevelopment Authority In and for the City of Monticello, Minnesota was duly held in the City
Hall in said City on Monday, November 9, 1998. commencing at
o'clock P.M.
lbe following members were present;
and the following were absent:
... '" II<
iii "'...
...
The Chair annowlced that the next order of business was consideration of the proposals
which had been received tor the purchase of the Authority's $7,425,000 Public Project Revenue
Bonds, Series 1998.
Ehlers & Associates, Tnc, presented a tabulation of the proposals which had been received in
the maMer specified in the Terms of Proposal of the Series 1998 Bonds. The proposals were as
follows:
1
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.....-- NOV 06 "98 10:34FlME'HLERS& FlSSOCIATES
.
EHLERS
C. ASSOCIATES INC
Memo
To:
Members of (he City Council
HRA Board of Conumssioners
Rusty Fifield/Mark Ruff
Sale of Bonds
November 6, 1998
From:
Subject:
Date:
This memo provides background information on the sale of bonds that will occur on Monday,
November 9.
1. Community Center Bonds
To accommodate the additional project costs approved by the City Council. the size of the
Community Center Bonds will increase to approximately $7,425,000, The final amount
will be set on Monday after we receive bids. We will strUcture the annual maturities to
achieve level annual debt service payments.
2.
Improvement Bonds
The sale of the Improvement Bonds has been postponed until the City Council meeting
on December 14. The delay is needed to make all of the proposed bond issues "bank
qualified" and achieve the lowest possible interest rates. The increase in the size of the
Community Center Bonds pushed the total eligible debt over the $10,000.000 calendar
year cap. The delay allows the Improvement Bonds to be dated January 1. 1999 and
count against the 1999 limit. The loss of bank qualified status could have increased
interest rates from 10 to 35 basis points,
3. Refundini Bonds
The refunding of the 1988 Water System Bonds will occur as planned.
4. Rating
Despite the increase in overall indebtedness. Moody's In"estors Service has confirmed
the City's existing "A3" rating. Moody's assigned a rating of "Baal '. to the Community
Center Bonds. reflecting the slight difference in security as lease revenue bonds. We are
"ery pleased with this result. It provides aslrong endorsement of the financial condition
of the City and of the local economy. We will have more information on the rating
review at the HRA and Council meetings.
3060 Centre Pointe Drive + Rosevllle, Minnesota 55113-1105
(651) 697-8506 + FAX (651) 697-8555
rusty@ehlers-;nc.com
Y/\\)
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BRA Agenda - 11/9/98
5.
Consideration to accept or deny a counter-offer for purchase of the prooerty located
at 218 Front Street.
A. REFERENCE AND BACKGROUND:
At the HRA meeting of October 14, 1998, the commissioners amended a motion to
include two counter-offer options. Options were subject to legal opinion on the
requirements of paying relocation benefits. Please read the attached letter to the seller
summarizing the lIRA's offer options.
Additionally and attached is a summary of the investment by the HRA over time based on
the two offer options. Perhaps, the HRA would be better of I accepting the cash buy-out
assuming a city loan with an interest rate of less than 4% thereby avoiding relocation
benefits. Attorney Greensweig will be present to answer questions relating to relocation
benefits.
The seller has submitted a written response to the HRA's two offer options accepting
Package A..
B. ALTERNATIVE ACTION:
1.
A motion ratifying the terms of Package A as outlined by theHRA and acceptable
to the seller, and authorizing legal counsel to prepare documents.
2. A motion ratifying the terms of Package B as outlined by the HRA and acceptable
to the seller, and authorizing legal counsel to prepare documents.
3. A motion accepting the cash buy-out at $86,000.
4. A motion to withdraw accepted offer as a result of the HRA requirements to pay
relocation benefits.
5. A motion to table any action.
C. RECOMMENDATION:
Recommendation is Alternative No.1 subject to legal opinion on relocation benefits. If
relocation benefits are required perhaps alternative nos. 3,4, or 5 should be considered.
D. SUPPORTING DATA:
Copy of October 23, 1998 letter summarizing HRA's two counter-ofler options and
summary ofHRA investment. Copy of submitted written response from seller.
3
Mrs. Deb Otten
7183 Cahill Avenue
Monticello, MN 55362
October 23, 1998
Re: Real estate property located at 218 Front Street.
Dear Deb:
Thank you for your telephone call of Wednesday. I did proceed to call and,check with the HRA
Commissioners for a clarification of the motion and amended motion. My apologies for misunderstanding
the amended motion. I understood the amended motion (counter-offer Package B) to mean a replacement of
the original motion (counter-offer Package A); however, the commissioners' amended motion was a counter-
offer including both Package A and Package B. Package B which includes an annual fee of$2,000 was
added to accommodate the seller's annual expenditure of taxes and insurance during the 3-year option. The
following is a recap of the offer and counter-offers as per the direction of the HRA commissioners.
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Purchase Price Option Fee
Purchase Price Increase
HRA
offer
9/2/98
$81,000
Seller counter- 10/14/98
offer
$86,000
HRA counter-offers:
Package A 10/14/98
$84,000
Package B
$81,000
10/14/98
.
3-year option.
Non-refundable
annual fee of $1,000.
Not applied to
purchase price.
4% annual increase
at anniversary date.
Cash buyout
1/1/1999.
3-year option.
Up-front $3,000
non-refundable fee.
Not applied to purchase
price.
4% almual increase
at anniversary date.
3-year option.
Annual fee 0[$2,000.
Annual fee disbursal of
$1,000 non-refundable
and $1,000 applied to
purchase price.
4% annual increase
at anniversary date.
~/\
MOnlicello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245. (612) 295-2711. Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (612) 295-3170 · Fax: (612) 27 t -3272
. Mrs. Otten
Page 2
October 23, 1998
The HRA counter-offers were subject to a legal opinion on the requirements of relocation benefits.
Should you have additional questions, please do not hesitate to call me at 271-3208. The next HRA meeting
is scheduled for 6:00 p.m. on November 9, 1998. If possible a response to the HRA counter-offers in \'iTiting
would be appreciated for distribution to the conunissioners on November 5. The HRA looks forward to
hearing from you and thanks you for your time. Deb, again, my apology.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
Q)~ \~(t\~~~
Ollie Koropchak
Executive Director
c: HRA File
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RECAP 218 FRONT STREET OFFER
Package A
$84,000 - 3-year option
Up-front $3,000 non-refundable fee.
Not applied to purchase price.
4% annual increase at anniversary date.
Price at anniversary date:
Year 1 - $87,360
Year 2 - $90,854.40
Year 3 - $94,488.58.
Package B
$81,000 - 3-year option
Annual fee of $2,000.
Annual fee disbursal of
$1,000 non-refundable and $1,000
applied to purchase price.
4% annual increase at anniversary
date.
Price at anniversary date:
Year 1 - $84,240
Year 2 - $87,609.60
Year 3 - $91,113.98 less applied fee of
$3,000 = $88,113.98.
The annual fee of $2,000 was to assist the
seller with upfront holding expenses oftaxes
and insurance, a concern of the seller.
Murray's point was long term over 3 years
better deal for seller. 1998 Taxes $821. 89.
Assesssments $369.21 delinquent utility bills
and compose fee.
The seller must terminate the month-to-mouth lease with the current tenant prior to an HRA
acquisition then no relocation benefits apply. Relocation benefits approximately or up to $20,000.
Is the HRA purchase option the same as an BRA acquisition?
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November 4, 1998
Debbie Otten
7183 Cahill Ave NE
Montice1lo,MN- -5.5.362
To the HRA for the City of Monticello:
Lamwriting tojnform-you-ofDl}'-deci!'lioato-accept YOUI-offeulfDctobeL14, 1998
regarding the real estate property at 218 Front Street.
Theatrer I ~-accep~is Pack<Jge A:--Purchaseprice--$&4,.000, .with a3 year..optipn and
an up-front $3,000 nOll- refundable fee, not to be applied to the purchase price, with a
pmchase-prire increase-ofA%annuall}'- on the-anniversary date of th.i.S-trans.,~ction.
Please have the HRA attorney prepare the documents and notify me.
Sinc.er~ly:
~~
Debbie M. Otten for Michael O'Connor, Owner .-
s/~
sorllmportant Definitions
Acquiring
Agency
Business
Displaced
Person
lJ\
,
\.f"'\
.......
This means an agency which has the
authority to acquire property by eminent
domain (condemnation).
Any lawful activity, with the exception of a
farm operation, conducted primarily for the
purchase, sale, lease, or rental of personal
or real property, or for the manufacture,
processing, or marketing of products,
commodities, or any other personal
property, or for the sale of services to the
public.
Any person (individual, family, corporation,
partnership, or association) who moves
from real property or moves personal
property from real property as a direct
result of the acquisition of the real property,
in whole or in part, or as the result of a
written notice from the agency to vacate the
real property needed for a project. In the
case of a partial acquisition, the agency.
shall determine if a person is displaced as a
direct result of the acquisition. Relocation
benefits will vary, depending on the type
and length of occupancy as discussed later.
As a displacee, you will be classified as:
o An owner occupant of a residential
property (includes mobile homes)
o A tenant occupant of a residential
property (includes mobile homes and
sleeping rooms)
o A business, farm, or nonprofit
organ ization.
1
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Any activity conducted solely o.marilY
for the production of one or more
agricultural products or commodities,
including timber, for sale or home use, and
customarily producing such products or
commodities in sufficient quantity to be
capable of contributing materially to the
operator's support.
Nonprofit A public or private entity that has
organization established its nonprofit status under
applicable federal or state law.
Farm
INTENT OF THIS BOOKLET
i
The relocation laws and regulations are
quite complex. This booklet is not meant
to discuss in detail the law and its
procedures. It is meant to give an
overview of the Federal and State
program. Please discuss all aspects of
your proposed relocation with your
displacing agency representative to
ensure your eligibility and prompt
reimbursement of claims. Always contact
your relocation advisor before you move
or finalize your plans.
2
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HRA Agenda - 11/9/98
6.
Consideration to hear a concept plan for redevelopment of the North Anchor area.
A. REFERENCE AND BACKGROUND.
This agenda item requires no action by the HRA. It is placed on the agenda in order for
you to hear the concept plan prepared for the North Anchor by Ron Erickson, KKE
Architects, Inc. for Brad Johnson of Lotus Realty Services. If time does not allow to hear
the presentation, the suggestion is to continue the HRA meeting thereby allowing all five
HRA commissioners to attend the Council meeting. Detailed drawings will be available
at the HRA and Council meeting.
Enclosed is a copy of a letter to Mr. Johnson following action by the Parks Commission
and prior to the Public Works Director requesting Council authorization to relocate the
lift station and sewer/water lines in the West Bridge Park.
4
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October 21, 1998
--
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t'Op)'
MONTICELLO
Mr. Brad Johnson
Lotus Realty Services
551 West 78th Street
P.O. Box 235
Chanhassen, MN 55317
Re: West Bridge Park Area Proposal
Dear Brad:
This is a letter to inform you of the Parks Commission deeision of October 15, 1998, and a
request for a presentation and the submittal of a detailed concept plan or proposal for
redevelopment ofthe West Bridge Park area at the HRA and City Council meetings of November
9, 1998.
The Parks Commissioners received a copy of your letter dated October 12, 1998 requesting
continued delay for implementation of the Parks Plan for West Bridge Park. The commissioners
elected to recommend that City Council move forward with redevelopment of West Bridge Park
per the Parks Plan and also recommended the Public Works Department proceed with relocation
ofthe lift station and water/sewer lines.
At the October 21 staff meeting for preparation of the October 26 City Council agenda, staff
recommended the Public Works Director delay requesting the Council to consider authorizing the
relocation of the lift station and water/sewer lines in West Bridge Park until the Council meeting
of November 9. This final delay to allow Lotus Realty Services to submit a detailed concept plan
or proposal for the said area to the Council.
The commissioners, council members, and staff support the Downtown/Riverfront Revitalization
Plan which encourages redevelopment of substandard parcels and revitalization of the downtown
and riverfront. The objectives are to increase pedestrian traffic and create a vibrant downtown
while increasing property values. Certainly, a restaurant, hotel, and apartment complex supports
the Revitalization Plan. Lastly, the public appears most interested in a family-style (Champ's like)
restaurant.
To assist you with your presentation and concept plan, the following are some questions being
raised: What is the best use for West Bridge Park? Is there an equal exchange ofland to preserve
parkland? Is West Bridge Park the best location for a downtown restaurant? What are other site
options for development of a restaurant? How does the mixed use development of a hotel, \0 / \
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245 . (612) 295-2711. Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (612) 295-3170. Fax: (612) 271-3272
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Mr. Johnson
October 21, 1998
Page 2
apartment complex, and restaurant affect Blocks 64,54,51,52, West Bridge Park, and Walnut
Street? What is the best realignment route for the water/sewer line and location of the lift station?
How does the mixed use development affect other public infrastructure such as streets, parks,
parking, as well as private property? Should the Council solicit request for proposals for
redevelopment of the West Bridge Park area? Has any developer put money on the table?
The intent of the deadline date is to allow the BRA and City Council to hear your detailed
concept or proposal for the West Bridge Park area, prior to City Council consideration to
authorize relocation of the lift station and water/sewer lines. Please keep in mind the November
9 meeting of the HRA is scheduled from 6:00 to 7:00 p.m. for consideration of awarding the bond
sale for the community center and entering into a lease agreement with the city; therefore, it is
important to keep the presentation short. All BRA members are adverse to the background for
redevelopment of the North Anchor area. The Council meeting begins at 7:00 p.m.
Should you have any questions, please do not hesitate to call me at 271-3208. Thank you for
your time and consideration.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
~~ ~",-~.D~
Ollie Koropchak
Executive Director
c:
Parks Commission
HRA
City Council
MCP
John Simola, Public Works
Rick Wolfsteller, Administrator
Jeff O'Neill, Assistant Administrator
\9/d-
5-98 03:39P Lotus Realty
, IJ..J HI.;IV lilY H.':./Y (lJ 11111; MI\l.1nll['l.1J;)
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7.
Consideration to authorize payment of monthlv HRA bills.
Recommendation is to authorize payment of monthly bills.
5
lIRA Agenda - 11/9/98
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Document, Number:
004614
Documen-r, Date: 10/26/88
Page:
J
Sold HOUSING AND REDEVELOPMENT
To: AUTHORITY IN AND FOR THE
CITY OF MONTICELLO MN
S11i.'p 'tvia.. :
Ship Date: 10/26/98
Due Date.: 11/05/98
Terms. ...: NET 10
It-em I.D./Liese.
3hjD
To:
Cus t I. D. . . . .: HDA
P.G. Number..:
P.O. Date....: 10~/26/98
.Job/Order No.:
3alespersor...:
Ordereci
'shipped
F'rice
t~ e t,
1(~,/22;/98
------~-~----------------~----------~~---------------------~~-----------------~
5375.. ()(i
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Unit,
.
DEMOLITION OF HOUSE ON 225 WEST
RIVER ST. MONTICELLO MN 55362
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Costs of Proposed HRA Lot Improvements
llim1
Tables - all concrete with 4 attached seats
66"x 66"x 2S"
Canvas Umbrellas, 7.5 ft diameter
Umbrella base stands
Park Benches - aluminum cast with red
wood slats, 6 ft long
Crushed granite with lime to cover lot
provided by Public Works
Split Rail Fence, two 20 ft sections
Rails
Line Posts
End posts
Flowers - annuals
Flower Planters - 6 triangular style
Provided by MCP
Bushes - arborvitae
Bush Planters - 10 gal ceramic
Potting Soil - 40 Ib bags
."-'~oi'<<~""<T~,..- -..
Hose (180'), spray nozzle & reel
Garbage Can - SO gal roll-away
Provided by Public Works
Labor - Set Up and Maintenance
Provided by Public Works and
MCP Volunteers
Total Cost.
, ... , ~. ,'~,
Unit Cost Quantity Total Cost Vl.?'l vllf"\ .SS
lo ,?.s. Q '0 A tt3
$ 549.00 4 $ 2,196.00 \ \ o. -
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115.00 4 460.00 ~ .")l", ~ g16 .
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25.00 4 100.00 'D.
249.00 2 498.00
7.49
8.00
7.79
8
2
4
59.92
16.00
31.16
2.50
60
150.00
24.99
2
49.98
39.99
2
79.98
3.99
16
63.36
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100.00
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KAY PARK-REC CORP. {/,\' \J^~ BC/~:#:
1301 PINE ST.-' """ s,;~ v - I ....
P.O. BOX 477 . c\\.J(!D:
JANESVILLE IA 50647-0477 0 V #:
WATS 800-553-2476 FAX 319-987-2900 P t
NONE
062909MN
rrCLO
000779~
07/27/98
DATE:
Sold To:MONTICELLO PARKS & REC DEPT
909 GOLF COURSE RD
MONTICELLO. MN 55362
Ship To:SAME
PO DATE SLS/DIST CUST PO#
DATE SHP. PRO #
CARR FOB
TERMS
===============================================================================
06/29/98 MNP/MNP 07/16/98 NONE EMBE FCTY NET/30
==================VERBAL GREG==================================================
ORDER SHIP DESCRIPTION ITEM # PRICE EXTENSION
===============================================================================
4 4
HUNTER GREEN
VINYL UMBRELLA
OT/UV
158.00
632.00
1
1
FREIGHT
FR/FREIGHT
15.55
15.55
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UNPAID BALANCES WILL ACCRUE A S/CHARGE OF 1 1/2% PER MONTH (18% PER ANNUM).
===============================================================================
NON-TAXABLE
647.55
TAXABLE
.00
SALES TAX
.00
FREIGHT
.00
DISC
.00
***> TOTAL
647.55
S a
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(\ ~ ct:Y DATE INVOICE NO.
~
8/26/98
8021
Flanagan
1 e s I
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BILL TO
Monticello Park & Recreation
250 E. Broadway
Box 1147
Monticello, MN 55362
SHIP TO
909 Golf Course Road
P.o. NO. TERMS REP SHIP DATE SHIP VIA
Greg Engle 20 DAYS NET MPD 8/18/98 American
ITEM DESCRIPTION QTY UNIT PRICE
100000251 Four Seat Table - vinyl clad top and seats - 4 489.00
J-Leg style frame in
green (275-4YV)
PROJECT
AMOUNT
1,956.00
100000381
Park Bench - 2-3/8" galvanized frame-
vinyl clad seat and back
(349-6GV)
2
240.00
480.00
Freight
Shipping Charges
Sales Tax, Minnesota
272.00
6.50%
272.00
158.34
~~
Total
$2,866.34
ar~aeC~de 2845 Hamline Avenue North · Suite 108 · Roseville · MN · 55113
651 Phone: 612.633.0123 · 1.800.328.3557 · Fax: 612.633.1515 · E-mail: FSaleslnc@aol.com
.
.
.
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1"j;<; '-\: \_??-:
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; CITY OF MONTICELLO
: po, BOX 1147
! MONTICELLO, MN 55362
',' 295.2711
OPENING
BAlA'-CE
P HMENTS
PE NAl TIE S
PRESORT
First Class Mail
U,s. POSTAGE
PAID
PERMIT 42
AOJUS T MENT S
PRESENT
PREVIOUS
CODE
AMOUNT
3830
3800
30
WR
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3.67 :
4. 89~LTN: 01 1 T F
~RA OF MONTICEL~
:PO BOX 1"14 7
MONTICELLO MN
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: ACCOUNT NO,
HAVE YOUR : NET AMOUNT
I AFTER TttlS DAlc
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1 1 /23/98 :. . ~MOU.NT PAlO I
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8.56
11/23/98
8.91
LEAF PICKUP IS OCT 31.
READING DATES
PREVIOUS 8/'j 8 /9 8
PRESENT 1 0/ 0 1 /9 8
ACCOUNT NO,
"J01-0043-00-00
NET AMOUNT
AFTER TH I S OAT E
PAY PAST DU E AMT.
98
PAST DUE AMOUNT
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HRA Agenda - 11/9/98
8.
Consideration of executive director's report.
a) 225 Front Street - Initially, this was planned as an agenda action item; however, with
the scheduled bond sale and North Anchor presentation combined with a less than one-
hour meeting, the HRA will consider action at the December meeting. The Carlson's
declined the City Council's right offlrst refusal; however, inquired to the use/rental of the
HRA garage. See attached letter.
b) 3 Walnut Street - After showing the Schliefhouse to the second interested party, they
decided not to rent. I'm proceeding to contact the last interested party prior to advertising
in the local newspaper. Enclosed is an estimate for repairs of the structure from Rolfe
McAfee per the assessment made by the Building Official. Mark Theisen and/or the
Public Works Department offered to repair the roof, not re-shingle, for a cost less than
$500 plus costs for other minor repairs. They can begin work Tuesday, November 10.
Unless the HRA disagrees, I'll authorize the Public Works to do the repairs.
c) 225 West River Street - Note the Hawkins house is gone. The Parks Department
sccded thc parcel and the demolition contractor's invoice is authorized for payment.
d) Housing Project- Developer Larson requested to be on the HRA agenda for a concept
presentation for redevelopment of the Klucas property on the west end of town. Hc was
deferred to the December meeting.
e) Minnesota and 6 Street - I ran TIF estimates for a developer interested in the
redevelopment of this area for the construction of 10 owner-occupied town homes. With
the cost to acquire the properties, TIF assistance, and value of new town homes, the
project still did not cashflow. Interestingly, the area does not qualify for a redevelopment
district therefore a housing district was proposed.
f) Private Redevelopment Contracts - Enclosed are letters to two redevelopers as a
reminder of the terms and conditions ofthe contracts.
g) For your information, the Council reduced the HRA request for $75,000 Industrial
Reservc Fund to $25,000 for budget year 1999. The marketing budget under economic
development is $35,000.
h) Industrial Brochure - Enclosed is the new industrial brochure. Please assist us in
marketing Monticello as a place for industrial development. Please refer leads to my
office. Brochures are being mailed on a monthly basis.
i) Industrial Leads - A couple of good leads have materialized. No commitments.
6
Il."..:.'.~'......,..
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f"
v
;
Relocation
Date
..;,.1;
-~"~I~
ii ,iT "
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Skillet Jun 98
Hallmark
H&R Block
Wright Way
Small Tenants
Companion Pets $3,000
Renaissance West $3,000
Monticello Optical $3,000
Northstar Capital $5,000
Barbara Lee's Dance $3.000
W eight Watchers $200
!
..
~
3
i
I
'!I
!lj
Demolition
JJ\.1E June 98
(grading. utilities)
.
Site Improvements
..
i
I
Parking lot
Site light
Soil Test
Landscaping
TOTALS
~
.
BBF Properties, Inc.
TIP Accountable Expenditures
Not-to-exceed $500,000
BBF
Wilson
$293.000.00 $ 75,859.36
$ 47,468.28 $ 47,468.25
$ 24,696.39 $ 24,696.39
$ 23.218.98 $ 23,218.98
$ 17,200.00 $ 17,200.00
$156,957.00 $156,957.00
$100,000.00
$ 36,000.00
$ 1.600.00
$ 17,000.00
$562,540.65 $500,000.00 $476,507.47 $153,730.41
Rank
BRA
$283,000.00 $ 75,859.36
$ 13,233.09 $ 13,233.09
$ 24,696.39 $ 24,218.98
$138,377.99 $ 23,218.98
$ 17.200.00 $ 17.200.00
~.<;
.
.
--
A October 19, 1998
1L( COP}'
MONTICELLO
Mr. Paul Ederer
Allied Companies
20600 County Road 81
Rogers, MN 55374
Re: Private Redevelopment Contract.between Allied Companies, LLC and the HRA
Dear Paul:
This is a letter of concern relating to the Private Redevelopment Contract between Allied Companies, LLC
and the Monticello HRA dated June 3, 1998. The Office of the HRA received a fax. from Steve Krenz,
Midwest Graphics, on October 6, 1998 relating to hiring often new employees. We share in the excitement
of hiring ten new employees; however, our concern is the starting pay of$8.00 per hour.
Per the Contract, ARTICLE III, Acquisition ofPropert;y: Site Improvements: Financial Assistance Section
3.7. Job and Wa~e Covenants. (a), the developer agreed to pay an hourly wage of at least $8.24, exclusive of
benefits. Section 3.7 (b) further states that during the life of the contract at least 90% of the jobs must pay a
rate equal to or greater than the 160% of the federal minimum wage for individuals over the age of20.
Today's federal minimum wage is $5.15. The HRA's concern lies with the non-compliance clause: If the
developer fails to comply with any of the terms of Section 3. 7(b), the developer shall repay to the HRA any
payments made by the HRA to the developer pursuant to the agreement. The hope of the HRA is by raising
the concern early the potential non-compliance issue is resolved and prevented.
Section 3.7 (b) was approved in the 1998 regular legislative session and became effective for tax. increment
financing districts requesting certification after April 30, 1998. This was the resolution to the "Green
Acres" issue.
Again, Paul, this letter is intended to raise the concern early in order to remedy the situation and prevent non-
compliance of the contract. Should you have any questions, please do not hesitate to call me at 271-3208.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
CJ~ \~d'\~
q ~-
Ollie Koropchak
Executive Director
c: Steve Krenz, Midwest Graphics
TIF District No. 1~23 File
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245. (612) 295-2711 · Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (612) 295-3170. Fax: (612) 271-3272
I
"'. , '.
'<C'
October 20, 1998
~
MONTICELLO
Mr. Barry Fluth
BBF Properties
19577 180th Avenue
Big Lake, MN 55309
Re: Private Redevelopment Contract between BBF Properties and the Monticello HRA
Dear Barry:
The intent of this letter is a reminder of the necd for BBF Properties to submit to the HRA written evidence
that BBF Properties has paid public redevelopment costs in at least the principal amount of $500,000 in
order for the HRA to deliver the $500,000 Taxable Tax Increment Revenue Note. The Note to be delivered
in accordance to certain Private Redevelopment Contract between BBF Properties and the Monticello HRA
dated March 20, 1998. Please refer to ARTICLE III, Public Redevelopment Costs, page 7 of the Contract.
.
Enclosed is an accountability of the public redevelopment costs and the amount paid and satisfactory to the
HRA ($153,730.41) as of October 20, 1998. The four columns represent relocation and demolition costs
submitted by BBF to Dan Wilson, Wilson acceptance of eligible TIF relocation and demolition costs,
disbursement of funds by lender, and HRA acceptance of paid and eligible relocation costs. I did contact
Barb Kennedy at US Bank, St. Cloud, a few days ago for an update of disbursements relating to the eligible
public redevelopment costs.
You will note, the Note shall bear interest at a rate of 7.5% from the date of delivery of the Note. The HRA
will deliver the Note upon BBF Properties submitting to the HRA satisfactory written evidence that BBF
Properties has paid public redevelopment costs in at least the principal amount of $500,000 in accordance to
the Contract.
Should you have any questions, please do not hesitate to call me at 271~3208.
Sincerely,
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
(C)~ K ()\ ~ ~..9 ~
Ollie Koropchak
Executive Director
Enclosures
.
c:
Brad Larson, Attorney
Steve Bubul, HRA Attorney
TIF District No. 1~22 File
~ ~.
Monticello City Hall, 250 E. Broadway, PO Box 1147, Monticello, MN 55362-9245. (612) 295-2711 · Fax: (612) 295-4404
Office of Public Works, 909 Golf Course Rd., Monticello, MN 55362 . (612) 295-3170. Fax: (612) 271-3272
NOV- 5-98 THU 11: 16 AM TWIN CITY HARDWARE
FAX NO. 612 535 2005
P. 2
. ESTIMATE .
11-5..98
ROLFE McAFEE
PO BOX 551
MONTICELLO MN 55362
612-295-5053 HOME PHONE
f 612-535-4660 8AM-5PM M-F
612-535-2005 FAX
THIS ESTIMATE IS FORTHE LIST OF JOSS GIVEN FORTHE HOUSE ON 3 WALNUT STREET BY OLLIE K. BID ASSUMES
HRA WILL PAY FOR BUILDING PERMIT. ALL DISPOSAL AND HAULING Of ROOFTEAR OFF DEBRIS IS INCLUDED IN BID.
BATHROOM:
RECAULKTUB, REFIT DOOR AND REPLACE LOCK $80.00
ADVISE If NEW TOILET SEAT REQUIRED. OLD ONE IS CRACKED. NO BID FOR THIS ITEM INCLUDED.
. UPSTAIRS NORTH BEDROOM/HALL: .
REPLACE LIGHT FIXTURE IN NORTH BEDROOM, REPAIR/REPLACE FIXTURE IN HALL $55.00
SMOkE OETECfORS:
INSTALL 5 DETEGORS TO MEET CODE. 3 UPSTAIRS, 1 lIVING ROOM, 1 BASEMENT. $100,00
FIRST FLOOR:
REPAIR/REPLACE CLOSET CEILING. REPLACE INSULATION. $200.00
REPAIR/REPLACE DAMAGED EAST PORCH CEILING AND WALL PANELS, MOULDINGS. 5225.00
BASEMENT:
REMOVE AND DISPOSE OF CRAWL. SPACE DEBRIS, DISMANTLE & REMOVE OLD FURNACE,
FURNACE PARTS. S 120.00
GARAGE:
REMOVE AND DISPOSE OF OIL BURNER. CHIMNEYTO REMAIN. $80.00
TREE BRANCH:
REMOVE AND DISPOSE OF HANGING TREE BRANCH ON soUTH WEST CORN!:R OF LOT. $75.00
ROOFING:
RE-ROOF 1/2 OF GARAGE ROOF OVER EXISTING (NO TEAR OFF). REPAIR SHINGLES NW CORNER
OF HOUS~ ROOF, REPLACE BROKEN ROOF\FASCIA BOARDS, SHINGLES SW SIDE Of WEST ROOf PEAK. -1.1..J..2M9.
. TOTAL BID: $2,095.00 .
~ '0.
.
.
.
JOHNSON, LARSON, & PETERSON, P.A.
ATTORN YS AT LAW
.
JAN C. LARSON+
JOHN T. PETERSON+
JUHL S. HALVORSON
CINDI S. MATT
+Real Property Law Specialist
Certified by Minnesota State Bar Association
October 29, 1998
Ms. Ollie Koropchak
City of Monticello
P.O. Box 1147
250 East Broadway
Monticello, MN 55362
Re: Richard and Marion Carlson Property/Purchase Agreement
Dear Ms. Koropchak:
My clients have contacted me concerning the offer extended by the City during the City
Counsel's October meeting, offering to pay the sum of$500.00 to the Carlsons for a Right of
First Refusal on the property. My clients appreciate the offer, but decline to accept same at this
point in time. Based upon attorney's fees they have incurred to date, coupled with future
attorney's fees in the review and examination of any Right of First Refusal Agreement, when
compared to the $500.00 sum offered by the City, it would not be cost effective to them at this
time to accept such an offer.
.
My clients have also asked me to follow-up on an offer made by the City during formal
discussions occurring in October of 1997. At that time, the City had offered the Carlsons the use
of the City garages located across the street from their property. The Carlsons would like to
pursue this matter further, and discuss the use/rental of the City garages for the purpose of storing
additional property that they have which was previously stored in their garage, which as you are
aware, they no longer have. For the purpose of discussing use and rental by the Carl sons of the
City's garages located across from their property, I would ask that you contact the Carl sons
directly. However, any further discussions relating to the purchase of the Carlson property
should remain directed to this office. Thank you.
May I remain,
.
~
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