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City Council Agenda Packet 03-10-1997MINUI'F.S REGULAR MEETING - MONTICELLO CITY COUNCIL Monday, February 24, 1997 - 7 p.m. Members Present: Bill Fair, Roger Carlson, Bruce Thielen, Clint Herbst, Brian Stumpf Members Absent: None Ia1 1 • 1' l'L 1' 1 1 � J A MOTION WAS MADE BY BRIAN STUMPF AND SECONDED BY ROGER CARLSON TO APPROVE THE MINUTES OF THE REGULAR MEETING HELD JANUARY 27, 1997,AS WRITTEN. Motion carried unanimously. A MOTION WAS MADE BY CLINT HERBST AND SECONDED BY BRIAN STUMPF TO APPROVE THE MINUTES OF THE REGULAR MEETING HELD FEBRUARY 10, 1997, AS WRITTEN. Motion carried unanimously. 3. Consideration ofadefing it man thp. agenda. A. Mayor Fair requested that the purchase of marketing items using the city logo bo discussed at the end of the meeting. B. Mayor Fair requested that the number of available liquor licenses be discussed at the end of the meeting. 4. C167.enA oo m njW i io R. re 1 s n, and comp win a. None. 5. Vnn�Ront na n r+, Mayor Fair roquested that item SD be removed from the consent agenda for discussion, A. (_:o aid rn inn of n resolution nutho zin r�'gsunnee of •,o. Rev nun Bond Pirrclhnae Amr m nt and Loan Ag=m n . and h Public Fn 'li i a Authori-y• t1N{NTP lonn. Recommendation: Adopt a resolution authorizing tho issuance of G.O. Revenue Bond Purchase Agreement and loan Agreement with Public Facilities Authority for the wastewater treatment plant expansion. SEE RESOLUTION 974. Page 1 (D Council Minutes - 2/24/97 B. Consideration of waiving statutoa li hili y limits for City insurance. renewals. Recommendation: Do not waive the monetary limits on tort liability established by Minnesota Statute 466-04- C. Consideration of confirming da for nn al Board of Heyiew m&eLjjW.- Wright County Assessor. Recommendation: Confirm the Board of Review date as May 6, 1997, at 7 p.m. D. Consideration of adopting n resolution Auppgrting the formation of a coition of cities to monitor utility tax reform iss + s nd preparation of statistic i data. Removed from the consent agenda for discussion. E. Cnnssideration of appointment to HRA Commission. Recommendation: Approve appointment of Dan Frie to the HRA effective immediately, with term expiration date of December 1998. F. Consideration of amendments to b +il brig permit. moratorium which Wnnld allow maintenance activities not exceeding 25'% of mnrket yAu. Recommendation: Adopt a resolution updating the interim ordinance establishing a moratorium on issuance of building permits pending completion of a redevelopment study and associated zoning code amendment by adding a provision which allows maintenance activities not exceeding 25% of market value. SEE RESOLUTION 97-5. G. Consideration of Parks .o missioner aPDOi ntment., Recommendation: Approve appointment of Rick Traver to the Parks Commission effective immediately, with term expiration date of December 1998. Co sid ra .ien of nutho 'v+tion to issue n huild*Ql;4Wj3UjLj0j& Downtown Redevelopment Aren for the addition of no yntry v taffi le and interior remodplincy nt TD9 Telecom, 416 Pine Street. Monti 11% Minnesota. Recommendation: Approve issuance of a building permit to TDS Telecom for a 70 sq ft addition at 316 Pine Street based on the finding that the proposed development will not impact the City's ability to implement redevelopment plans. Consideration of ordering fengibility study for development of d path. wnv ssgmen and reconstruction of Meadow Oak pnthways. Recommendation: Authorize preparation of feasibility study for construction of a pathway connecting Ellison Park to Mississippi Drive, a pathway along County Road 118 connecting the Middle School with CSAH 75, a pathway connecting the Meadow Oak area to the Pago 2 2 Council Minutes - 2/24/97 school campus area, a pathway connecting the Meadow Oak/Briar Oakes/Oak Ridge area to the Middle School, and reconstruction of pathways in the Meadow Oak area. 6D. t •ovirideration of adont_ng a resolution RuRaorting the formation of a coalition of cit; g to monitor utility tax reform issues and preparation of g a is i 1 data. City Administrator Rick Wolfsteller reported that he has attended a number of meetings regarding tax legislation proposed by NSP and other investor-owned utilities attempting to eliminate electric generating facilities from paying personal property tax. A number of communities rely heavily on utility companies' personal property tax in calculating their overall value. In Monticello's case, if the entire personal property owned by NSP was no longer taxable, the City would lose approximately 57'% of its overall city base. Wolfsteller explained that although a replacement type of revenue would likely be proposed, many questions remain unanswered with no guarantee of revenue replacement for those cities affected. Future ramifications of the decreased tax base include downgrading of the City's bond rating, which would make borrowing more costly in the future, and the loss of future ability to raise taxes for any general purpose. In order to protect cities interests, the coalition group requested that each individual city adopt a resolution agreeing to participate in the coalition to oppose and monitor legislation in the future. In addition, the group recommended that the law firm of Flaherty and Koebele, a St. Paul lobbyist group, be retained at a cost of up to $2,000 per city. Mayor Fair requested that this item be tabled to the next Council meeting pending the outcome of meetings scheduled for February 26 and February 27. He preferred that the City obtain additional information and inform NSP of their concerns before taking an adversarial position. Wolfsteller noted that a two-week delay in joining the coalition probably wouldn't cause any problem; however, NSP continues to lobby and pursue the legislation at this time. After discussion, it was the consensus of Council to table adoption of the resolution joining the coalition until the March 10 Council meeting. Page 3 O Council Minutes - 2/24/97 Assistant Administrator Jeff O'Neill reported that the Planning Commission conducted a public hearing regarding the preliminary plat of 10ein Farms Phase III residential subdivision and recommended approval contingent on changes identified by the City Planner and Planning Commission. It was also recommended that final street and sidewalk design requirements should be subject to potential street design modifications that will be reviewed on March 10. Planner Steve Grittman explained that a number of revisions had been made to the preliminary plat from staff reports and Planning Commission review. It was recommended that east/west pedestrian access to the park be created by installing a pathway along the south side of School Boulevard. In addition, Planning Commission recommended that pathways or sidewalks be installed on both sides of Country Lane and Farmstead Drive; however, the developer requested that sidewalks be installed on one side of each street. It was noted that pedestrian traffic from the subdivision can use local roads to important destination points without the need for the sidewalk on School Boulevard. AFTER DISCUSSION, A MOTION WAS MADE BY CLINT HERBST AND SECONDED BY BILL FAIR TO ELIMINATE THE REQUIREMENT OF PROVIDING SIDEWALKS ALONG THE SOUTH SIDE OF SCHOOL BOULEVARD. AFTER FURTHER DISCUSSION, CLINT HERBST AMENDED HIS MOTION TO STATE THAT A PATHWAY IS TO BE EXTENDED FROM FROM FARMSTEAD DRIVE TO FALLON AVENUE. Amendment to the motion was seconded by Brian Stumpf and carried unanimously. Council then discussed the landscape plan. Developer Tony Emmerich stated that he would abide by the existing zoning ordinance, which requires planting two trees per frontage. Councilmember Thiolen stated that he would like to see the developer work with the Parks Commission. Assistant Administrator O'Neill noted that the Parks Commission could use a portion of the shade tree program budget for this purpose.. City Engineer Weisel requested that Council also require the developer to extend the lot linea through the pond on the west side of the plat. Pago 4 O Council Minutes - 2/24/97 AFTER DISCUSSION, A MOTION WAS MADE BY BRIAN STUMPF AND SECONDED BY BRUCE THIELEN TO DELAY MAKING A DECISION ON SIDEWALKS ALONG COUNTRY LANE AND FARMSTEAD DRIVE AND THE LANDSCAPE PLAN FOR THE DEVELOPMENT UNTIL CONSIDERATION OF THE FINAL PLAT. MOTION INCLUDED APPROVAL OF THE PRELIMINARY PLAT SUBJECT TO THE FOLLOWING CONDITIONS: A. A PATHWAY IS TO BE PROVIDED ALONG THE SOUTH SIDE OF SCHOOL BOULEVARD FROM FARMSTEAD DRIVE TO FALLON AVENUE. B. THE POND WHICH LIES WITHIN THE PARK 1S DESIGNED AND CONFIGURED TO ALLOW PEDESTRIAN PASSAGE BETWEEN SUCH POND AND THE ADJACENT RESIDENTIAL LOTS WHICH LIE TO THE WEST. C. THE PARKS COMMISSION TO PROVIDE A RECOMMENDATION AS TO THE REMOVAL OR ADAPTATION OF EXISTING STRUCTURES WHICH LIE WITHIN THE DESIGNATED PARK AREA. D. TO THE EXTENT POSSIBLE, ALL SIGNIFICANT TREES (AS DETERMINED BY THE CITY) ARE PRESERVED. E. THE SUBMITTED GRADING AND EROSION CONTROL PLAN IS SUBJECT TO REVIEW AND APPROVAL BY THE CITY RNGINEER F. THE SUBMITTED UTILITY PLAN IS SUBJECT TO REVIEW AND APPROVAL BY THE CITY ENGINEER. G. LOT LINES ON THE WEST SIDE OF THE PLAT SHALL BE EXTENDED THROUGH THE PONDING AREA. H. 6 -FT CONCRETE SIDEWALKS FOR COUNTRY LANE AND FARMSTEAD DRIVE WILL BE DETERMINED AT FINAL PLAT APPROVAL. 1. THE LANDSCAPE PLAN, WHICH SPECIFIES REAR YARD LANDSCAPING SCREENING METHODS ALONG SCHOOL BOULEVARD AND OAKWOOD DRIVE, WILL BE CONSIDERED AT FINAL PLAT APPROVAL. THE PLAN SHOULD COMBINE THE STANDARD LANDSCAPING REQUIREMENT FOR DOUBLE - FRONTING LOTS WITH THE BOULEVARD PLANTING PROGRAM AS ESTABLISHED BY THE PARKS COMMISSION. Motion carried unanimously. Page 6 (D Council Minutes - 2/24197 Planner Steve Grittman reported that the current process for zoning variances provides for final decision by the Planning Commission unless appealed, in which case the variance would then he considered by the City Council. The proposed ordinance amendment would streamline the procedure by requiring that Planning Commission conduct the public hearings and then make a recommendation to the City Council for final approval. It was staffs view that the process would be easier to explain to applicants under the proposed ordinance amendment and would not result in additional unnecessary discussions by the Council because the variance requests would be submitted under the consent agenda. Councilmember Herbst noted that the change might reduce the perceived authority of the Planning Commission, and the benefits of streamlining the process did not offset this potential effect. Therefore, he believed that the ordinance should remain as written. AFTER DISCUSSION, A MOTION WAS MADE BY CLINT HERBST AND SECONDED BY ROGER CARLSON TO DENY THE ORDINANCE AMENDMENT GOVERNING THE VARIANCE PROCESS. Voting in favor: Clint Herbst, Roger Carlson, Bruce Thiclen, Bill Fair. Opposed: Brian Stumpf. It was Stumpf's view that Council should support efforts to streamline procedures where possible. Motion carried. Economic Development Director 011ie Koropchak reviewed the year-end EDA financial statements, activity report, and 1997 proposed budget, which were approved by the EDA at their February 11 meeting. Koropchak noted that the GMEF fund balance at the end of 1996 was $942,170.58. The GMEF 1997 cash flow projections were estimated Pt total receipts of $282,040.84, for a total beginning balance and receipts of $557,369.01, and expenditures were estimated at $226,080. The expected cash balance for December 1997 was estimated at $331,289.01. A MOTION WAS MADE BY BRIAN STUMPF AND SECONDED BY CLINT HERBST TO ACCEPT THE EDA BALANCE SIIEET; STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES 1N FUND BALANCE; 1997 CASH FLOW PROJECTIONS; AND THE ANNUAL ACTIVITY REPORT AS PRESENTED. Motion carried unanimously. Page 6 0 Council Minutes - 2/24/97 C10. Consideration to review year-end find b lanrna of UDA . and S ..R . fiinda, Economic Development Director 011ie Koropchak reviewed the year-end financial report for the Urban Development Action Grant (UDAG), which was a federal grant to the City of Monticello for a loan to Fulfillment Systems, Inc. The principal and interest payback began in 1988 and will end in 2000. Revenues were reported at $296,396.12, with expenditures of $227,500, for a fund balance of $68,896.12. Koropchak also reviewed the year-end financial report of the Small Cities Economic Recovery Grant (SCERG), which was a state grant to the City for a loan to the Aroplax Corporation. The principal and interest payback began in 1992 and will end in 1999. Revenues were reported at $129,483.04, with $0 expenditures, for a fund balance of $129,483.04. No action was required by Council. 11. Consideration .. to purchnigo. a yphielp forag city t Chief Building Official Fred Patch requested Council consideration of the purchase of a vehicle for the building department for which $14,000 was included in the 1997 budget. Three quotes were received for used Dodge Caravans ranging from $12,850 to $14,890. Patch noted that Ninety -Four Services, Inc., of Monticello had the best vehicle for the price quoted at $13,100. Councilmember Bruce Thielen noted that the City could purchase a new vehicle through the state contract for an additional $4,000. It was his recommendation that the City authorize purchase of a now van with all the warranties rather than a used vehicle. AFTER DISCUSSION, A MOTION WAS MADE BY BRUCE THIELEN AND SECONDED BY ROGER CARLSON TO AUTHORIZE FRED PATCH TO PURCHASE A NEW 1997 VAN THROUGH THE STATE CONTRACT AT A COST NOT TO EXCEED 819,000. Motion carried unanimously. 12. ['nn; iderntion of rhanfrn nrA r ho icy for wastewater t II mont plant proi . Public Works Director John Simola noted that one of the delay -causing issues identified during the wastewater treatment plant partnering workshop was timely approval of key change orders. Because the schedule for the Page 7 ?/ Council Minutes - 2124/97 treatment plant is extremely tight, Simola requested that Council approve a policy to handle change orders which could cause delays in the project if held for approval at a Council meeting. The proposed policy would authorize the City Administrator and Public Works Director to approve individual change orders costing $10,000 or less with a maximum cumulative amount of $50,000 when bringing such change orders to Council would cause a delay. In all other instances, change orders would be authorized by the Council. AFTER DISCUSSION, A MOTION WAS MADE BY BRIAN STUMPF AND SECONDED BY BRUCE THIELEN TO ADOPT A RESOLUTION APPROVING THE CHANGE ORDER POLICY AS PROPOSED FOR THE WASTEWATER TREATMENT PLANT EXPANSION PROJECT. Motion carried unanimously. SEE RESOLUTION 97-6. 11: 11 I f IL �4'. 1 11'1.11'1 1. VI• :M 1 Public Works Director John Simola reported that City staff, HDR, PSG, and Adolfson & Peterson and their subcontractors recently attended a two-day partnering workshop to further the development of a team approach to construction of the treatment plant. While cost-saving measures do appear occasionally in projects, the majority of change orders involve additional costs. He noted that many "metro" projects have used construction incentive change proposals to assist in lowering the project's cost to stay within budget. This allows for savings being split 50/50 between the City and the contractor when a specific cost-saving measure less than $100,000 originates from a contractor and is approved by all parties. Any changes resulting in a total savings of more than $100,000 would be negotiated individually. It was proposed by the Monticello wastewater treatment plant partnering team that the City Council consider adding an amendment to A & P's contract to include construction incentive change proposals. A MOTION WAS MADE BY ROGER CARLSON AND SECONDED BY CLINT HERBST TO APPROVE AN AMENDMENT TO ADOLFSON & PETERSON'S CONTRACT ADDING THE CONSTRUCTION INCENTIVE CHANGE PROPOSAL AS PRESENTED. Motion carried unanimously. Assistant Administrator O'Neill reported that in 1996 the City fhnded the fireworks display that occurred on Sunday of the Riverfest weekend. Page 8 ?/ Council Minutes - 2/24/97 Because the event was a success, $10,000 was budgeted in 1997, and Council was asked to consider authorizing expenditure of these funds for the 1997 fireworks display. Councilmember Herbst requested that the City purchase the same package as was displayed in 1996 but not to exceed $10,000. Council also discussed whether the fireworks should be displayed in the same area as last year or over the Mississippi River near Ellison Park. AFTER DISCUSSION, A MOTION WAS MADE BY CLINT HERBST AND SECONDED BY BRIAN STUMPF TO AUTHORIZE FUNDING OF THE RIVERFEST FIREWORKS USING THE SAME PACKAGE AS DISPLAYED IN 1996, NOT TO EXCEED $10,000. Motion carried unanimously. Mayor Fair also requested that the public works department install 220 wiring at the Ellison Park gazebo as requested by the Lions Club. 15. Consideration of billg for the month of February. A MOTION WAS MADE BY BRIAN STUMPF AND SECONDED BY BRUCE THIELEN TO APPROVE THE BILIS FOR THE MONTH OF FEBRUARY AS PRESENTED. Motion carried unanimously. 16. 011ier mntters. Mayor Fair requested that Council consider purchasing items using the city logo to be given as mementos to guests of the City. Staff researched the cost of coffee cups with the city logo, which was estimated at $700-$800 for 144 cups. Economic Development Director 011ie Koropchak noted that the Industrial Development Committee has also discussed purchasing marketing items and that there may be money available in the economic development fund for such purchases. AFTER DISCUSSION, A MOTION WAS MADE BY BRUCE THIELEN AND SECONDED BY ROGER CARLSON TO DIRECT OLLIE KOROPCHAK TO RESEARCH AND PURCHASE MARKETING ITEMS FOR THE CITY USING FUNDS FROM THE ECONOMIC DEVELOPMENT BUDGET, NOT TO EXCEED $2,000. Voting in favor: Bruce Thielen, Roger Carlson, Bill Fair. Opposed: Clint Herbst, Brian Stumpf. Motion carried. Pago 9 9) Council Minutes - 2IM7 CB. Mayor Fair reported that he received a letter from Dan Frie, representing the Monticello Country Club, noting concerns about the lack of liquor licenses available in the city at this time. The Country Club plans to expand and would like to obtain a liquor license. City Administrator Wolfsteller noted that Monticello would not be eligible to issue additional liquor licenses until the population exceeds 10,000 unless a referendum is held and a majority votes to approve the issuance of additional licenses. Mayor Fair directed staff to get in touch with Dan Frie regarding the Country Club's time table for expansion so that the City has some idea of when a possible referendum would be held. C. City Administrator Rick Wolfsteller noted that the Wright County Civil Defense Director requested a meeting with the City Council for the purpose of introducing them to the NSP representative. It was the consensus of Council to meet with the Wright County Civil Defense Director and NSP representative at 6 p.m., Monday, March 10, 1997, at city hall. A MOTION WAS MADE BY BRUCE THIELEN AND SECONDED BY BRIAN STUMPF TO ADJOURN THE MEETING. Motion carried unanimously. Karen Doty Office Manager A Paige 10 (D C Council Agenda - 3/10/97 SA. C Mideration of co firming n new n o for nnnwi Board of Review meeting - Wrigbt CounIX Assessor. (KD.) At the February 24, 1997, meeting, the City Council confirmed the County Assessors date of Tuesday, May 6, 1997, at 7 p.m., for the annual Board of Review meeting; however, it was recently discovered that May 6 is the date for a regular meeting of the Planning Commission, which would cause a conflict with use of the council chambers. Rick spoke with the County Assessor, and Council is asked to confirm a new date of Wednesday, May 7, at 7 p.m., for the Board of Review. The HRA does have a regular meeting scheduled for May 7; however, Rick and I felt the HRA meeting could be held in the city hall conference room due to the small number of residents that attend HRA meetings. None. Confirm the new Board of Review date of May 7, 1997, at 7 p.m. If the above date is not acceptable, provide an alternative data for the County Assessor to consider. Council Agenda - 3/10/97 conlition nf cities to monitorreform Issues nnd preparation A_ REFERENCE AND BACKGROUND: At the previous Council meeting, the Council had received a proposed resolution and some background information concerning the establishment of a coalition of cities to band together to keep on top of the personal property tax elimination that NSP and other investor-owned utilities are proposing. As I noted, the current legislation as drafted by NSP and other utilities would eliminate their personal property from being taxed, which in Monticello's case would amount to the elimination of over $200,000,000 in property value. The Council did not take any formal action on the resolution at the last meeting to enable the Mayor and myself to attend additional meetings with NSP representatives to get a better understanding of what they were proposing. A brief meeting was held at the Becker City Hall on Wednesday, February 26, at which the CEO of NSP, Mr. Jim Howard, and the Director of Intergovernmental Relations, Mr. Tom Weaver, explained that they are continuing with their proposal to introduce legislation to eliminate personal property tax, but they indicated a willingness to work with host communities like Monticello in creating legislation that would protect our current revenue sources and address other concerns we had. A second meeting, which 1 attended, was held at the League of Minnesota Cities office on Thursday, February 27, at which the topic was supposed to be discussion of possible replacement mechanisms that could be put into their proposed bill that would protect our revenue and address the concerns the various cities and counties have. In addition to representatives of NSP, Minnesota Power, and other utilities, representatives from Red Wing, Oak Park Heights, Becker, Sherburne County, Burnsville, and a few other communities were present to hear from NSP the same reasons why they're proposing the elimination of property taxes but no real solutions or recommendations on the concerns that were raised by the individual communities. The investor-owned utilities seemed to indicate they wanted to work with the various communities in putting together a proposed bill that would make us all feel more comfortable with this change but at the same time noted that they are introducing legislation early next week (March 3) without any changes at this time. The community representatives were somewhat dismayed by NSP's reluctance to wait even one week for another Council Agenda - 3/10/97 meeting that had been scheduled to go over possible amendments to their legislation and felt that NSP and the other utilities have somewhat set the tone by indicating they plan to push ahead full force in getting legislation passed even though they indicate they want to work with the communities involved. The coalition of core cities met briefly after this meeting last Thursday and reviewed what is happening with our lobbyist, Attorney Tim Flaherty, who indicated the cities need to be on top of this issue and begin preparation for working toward delaying any action on this bill until at least the next session (1997.1998). Being a seasoned lobbyist and very familiar with the legislative process, Mr. Flaherty feels very uncomfortable for the cities most affected by this personal property tax loss to sit back and hope that we can arrive at some acceptable language that can be added to their bill in the future, as he feels NSP and the other utilities will be pushing very hard to get anything passed that benefits them financially. Ideally, delaying any introduction of legislation until next year would be the most beneficial for all of us and would allow us more time to deal with developing language that can address all of our concerns and hopefully protect our revenue source. The coalition was meeting Monday afternoon with the lobbyist to develop language amendments that would help protect the local communities and should have met with NSP and the other investor utilities on Thursday, March 6. It is assumed by the time the Council will be acting on this that legislation has already been introduced by NSP and the other utilities to eliminate personal property tax. If any changes did get incorporated because of the Thursday, March 6, meeting, it is doubtful that a completely - acceptable proposal could have been arrived at that Quickly. I believe it's imperative that the City of Monticello join in the coalition with the other communities and help fund any lobbying activities that are necessary to protect our interests and yet at the same time continue working in a joint effort with the utilities in trying to arrive at an acceptable alternative to their tax proposal. That is not to say that the utilities and host communities will not be at odds during this process, but being able to delay any passage of personal property tax reform until next session would definitely be in our best interest. With the City of Monticello standing to lose a substantial amount of tax base, I would hope the City Council would be supportive of this general resolution and he willing to commit funding toward the coalition's budget on dealing with this tax reform issue. Council Agenda - 3/10/97 Adopt the resolution supporting the formation of the coalition of cities whose purpose will be to work with the utilities but also work independently with our own lobbyist for ensuring that tax reform issues are beneficial to host communities. Do not adopt the resolution or join the group at this time. (7_ STAFF RECOMMENDATION: As I noted earlier, it is again my strong recommendation that the City join the coalition in funding the hiring of a lobbyist, who will work with the group and with representatives of the investor-owned utilities in developing amendments to the proposed personal property tax bill. It is very obvious from the February 26 meeting at the League office that the investor-owned utilities are forging ahead in their attempts to get some form of legislation passed this year, and it will take a lot of effort by the coalition and lobbyist to protect our interest and hopefully delay any legislative action until at least next year or until deregulation takes effect in the industry. I believe a few thousand dollar commitment to this group could be a drop in the bucket compared to the potential $1.76 million personal property tax levy NSP pays annually. Copy of resolution. RESOLUTION 87- Q A RESOLUTION SUPPORTING THE FORMATION OF A COALITION OF CITIES TO DEAL WITH TAX REFORM FOR INVESTOR-OWNED UTILITIES REGARDING TAX ON PERSONAL PROPERTY WHEREAS, the City of Monticello is the host to the NSP Nuclear Power Plant; and WHEREAS, the City of Monticello derives revenues from the energy facility located in Monticello in the form of personal property taxes on machinery, which amounts to over 67% of the total tax levy for the year 1997; and WHEREAS, a study conducted by the Minnesota Department of Revenue in conjunction with the Public Utilities Commission (PUC) and the Department of Public Service has issued a study dated January 16, 1997, entitled "Analysis of Utility Taxation in Minnesota" and has presented such information before the Senate Subcommittee for Property Tax and Local Government Budget Division, Senator Sandra L. Pappas, Chair, on February 6, 1997; and WHEREAS, the above -referenced study by the Department of Revenue has in fact recommended the decreased use or elimination of personal property tax as a source of revenue for local entities; and WHEREAS, investor-owned utilities (IOU's) have proposed legislation which would remove personal property tax from the available tax capacities of the affected jurisdictions; and WHEREAS, jurisdictions who lose tax capacity could see significant increases in property taxes at the local level as a result of such legislation without replacement revenues; and WHEREAS, the replacement revenues of a utility or "meter" tax or other such remedies do not provide the same assurance of cash flow and leaves affected jurisdictions with an inability to deal adequately with financial concerns; and WHEREAS, the replacement revenues would also be subject W collection and "tinkering" by the state giving jurisdictions inadequate security in receipt of revenues both now and in the future with the added responsibility of sunsctting the revenue stream completely; mid WHEREAS, with the loss of the personal property taxes, the affected jurisdictions will experience an adverse impact in its ability to bond, its bond ratings, its long- term debt, and will experience problems with outstanding debt and including issues concerning bond disclosure requirements. a8F4 Resolution 97 - Page 2 NOW, THEREFORE, BE IT RESOLVED, the City of Monticello shall appoint the City Administrator as the liaison to work with other similarly -affected governmental entities and representatives of the investor-owned utility groups in a joint effort to develop appropriate language in any potential legislation introduced to state legislators that would protect the revenue sources and taxing capabilities of governmental entities with utility personal property. BE IT FURTHER RESOLVED that the coalition of cities will lobby toward the coalition's goal of delaying any personal property tax reform during the current legislative session until a satisfactory proposal with replacement revenue sources is established. BE IT FURTHER RESOLVED that the representatives will work as committee members for the purpose of giving direction to lobbyists working on the issue as well as the generation of a coalition budget and formula for funding of the effort. Adopted this 10th day of March, 1997. Mayor City Administrator f Council Agenda - 3110/97 ifC. Consideration of appmVin�ppLication for BambLQ icense .wnewal--American Lemon Post 260. (R.W.) The American Legion Club currently operates a pull -tab operation at their club. Their gambling license will expire on August 1, 1997, and they are requesting City Council approval to allow them to apply to the State Gambling Control Board for a two-year renewal of their license. As the Council has requested in the past, enclosed you will find a copy of the organization's donations that have occurred from their gambling operations during the past couple of years. The purpose of the financial report is to provide the Council with an idea of where the charitable donations are being made by the licensee that are located in the city of Monticello. Accept the report as presented and adopt the resolution approving the application for renewal of the license for the Legion Club. Do not adopt the resolution approving the reissuance of the license. If this option is selected, the Legion Club would not be allowed to continue their pull -tab operation after July 31, 1997. r STAFF F. ,p MF.NDATION; It has been the Council's past policy not to oppose any gambling license application renewal. City staff does not have any reason to recommend the renewal application be denied. Copy of resolution; Copy of renewal application; Copy of financial summary report. RESOLUTION 97 - RESOLUTION AUTHORIZING THE ISSUANCE OF A GAMBLING LICENSE WHEREAS, the American Legion Post 260 of Monticello has submitted an application to the City Council of Monticello for the issuance of a charitable gambling license to conduct gambling at their facility located in Monticello, Minnesota; and WHEREAS, upon review of the organization's activities, the Council is not opposed to the gambling license being issued by the State Gambling Control Board. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL that the American Legion Post 260's application for license issuance listed above is hereby approved, and the State Gambling Control Board is authorized to process the application. Adopted by the City Council this 10th day of March, 1997. Mayor City Administrator 4TC Nest STATS OF MQIOBSOTA INmR BOARD OBS OWL! cA=Lnm CONTROL BOARD JANT PAID PRffiBItB PBYM¢T RRN A APPLICATION I(- PRINTED: ICU= NO. DATE iPPR I LICENSE NMER: B-00671-001 EFFECTIVE DATE: 08/01/95 EXPIRATION DATE: 07/11/97 NAM OF ORGANIZATION: American Legion Post 760 Monticello GAMBLING PRffi8RN INFORMATI0N7 NAME OF IWABLISHNSW WHERE GAMBLING WILL BE CONDUCTED Am Legion Post 760 304 RIM St Monticello 55367 COUNTY Wright IS THE PREMISES LOCATED WITHIN THE CITY LIMITS?: Y LESSOR XMRMAT202Q DOES YOUR ORGANIZATION OWN THIS SITE?: Yes IF NO, LIST THE LESSOR: NAME OF PROPERTY OWNER (WHEN NOT LESSOR): S 4E FEET PER MON771: 0 AMOUNT PAID FOR RENT PER MONTH: 0 S� AS FEET PER OCCASION: 0 AMOUNT PAID PER OCCASION: 0 RD= ACTIVITY BINGO IS CONDUCTED ON THIS PREMISES: No IF YES, REFER TO INSTRUCTIONS FOR REQUIRED ATTACHMENT STORM Aumsa 304ILM St Monticello LN 55362 Sam wnw=OM lot Rational Bank Bo: 139 Monticello MOM 55361 GAMBLING BANK ACCOUNT NUMBER: 091905567 OA TWO 16ma PROVIDED EBLOW LIST THE NAME, ADDRESS AND TITLE OF AT LEAST TWO PERSONS AUTHORIZED TO SIGN CHECKS AND MMNS DEPOSITS AND WITHDRAWALS FOR THE GAMBLINO ACCOUNT. THE ORGANIZATION'S TREASURER MAY NOT HANDLE GAMBLING FUNDS. R (BB BIAS TO COWLSTS TRS SBVERBE emu OF THI6 APPLICATION) THIO FORM WILL BB MADE AVAILABIA IN ALTP3MTIVB FORMAT (I.E. LAROE PRINT. BRAILLE) UPON RROUEST 5da ACRNONL[07Qit�P! GAIDBLrNG PREXISRS AUTHORIZATION Y GIVE CONSENT TO LOCAL LAN ENFORCE4EN'T OFFICERS, THE GAMBLING CONTROL BOARD, OR AGENTS HE BOARD, OR THE COM41SSIOMM OF REVENUE OR PUBLIC SAFETY, OR AGENTS OF THE COMMISSIONERS, ENTER THE PREMISES TO ENFORCE THE LAW. BANK RECORDS INPORMATION THE GAMBLING CONTROL BOARD IS AUTHORIZED TO INSPECT THE BANK RECORDS OF THE GAMBLING ACCOUNT WHENEVER NECESSARY TO FULFILL REQUIREKENTS OF CURRENT GAMBLING ROLES AND STATUTES. I DECLARE THATs I HAVE READ THIS APPLICATION AND ALL INFORMATION SUBMITTED TO THE GAMBLING CONTROL BOARD; ALL INFORMATION IS TRUE, ACCURATE AND COMPLETE;; ALL OTHER REQUIRED INFORMATION HAS BEEN FULLY DISCLOSED; I AM THE CHIEF EXECUTIVE OFFICER OF THE ORGANIZATION; I ASSUME FULL RESPONSIBILITY FOR THE FAIR AND LAWFUL OPERATION OF ALL GAMBLING ACTIVITIES TO BE CONDUCTED; I WILL FAMILIARIZE MYSELF WITH THE LAWS OF MINNESOTA GOVERNING LAWFUL GAMBLING AND RULES OF THE GAMBLING CONTROL BOARD AND AGREE, IF ISSUED A PREMISES PERMIT, TO ABIDE THOSE LAWS AND RULES, INCLUDING AMENDMENTS TO THEM; ANY CHANGES IN APPLICATION INFORMATION WILL BE SUBMITTED TO THE GAMBLING CONTROL BOARD AND LOCAL UNIT OF GOVERIZMENT WITHIN TEN DAYS OF THE CHANGE; • I UNDERSTAND THAT FAILURE TO PROVIDE REQUIRED INFORMATION OR PROVIDING FALSE OR MISLEADING INFORMATION MAY RESULT IN THE DENIAL OR REVOCATION OF THE PREMISES PERMIT. SIGHATURE Of CHIRP R3mCv7TV/ OFFICER VATS L ACRaONLEDGMETP 1 THE CITY- MUST SIGN THIS APPLICATION IF THE GAMBLING PREMISES IS LOCATED WITHIN CITY LIMITS. 2. THE COUNTY-- AND TOWNSHIP•• MUST SIGN THIS APPLICATION IF THE GAMBLING PREMISES IS LOCATED WITHIN A TOWNSHIP. 7. FOR TOWNSHIPS THAT ARE UNORGANIZED OR UNINCORPORATED, THE COUNTY*• IS REQUIRED TO ATTACH A LETTER TO THIS APPLICATION INDICATING THE TOWNSHIPS STATUS. 0. THE LOCAL UNIT OF GOVERNMENT (CITY OR COUNTY) MUST PASS A RESOLUTION SPECIFICALLY APPROVING OR DENYING THIS APPLICATION. S. A COPY OF MER LMA* UNIT OF GOVERLKM'S RASOIXTIOH APPROVDM THIA APPLICATION MUST BR ATTACHED TO THIS APPLICATION. 6. IF THIS APPLICATION IS DENIED BY THB LOCAL UNIT OF GOVERNMENT, IT SHOULD NOT BE SUBMITTED TO THE GAMBLING CONTROL BOARD. TOMNSHIPi BY SIGNATURE BELOW, THE TOWNSHIP ACKNOWLEDGES THAT THE ORGANIZATION IS APPLYING FOR A PREMISES PERMIT WITHIN TOWNSHIP LIMITS. CITY* OR COMM" SONNMP*• CITY OR COUNTY NAME TOWNSHIP NAME 044 o F Alli) uTie e i 117SAQ NO APPLICATION SIGNATURE OF PERSON RECEIVING APPLICATION � T E I G DATE RE i TITLE DATE RECEIVED °� s/�7 J�CI�•. ..j— Ge R"n To TLS CKWMINT POR REQDIRm AT rALommT/ NAIL TOI GAOLIRO CONTROL ROAAD 1711 N COMM m R - /OZT/ 100 / RO/RVILLR, R7 $5111 �C� Monticello American Legion Lawful Purpose Donations 14 %,Owl 238,369.42 SCD 31,250.00 Monticello Scholarship Program .Monticello Youth Sports 19,162.52 Monticello Food Shelf 500.00 Medical -Local 3,298.12 Disabled Vets -National 806.86 Dinner For Special Education Youths 414.00 School Patrol For Monticello Schools 10,797.00 Minnesota Boys State 380.00 Monticello Canmrnity Parteners 300.00 Christmas Presents For The Nursing Hare 862.90 Monticello Graduation Party 1,000.00 Bus Trip For Monticello Marching Bard 500.00 Manorial Day Program 500.00 Veterans Day Program 700.00 U.S. Flags Presented To 9usinesses/Sch0019/City/Ard/Parades 3,662.58 Momanont To Vets 2,562.36 Special Olympics 50.00 Funerals And %lakes 1,962.80 Annual Audit 4,300.00 Federal Tomes 2,550.00 Stato Taxes 118,146.00 Real Estate Taxesa 34,664.28 14 %,Owl 238,369.42 SCD Council Agenda - 3/10/97 gD, Consideration of _funding publication and adv rtiaing-expenfiM associated with the Fi_re_, Department 100 -year Anniverm= Celebration W.O.) A RFFFRENCE AND BACKGROUND: City Council is asked to contribute $2,000 toward expenses associated with the Fire Department's 100 -year Anniversary Celebration festivities. As you may know, the Saturday of Riverfest will feature Fire Department events, including a fire equipment parade, a street dance and open house, fire truck rides, and other festivities. Also, a beer garden will be operated on the fire hall grounds by the Lion's Club. The Fire Department will also be publishing a history of the Fire Department. Council is asked to contribute funds toward payment of advertising expenses and to help fund 100 -year history publication expenses. In making the request, Brad Fyle indicated that revenue from the event (beer garden) will be provided to the City to offset the City expense. I am not sure how much money they expect to make. Funds are not specifically budgeted for this event; however, reserves are sufficient to cover this expense. R ALTERNATIVE ACTION : 1. Motion to approve $2,000 expenditure for advertising and publication expenses associated with the celebration of the 100 -year anniversary of the Fire Department. 2. Motion to deny $2,000 expenditure for advertising and publication expenses associated with the celebration of the 100 -year anniversary of the Fire Department. This only happens once every 100 years. Let's see, if we spread that cost out over 100 years, that's 20 bucks/year to spend on recognition of the tremendous volunteer effort by our firefighters. Sounds like a good deal to me. None. Council Agenda - 3/10/97 SE. ConAideration of authorizing a phnnge In funding level for bnilding . (F.P.) Request for City Council Action: Request for authorization to amend the previous motion made by City Council on February 24, 1997, regarding the purchase of a vehicle for the Development Services Department to not limit the purchase source to the State of Minnesota contract, and to increase the amount budgeted to purchase a vehicle for use by the Development Services Department by $1,650. Approval of this authorization will provide the following opportunities: Staff will be able to purchase a vehicle from a local dealer. Vehicle delivery will be expedited to within one (1) week rather than 90 to 120 days after placement of the order through the State Contract (delivery in June or July). A driver's side eliding door will be provided as an additional option, and the vehicle will be rustproofed and undercoated by the dealer prior to delivery. Without approval of this authorization, City staff and City Council will either continue to routinely drive personal vehicles for City business until vehicle delivery in June or July, or vehicles deployed in other departments will have to be redistributed and that other department will have to manage the redeployment. Approve the authorization as recommended by the City Administrator. Deny the authorization and direct staff to proceed in accordance with the previous motion. Q STAFF F..O MPNDATION: The City Administrator recommends that the City Council approve authorization to increase the amount budgeted to purchase a vehicle for development Services by $1,650 and amend the previous motion by City Council regarding this purchase to not limit purchase source to the State of Minnesota contract. None. e. Council Agenda - 03/10/97 . ►11 ; • 1► As we previously updated the City Council, we received 58 applications for the position of Inspector/Observer. This is the second such position, as Tom Bose is currently in this position also. The City Administrator, Tom Bose, and myself narrowed the field of candidates from 58 to 15, and then to 9 for the interview process. The interview committee, during the first round of interviews, narrowed the field of candidates to 3. These 3 were invited back for a second interview with Bob Peplin of HDR, Bret Weiss of WSB, Chief Building Official Fred Patch, Councilmember Brian Stumpf, Inspector Tom Bose, and myself. During the second interview on Thursday, March 6, 1997, the committee came to a unanimous consensus that Mr. Elmer Ohnstad was the most well- qualified individual for the position. Mr. Ohnstad has a great wealth of construction experience, 14 years of which were with Barbarossa & Sons, Inc., building wastewater treatment plants from the ground breaking through start-up of the facilities. Elmer lives in rural Buffalo. He is scheduled for a full physical exam on Monday, March 10, 1997, at 3:30 p.m. We have informed Mr. Ohnstad that he would start at Step 4 of Grade 8 at $15.31 per hour, and after successfully completing his probationary period, he would move to Step 5 at $15.97 per hour. Step 6 at $16.64 per hour would be available one year after the end of the probationary period after successful completion of the employee performance review. Mr. Ohnstad is in agreement with the salary range. Since he is currently on seasonal layoff with the contractor his is working for, he is able to start almost immediately if so approved by the City Council. The first alternative would be to hire Elmer Ohnstad contingent upon successful passing of the physical by the City's health officer, and starting at Step 4 of Grade 8, $15.31 per hour. The second alternative would be not to hire Elmer Ohnstad. It is the unanimous recommendation of the interview committee that the City Council approve hiring Mr. Elmer Ohnstad as an additional Inspector/ Observer beginning with wastewater treatment plant expansion project as outlined in alternative 111. D_ 91IPPORTINO DATA: None. 14 Council Agenda - 3/10/97 i :. , ., m.. --mv-7-Mr-Ul Y.Mr. will Council is asked to conduct a public hearing and consider vacating all or a portion of Locust Street between 6th and 5th Streets. This street segment is directly east of the fire hall and west of the proposed Peterson/Grimsmo mortuary site. At the February 10 meeting of the City Council, Council reviewed a variance request by the City that allowed the mortuary parking lot to encroach on the 5 -ft setback requirement along Locust Street between 6th and 5th Streets. The variance request was made by the City and was necessary in order to allow the proposed mortuary to be developed in a manner consistent with the design goals of the proposed redevelopment plan. The developers of the site did not need a variance to develop the site but are willing to work with the City to achieve the design goals. Essentially, the 5 -ft encroachment on the west side was due to design considerations affecting the Walnut Street side of the property. The design goals causing the variance result from the future need to widen Walnut Street l7 ft) and to accommodate a parking lot setback of 5 ft on the Walnut Street side of the property. In addition, it was noted that Locust Street provides minimal benefit as a public street and would likely become part of a larger parking area at some point in the future; therefore, a variance at this location made sense. A concern was expressed that the granting of the variance may set a precedent that would open the door to similar requests. By vacating and conveying a portion of Locust Street to the mortuary, the need for the variance would no longer exist and the precedent would disappear. On the other hand, it could be argued that the circumstances relating to the variance request are unique. Although a particular hardship has not been demonstrated, the reasons for granting the variance aro specific to this site, and the action does not violate the intent of the zoning ordinance. Furthermore, vacation of a public street is a significant action that should be taken when there is some level of certainty that there is a need for conveying Cho land into private hands. Although it looks like the area will be used for C an expanded parking lot in the future, it might make sense to wait to vacate until the parking lot is ready to be expanded. Council Agenda - 3/10/97 R ALT .RNATIV . ACTIONS: 1. Motion to vacate all or a portion of Locust Street between 6th and 5th Streets. Under this alternative, a strip of land at least 5 ft wide would need to be conveyed to the mortuary in order to avoid the need for a variance. If Council selects this alternative, then it may wish to link the conveyance of the vacated area with the acquisition of land necessary to widen Walnut Street. Simply vacating the road and then keeping it in the City's hands will not eliminate the need for the variance, as a 5 -ft setback is needed between a parking lot and any parcel. 2. Motion to deny vacation of all or a portion of Locust Street between 6th and 6th Streets. Under this alternative, the City takes a wait and -see approach regarding the ultimate use of Locust Street and lives with the potential precedent created through the variance granted last month. C, STAFF F COMMENDATION: It is my view that the precedent set by the variance approval will not have significant consequences given the unique circumstances. Although it is likely that a vacation of Locust Street will occur in the future, it might make sense to wait until expansion of the parking lot is imminent. Copy of mortuary site plan from 2110/97. Peterson-Grimsmo Chapel. Monticello Fire Hall OP PPOJ� dOLS, -*3 I'll OITN POL" A�, H f .f J ',�o' J t 11;'1' 't " r �; - 1 � , ;•• " ,' • r • (��' ( ' � ' — - ,'1(�rtlrl N t�j a/ r p+'�, . '11i 1;ifti ptf• 7 � •, �'8; 0 i .• t j r t , r,. I•'"''� if ! �(rJJ a M�„ + f'•• � � = Sf~ •iti�(Mi +rt 1 !b' t t el i�• .. r� "J, •t t t• r-- n t 1IDgyo Chap y J : 'L 1: I J lr t . t . , ; 7 � �;', ' � � l (t f � I'• ! � w . Qece�a9� 81�ck 13 r r i J, (' 1, 1r rJ7 �- ,.� • If 1,r ,�fl t at~ 1 •,.r•�' I i Lot \ • ! J i j •rt!1i1 r;. j;rr `1 it y �, ' �. •} t �• ,r i 1 I m ) '; t1 tr r�..tt � 9T j,tr.�',,•1� 7J,1,.�.:�.=��..,,. n+� i• . • ! i f .• ^ �+ 1 , : 1 ,1 + r J /77 11111f i t t j I , r 1 i• 1' � " J r "� ' • • � 1 1 J '� t r (� +. "+-. , t f�.� '. 1 t� w r t J r j° '•' r _ •� • +' �+ ► •i I • ST' .i fy � �.. J '• w r J(f" •�� _ + f' `1f• t / •i J t j• •7 t i., .. o 'i / J j. r f ,l t J t•� • i�I •1 J t •I 1n •, t `t Ir •� 1 1�1 1' � '.�,•w,�?., , N ,•`•'' 'J Iti 4„�,,,�"""'a-,- .yam-' l � _ • d (,,... - �J � r 0.� r NO. 94 oZ s t r•,'o Council Agenda - 3/10/97 8. Public Hearing --Consideration of adopting n resolution approvina the modiS cation of Central Monticello Redevelopment Project No. 1; modllication of TIF District No. 1-17o and establishment of TIF District No.1-22 and approving the plan relating thereto. (O.K.) A RFFERENCE AND BACKGROUND: Public Hearing The public bearing may be opened for comments and questions relating to the modification of Central Monticello Redevelopment Project No. 1; modification of TIF District No 1-17; and establishment of TIF District No. 1-22 and its plan. All the schedule of events required by law to he performed prior to the modification of the plans and establishment of a new TIF District have been satisfied. See attached schedule of events. At the HRA meeting of March 6, 1997, the commissioners adopted the resolution for modification and establishment of the new district subject to receipt of evidence for the "but for" test from the developer of District No. 1-17. Modifleatien of Central Monticello Redevelopment Project No. 1 Each time a district is modified or a new TIF District is established, Project No. 1 must be modified to include the changes. Modlfleatjion of TIF District No. 1.17 TIF District No. 1-17 was approved in 1994 and certified in 1996 for Fay -Mar Tube & Metal Fabricators, Inc. The 11 -year economic district was created for a manufacturing business and to increase the tax and employment base of the city and state. The original project included the construction of a 16,000 sq fl manufaduring/ofTice facility at a minimum estimated market value (EMV) of $400,000. The projected employment was 30 new jobs. In 1996, the company ornployed 36. Initially, the company received TIF assistance for land acquisition costs in the amount of $60,000. The plan for TIF District No. 1.17 is proposed for modification to increase the budget allowing the HRA the ability to collect the captured tax capacity from the proposed 20,000 aq fl expansion. The EMV of the expansion is $600,000. The expansion is projected to create 20 now jobs over two years. Average 10 Council Agenda - 3/10/97 wage, $8.60. The expansion will generate sufficient tax increment to assist the company with site improvement costs; however, the amount of the assistance has not been determined at this time. Two considerations, first the district does carry a HACA penalty. The annual increase of the penalty could be up to $14,000 per year due to the expansion. Because the expansion generates sufficient increment, the HRA elected to increase the public improvement costs of the budget within the TIF Plan to cover the anticipated loss to the City. The public improvement must be an improvement in the City's general fund. Secondly, the "but for" test must be met. The test asserts that the expansion would not occur solely through private investment within the foreseeable near future. As mentioned above, the HRA's approval for modification of TIF District No. 1-17 is subject to receipt of evidence of the "but for" test from the developer. Establishment of TIF District No. 1-22 TIF District No. 1.22 is a redevelopment district with a life duration of 26 years. The district is proposed for establishment to assist in implementing the downtown/riverfront revitalization efforts. The first available tax increment of the district will be from the proposed funeral home project along Walnut Street. It is anticipated the tax increment will be used to assist with land acquisition, demolition, relocation, or public and site improvement costs associated with redevelopment of the district. As stated previously, the developer of the funeral home will not receive any direct assistance from the tax increment. Because the proposed geographic boundary of the district is large, other levels of government may criticize and the State Auditor may raise questions. Therefore, it is important that the City Council determine that the attached findings meet the "blight" criteria for establishment of a redevelopment district. The attached findings are provided by the Chief Building Official of the City of Monticello. Secondly, it is important that the Council determine the findings for the "but for" test. In good faith judgment, the HRA found the findings by the Chief Building Official to satisfy the "blight" criteria requirements. Additionally, the HRA felt the "but for" test was obvious due to the findings of the Building Official. This redevelopment district will not carry a HACA penalty if the City or HRA makes a local contribution to the developments out of unrestricted or general land sources equal to 6% of the annual tax increment. It was recommended Council Agenda - 3110197 by the HRA that the City consider making the local contribution match for this district, as the HRA has a limited resource of unrestricted or general fund dollars. Adoption of Etesolution The enclosed resolution for adoption affirms the above information and findings, authorizes City officials to implement the TIF Plan, and allows the option to issue a bond. It is anticipated that Mark Ruf, Plan Preparer and Consultant, will be present at the meeting to address Council questions. It would be to your benefit to read the attached letter from Mark Ruff. Upon hearing comments from the general public, the public hearing may be closed. Council members are then requested to consider and take action of the following alternatives. B. ALT .RNATIV . ACTIONS: Close the public hearing and move to adopt the resolution approving the modification of Central Monticello Redevelopment Project No. 1; modification of TIF District No 1.17; and establishment of TIF District No. 1.22 and its plan. Close the public hearing and move to deny adoption of the resolution approving the modification of Central Monticello Redevelopment Project No.1; modification of TIF District No 1-17; and establishment of TIF District No. 1-22 and its plan. A motion to continue the public hearing and move to table any action of the resolution. C. STAFF RF.COMMF.NDATION: Assuming no adverse public comment, staff recommends alternative bl subject to receipt of evidence for Cho "but for' test from the developer relating to the modification of TIF District No. 1.17. Both projects conform to the overall objectives of tho Monticello Comprehensive Plan. n SUPPORTING DATA: Resolution for adoption; "Blight' criteria findings; Schedule of events; Plans for TIF District No. 1-17 and 1.22; Letter item Mark Ruff. MPR 06 '<57 10:49AM EH ERS & A--- CIRTES P.2i10 CITY OF MONTICELL.O WRIGHT COUNTY STATE OF MINNESOTA Council rtxmber introduced the following resolution and moved Its adoption: RBSOLITTION NO. RESOLUTION MODIFYING CENTRAL MONTICFLLO REDEVELOPMENT PLOJECT NO.1 AND ADOPTING THE MODIFIED REDEVELOPMENT PLAN THEREFOR AND MODIFYING TAX INCREMENT FINANCING DISTRICT NO. 1-17 AND ADOPTING THE MODIFIED TAR ItNCREVIIs a FINANCING PIAN TT-EREFOR. BE R RESOLVED by the City Coun:il (the "Council') of the City of Monticallo. Mitr ossa (the -City"), as follows: Section 1. &W$&. Le I. It has been proposed that the City Council (tbc"Catneir) of the City of Mcrueello (the "City") mo.tify Central Monticello Redtw4lopment Project No. 1 (the "Redevelopment Project No. 1") mid adopt the M 3dilied Redevelopsaent Plan therefor end modiPj Tax Increment Financing District 1-. 7 ("District No. 1-17") utd adopt the Modified Tan Ltacuwnt Financing Plan therefor (collectively, the "bloE, ied Plans") all pnrsuanr to and in accordance with Mitmesom Stsmtes. Sections 469.001 to 469.047 and Sectio.is 469.174 to 469.179. inclusive, as amended (the "Acta",, all as m)!arted in the Modified Plans and pre w.ted for the Council's C:mideretion. 1.0:. The Council has investigated the facts relat,ng to the Modified Plans. I.61. The City has perforrnod all actions requ;n:d by law to be Pe7fo1111ed PttiN to the is.opd- and approval of the proposed Modified Plans, including, but not limited to, notification of Wright County and School District No. 882 having taxing jurisdiction over the property currently included in Distrit • No. 1-17. a review of and written comment on the Modified Plan% by the City Planning Cominission. and he holding of a public .tearing upon published notics as requited by law. 1.0 t. Certain written reports fm,n the developa and their financing institudons (tho "Reperu") relating to the Modified Plans and to the a6t;vities contaapland therein have heretofore been pt:pwod and submitmed to the Council and/or made a pan of the City files and proceedings on the Modified dans. The Reports include dots information ars.'or wbstan wuion constituting or relaxing to (1) the VuJin ar,J arulyan" on why the .trodificatiao to District N,%.1.17 rnocra die. w.<A lad "but fes^ test; and (2) the bases 'ar the other findings ant determinations inside in this resole wi. 'rhe (buncil hereby confirms, ratifies tun: adopts the Reports, wl tch are hereby incorporated into and m t does duly a pan of this resolution to the nen a extent n if in forth in full herein. M•Um111JOTAVbMrICYUTIYI Ji1CT'17.ay , I TIA10 I MPR 06 'c7 10:50iMt EFL.ERS is ASSOCIATES P. 3i10 Section 2. Findings for The AtIntion and Aioroval of the Modified Plans. 2.01. The Council hereby finds that the Modified Plans, ate intended and, in the judgement of this Council. the effect of such actions will be, to provide an impetus for development in the public purpose and accomplish certain objectives as specified in de Modified Plats, which are hereby incorporated haaia Section 3. Findings for the Establishment of Tax Increment Financing District No. 1-22. 3.01. The Council hereby reaffirms its prisvioat finding dust Tax Iucremetx Financing CVistrict No. 1.17 iq in the public interest and is an 'economic development district' under Minnesota Statutes, Section 469.174.subd. 12. 3.02. The Council further finds thu the proposed developments would nos ooeur solely through private investment within the reasonably foreseeable fit=, that the Modified Plans conform to the geraal plan for the. development or redevelopment of the City as a whole: and that the Modified Plans will afford maxorium opportunity consistent with the sound needs of the City as a whole, for the development of District No. 1-17 by private eruapdse in fhet fie intent is to provkle only that public ass's tarroe necesuo to snake de private developments financially feasible. 3.03. The Council further fords, decbm and dcmrrht = that the City made the above findings stated in this Secion and has sec forth the reasons and supporting facts for each demtmi whim to wdb& attached hereto as Exhibit A. Set don 4. Amoval and Admion of ft Modified Plans, 4.01. The Modified Plana. as preserved to the Cotmell an this data including without ht titatlun the findings and atatmieab of objectives eonWnedrhaein. am (hereby approved. ratified, csmbhslhed, and adopted and :hail be placed an file in hie office of die Executive Dhoctor of the HRA. 4.02 The staff of die City, the City's advises and legal counsel are ahrdwrised and dktcw to proeeod with the implemenstim of do Modified Plans and to negotiate, draft prepare and prermt to olds Council for is eaaiderat on all hirdher plan resotudom. docti F and contracts necessary for this purpose. 4.03 The craft of the City are also autihodred to file the Modified Ta: Increment Fhuaein)i Plan for Tru Increment Financing District No. 1-17 with the Store Department of Revenue. This motion for the adoptimh of the foregoing resolution was duly seconded by Cana. U member , and upas a vote being sten dos3n, the following voted in favor dtereoP and the following voted against the same: M: MIM SOTAWOMTI WAM-XIOMI1O TV] MPR 06 "!i 10*SWM E}LERS S FGSXIP7E5 P. 4/10 Dated: March 10, 1997 . aft lDki-A Mayor City Administrator (seal) M.uWOgWAWOMi1CQAflFl4xCRYrf W M 06 '97 10:50AM EKn6 & ASSOCIATES P.S/Le 1XHMrr A PWS0LLrn0N r The teasons and has wppotting the finds for the adoption of the Modified Tax Increment Fintxiog Plan for District No. 1.17 o rogaired pursuant to Mirwesow Stanua. Sections 469.173, Subdivision ) ane w follows: I. Finding riot the District No. 1-17 Is an economic development dirrria as def ned in Minuemta Stawas Sections 469.174. Subdivision 12. Dimict No. 1-17 is in the public interest because it will ditcourep commerce, industry, or mm ubcoarims Rom moving their apenacas to snotbu sty or —mcipality rad it will reals in itrseased employment in the state. 2. F/ndbeg that the proposed devekp itm in the gdni" of rhe Cowncil. world not occur glib through prrwase fnvennent withw the rearaaaby foreseeable future and dwrow the use of ms L erenmo ie deemed ueastsary. Due to the high cos[ of development on the parcel and the can of fining the proposed impmvemeau. this project is fessiblo only through &instance, in part from tax m=ment financing. J. Fbb&g rim rhe M0449d Tar Inamw Fluanc tg Pfau for District No. 1.17 oo+bfonrts to due geared plan for the development or redevefopnrear of the mtouicoaU0 at a whole. The Modified Ta: Increment Fmm=g Plan ras mvlewed by the Planning Cavnm=ion on Match 4.19W7. The PWubS Commission found dwt Oto Modilled Tax htctement Financing Plan conform to the genwW develrpsnew plan of the City. 4. Finding tical the Moddied Tax hwemav Financing Plan for madcr No. 1.17 wN &ford umdnuam oppanunity, oonsiuetu wkh the sound needs of the Chy as a whak for the devekpo nr qf Gurol Mmkello Redevelopment PwJecr No. 1 by private enterprise. The project to be assisted by Tana iaetanroeu Financing District No. 1-17 win result in iniac wd wiptoymml in the City ud the Sim of Mlnwavot& inmased tax bate of due State. and add a high auaUty develaprnw nt to the City. M. W U030TA W OMT1=T V 1.111Cw191, ep MAR 06 '97 10:50F" EFLERS 8 PSSOCIRTES P.6/10 CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Council m ember introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION MODIFYING CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND ADOPTING THE MODIFIED REDEVELOPMENT PLAN THEREFOR AND ESTABLISHING WITHIN CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 TAX INCREMENT FINANCING DISTIRICT NO. 1.22 AND ADOPTING THE RELATED TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the 'Council') of the City of Monticello. Nbnnesota (the 'City"), as follows: Section 1. Rdam. 1.0 t. it has been proposed that the City Council (the"Council'I of the City of Moreceilo (the "City mo tify Central Monticello Redcvctopment Project No. 1 (the "Redevelopment Project Ifo. 1") and adopt the 'Modified Redevelopment Pun therefc• and adopt a Tax Increment Financing Plan for the establishtm to of Tax Increment Financing District No. 1-22, (collectively, the "Plans') all part ant to and in accordance with Minnesota Salutes. Souictu 469.001 to 469.047 and Sections 469.174 to 469.179, inclusive, as amended (the "Acts"), all as reflected in the Plans and presented for the Council's consideration. 1.02. The Council has investigated the facts relating to the Plans. 1.03. The City has performed all actions requited bylaw to be performed prior to the adoption and approval of the proposed Plans, iechding, but not limited to, naifiwion of Wright County and Sctrool Disaitn No. 882 halting taxing jurisdiction ovcr the property to be included in Tax Increment Financing District No. 1.22 ("Dituiet No. 1-22"L a review of and written comment on the Plans by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (1ho "Reports-) relating to the Plans and to the activities contemplated th—tn haws heretofore been prepared by cuff and subrniuBd to the Council and/or made a part of the City fiks and proceedings an the Plans. The Reports Include dna, information mWor substantiation umstituting or [elating to (1) the "studies ad analyses' on why Uro new Tru Increment financing District No. 1-22 ttteea the wcalltxl "but for tett: and (2) the bases for rhe other findings and dnarminations made in this resolution, Tho Counc? I hereby conflma, ratifies and adopts the Reports, which am hereby incorporated into and made as Polly a pan of this resolution to the same extant as if sec forth in NII hadn. M.w90130MMOK11MATM MCnrY3x.113 SE rM 06 197 10:51RM Di ERS & RSSOCIRtS P.7i10 Section L Viiidinsrs for the Adoption and Aooroval of the mpg, 2.01. The Council hereby finds that the Plans. are intended and, in the judgement of this Couna the effect of such actions will be, to provide an impetus for redevelopment in the public purpose and accomplish certain objcctives as specified in the Plans, which are hereby incorporated herein. Section 3. rjpdinas for the Esuablishment of Tax Increment Financing District No. 1-22, 3.01. The Council hereby finds that Tax Increment Financing District No. 1-22 is in the public interest and is a "redevelopment district` under Minnesota Statutes, Section 469.174, staled. 10 OX l ). 3.02. The Council f nth er finds that tete proposed developments would not occur solely through private mmstment within the reasonably foreseeable tubae and that the increased maker valise on the site that could reasonably be expected to occur without tete use of tax increment financing would be I= than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projiecud tax inaemrnts for the maximum duration of District No. 1-22 permitted by die Tax hicrament Finsrwiq Plan. that the Plans conform to the general plan for die development or tedrvelopment of the City as a whole; and that the Plass will afford maximum opportunity consistent with the sound needs of the Ciry as a whole, for the development of District No. 1.22 by private enterprisc. 3.03. The City elects to melte a qualifying local contribution in accordance with Minnesr to Statues, Section 273.1399. subd. 6(a in order to qualify Diwict No. 1-22 for awnption from state aid losses ser forth in Section 273.1399. 3.04. The Council further Ends, dechms and dexamloes aha the City made the above findings stated in th's Section and has set forth the reasons and supporting fads for each detan ninadon in writing, attached hecto as Exhibit A. Section 3. Agmp mal and Adexhmion of the Plans. 4.01. The Plans, at presented to due Council an this date, Including without limitatimh we findings and statemcnu of objectives contained therein. are herby approved, ratified. established. and a:opted and shall be placed on File in the office of the Executive Director of ahs HAA. 4.02. Tbs staff of the City, the City's advisors and legal counsel are authorized and -Iireeted to proceed with the impl mentation of the Plans and to negotiate, draft. prepare and present to this :ouncil for its consideration all hsrther plans, resolutions. documents and contracts necessary for this purpn a. 4,03 The Audita of Wright County is r queued to entity the original net tax capadt3 of Dishier No. 1-27, as described in the Plaro, will to codify in each year thteeafba tate amount by which the - viginal act tax capacity has Increased or decreasod: and the City of Monticello is wtthortzed and ill rected to forthwith tmnrrrtit this request to the County Auditor in such forte and comma as the Auditor may specify. together with a list of all properties within District No. I.22. fru which building permits havt been issued during the 18 months Immedirtely preceding the adaption of this resolution MAMI?U UTAWOrTtCraaTW4�UCrrrneras M MFR 06 'S7 10:51F" EHLERS S RSSOCIATES P.8/10 7be motion for dw adoption of the fanning noolutim was duly wooded by Cotmil in= , and upon a vote being taken dnaeonn, die following voted in livor thereof, and the following voted against die same: Dared: March 10, 1997 A77W; Mayor City Administtamr (Sew) M aQ M MAR 06 197 ii:OB611 EFLERS 6 ASSOCIATES P.2/2 OGMIT A RESOLVUON N The arson and facts supporting the fundings for the adoption of the Tax Increment Financing Plan for Tu Inert Financing District No. 1-22, ('District No. 1-22*) as requited pursuant tc Minnesota Statutes, Sema 469.173. Subdivision 3 arc as follows: Finding that the District No. 1.22 is a "redevebpnent district' as defused in Mionesoln Statutes, Section 069.174, Subdivision 10 (a) (1). District No. 1-22 consists of 640 parcels, with plans to redevelop the area for cmnmaeiaifundusuial pwpeaa. Parcels that make up over 70 percent of the area in District No. 1-22 ate occupied by buildings, street. rttilities or other improvements and mole tban 50, - of the buildings in District No. 1-22, not including outbuildings, we structurally substandard to a degree requiring substantial renovation or clearance, all as demonstrated by the infor nation found in Appendix,E of the Tax Increment Finartcing Plan for Tax Increment Financing District No. 1.22. Finding Not the proposed developosm in dee opinion of the Council, would not occur ae/ely Nroulh private mvesaaent within the reasonablyforeseeable futwe and Nat the Increased marker value of the site Nat could reasonaby be expected to occur without the use of tae increment financing would be leu than the increase in the market value estimated to result from the proposed development 4 ter subttnattng the prereat wire of the projected as eneraaew for As nm.dnsuns duration of the district permirid by As plan. Due to the high cost of redowioprnent or the parcels currently occupied by or adjoining parcels with substandard buildings. the limited amount of com nereiallodusuttid property for expansion adjacent to the existing pmjcct, the incompatible land uses at dose proximity, and the cost of financier the proposed impro%ernents, this project is feasible only through assistance, in part, from tax hrcremern financing. A comparative analysis of estimated market value both wuh and without establishment of District No. 1.22 and the use of tax irhae muata bas been pem[attned as described above, If W development which is proposed , to assisted with tax increment were to occur In District No. I.22, the total increased market value would be up to 1633,000,000. It is the Council's finding that no development with a market value of grazer dun 1617,730,000 would occur without tax increment aawtwoo in this district witch 23 yam. Even if the acmd increased market value due to tax increment assistance were only 19 of the maximum estimate of 1633.000,000. the Council finds that it is reasonable to auume that no moue Nan $6.000,000 of new development would occur without tax increment ouistauae. This finding Is based upon evidence from smaW past expaience with the high cat of acquisition and new commxtion of redevelopment within downtown and the building inspectors evidence that builds" pennits gime Jame 1993 totaled Ins dion 539.300. Fv dbrg drat rho Dtrcfa No, 1.22 co%fonmr to the gawtni plmr for der devefoplratr or reddowLop N of rite manieipafiry as a whole. The Tax Inaemam Flnonda Plan for District No. 1.22 has bean reviewed by the Planning Commission and been found by resolution to conform eo the general development and redevelopment: plan of the City. a.UaNWWAU14RCsUW143%cM hat] �ti MAR 06 '97 10:52AM ERJMS ti GSSOCIRTES P. 10/10 C4. Finding that the Ta:1wrement Financing Plan for Duma No. 1.22 wiU fwd manomm opponuntry, connswu with the round needs of rhe City at a whole, for Bre developmou of Centra/ Monticello Redevelopment Project No. l by private vwVnre. ' The commaciaVmduwW developmrnt to be udsted by Diwict No. I-22 will resit in increased cW)oymew in the City and the State of Mhmnot>4 rhe reoovatioa of substandard proputim, iaataased to base of the State and add a high quality developmau to rhe City. M �M1Mtao't�W 0�n1e6QIfl+OiOTNtr.aL 31 CMemorandum Date: Ma "b 2, 1997 To: City of Monticello H.R.A. 011ie Koropchak. H.R.A. Executive Director From: Fredrick H. Patch, Chief Building Official Monticello Downtown Redevelopment Area Bight Criteria Qualification 1 have examined the Monticello Downtown Redevelopment Area to provide an opinion as to whether or not it meets the `Blight Criteria" for redevelopment tar increment districts as required by Minn. Stat. 469.114, subd. 10.. The Monticello Downtown Redevelopment Area must meet the following criteria to qualify as a redevelopment district: Parcels consisting of 70 percent of the area of the district must be occupied by buildings, streets, utilities or other improvements; and, More than 50 percent of the buildings, not including outbuildings, must be structurally substandard to a degree requiring substantial renovation or clearance. ("Strixttuaay wAam LaC mama thm the bmlthr; owt� defech w zwxnnW ckmmtz. as a mcibmaco of dcfe�imdes m rnmtW WjW= and fmt7mu, h& and •malou . fire plow m vrbb&n edequem egten, toynm m condimo of mtaiu pxfi imm. m ®ilm ractom which ddati or dcficaacim me afaakaat tocol ogmlkma to )usril) MroWtam a ckmmce. A ImAdutg is as Mxanily whatmdard Wit is in ampti®ce with the Wiling code tppdualie to icor hdl mp of emu to modified to a>tufy mo budding arb at a Cott of 1=3 iban 15 p=mt of tho co;t of coamtutmg a naw mucwe of the Lente aqume lbomgo and typo on Iho am.) Finding 1. An aerial photograph taken by Mark Hurd Company on March 22, 1994 dearly depicts that more than 70 percent of the arca of the district is occupied by bu ildings, parking lots and streets. Finding 2. In 1972, the State of Minnesota adopted the first Minnesota State Building Code. The City of Monticello first adopted and enforced the Minnesota State Building Code in 1975. Since then, many new building codes have been adopted that require buildings to be constructed very differently than prior to 1975. 71w most pervasive differences in buildings constructed after 1975 are in the addition of requirements for handicap accessibility, energy conservation, and prohibitions against the use of lead, asbestos and other toxic substances in building materials. I have reviewed property records of the Wright County Assessor and determined that there are 670 total parcels in the Monticello Downtown Redevelopment Area. m One -hundred and eighty-five (185) of those parcels have not been assigned building valuations. Those parcels are small remnants, vacant or immediately adjoining parcels and under the same ownership as parcels that have been built upon. There are at least 485 parcels that have been assigned building valuations and are built upon. Of those 485 built parcels, 403 (83%) have buildings that were constructed prior to building code adoption in 1975. For those buildings constructed prior to 1975, the cost of building modifications necessary to satisfy the requirements of the 1995 Minnesota State Building Code will exceed 15 percent of the cost of constructing a new structure of the same square footage and type on each site. The following are examples of items that would need to be improved to enable buildings constructed prior to 1975 to meet the requirements of the 1995 Minnesota State Building Code: 1. Many buildings in the Monticello Downtown Redevelopment Area provide public accommodations and would be required to fully comply with the 1995 Minnesota State Handicap Code and ADA Design Guidelines. Without major structural change, many commercial buildings could not conform to the detailed requirements for site, building and facilities accessibility. 2. Roof and wall thermal resistance must be increased to meet current energy codes. This would require the opening of roof and/or walls of buildings and installation of additional insulation. 3. Where building structures were constructed using lumber that was not graded and properly sized (i.e. logs used for columns, local mill sawn lumber) building structures would require reinforcement or replacement. 4. Mortar used in stone foundations downtown and elsewhere in the redevelopment area has been observed to be soft and crumbling (frilly aged in the process of hydrolysis). Substantial structural renovation would be required. 5. In most cases, wiring methods and materials have changed and substantial upgrades would be required (i.e. ground fault interruptible circuitry, and increased service entrance size due to increased load demand). 6. Plumbing methods have changed for sanitary sewer waste and vent, and for water distribution piping. Prior to March 1983, copper piping used for water distribution was joined with lead based solder. For buildings constructed prior to 1983, most plumbing piping would have to be replaced. 7. Paint would have to be stripped ftom buildings as lead was often used as a paint additive. Page 2 Ir K N Glass and glaring requirements have changed to require installation of safety glass in locations that may be subject to human impact. Any glass in a door or within 24 inches of a doorway must be replaced with safety glass. Floor tile, siding, roofing materials, ceiling texture, linoleum, duct wrap and insulation for plumbing and heating piping were often asbestos containing and would need to be abated and replaced with non -asbestos containing materials. 10. Five blocking and fire and draft stops do not exist in many of the pre -1975 buildings. Installation of fire blocking and fire and draft stops to meet current codes would require substantial demolition and reconstruction of buildings. City building department records indicate that only three (3) pre -1975 buildings in the project area have been substantially renovated to meet the building codes of the 1989s. Many other buildings have had minor remodeling but have not been updated to current codes. Based on the age of buildings, and without detailed inspection and analysis of each building within the Monticello Downtown Redevelopment Area, for the 403 pre -1975 buildings to be brought into compliance with current building codes, most would need to be completely gutted and reconstructed. The cost for such work would by far exceed 15 percent of the cost of constructing a new building. Based on my knowledge of the building codes, personal on-site observations of buildings within the project area, and information available from the Wright County Assessor, l conclude that at least 82 percent of the buildings, not including outbuildings, meet the definition of "structurally substandard" to a degree requiring substantial renovation or clearance, and meet the "Blight Criteria" for redevelopment tax increment districts as required by Minn. Stat. 469.174, subd. 10. Attachments: Wright County Assessors Property Data for Monticello Downtown Redevelopment Area Parcels Aerial Survey, Photographed by Mork Hurd Company on March 22, 1994 Building Cade Adoption Dates From Building Codes & Standards Division, Department of Administration, State of Minnesota Page 3 8L NOTE: Since June 1995, there have been 12 total building permits issued within the Monticello Downtown Redevelopment Area. Total valuation of work conducted under those 12 permits is S 59.500. Page 4 TH EhWn MW ftWCW ®81M CLEADERS IN PUBLIC FINANCE MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY AND THE MONTICELLO CITY COUNCIL 11 " �^O0r"Y01^..""'°WkDbRFICED 1N MINNEAPOLIS, MN AND EAOOKFIELD, WI 2950 Norwcat Contot . 90 South Seventh Street. MtnrteiWis, MN 55402.4100 Telephone 812.339.9291 . FAX 812.3394854 9 PI.) 0 MODIFICATION OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. AND THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-22 (a redevelopment district) Schedule Everitt January 10. 1997 January 27, 1997 of as of Letter and map received by local county Commissioner giving notice of o potential redevelopment district (30 days prior to public hearing notice published). (Sent by January 24, 1997) January 27, 1997 City Council calls for a public hearing to modify Redevelopment Project No. 1 and establish Tax Increment Financing District No. 1 -22 - February S.1997 Plans forwarded to School District. County Board and Hospital District (at least 30 days prior to public hearing). (Sent by February 3, 1997) February 27, 1997 Date of publication of hearing notice and map (at [cast 10 days but not more turn 30 days prior to hearing). (Notice to Monticello Times by February 24, 1997) March 4.1997 Planning Commission finds Plans to be in compliance with the comprehensive plan. Manch 5,1997 HRA approves the Plans. March 10, 1997 City Council holds public hearing on the modification of Redevelopmcnr Project No. I and the establishment of Tax Irlcrerltent Financing District No. 1.22 and pestes resolutions approving the Plans. Meeh 11, 1997 EhlerslPublicorp Certifies Plans to county and state. 11 " �^O0r"Y01^..""'°WkDbRFICED 1N MINNEAPOLIS, MN AND EAOOKFIELD, WI 2950 Norwcat Contot . 90 South Seventh Street. MtnrteiWis, MN 55402.4100 Telephone 812.339.9291 . FAX 812.3394854 9 PI.) 0 I Draft as of February 27, 1997 II Draft for HRA and Planning Commission Review MODIFIED TAX INCREMENT FINANCING PLAN for the modification of TAX INCREMENT FINANCING DISTRICT NO. 1-17 (an economic development tax increment financing district) located within CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Public Hearing: Mangy 10, 1997 Adopted: Prepared by: EHLERS AND ASSOCIATES. INC. 2930 Norwest Building 90 South Seventh Sam Minneapolis, Minnesota 534024100 Phone: (612) 3394291 Fox: (612)339-0834 E-mail: info®chlem-inc.com Web Site: www.ehkn4nc.com TABLE OF CONTENTS (for reference purposes only) SECTION XVII MODIFIED TAX INCREMENT FINANCING PIAN FOR TAX INCREMENT FINANCING DISTRICT NO. I-17 ............................. 18-1 Subsection 18-1. Forward .................................................... 18-1 Subsection 18.2. Statutory Authority ............................................ 18-1 Subsection 18-3. Statement of Objectives ........................................ 18-1 Subsection 18-4. Redevelopment Plan Overview ................................... 18-1 Subsection 18-5. Legal Description of Property in Tax Increment Frtartcing District No. 1-17 18-2 Subsection 18-66. Classification of Tax Increment Financing District No. 1-17 ............ 18-2 Subsection 18-7. Original Tax Capacity and Tax Rate .............................. 18-2 Subsection 18-8. Estimated Captured Net Tax Capacity Value/Increment ............... 18-3 Subsection 18-9. Property To Be Acquired ....................................... 18.4 Subsection 18-10. Uses of Funds ................................................ 18-4 Subsection 18.11. Sources of RevenuelBonded Indebtedness .......................... 18.5 Subsection 18-12. Duration of Tax Increment Financing District No. 1-11 ................ 18.6 Subsection 18.13. Estimated Impact on Other Taxing Jurisdictions ..................... 18.6 Subsection 18-14. Modifications to Tax Increment Financing District No. 1-17 ............ 18.7 Subsection 18-15. Administrative Expenses ....................................... 18.8 Subsection 18-16. Limitation of Increment ........................................ 18-8 Subsection 18-17. Use of Tax Increment .......................................... 18-9 Subsection 18.18. Notification of Prior Planned Improvements ....................... 18.10 Subsection 18-19. Excess Tax Increments ........................................ 18.10 Subsection 18-20. Requirements for Agreements with the Developer ................... 19.10 Subsection 18.21. Assessment Agreements ....................................... 18.11 Subsection 18.22. Administration of Tax Increment Financing District No. 1-17 .......... 18.11 Subsection 18.23. Financial Reporting Requirements .............. I................ 18.1 Subsection 18.24. Municipal Approval and Public Purpose .......................... 18.13 Subsection 18-25. Other Limitations on the Use of Tax Increment ..................... 18.14 Subsection 18-26. State Tax Increment Financing Aid .............................. 18-14 Subsection I8-27. County Road Costs ........................................... 18.14 Subsection I8-28. Economic Development and Job Creation ......................... 18.14 Subsection 18-29. Summary ................................................... 18.15 APPENDIX A BOUNDARY MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICT NO. 1- 17 ......................... A -I APPENDIX B LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN TAX INCREMENT FINANCING DISTRICT NO. 1-17 .............................. B -I APPENDIX C ESTIMATED ADDITIONAL CASH FLOW FOR TAX INCREMENT FINANCING DISTRICT 1.17....................................................................... C-1 APPENDIXD ` MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVEIAPMENTI ....... D-1 SECTION XVIII MODIFIED TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1•I7 Subsection 19-1. Forward The City of Monticello ('City'), the Monticello Housing and Redevelopment Authority (the *HRA'), staff and consultants have prepared the following information for the expedition of the modification of Tax Increment Financing District No. 1-17 ("District No. 1-17'), an economic development tax increment financing district, located in Central Monticello Redevelopment Project No. I . The original Tax Increment Financing Plan for Tax Increment Financing District No. 1-17 was adopted on August 8, 1994. This modification is intended to facilitate the 20,000 square foot expansion of Fay -Mar's existing 15,000 square foot facility. Subsection 18-2, Statutory Authority Within the City of Monticello, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the City and HRA have certain statutory powers pursuant to Minnesota Statues, Sections 469.001 through 469.047, inclusive, as amended, and Sections 469.174 through 469.179, inclusive, as amended (the "Tax Increment Financing Act" or —171F Act"), to assist in financing public costs related to this project. This Section contains the Modified Tax Increment Financing Plan (the "Plan") for District No. 1-17. Other relevant information is contained in the Modified Redevelopment Plan for Central Monticello Redevelopment Project No. 1. ( Subsecilon is -J, Statement of Ohlectives District No. 1.17 currently consists of I parcel of land and adjacent and internal rights-of-way. District No. 1.17 was created to facilitate the constitution of a 15.000 square foot office/manufacturing facility in the City of Monticello. This modification is intended to facilitate the 20,000 square foot expansion of Fay -Mar's existing 15,000 square foot facility. This plan is expected to achieve many of the objectives outlined in the Modified Redevelopment Plan for Central Monticello Redevelopment Project No. I. The activities contemplated in the present Modified Redevelopment Plan and the Modified Tax hrcrement Financing Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of District No. 1.17 and Central Monticello Redevelopment Project No. I. Suhsectlor lg-4, Redevetomment Plnn Overvka 1. Property to be Acquired - Selected property located within District No. 1.17 may be acquired by the City or HRA and is further described in this Plan. 2. Relocation - Complete relocation services are available pursuant to Minnesota Statutes, Chapter 117 and other relevant state and federal laws. 3. Upon approval of the developer's plan relating to the project and completion of the necessary legal requirements, the City or HRA may sell to the developer selected properties that they may acquire within District No. 1-17 or may lease land or facilities to the developer. City of Moatkctb Madincd Tai h,erm avecLR/ Pint far Tu Itrorrea R.Oc1y nutria W 1.17 12.1 The City or HRA may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public streets work within District No. 1-17. Subsection 18.5. Leenl Description of Proaerty in Tax Increment Financinm District No. 1.17 District No. I-17 encompasses all property and adjacent rights-of-way identified by the parcel listed below. Please see the map in Appendix A for further information on the location of District No. 1-17. Parcel Numbers 155-085.001010 (previously a pan of PIN 155-011-000101) Subsection 18.6. Classification of Tax Increment Financing District No. 1-17 The City and HRA, in determining the need to create a tax increment financing district in accordance with Minnesota Statutes, Sections 469.174 to 469.179. as amended, inclusive. find that Tax Increment Financing District No. 1.17, to be established, is an economic development district pursuant to Minnesota Statutes, Sections 469.174. Subdivision 12 as defined below: "Economic Development District" means a type of tar increment financing district which consists of any project, or portion of a project, not meeting the requirements found in the definition of redevelopment district, renewal and renovation district, soils condition district, mined underground space development district, or housing district, but which the authority fords to be in the public interest because: (1) it %•ill discourage commerce, industry, or manufacturing from moving their operations to another state or municipality: or (2) it will result in increased employment in the state: or (3) it will result in preservation and enhancement of rhe tax base of the state. District No. 1.17 is in the public interest because it will meet the statutory requirement from clause I and 2. Revenue derived from tax increment from an economic development district may not be used to provide improvements, loans, subsidies, grants, interest nate subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a purpose other than: (1) the manufacturing or production of tangible personal property, including processing resulting in the change in condition of the property; (2) warehousing, storage, and distribution of tangible personal property, excluding retail sales: (3) research and development related to the activities listed in items (1) or (2): (4) telemarketing if that activity is the exclusive use of the property: (5) tourism facilities: or (6) space necessary for and related to the activities listed in items (1) and (5). District No. 1.17 qualifies, as it will have facilities under Purposes 1, 2, and 6. ,Sphcectlnn 18-7 ., Otialnal Tax CAnnelty-and Tax Rail: Pursuant to Minnesota Statutes, Sections 469.174, Subdivision 7 and Sections 469.177, Subdivision 1, the Original Net Tax Capacity (ONTC) as certified for District No. 1.17 is based on the market values placed on City d m mtcew Madilkd To tw.m m taaamuy Rm b Tu mnnoau Fbu tq pnuin No 1.17 18.3 the property by the assessor in 1994 for taxes payable 1995. There is not an economic development adjustment factor associated with District No. 1-17. Pursuant to Sections 469.177, Subds. 1 and 2, of the TIF Act, the County Auditor shall certify in each year (beginning in the payment year 1996) the amount by which the original value has increased or decreased as a result of a change in tax-exempt property within District No. 1-17, reduction or enlargement of District No. 1-17, or changes in connection with previously issued building permits. In any year in which the current Net Tax Capacity value of District No. 1-17 declines below the ONTC, no value will be captured and no tax increment will be payable to the City or HRA. The County Auditor shall certify in each year after the date the ONTC was certified (beginning in payment year 1996), the amount the ONTC has increased or decreased as a result of: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district; 3. change due to adjustments, negotiated or court-ordered abatements; 4. change in the use of the property and classification; or 5. change in state law governing class rates. The original local tax rate for District No. 1.17 is the local tax rate for taxes payable 1995. The Original Tax Capacity and the Original Local Tax Rate for District No. 1-17 appear in the table below. Original Tax Capacity Value $46 Percent Retained by Authority 100% Original Tax Rate 112.873 Suh%"Ion 19.8. Ectlmated Captured Net Tax Caandty ValueAnceement Pursuant to Minnesota Statutes, Sections 469.174 Subdivision 4 and Minnesota Statutes, Sections 469.177, Subdivision 1, 2, and 4, the estimated Captured Net Tac Capacity (CTC) of District No. 1. 17. within Central Monticello Redevelopment Project No. I, upon completion of the project, will annually approximate tax increment revenues as shown in the table below. The City and HRA request 100 percent of the available increase in tau capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 1996. The project tax capacity listed is an estimate of values when the project is completed. Original (Adopted August 8, 1994) FAtlmppted Ta Ca adty upon Comptetlon of PrcRca $17,253 Original Fstimated Tax Capacity M FAUmated Captured Tax Capadty $17,207 EAlmat�d Atlnual Rx Increment (CTC x ax to $19,422 My of Mmtkcoo Madlrkd Tu Io, , Rnmctq PtM no Tu IRamclq Darin No 1 • 17 11.1 `7 Please note that tax increment was not received in 1996 on the original project as expected in the original plan. Increment on the original project is expected in 1997. The additional increment from the modification described below is expected to begin in 1999. All increment will be received through 2005. As modifred March 10, 1997 Estimated Tax Capacity upon Completion of Project $35,000 Original Estimated Tax Capacity Q Estimated Captured Tax Capacity $35,000 Estimated Annual Tax Incl etnent (CTC it Local Tax Rate $39,506 The total project tax capacity for the property is the combination of the above two chars. Subsection 18-9. Property To He Aatalred The City or HRA may acquire any parcel within District No. 1-17 including interior and adjacent street rights of way. I. Any properties identified for acquisition will be acquired by the City or HRA only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. 2. The following are conditions under which properties not designated to be acquired may be acquired: The City or HRA may acquire property by gilt, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this tax increment financing plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subxectlon 18.10. 41xei of Fundi Currently under consideration for District No. 1.17 is a proposal to expand an existing facility. The City and HRA have determined that it will be necessary to provide assistance to the project for certain costs. The HRA has conducted a feasibility study for the development or re&Welopment of property in and around District No. 1.17. To facilitate the modification and development or redevelopment of District No. 1.17, this Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with District No. I.17 is outlined in the following table. Cay d Momadlo MOM(W Tun drtanem Ran,* Ptia rur Tu hoem m Romans tinow No. 1.17 114 gT Uses or Funds Original Modified Total 8/8/94 3/10/97 Combined Land Acquisition 550,000 50,000 Public Improvements 40,000 67,500 107,500 Site Improvements 0 67,500 67,500 Contingency 13,500 13,500 Ad ministrati velProfessional Services Costs (up to 10%) 12,000 15.000 27,000 Interest 16,632 125,000 141,632 Discount 2.868 2.868 TOTAL $135.000 275.000 410.000 Estimated costs associated with Tax Increment Financing District No. I-17 are subject to change. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. No more than 20 percent of the tax increment paid by property within District No. 1-17 will be spent on activities related to development or redevelopment outside of District No. 1-17 but within the boundaries of Central Monticello Redevelopment Project No. 1, (including administrative costs, which are considered to be spent outside of District No. 1.17) subject to the limitations as described in this Plan. Subsection 18-11. Sources of Revenue/pRBAS Indebtednecv, Public improvements costs. acquisition, relocation, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The City or HRA reserves the right to use other sources of revenue legally applicable to the Modified Redevelopment Plan and the Modified Tax Increment Financing Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and constroction, proceeds from the sale of Imd, other contribu- tions from the developer and investment income, to pay for the Estimated Public Costs. The City or HRA reserves the right to incur bonded indebtedness as o result of the Modified Tax Increment Financing Plan. The total amount of bonded indebtedness related to the use of tax increment financing will not exceed 5410,000 (including bonded indebtedness of $135.000 as originally adopted and bonded indebtedness of 5275,000 as modified March 10, 1997) without an amendment to the Tax Increment Financing Plan pursuant to applicable statutory requirements, This provision does not obligate the City or HRA to incur debt. The City or HRA will issue bonds only upon the determination that such action is in the best interest of the City. The City or HRA may also finance the activities to be undertaken pursuant to the Modified Tax Increment Financing Plan through loans from funds of the City or HRA or to reimburse the developer on a "pay-as-you-go" basis for eligible activities paid for by the developer. The estimated sources of funds for District No. 1.17 are contained in the table below. car of Mmaccau Modtmcd Tu Wwrtwo Flmedoy RM to Tu tw m,. Randvs Duran No, 1.17 1114 8a 51 As modiAed March 10,1997 Sources of Funds Total Tau Increment $410,000 Local Contribution Other Revenue Sources TOTAL $410,000 Subsection 18.12. Duration of Tax Increment Financing District No. 1-17 Pursuant to Minnesota Statutes, Sections 469.175, Subdivision 1, and Sections 469.176, Subd. I, the duration of District No. 1.17 must be indicated within the Plan. Pursuant to Minnesota Statutes, Sections 469.176, subdivision 1(b), the duration of District No. 1.17 will be 9 years from the date of receipt of the first increment by the City or HRA or I I years from the date of approval of the Plan, whichever is less. The date of receipt by the City of Monticello of the first tax increment will be approximately 1997 for the original project and 1999 for the additional project Thus, it is estimated that District No. 1-17, including any modifications of the Plan for subsequent phases or other changes, would last from 1997 to 2005, or when the Plan is satisfied. The City or HRA does reserve the right to decertify District No. 1.17 prior to the legally required date. Subsectlon 18.13, Estimated Imanct on Other Taxing J i"kilons The estimated impact on other taxing jurisdictions assumes construction which would have occurred without the creation of District No. 1.17. If the construction is a result of tax increment financing, the impact is 50 to other entities. Notwithstanding, the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact that the construction would not have occurred without the assistance of the City or HRA, the following estimated impact of District No. 1.17 would be as follows if the 'but for test was not met: Orlglaal IMPACT ON TAX BASE As modified March 10, 1997 IMPACT ON TAX BASE, Cid of aim Modified TU t -wo tuecty Pin The T" 1`131—tits Dlmlcr No 1.17 114 gv 1993/1994 Estimated Captured Total Net Tau Capacity (CTC) Percent of CTC Tax Capach Up m Pmiect Completion to Entity Total Wright County $48.638,744 17.207 0.0354eb I.S.D. No. 882 15,583.604 17,207 0.1104% City of Monticello 18,344,524 17,207 0.0938% Other 23.874,025 17,207 0.0721% As modified March 10, 1997 IMPACT ON TAX BASE, Cid of aim Modified TU t -wo tuecty Pin The T" 1`131—tits Dlmlcr No 1.17 114 gv Original IMPACT ON TAX RATES 1996/1997 Estimated Captured Potential Total Net Tax Capacity (CTC) Percent of CTC cm Tax Capacity Upon iect Completion to Entity Total Wright County 53,630,869 35,000 0.0653% I.S.D. No. 882 19,237,501 35,000 0.1819% City of Monticello 15,792,922 35,000 0.2216% Other 26,334,087 35,000 0.1329% Original IMPACT ON TAX RATES As modMed March 10, 1997 IMPACT ON TAX RATES 1994 Extension Percent Potential Rates of Total cm Taxa Wright County 0.3197 28.07% 17,207 5,500 I.S.D. No. 882 0.6063 53.25% 17,207 10,433 City of Monticello 0.1853 16.27% 17,207 3,188 Hospital District 0.0274 2.41% 17.207 lu Total 1.1387 100.005b 68,828 19,594 As modMed March 10, 1997 IMPACT ON TAX RATES The estimates for the modifications listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the estimated 1995/Pay 1996 nue. The total net capacity for the entities listed above are based on Pay 1996 figures. The expansion of District No. 1.17 will be certified under the actual 1996/Pay 1997 rates which were unavailable at the time this Plan was prepared. In accordance with Minnesm Statutes, Sections 469.175, Subdivision 4, any reduction or enlargement of the C geographic area of Central Monticello Redevelopment Project No. I or District No. 1.17; increase in amount of bonded indebtedness to be incurred, including a det r ination to capitalize interest on debt if that chy d mmaccuo Mwiw Tu mna"RR=iq PW tx To WMMM Po iq obaln No. 1.17 11.7 S0 )996 Exlension Percent Paential BP39i pf Toml IRM Wright County .29499 26.68% 35,000 10,325 I.S.D. No. 882 .60110 54.36% 35,000 21,039 City of Monticello .18509 16.7456 35,000 6,478 Other X63 2,2356 Mm 99 Total 1.1058 100.00% 38,703 The estimates for the modifications listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the estimated 1995/Pay 1996 nue. The total net capacity for the entities listed above are based on Pay 1996 figures. The expansion of District No. 1.17 will be certified under the actual 1996/Pay 1997 rates which were unavailable at the time this Plan was prepared. In accordance with Minnesm Statutes, Sections 469.175, Subdivision 4, any reduction or enlargement of the C geographic area of Central Monticello Redevelopment Project No. I or District No. 1.17; increase in amount of bonded indebtedness to be incurred, including a det r ination to capitalize interest on debt if that chy d mmaccuo Mwiw Tu mna"RR=iq PW tx To WMMM Po iq obaln No. 1.17 11.7 S0 determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized; increase in the portion of the captured tax capacity to be retained by the City or HRA; increase in total estimated tax increment expenditures; or designation of additional property to be acquired by the City or HRA shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original plan. The geographic area of District No. 1-17 maybe reduced, but shall not be enlarged after five years following the date of certification of the original tax capacity by the county auditor. The requirements of this paragraph do not apply if (1) the only modification is efimination of parcel(s) from the project or district and (2) (A) the current tax capacity of the parcel(s) eliminated from the district equals orexceeds the tax capacity of those parcel(s) in the district's original tax capacity or (B) the authority agrees that. notwithstanding Sections 469.177, subdivision 1, the original tax capacity will be reduced by no more than the current tax capacity of the parcel(s) eliminated from District No. 1-17. The City or HRA must notify the County Auditor of any modification that reduces or enlarges the geographic area of District No. 1-17 or Central Monticello Redevelopment Project No. 1. Modifications to Tax Increment Financing District No. 1-17 in the form of a budget modification or an expansion of the boundaries will be recorded in the Plan. Subsecllen 18-15, Adminktrative Exaensex In accordance with Minnesota Statutes, Sections 469.174, Subdivision 14, and Minnesota Statutes. Sections 469.176, Subdivision 3, administrative expenses means all expenditures of an authority other than amounts paid for the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the district, relocation benefits paid to or services provided for persons residing or businesses located in the district or amounts used to pay interest on, fund a reserve for, or sell at a discount bonds issued pursuant to Sections 469.178. Administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Tax increment may be used to pay any authorized and documented administrative expenses for District No. 1-17 up to but not to exceed 10 percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for Central Monticello Redevelopment Project No. 1, whichever is less. Pursuant to Minnesota Statutes, Sections 469.176, Subdivision 4h, tax increments may be used to pay for the county's actual adminisxative expenses incurred in connection with District No. 1.17. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to Minnesota Statutes, Sections 469. 177. Subdivision 11, the county treasurer shall deduct an amount equal to 0.1 percent of any increment distributed to the City or HRA and the county treasurer shall pay the amount deducted to the state treasurer for deposit in the state general fund. Subsection 18-16. Uniltation n(lnerrment Pursuant to Sections 469.176, Subd. 1(a), of the TIF Act, no tax increment shall be paid to the City or HRA for Di strict No. 1.17 alter three (3) yew from the date of certification of the Original Net Tax Capacity value of the taxable property in District No. 1-17 by the County Auditor unless within the three (3) years period: (1) bonds have been issued pursuant to Sections 469.178, or in aid of a project pursuant to any other law, except revenue bonds issued pursuant to Sections 469.132 to 469.163, or (b) the City or HRA has acquired property within District No. 1- 17. or (c) the City or HRA has constructed or caused to be constructed public improvements within District No. 1.17. Coy d Mmkcau 11addW Tu mem m Fka=my Plan fu Tu laacrncm Ra=ml DI¢M No. I. n 11.1 The bonds must be issued, or the City or HRA must acquire property or construct or cause public `r!1 improvements to be constructed by approximately August, 1997. The tax increment pledged to the payment of bonds and interest thereon may be discharged and may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to Minnesota Statutes, Sections 469.176, Subdivision 6: if, after four yearsfrom the date of certification of rhe original tax capacity, of the tax increment financing district pursuant to Minnesota Statutes, Sections 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan. no additional tar increment may be taken from that parcel and the original tax capacity of that parcel shall be excluded from the original tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including improvement ofa street adjacent to that parcel, in accordance with the tax incrementfinancing plan. the authority shall certify to the county auditor in the annual disclosure report that rhe activity has commenced. 77+e county auditor shall certify the tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original tar capacity of the tar increment financing district. The county auditor must erpforce the provisions of this subdivision... For purposes of this subdivision, qualified improvements are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The City or HRA or a property owner must improve parols within District No. 1.17 by approximately August, 1998. Suhsectlon IA -17, Use of Tax Increment The City or HRA hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in District No. 1.17 for the following purposes: I. to pay the principal of and interest on bonds used to finance a project; 2. to finance, or otherwise pay the capital and administration costs of the Central Monticello Redevelopment Project No. I pursuant to the Development District Act; 3. to pay for project costs as identified in the budget 4. to finance, or otherwise pay for other purposes as provided in Sections 469.176. Subd. 4, of the TIF Act; S. to pay principal and interest on any loans, advances or other payments made to the City or HRA or for the benefit of Central Monticello Redevelopment Project No. 1 by the developer. 6. to finance or otherwise pay premiums and other costs for insurance. credit enhancement, or other security guarantecing the payment when due of principal and interest on tax increment bonds or bonds issued pursuant to the Tax Increment Financing Plan or pursuant to Minnesota Statutes, Chapter 462C and Minnesota Statutes, Sections 469.132 to 469.165. or both; and 7. to accumulate or maintain o reserve securing the payment when due of the principal and edy d M—.M.Encb Tal Ioaettru Resnp tTm fm Tu Irctcncm Raa ft oi:ma No 1.17 11.0 8y interest on the tax increment bonds or bonds issued pursuant to Minnesota Statutes, Chapter (� 462C and Minnesota Statutes, Sections 469.152 to 469.165, or both. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by Sections 469.176, subd. 4, of the TIF Act. Tax increments generated in Tax Increment Financing District No. 1.17 will be paid by Wright County to the City of Monticello for the Tax Increment Fund of said District No. 1-17. The City or HRA will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for City or HRA administration (up to 10 percent) and the costs of public improvement activities outside District No. 1-17. Subsection 18-18. Notification of Prior Planned Imorovements The City or HRA shall, after due and diligent search, accompany its request for certification to the County Auditor or its notice of District No. 1-17 enlargement with a listing of all properties within District No. 1-17 or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Modified Tax Increment Financing Plan by the municipality pursuant to Sections 469.175, Subd. 3, of the TIF An. The County Auditor shall increase the original value of District No. 1.17 by the value of improvements for which a building permit was issued. Pursuant to Minnesota Statutes, Sections 469.177, Subdivision 4, the City or HRA has reviewed the area to be included in the Tac Increment Financing District No. 1.17 and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the Plan by the City and HRA. If the building permit had been issued within the 18 month period preceding approval of the plan by the City and HRA, the county auditor shall increase the original tax capacity of the district by the valuation of the improvements for which the building permit was issued. Pursuant to Minnesota Statutes, Sections 469.176, Subdivision 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the Modified Tax Increment Financing Plan, including the amount necessary to cancel any tax levy as provided in Minnesota Statutes, Sections 475.61, Subdivision 3, the City or HRA shall use the excess amount to do any of the following: 1. prepay the outstanding bonds; 2. discharge the pledge of tax increment therefor. 3. pay into an escrow account dedicated to the payment of such bond; or 4. return the excess to the County Auditor for redistribution to the respective taxing juri sdk6ons in proportion to their tax capacity rate as provided in Minnesota Statutes. Sections 469.176, Subd. 2. In addition, the City or HRA may, subject to the limitation set forth herein, choose to modify the tax inaernent financing plan in order to finance additional public costs of Central Monticello Redevelopment Project No. Snhmoign 18.20. &aulrements far ASremtents with the Develnxr The City or HRA will review any proposal for private development to determine its conformance with the cur of Mam¢cno ModUhti rar Increven cte.ortey Por res Tu hrn®ca rawdais Maw No 1.17 1410 U12 Modified Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the City or HRA to demonstrate the conformance of the development with city plans and ordinances. The City or HRA may also use the Agreements to address other issues related to the development. Pursuant to Sections 469.176, Subd. S, of the TIF Act, no more than 10 percent, by acreage, of the property to be acquired in District No. 1-17 as set forth in the Modified Tax Increment Financing Plan shall at any time be owned by the City or HRA as a result of acquisition with the proceeds of bonds issued pursuant to Sections 469.178, of the TIF Act, without the City or HRA having, prior to acquisition in excess of 10 percent of the acreage, concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the City or HRA should the development not be completed. Subsection IS -21. Assessment Agreements Pursuant to Minnesota Statutes, Sections 469.177, Subdivision 8, the City or HRA may enter into an agreement in recordable form with the developer of property within District No. 1-17 which establishes a minimum market value of the land and completed improvements for the duration of District No. 1-17. The assessment agreement shall be presented to the assessor who shall review the plans and specifications for the improvements constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment ugreement appear, in the judgment of the assessor. to be a reasonable estimate, the assessor may certify the minimum market value agreement. Suhseetlon IR -22, Adminkslration of Tax Increment Financing P)Ndct No. 1-17 Administration of District No. 1.17 will be handled by the Executive Director of the HRA of the City of Monticello. Suhsectlon IR -23. JInnnclal ReunrtlnLReanlremenls Pursuant to Minnesota Statutes. Sections 469.175, Subdivisions S, 6, and 6(a): the City or HRA must file an annucl disclosure report for all tax inurement financing districts with the State Auditor, the County Board, the School Board, and the County Auditor. Pursuant to Sections 469.175, Subd. 5, of the Tax Increment Financing Act, the City or HRA must file an annual disclosure report for District No. 1.17. The report shall be filed with the County Board. County Auditor. School Board, and the State Auditor on or before July I of each year. The report to be filed by the City or HRA shall include the following information: 1. the amount and source of revenue in the tax increment account; 2. the amount and purpose of expenditures from the account; 3. the amount of any pledge of revenues, including principal and interest, on any outstanding bond indebtedness: 4. the wigirml oct tax capacity of District No. 1.17; 5. the captured net tax capacity retained by the City or HRA: 6. the captured net tax capacity shared with other taxing districts: 7. the tax increment received; and 8. any additional information necessary to demonstrate compliance with the tax increment ray d ltonslcetb Madnkd Tea tr TM= RNWAI Rae b Tea tenemeol Pjanditti Dam No, 1.17 11.11 grfi financing plan. Sections 569.175, Subd. 5, of the TIF Act also provides that an annual statement showing the tax increment received and expended in that year, the original value, captured net tar capacity, amount ofoutstanding bonded indebtedness. the amount of the district's increment paid to other governmental bodies. the amount paid for administrative costs, the sum of increments paid. directly or indirectly, for activities and improvements located outside of the district. and any additional information the City or HRA deems necessary shall be published in a newspaper of general circulation in the City. Pursuant to Minnesota Statutes, Sections 469.175. Subd. 6, of the TIF Act the City or HRA must annually submit to the State Auditor, on or before July I, a financial report which shall: provide for full disclosure of the sources and uses of the public funds in District No. 1-17; permit comparison and reconciliation with the City and HRA's accounts and financial reports; pmnit auditing of the funds expended on behalf of District No. 1-17 or that is funded in pan or whole through the use of a development account funded with tax increment from other tax increment districts or with public money. and be consistent with generally accepted accounting principles. The financial report must also include the following: the original net tax capacity of District No. 1-17: the captured net tax capacity of District No. 1-17, including the amount of any captured net tax capacity shared with other taxing districts; the amount budgeted under the Modified Tax Increment Financing Plan, and the actual amount expended for, at least. the following categories: (for the reporting period and for the duration of District No. 1.17) a. acquisition of land and buildings through condemnation or purchase; b. site improvements or preparation costs: c. installation of public utilities, parlung facilities, streets, roads, sidewalks, or other similar public improvements; d. administrative costs, including the allocated cost of the city; e. public park facilities, facilities for social, recreational, or conference purposes, or other similar public improvements; and the total costs of the property to the authority and the price paid the developers (for properties sold to developers); the amount of increments rebated or paid to developers or property owner for privately financed improvements or other qualifying costs, other than those reported under clause (7), that were issued on behalf of private entities for facilities located in District No. 1-17. Pursuant to Minnesota Statutes, Sections 469.175, subdivision 6a, the City or HRA roust also annually report to the State Audita before or on July I of each year the following amounts for the entire City or HRA: the total principal amount of nondefeased bonds that ere outstanding at the end of the previous calendar year, and the total annual amount of principal and interest payments that oro due for the current calendar year on (i) general obligation tax increment financing binds and (ii) other tax increment financing bonds; and for each tax incremrnt financing district within the City: City of xfmwcuo "(10 Te% lannnem Raanin Rao fu To tact' Randa Dam No. 1.11 I41: the type of tax increment financing district; the date on which the district is required to be decertified; the amount of any payments and the value of in-kind benefits, such as physical improvements and the used of building space, that are financed with revenues derived from increments and are provided to another governmental unit (other than the municipality) during the preceding calendar year, the tax increment revenues for taxes payable in the current calendar year, whether the Modified Tax Increment Financing Plan or other governing document permits increment revenues to be expended outside of District No. 1-17; any additional information that the State Auditor may require. Copies of this report must also be provided to the county and school district boards. Subsection 18-24, Munieloal ADgroval and Public Purpose The reasons and facts supporting the finds for the adoption of the Modified Tax Increment Financing Plan for District No. 1-17 as required pursuant to Minnesota Statutes, Sections 469.175, Subdivision 3 are as follows: 1. Finding that the District No. 1-17 is an economic development district as defined in Minnesota Statutes, Sections 469.174, Subdivision 12. District No. 1.17 is in the public interest because it will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality and it will result in increased employment in the state. 1. Finding that the proposed development in the opinion of the Council, Mould not occur solely through private investment within the rcasonably foreseeable future and therefore the use of tax increment is deemed necessary. Due to the high cost of development or redevelopment on the parcel and the cost of financing the proposed improvements, this project is feasible only through assistance, in pan, from tax increment financing. 3. Finding that the Afodilled Tax Increment Financing Plan for District No. 1.17 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Modified Tax Increment Financing Plan was reviewed by the Planning Commission on March 4, 1997. The Planning Commission found that the Modified Tax Increment Financing Plan conforms to the general development plan of the City. 4. Finding that the Modoed Tat Increment Financing Plan for District No. 1-17 will afford maximum opportunity. consistent with the sound needs of the City as a whole, for the development of Central Montirella Redevelopment Project No. I by private enterprise. The project to be assisted by Tax Increment Financing District No. 1.17 will result in increased employment in the City and the State of Minrtestlta, increased tax base of the State, and add a high quality development to the City. Additional findings ane set forth in the Authorizing Resolution of the City. City d Momktw Modlticd Tu tK.= romcuy Che for To tK=00 FbLvxbV DmM No. 1.17 IN -0 gcow Subsection 18-25. Other Limitations on the Use of Tax Increment I. General Limitations. All revenue derived from tax increment shall be used in accordance with the tax increment financing plan. The revenues shall be used to finance or otherwise pay public capital and administration costs pursuant to Minnesota Statues. Sections 469.124 through 469.134. These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for the construction, renovation, operation or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government: this provision shall not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. a commons area used as a public park or a facility used for social, recreational or conference purposes and not primarily for conducting the business of the municipality. Five Year Limitation on Commitment of Tax Increments. Tax Increments derived from District No. 1.17 shall be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule set forth in Minnesota Statutes, Sections 469.1763, subdivision 3, has been satisfied: and beginning with the sixth year following certification of District No. 1-17, 80 percent of said tax increments that remain after expenditures permitted under said five year rule toast be used only to pay previously commitment expenditures or credit enhanced bonds as more fully set forth in Minnesota Statutes, Sections 469.1763, subdivision 5. &bs"lon 18-265 State Tax Increment Financing Aid Pursuant to Minnesota Statutes, Sections 273.1399, for tax increment financing districts for which certification was requested after April 30, 1990, a municipality incurs a reduction in state tax increment financing aid (RIMFA) applied to the municipality's Local Government Aids (LGA) first and, Homestead and Agricultural Aid (HACA) second, in an amount equal to a formula based upon the equalized qualifying captured tax capacity (QCTC) of the tax increment financing district. Subsection 18.27, Couniv Road Crisis Pursuant to Minnesota Statutes, Sections 469.175, Subdivision 14 the county board may require the authority to pay for all or pan of the cost of county road improvements if, the proposed development to be assisted by tax increment will in the judgement of the county, substantially increase the use of county roads requiring const m -don of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or other county plan. In the opinion of the City and HRA and consultants, the proposed development will have little or no impact upon county mads. tribe county elects to use increments to Improve county roads, it must notify the City or HRA within thirty days of receipt of this plan. Y .lI111 Ira L= -L l '1!IF MUMY �!1 To the extent applicable, the City or HRA agrees to comply with Minnesota Statutes, Section 1161.991, which states that a business receiving state or local govemmcm assistance for economic development orjob growth purposes, including tau increment financing, must create a net increase in jobs and meet wage level goals in Minnesota within two years of receiving assistance (See Appendix D). C3Y eA ximt can MOCIAkd Tu tlKtt'IrasL Fievetloy Pts tm Tu foOrnCTi tawxlay dam Nu 1.17 1844 Srlbsection 18-1Summary CThe City of Monticello is establishing Tax Increment Financing District No. 1-17 to preserve and enhance the tax base, and provide employment opportunities in the City. The Modified Tax Increment Financing Plan for Tax Increment Financing District No. 1.17 was prepared by Ehlers and Associates, Inc., 2950 Norwest Center, 90 South Seventh Strut, Minneapolis, Minnesota 5SQ24100, telephone (612) 339-829 1. City of Mmtic'no Mad- Tu htnt "PAu4r4 Ptm fw Tu tmaeomt Rm" DWro a Ne 1.17 1415 IS UO APPENDIX A BOUNDARY MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICT NO. 1.17 %FF Ie ' _ _ Til' t:l.r -... _ t.•!:; �,, '1 .rut"' ii::.._.� . /-.��,s.:• r'- Z1, `�• �.. .n �1 � . `.'ll 1 1`r' ti a-.•j is "' T . .«,- .` t ��W•.} r' • :P' . 1 ::,a , \Cir.',fjr+ •-%': ,..,... t: , .;:±!, .,>...�"' . �= �M.M I-J r s.:,utnu \I.;n: is i. �'' „• t. i } ; Itt : ._iwo a if-W n..u«.,e, ;, • 1 .,..•�\1_ 110 • ,. t v�':»• ` .} . � / � ■f reEAf w«,. r. . i 1 \ i r \ `•�' i A•►UO Ae m.tllit A.Me1 WII O. •.,e1e.e„ - ;.—.,, rti` ..� ee •\ „ .` , .S�fwrtRl7�uiir-[o,..n..N.,ue1 .•J; !, •+�• •'ra e •. .\ ••.�,i \<.;. ,..,5't rt• r. .a.j,.•'ti,.-n.ee 1 � � t` 4e !e .� '• •:.tea i., ' '' .�' . L ` _.t 1._!' Hd u�+eel Bli.,an �11Y b -ee . n •t i7.:�.:.1 •- f .•' 1 •'::..:• .. 'e"ba '\ ,-ia ., .'••1 to 1•- .. JL Annexation Study ' . i•� ?I _ _.. ,,=�O City of Monticello :[[�: _ :.i j. ; �� fC�f; ,. .r ..; ^�-VAWW'QLOY '•MMn"f010 7..�!. �lt1•!;r er' ; L\�' 1+ri4�: • � � 1?)h:1 .::!` • . i f 1 . r " . �..-J f �r a!M" 111 , L.l( �� _ ••i r' �� 61slln g Zoning �. , �.,y qti,.� I• u C a 1. t . u ,:, �•... �? }' \ r C�2�. ...r... I .4 /• t i.`� 1 K` .Vyr.�..� :r a t'' Jv'e`' ..ice\ r✓ j i• I�, tit ? I-i.�`.. ': %' .� JTJ St%iy fig— ,1 ® � «: astsiu�- 4 .� City limits Redevelopment nts• BOUNDARY MAP OF TAX INCRE VIENT FINANCING DISTRICT NO. 1-17 Healon SCC/ , l%i �* ' a.•„ `� .= Q/ d watimb i • ry .. .i_ • •dwc.:, ,.fir' '.:::. ��`.� �`"ti'� • � Ld Lam? + : ��r Lei ;!y}.n i•?�•'•,'�ctti a•• a«.. F.:.4ST::fin..-...!;rrvrlwaw.tasxrn�ini.r•. �!�' YIb ! •� l I , � T f ,' SNM APPENDIX B C LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN TAX INCREMENT FINANCING DISTRICT N0. 1-17 Parcel Numbers 155-085-001010 (previously apart of PIN 155-011-000101) AAiMm% B•1 00 T I APPENDIX C C ESTIMATED ADDITIONAL CASH FLOW FOR TAX INCREMENT FINANCING DISTRICT 1-17 •FPKMIf C•I 0=717? Gry rr MGrwft • T. WcW-1 EmmAa • F.,Mar Expsalal Pp 1 T.I.F. CASH FLOW ASSUMPTIONS wm0on Rate: 0.a000x PapAs-You{)o erdoaA RAs: 8.270% Tu Ext snsbn RAs: 112.879% Pay 98 BASE VALUE INFORMATION Groes Percent Nel P4yabe Vahm llae0 VarusYear Parcel 1175-087-001010 0 100.00% 0 <- Estimate 0 0.00% 0 TOW Orlptrtel Market Veka 0 0 Claes Raw: CJI Properly .8fo0.0b0 x.8000% 4100.000 x0000% Od" Tax Capm*f. 0 PROJECT VALUE INFORMATION Type of Tex frcrdrre DWn= Eoororluc OwvtpmeM IMsrxrfachatm Type of Derabprtrlc Numbm of Bpmm Fact 20.000 Nosy EaWwted Market Vada On Jan. 2, 1997: mo,sm Pay 98 F WI Morkst VabA of UM &M BuBOV 780.877_ Pay 98 Projost GTesm FGA Properly .8100.000 1.8000% 4100.000 & n r - Addbonel Eatkneted Tu Capstlty on Jan. 2.1997: 35.000 Pay 98 Total Project Tax Capacity A CarpWJcn: 35,000 Pay M Proem Taxes Per UrWS0uam Foot $1.95 Asmsorm Market V" Per UM Spuaro Foot 138.04 Project Total Tams for Esdrnafo Purposes: 39.508 Pay 98 AnnuW Tax dererrm Erveetod A Ful Velum: 0 Pry M SUMMARY INFORMATION ` Gma U. Cay Gry Not tJ. tZhoLaoll AOmin. POd4q To Proklet_ Fu m Vsda 278,811 (27,854) 97,978 0 Promote Vada: 188,072 (18A07) 89,900 0] BUT FOR ANALYSIS C dale Me" Varum • Eat 0 Nm Markel VOA • Est DBfmrmga 700,877 Preaars Value at Tu hawmeN X89 072 o8temr10s 691,8031 VmbA likely to Occur WegrA TIF to Lea 91an: 091,803 PNPWN by PWAMM Ib. O-11AWK4 0212787 Coy d tA-Wo - Tu b -,W Ex n - Far. Enxx- P". 2 TAX INCREMENT CASH FLOW p tea.- v L L.- Ong. Pr -?w Captured 'SerN-Amwl Admin. Sm AraaW NACA �PERIODBEGINNIM Tax Tax Tax Grove Tax atNSI Tax Pertany PERIOD ENDING A. Mn, Yr. CapaCrty CapeNy CaDwAv I IncrortgN 10.00% wxcrerrterd 35.429% Ym. Y1n. Yr. 02-01 1994 0 0 01 0 0 0 0 0.0 08-01 1994 00 0.0 08,0 1994 0 0 0 0 0 0 0 0.0 02-01 1985 0.5 02-01 1995 0 0 OI 0 0 0 0 008.01 0.008.0 1 1895 1.0 08-01 1993 0 0 0 0 0 0 0 0.0 02-01 1998 1.5 02-01 1890 0 0 OI 0 0 0 0 0.0 08-01 1998 2.0 OE.0 1898 0 0 0 0 0 0 0 0,002-01 1987 2.5 02-01 1997 0 0 0 0 0 0 0 0.508-01 1997 3.0 08-01 1997 0 0 0 0 0 00 1.0 02-01 1998 3.5 02-01 1898 0 0 0 0 0 0 0 1.5 08-01 1998 4.0 08-01 1998 0 0 0 0 0 0 0 2.0 02-01 1889 4.5 02-01 1999 0 35,000 35.000 19.753 (1,975) 17,778 8,998 2.3 o"1 1998 5.0 08-01 1998 0 35.000 35.000 18,753 (1,975) 17,778 8.998 3.0 02-08-01 2000 3.5 02-01 2000 0 35.000 35,000 19,753 (1,975) 17,77 8 8.988 3.5 01 2000 8-0 8.001 2000 0 35,000 35.000 19.753 (1,975) 17,778 8,998 4002-0t 2001 8.5 02-01 2001 0 35.000 35:00D 19,753 (1,875) 17,778 8,998 4.5 08-01 2001 To 0811 2001 0 35.000 33.000 18,753 (1,975) 17,778 8.888 5.0 02-01 2002 7.5 02-01 2002 0 35.000 35,000 19,753 (1,975) 17,778 B,BBB 5.5 08-01 2002 8.0 08-01 2002 0 35.000 35.000 19,753 (1.975) 17,778 8,998 8.002.0 1 2003 0.5 0201 2003 0 35,x00 35.000 19,753 (1,975) 17,778 6,898 8.s 09-01 2003 9.0 ae-01 2003 0 35,000 35.000 18.753 (1,976) n.77e e.9B8 7.o 02.0 2004 9.502-01 2004 0 35,000 35,000 19,753 (1,975) 17,778 8.888 7.5 08-01 2004 10,005-01 2004 0 35.000 35.000 19.753 (1,975) 17,778 B,B9B 8.002-01 2005 10.5 02-01 2005 0 35.000 35,000 19.753 (1,973) 17,778 8.988 8.5 08-01 2005 11,0 0801 2005 0 3.5.000 35.000 18,753 11,975) 17.778 B.m 9.002.0 1 2008 Totah I 278,541 (27,854) 248,887 87975 , Vreeera Vnhxn I 189.072 (18,907) 152.183 58900 p tea.- v L L.- IDraft as of February 27, 1997 Draft for HRA and Planning Commission Review TAX INCREMENT FINANCING PLAN for the establishment of TAX INCREMENT FINANCING DISTRICT NO. 1-22 (a redevelopment tax increment financing district) located within CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA neNrtuur Public Hearing: March 10, 1997 Adopted: Prepared by: EHLERS AND ASSOCIATES. INC. 2950 Norwest Building 90 South Seventh Strep Minneapolis, Minnesota 55402-4100 Phone: (612)339.8291 Fax: (612)339-0854 E-mail: info®ehlers-Inc.com Web Site: www.ehlenanc,com SMM TABLE OF CONTENTS (for -Jenne purposes only) SECTION XXIII TAX INCREMENT FINANCING PIAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-22 ............................. 23-1 Subsection 23-1. Forward .................................................... 23.1 Subsection 23-2. Statutory Authority ............................................ 23.1 Subsection 23-3. Statement of Objectives ........................................ 23.1 Subsection 23-4. Redevelopment Plan Overview ................................... 23-1 Subsection 23-5. Legal Description of Property in Tax Increment Financing District No. 1.22 23-2 Subsection 23.6. Classification of Tax Increment Financing District No. 1-22 ............ 23.2 Subsection 23-7. Original Tax Capacity and Tax Rate .............................. 233 Subsection 23-8. Estimated Captured Net Tax Capacity Valudlncrement ............... 23-3 Subsection 23-9. Property To Be Acquired ....................................... 23-4 Subsection 23.10. Uses of Funds ................................................ 23-4 Subsection 23-11. Sources of Revenue/Bonded Indebtedness .......................... 23-5 Subsection 23-12. Duration of Tax Increment Financing District No. 1-22 ................ 23-5 Subsection 23-13. Estimated Impact on Other Taxing Jurisdictions ..................... 23.6 Subsection 23-14. Modifications to Tax Increment Financing District No. 1-22 ............ 23.6 Subsection 23-15. Administrative Expenses ....................................... 23-7 Subsection 23-16. Limitation of Increment ........................................ 23-7 Subsection 23-17. Use of Tax Increment .......................................... 23.8 Subsection 23-18. Notification of Prior Planned Improvements ........................ 23.9 Subsection 23-19. Excess Tax Increments ......................................... 23.9 Subsection 23-20. Requirements for Agreements with the Developer ................... 23.10 Subsection 23-21. Assessment Agreements ....................................... 23.10 Subsection 23-22. Administration of Tax Increment Financing District No. 1.22 .......... 23.10 Subsection 23.23. Financial Reporting Requirements ............................... 23.10 Subsection 23.24. Municipal Approval and Public Purpose .......................... 23.12 Subsection 23.25. Other Limitations on the Use of Tax Increment ..................... 23.13 Subsection 23.26. State Tax Increment Financing Aid .............................. 23-14 Subsection 23-27. County Road Costs ........................................... 23.14 Subsection 23-28. Economic Development and Job Creation ......................... 23.14 Subsection 23-29. Summary ................................................... 23-I5 APPENDIX A - BOUNDARY MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. I AND TAX INCREMENT FINANCING DISTRICT NO. 1.22 ................... A-1 APPENDIX B - LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN TAX INCREMENT FINANCING DISTRICT NO. 1.22 .............................. 8.1 APPENDIX C - ESTIMATED CASH FLOW FOR TAX INCREMENT FINANCING DISTRICT NO. 1.22 .............................. C-1 APPENDIX D - MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT) ....... 1) 1 APPENDIX E - REDEVELOPMENT QUALIFICATIONS FOR TAX INCREMENT FINANCING DISTRICT NO. 1.22 .............................. B-1 SECTION XXIII TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-22 Subsection 23-1, Forward The City of Monticello ('City'), the Monticello Housing and Redevelopment Authority (the 'HRA'), staff and consultants have prepared the following information for the expedition and establishment of Tax Increment Financing District No. 1-22 ("District No. 1-22"), a redevelopment tax increment financing district, located in Central Monticello Redevelopment Project No. I. The City of Monticello, the Monticello HRA, and various community groups have focused attention upon the redevelopment of the downtown area in the past two years. Specifically, the Monticello Community Partners commissioned a study of the downtown by a planning firm, Hoisington Koegler Group (HKG), in 1996. The HKG study, which has included input from a variety of sources within the community, is nearing completion. The first step in the implementation of the HKG study is the establishment of District No. 1-22. The reasons for the size and scope of District No. 1-22 is derived from the HKG study. The four main areas of focus of the study include redevelopment of property adjacent to the Mississippi River, which may include a hotel/confererice center or other tourism destination; redirection of downtown Monticello to Walnut Street mther than Broadway and the establishment of a retail base and public corridor along Walnut; revitalization of existing structures along Broadway, and the redevelopment of the Monticello Mall. Other smaller redevelopment opportunities exist within the proposed boundaries of District No. 1.22. Subwelon 23-2. Statutory Authority Within the City of Monticello, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the City and HRA have certain statutory powers pursuant to Minnesota Statues, Sections 469.001 through 469.047, inclusive, as amended, and Sections 469.174 through 469.179, inclusive, as amended (the "Tax increment Financing Act" or "T7 Act"), to assist in financing public costs related to this project. This Section contains the Tax Increment Financing Plan (the "Plan") for District No. 1-22. Other relevant information is contained in the Modified Redevelopment Plan for Central Monticello Redevelopment Project No. I. Subcectlon MA Statement of Ohl"ves, District No. 1.22 currently consists of many parcels of land and adjacent and internal rights-of-way, as illustmted on the map in Appendix A. District No. 1-22 is created to facilitate Monticellos downtown revitalization plan in the City of Monticello. This plan is expected to achieve many of the objectives outlined in the Modified Redevelopment Plan for Central Monticello Redevelopment Project No. 1. The activities contemplated in the present Modified Redevelopment Plan and the Tax Increment Financing Plan do not preclude the undertaking of otter qualified development or redevelopment activities. These activities are anticipated to occur over the life of District No. 1.22 and Central Monticello Redevelopment Project No. 1. Suhsecllan 23.4, Redevelonment Rlnn Overview 1. Property to be Acquired - Selected property located within District No. 1-22 may be Chy d Mmtimlio To' Ramiwitiji Pim kr Tor htctanmt Poueciey DwIm No 1.22 23.1 � I • acquired by the City or HRA and is further described this Plan. 2. Relocation - Complete relocation services are available pursuant to Minnesota Statutes, Chapter 117 and other relevant state and federal laws. Upon approval of the developers plan relating to the project and completion of the necessary legal requirements, the City or HRA may sell to the developer selected properties that they may acquire within District No. 1-22 or may lease land or facilities to the developer. The City or HRA rrtey perform or provide for some or all necessary acquisition, construction, relocation,dernolition, and required utilities and public streets work within District No. 1.22. Subsecllon 23-5, Legal Descrintlon of P'ronerty In Tax Increment Financing IN trlct No. 1-22 District No. 1-22 encompasses all property and adjacent rights-of-way identified by the parcels as illustrated on the map in Appendix A. Sub. edlon 23.6. ClaWfIcatlnn of Tax Increment financing DMrict No The City and HRA, in determining the need to create a tax increment financing district in accordance with Minnesota Statutes, Sections 469.174 to 469.179, as amended, inclusive, find that Tax Increment Financing District No. 1-22, to be established is a redevelopment district pursuant to Minnesota Statutes, Sections 469.174. Subdivision 10(al(I) as defined below: (a) "Redevelopment distria" means a type of tar increment financing district consisting of a project, or portions of a project, within which the authority fbtds by resolution that one of the following conditions, reasonably distributed throughout the district, exists: (I) parcels consisting of 70 percent of the area in the district are occupied by buildings, street, utilities, or other improvements and more than 30 percent of the buildings. not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance: or (2) The property consists of vacant, unused underused inappropriately used. or irtfrequently ased raihnrds, rail storage facilities or euessive or vacated railroad rights -of --way. (b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements ora combination of deficiencies in essential utilities and facilities. light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to Justify substantial renovation or clearance, A building is not srruntrally substandard ifit is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality rimy find that a building is not disqualified as structurally substandard under the preceding tentence on the basis of reasonably available evidence, such as the sive, Cay of Momlcrao Tu Wye= RMWIn Ptm ra Tor mnaamt pama" olmin eta Im ls-t type, and age of the building, the average cost ofplumbfng, electrical, or structural repairs or other similar reliable evidence. If the evidence supports a reasonable conclusion that the building is not disqualified as srmcrurally substandard. the municipality may make such a determination without an interior inspection or an independent, expert appraisal of the cost of repair and rehabilitation of the building... (c) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities or other improvements until 15 percent of the area of the parcel contains improvements. In meeting the statutory criteria described above, the City and HRA rely on the following facts and findings: 0 An inventory of the parcels shows that at least 70 percent of the parcels in District No. 1-22 are occupied as defined in the TIF Aa An inspection of the buildings located within District No. 1-22 finds that more than 50 percent of the buildings are structurally substandard as defined in the TIF Act (See Appendix E). Subsection 23-7.nes Tex Canaetty and Tax Rate Pursuant to Minnesota Statutes, Sections 469.174, Subdivision 7 and Sections 469.177, Subdivision 1, the Original Net Tax Capacity (ONTC) as certified for District No. 1-22 is based on the market values placed on the property by the assessor in 1996 for taxes payable 1997. Pursuant to Sections 469.177, Subds. I and 2, of the TIF Act, the County Auditor shall certify in each year (beginning in the payment year 1999) the amount by which the original value has increased or decreased as a result of a change in tax-exempt property within District No. 1-22, reduction or enlargement of District No. 1.22 or changes in connection with previously issued building permits. In any year in which the anent Net Tax Capacity value of District No. 1-22 declines below the ONTC, no value will be captured and no tax increment will be payable to the City or HRA. The County Auditor shall certify in each year after the date the ONTC was certified (beginning in payment year 1999), the amount the ONTC has increased or decreased as a msuh of: 1. change in tax exempt status of property; 2. reduction or enlargement of the geographic boundaries of the district: 3. change due to adjustments, negotiated or court-ordered abatements: 4. change in the use of the property and classification: or 3. change in state law governing class rates. The original local tax rate for District No. 1-22 will be the local tax rate for taxes payable 1997. The Original Tax Capacity and the Original local Tax Rate for District No. 1-22 appear in the table below. Orlglnal Tax Capacity Value NA Percent Retained by Authority 100% Original Tax Rate I.IOSg1 $ubaecllnn 23-N, Ectlmated Cuatumd Net Tax Cnoacity Vahtellrlrmm"t Pursuant to Minnesota Statutes, Sections 469.174 Subdivision 4 and Minnesota Statutes, Sections 469.177, Subdivision 1. 2. and 4, the estimated Captured Net Tax Capacity (CTC) of District No. 1.22, within Central city of Ma imaD Tushhnnrw Ftmachn Phn fan Tan bac mm Rawctoll draw No 142 23.3 ;rt► Monticello Redevelopment Project No. 1, upon completion of the projext will annually approximate tax (\ increment revenues as shown in the table below. The City and HRA request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 1999. The project tax capacity listed is an estimate of values when the project is completed. Estimated Tax Capacity upon Completlon of Pro ect $1,525,000 Orlgdnal Estimated Tax Capacity NA Estimated Captured Tax Capacity $1,525,000 Estimated Annual Tax Increment (CTC x Local Tax Rate $106,360 Subsection ,23-9, Property To Re ACQUIred The City or HRA may require any parcel within District No. 1-22 including interior and adjacent street rights of way. 1. Any properties identified for acquisition will be acquired by the City or HRA only in order to accomplish one or more of the following: storm sewer improvements; provide Land for needed public streets, utilities and facilities; tarty out [arid acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. 2. The following are conditions under which properties not designated to be acquired may be acquired: The City or HRA may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this tax increment financing plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsectlon 23.10. Uses of Fundi Currently under consideration for District No. 1.22 is a proposal to facilitate Monticello's downtown revitalization plan. The City and HRA have determined that it will be necessary to provide assistance to the project for certain costs. The HRA has conducted a feasibility study for the development or redevelopment of property in and around District No. 1-22. To facilitate the establishment tad development or redevelopment of District No. 1.22, this Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of (Inds associated with District No. 1-22 is outlined in the following table. Uses of Funds Total Land Acquisidon $4,275,000 Site Improvements 4,275.000 Public Improvements 4,275,000 Public Utilities 4,275.000 Other Public Improvements Interest 20,000,000 C1ry d Markcao Tea hncmm 17mcuy Pia for U% homrm Remdnt Mina No 1,11 23-4 Fee C Costs of Local Contribution 950,000 Administrative Costs (up to 10%) 1,900,000 TOTAL $39,950,000 Estimated costs associated with Tax increment Financing District No. 1.22 aro subject to change. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. No more than 25 percent of the tax increment paid by property within District No. 1-22 will be spent on activities related to development or redevelopment outside of District No. 1-22 but within the boundaries of Central Monticello Redevelopment Project No. 1, (including administrative costs, which are considered to be spent outside of District No. 1-22) subject to the limitations as described in this Plan. Subsection 23-11. Sources of Revenue/Bonded Indebtedness Public improvements costs, acquisition, relocation, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The City or HRA reserves the right to use other sources of revenue legally applicable to the Modified Redevelopment Plan and the Tax Increment Financing Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contributions from the developer and investment income, to pay for the Estimated Public Costs. The City or HRA reserves the right to incur bonded indebtedness as a result of the Tax Increment Financing Plan. Additional indebtedness may be required to finance other authorized activities. The total amount of bonded indebtedness related to the use of tax increment financing will not exceed 39,000.000 without an amendment to the Tax Increment Financing Plan pursuant to applicable statutory requirements. This provision does not obligate the City or HRA to incur debt. The City or HRA will issue bonds only upon the determination that such action is in the best interest of the City. The City or HRA may also finance the activities to be undertaken pursuant to the Tax Increment Financing Plan through loans from Ponds of the City or HRA or to reimburse the developer on a "pay-as-you-go" basis for eligible activities paid for by the developer. The estimated sources of funds for District No. 1.22 are contained in the table below. Sources of Funds Total Tax Increment 539.000,000 Interest Local Contribution 950,000 TOTAL $39,950,000 Pursuant to Minnesota Statutes, Sections 469.175, Subdivision 1, and Sections 469.176, Subd. I, the duration of District No. 1.22 must be indicated within the Plan. Pursuant to Minnesota Statutes. Sections 469.176, Cay of Momkello TU haiemem to wam Pier tat Tu hanemcm Flmciy olutln No. 132 23-0 subdivision I(b), the duration of District No. 1-22 will be 25 years from the date of receipt of the first !l( incremem by the City or HRA. The date of receipt by the City of Monticello of the first tax increment will be approximately 1999. Thus, it is estimated that District No. 1-22, including any modifications of the Plan for subsequent phases or other changes, would terminate after 2023, or when the Plan is satisfied. The City or HRA does reserve the right to decertify District No. 1-22 prior to the legally required date. Subsection 23-I3e Estimated Imoact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes construction which would have occurred without the creation of District No. 1-22. If the construction is a result of tax increment financing, the impact is SO to other entities. Notwithstanding, the fact that the fiscal impact on the other taxing jurisdictions is SO due to the fact that the construction would not have occurred without the assistance of the City or HRA, the following estimated impact of District No. 1-22 would be as follows if the "but for' test was not met: IMPACT ON TAX RATES 1996/1997 Percent Potential ExtensionRntei ofTanl SM IM Wright County .29499 26.68% 1,525,000 449,860 I.S.D. No. 882 .60110 54.36% 1,525.000 916,678 City of Monticello .18509 16.74% 1.525,000 282,262 Other f?,3 2.23% 1.523.Q00 37361 Total 1.1058 100.005E 1.686,360 The estimates listed above display the fired tax capacity when all construction is completed. The tax rate used for calculations is the estimated 1996/Pay 1997 rate. The total net capacity for the entities listed above are based on estimated Pay 1997 figures. District No. 1-22 will be certified under the actual I996/Pay 1997 rates which were unavailable at the time this Plan was prepared. Subcectlon 23-14. Modifkatlom to Tax Inemmmt Flnandnn Wdd No. 1.22 / to accordance with Minnesota Statutes, Sections 469.175. Subdivision 4, any reduction or enlargement of the City d mmiccno Ta mMUEM Ru"ia Rs Wr h Comm m %Mtt DmM W 1.22 23-0 STS E IMPACT ON TAX BASE 1996/1997 Estimated Captured Total Net Tax Capacity (CTC) Percent of CTC Tax Canxity Ug2n iect Comoletioq to Entity Total Wright County 53,630,869 1,525.000 2.84355E I.S.D. No. 882 19,237,501 1,525,000 7.9272% City of Monticello 15.792,922 1,525,000 9.65625E Other 26,334,087 1,525,000 5.7910% IMPACT ON TAX RATES 1996/1997 Percent Potential ExtensionRntei ofTanl SM IM Wright County .29499 26.68% 1,525,000 449,860 I.S.D. No. 882 .60110 54.36% 1,525.000 916,678 City of Monticello .18509 16.74% 1.525,000 282,262 Other f?,3 2.23% 1.523.Q00 37361 Total 1.1058 100.005E 1.686,360 The estimates listed above display the fired tax capacity when all construction is completed. The tax rate used for calculations is the estimated 1996/Pay 1997 rate. The total net capacity for the entities listed above are based on estimated Pay 1997 figures. District No. 1-22 will be certified under the actual I996/Pay 1997 rates which were unavailable at the time this Plan was prepared. Subcectlon 23-14. Modifkatlom to Tax Inemmmt Flnandnn Wdd No. 1.22 / to accordance with Minnesota Statutes, Sections 469.175. Subdivision 4, any reduction or enlargement of the City d mmiccno Ta mMUEM Ru"ia Rs Wr h Comm m %Mtt DmM W 1.22 23-0 STS E geographic area of Central Monticello Redevelopment Project No. I or District No. 1-22; increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on debt if that determination was not a pan of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized; increase in the portion of the captured tax capacity to be retained by the City or HRA: increase in total estimated tax increment expenditures; or designation of additional property to be acquired by the City or HRA shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original plan. The geographic area of District No. 1-22 rnay be reduced, but shall not be enlarged after five years following the date of certification of the original tax capacity by the county auditor. If a redevelopment district is enlarged. the reasons and supporting facts for the determination that the addition to the district meets the criteria of Sections 469.174, subdivision 10, paragraph (a), clauses (I ) to (5). must be documented. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the project or district and (2) (A) the current tax capacity of the parcel(s) eliminated from the district equals or exceeds the tax capacity of those parcel(s) in the district's original tax capacity or (B) the authority agrees that, notwithstanding Sections 469.177, subdivision 1, the original tax capacity will be reduced by no more than the current tax capacity of the parcel(s) eliminated from District No. 1-22. The City or HRA must notify the County Auditor of any modification that reduces or enlarges the geographic area of District No. 1.22 or Central Monticello Redevelopment Project No. I. Modifications to Tax Increment Financing District No. 1-22 in the form of a budget modification or an expansion of the boundaries will be recorded in the Plan. Suhsectfon 23 15. dm nist live Expenses In accordance with Minnesota Statutes, Sections 469.174, Subdivision 14, and Minnesota Statutes. Sections 469.176, Subdivision 3, administrative expenses means all expenditures of an authority other than amounts paid for the purchase of land or amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the district, relocation benefits paid to or services provided for persons residing or businesses located in the district or amounts used to pay interest on, fund a reserve for, or sell at a discount bonds issued pursuant to Sections 469.178. Administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Tax increment may be used to pay any authorized and documented administrative expenses for District No. 1-22 up to but not to exceed 10 percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for Central Monticello Redevelopment Project No. 1, whichever is less. Pursuant to Minnesota Statutes, Sections 469.176, Subdivision 4h, tax increments may be used to pay for the county's actual administrative expenses incurred in connection with District No. 1.22. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to Minnesota Statutes, Sections 469. 177, Subdivision 11. the county treasurer shall deduct an amount equal to 0,1 percent of any increment distributed to the City or HRA and the county treasurer shall pay the amount deducted to the state treasurer for deposit in the state general fund. Subwalon 23-16. Limitation of Inctment Pursuant to Sections 469.176, Subd. I (a), of the TIF Act, no tax increment shall be paid to the City or HRA for Disu ice No. 1-22 alley three (3) years from the duce of ixrtincatiun of the Original Net Tax Capacity value of the taxable property in District No. 1-22 by the County Auditor unless within the three (3) years period: (a) bonds have been issued pursuant to Sections 469.178, or in aid of a project pursuant to any other law, except revenue bonds issued pursuant to Sections 469.152 to 469.165, or coy of momvri o Toa to comm Rdothy Pto for Ta Wwr mr Flmtuit Dam No 1.22 23.7 9aU. (b) the City or HRA has acquired property within District No. 1-22, or (c) the City or HRA has constructed or caused to be constructed public improvements within District No. 1-22. The bonds must be issued or the City or HRA must acquire property or construct or cause public improvements to be constructed by approximately March- 2000. The tax increment pledged to the payment of bonds and interest thereon may be discharged and may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to Minnesota Statutes, Sections 469.176, Subdivision 6: if, after four yeart from the date of certification of the original tax capacity of the tax increment financing district pursuant to Minnesota Statutes, Sections 469.177, no demolition. rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utilityservice including sewer or water systems, has been commenced on a parcel located within a rax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan. no additional tar increment may be taken from that parcel and the original tax capaciry of that parcel shall be excluded from the original tax capacity of the tar increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including improvement of a street adjacent to that parcel, in accordance with rhe tax increment financing plan, the authority shall certify to the county auditor in the annual disclosure report that the activiry has comme"ed. The county auditor shall terrify the uu.capocity thereof as most recently certified by the commissioner of revenue and add it to the original tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision... For purposes of this subdivision. qualified improvements are limited to (1) construction or opening of a new street (2) relocation of a street and (3) substantial reconstruction or rebuilding of an existing street. The City or HRA or a property owner must improve parcels within District No. 1.22 by approximately March. 2001. The City or HRA hereby determines that it will use 100 percent of the captured net tau capacity of taxable property located in District No. 1.22 for the following purposes: 1. to pay the principal of and interest on bonds used to finance a project; 2. to finance, or otherwise pay the capital and administration costs of the Central Monticello Redevelopment Project No. I pursuant to the Development District Act; 3. to pay for project costs as identified in the budget 4. to fitwa:e, uotherwise pay for utter pwlxwses as provided In Sections 469.176, Subd. 4, of the TU' Act; 3. to pay principal and interest on any loans, advances or other payments made to the City or HRA or for the benefit of Central Monticello Redevelopment Project No. I by the developer, 6. to finance or otherwise pay premiums and other costs for insurance, credit enhancement. or ^_iry of MomkCno h toctmcs Rntictq Plan fn TU (Moment RUK* EXWk1 Na 1.22 234 %v%/ other security guaranteeing the payment when due of principal and interest on tax increment bonds or bonds issued pursuant to the Tax Increment Financing Plan or pursuant to Minnesota Statutes, Chapter 462C and Minnesota Statutes, Sections 469.152 to 469.165. or both: and 7. to accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to Minnesota Statutes, Chapter 462C and Minnesota Statutes. Sections 469.152 to 469.165, or both. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by Sections 469.176, subd. 4, of the TIF Act. Tax increments generated in Tax Increment Financing District No. 1-22 will be paid by Wright County to the City of Monticello for the Tax Increment Fund of said District No. 1-22. The City or HRA will pay to the developers) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for City or HRA administration (up to 10 percent) and the costs of public improvement activities outside District No. 1-22. Subsection 23.18, Notifkation of Prior Planned Imarovementc The City or HRA shall, after due and diligent search, accompany its request for certification to the County Auditor or its notice of District No. 1-22 enlargement with a listing of all properties within District No. 1-22 or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Tax increment Financing Plan by the municipality pursuant to Sections 469.175. Subd. 3. of the TIF Act The County Auditor shall increase the original value of District No. 1.22 by the value of improvements for which a building permit was issued. Pursuant to Minnesota Statutes, Sections 469.177. Subdivision 4, the City or HRA has reviewed the area to be included in the Tax increment Financing District No. 1.22 and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the Plan by the City and HRA. If the building permit had been issued within the 18 month period preceding approval of the plan by the City and HRA, the county auditor shall increase the original tax capacity of the district by the valuation of the improvements for which the building permit was issued. Subsection 23.19. E,,gee LTax Increments Pursuant to Minnesota Statutes, Sections 469.176, Subdivision 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the Tax Increment Financing Plan, including the amount necessary to cancel any tax levy as provided in Minnesota Statutes, Sections 475.61, Subdivision 3. the City or HRA shall use the excess amount to do any of the following: . prepay the outstanding bonds: 2. discharge the pledge of tax increment therefor, 3. pay into an escrow account dedicated to the payment of such bond: or 4. return the excess to the County Auditor for redistribution to the respective taxing jurisdictions In proportion to their tax capacity rate as provided in Minnesota Statutes, Sections 469.176, Subd. 2. In addition, the City or HRA may. subject to the limitation set forth herein, choose to modify the tax increment financing plan in order to finance additional public costs of Central Monticello Redevelopment Project No. Cay of m m�uo Tu tw� Rmx W Pt= fm To tavorcsa Ra ars Dimm No 1.22 2l.9 Subsection 23-20. Reaufrements for Aereements with the Developer The City or HRA will review any proposal for private development to determine its conformance with the Modified Redevelopment Plass and with applicable municipal ordinances and codes. To facilitate this effort, the following documrnts may be necii-steel for review and approval: site plan, construction, mechanical, and electrical system drawings. landscaping plan, grading and stone drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the City or HRA to demonstrate the conformance of the development with city plaits and ordinances. The City or HRA may also use the Agreements to address other issues related to the development Pursuant to Sections 469.176, Subd. 5, of the TIF Act, no more than 25 percent, by acreage, of the property to be acquired in District No. 1-22 as set forth in the Tax Increment Financing Plan shall at any time be owned by the City or HRA as a result of acquisition with the proceeds of bonds issued pursuant to Sections 469.178, of the T-ff Act, without the City or HRA having, prior to acquisition in excess of 25 percent of the acreage. concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the City or HRA should the development or redevelopment not be completed. &bsection 23-2L Assessment Agreements Pursuant to Minnlesotn Statutes, Sections 469.177, Subdivision 8, the City or HRA may enter into an agreement in recordable form with the developer of property within District No. 1-22 which establishes a minimum market value of the land and completed improvements for the duration of District No. 1.22. The assessrnem agreement shall be presented to the assessor who shall review the plans and specifications for the ( improvements constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appear, in the judgment of the assessor, to be a reasonable estimate, the assessor may certify the minimum market value agreement. Subsection 23-22, Administration of Tax Increment Financing Dlarlct N2,01 Administration of District No. 1.22 will be handled by the Executive Director of the HRA of Monticello. Suirwetlon 23.23, 10npntinl Reporting Reuulrement` Pursuant to Minnesota Statutes, Sections 469.175, Subdivisions S. 6, and 6(a); the City or HRA must file an annual disclosure report for all tax increment financing districts with the State Auditor, the County Board, the School Board, and the County Auditor. Pursuant to Sections 469.175. Subd. S. of the Tax Increment Financing Act. the City or HRA [oust file an annual disclosure report for District No. 1.22. The report shall be filed with the County Board, County Auditor, School Board, and the State Auditor on or before July I of each year. The mpon to be filed by the City or IiRA shall include the following information: I. the amount and source of revenue in the tax increment account: 2. the amount and purpose of expenditures from the account: J. the amount of any pledge of revenues, including principal and interest. on any outstanding bond indebtedness: 4, the original net tax capacity of District No. 1.22; Qty a Marmon a TIO.' R WKI" Pea nx To Hooater pini No, 1.27 23.10 8pq 5. the captured net tax capacity retained by the City or HRA; t?1 6. the captured net tax capacity shared with other taxing districts; 7. the tax increment received; and 8. any additional information necessary to demonstrate compliance with the tax increment financing plan. Sections 469.175, Subd. 5, of the TIF Act also provides that an annual statement showing the tax increment received and expended in that year, the original value, captured net tax capacity, amount of outstanding bonded indebtedness, the amount of the district's increment paid to other govemmental bodies. the amount paid for administrative costs, the sum of increments paid, directly or indirectly, for activities and improvements located outside of the district, and any additional information the City or HRA deems necessary shall be published in a newspaper of general circulation in the City. Pursuant to Minnesota Statutes, Sections 469.175, Subd. 6, of the TIF Act, the City or HRA must annually submit to the State Auditor, on or before July I, a financial report which shall: 1. provide for full disclosure of the sources and uses of the public funds in District No. 1-22; 2. permit comparison and reconciliation with the City and HRA's accounts and financial report; 3. permit auditing of the funds expended on behalf of District No. 1-22 or that is funded in part or whole through the use of a development account funded with tax increment from other tax increment districts or with public money; and 4, be consistent with generally accepted accounting principles. The financial report must also include the following: the original net tax capacity of District No. 1.22; the captured net tax capacity of District No. 1.22, including the amount of any captured net tax capacity shared with other taxing districts; the amount budgeted under the Tax Increment Financing Plan, and the actual amount expended for, at least, the following categories: (for the reporting period and for the duration of District No. 1-22) a. acquisition of land and buildings through condemnation or purchase; b. site improvements or preparation costs; C. installation of public utilities, parking facilities, streets, roads, sidewalks, or other similar public improvements; d. administrative costs, including the allocated cost of the city; C. public park facilities, facilities for social, recreational. or conference purposes, or other similar public improvements; and the total costs of the property to the authority and the price paid the developers (for properties sold to developers); the amount of increments rebated or paid to developers or property owners for privately financed improvements or other qualifying costs, other than those reported under clause (3). that were issued on behalf of private entities for facilities located in District No. 1.22. Pursuant to Minnesota Statutes, Sections 469.173, subdivision 6a, the City or HRA must also annually report to the State Auditor before or on July 1 of each year the fulluwing amounts for the entire City or HRA: the total principal amount of nondefeased bonds that are outstanding at the end of the previous calendar year, and the total annual amount of principal and interest payments that are due for the current Chy of Maouk.Cuo Toa Wcnvm Rnmdry Pt o mar To tmt RnwK% D=%O No 1.22 11.11 ryy calendar year on (i) general obligation tax increment financing bonds and (ii) other tae increment financing bonds; and for each tax increment financing district within the City: the type of tax increment financing district; the date on which the district is required to be decertified: the amount of any payments and the value of in-kind benefits, such as physical improvements and the used of building space, that are financed with revenues derived from increments and are provided to another governmental unit (other than the municipality) during the preceding calendar year. the tax increment revenues for taxes payable in the current calendar year, whether the Tax Increment Financing Plan or other governing document permits increment revenues a be expended outside of District No. 1-22; any additional information that the State Auditor may require. Copies of this report must also be provided to the county and school district boards. Subsection 23-24. Munkipal Approval and Public Purpose The reasons and facts supporting the finds for the adoption of the Tax Increment Financing Plan for District No. 1-22 as required pursuant to Minnesota Statutes, Sections 469.175. Subdivision 3 are as follows: Finding that the District No. 1.22 is a redevelopment district as defined in Minnesota Statutes, Sections 469.174, Subdivision 10(a)(1). District No. 1.22 is a redevelopment district and qualifies by having mote than 70% of the area of its parcels occupied and more than 50% of the buildings on those parcels structurally substandard (Subdivision(a)(1). Finding that the proposed development, in the opinion of the City Council, would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax incrementf financing would be less than the increase in the market value estimated to rends from the proposed development af,'er subtracting the present value of the projected tax increments for the maximum duration of District No. 1.22 permined by the Tax Increment Financing Plan. Due to the high cost of development or redevelopment on the parcels and the cost of financing the proposed improvements, this project is feasible only through assistance, in pan, from tau increment financing. A comparative analysis of estimated market values both with and without establishment of Tax Increment Financing District No. 1.22 and the use of tax increments has been performed as described above. Such analysis is included in the Tax Increment Financing Pian and shows that the estimated market value of the proposed development (las the indicated subtractions) atter discounting by the present value of the tax increment is significantly greater than the increase in the market value estimated to result from any other development that could be expected to occur without the use of tax increment atter subtracting the present value of the projected tar increments for the maximum duration of District No. 1.22 permitted by the Tax Increment Financing Platt. (See Cashflow in Appendix C). Chy of Momiccpo Tu 6acmem Ramcim Ae b T1n Rnsciy Dwnd No 1.22 2112 % ZZ 3. Finding that the Tax Increment Financing Plan for District No. 1-22 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Tax Increment Financing Plan was reviewed by the Planning Commission on Manch 4, 1997. The Planning Commission found that the Tax Increment Financing Plan conforms to the general development plan of the City. Finding that the Tax Increment Financing Plan for District No. 1.22 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Central Monticello Redevelopment Project No. I by private enterprise. The project to be assisted by Tax increment Financing District No. 1.22 will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City. Additional findings are set forth in the Authorizing Resolution of the City. &bsection 23-25. Other Limitations on the Use of Tax Increment General Limitations. All revenue derived from tax increment shall be used in accordance with the tax increment financing plan. The revenues shall be used to finance or otherwise pay public capital and administration costs pursuant to Minnesota Statues. Sections 469.124 through 469.134. These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for the construction, renovation, operation or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of govemment or the state or federal government; this provision shall not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. a commons area used as a public park or a facility used for social, recreational or conference purposes and not primarily for conducting the business of the municipality. Pooling Limitations. At least 75 percent of tax increments from District No. 1-22 must be expended on activities in District No. 1-22 or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of District No. 1-22 except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of District No. I - 22 3. Five Year Limitation on Commitment of Twt Increments. Tax Increments derived from District No. 1.22 shall be deemed to have satisfied the 75 percent test set forth in pamgmph (2) above only if the five year rule set forth in Minnesota Statutes, Sections 469.1763. subdivision 3. has been satisfied; and beginning with the sixth year following certification of District No. 1.22, 75 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously commitment expenditures or credit enhanced bonds as more fully set forth in Minnesota Statutes, Sections 469.1763, subdivision 5. 4,dRe�nment Morin. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation of redevelopment and renewal and renovation districts under Sections 469.174. These costs include City M Mpakd h) Ta hnaw= Fimcloy Plan (m Tu tncrcmera Rwtc4 Dui kt No. IJI 23.17 0#444 acquiring properties containing structurally substandard buildings or improvements, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition of structures, clearing of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the authority may be included in the qualifying costs. Subsection 23.26. State Tax Increment Financirre Aid Pursuant to Minnesom Statutes. Sections 273.1399, for tax increment financing districts for which certification was requested after April 30, 1990, a municipality incurs a reduction in state tax increment financing aid (RISTIFA) applied to the municipality's Local Government Aids (LGA) first and. Homestead and Agricultural Aid (HACA) second, in an amount equal to a formula based upon the equalized qualifying captured tax capacity (QCTC) of the tax increment financing district Pursuant to Minnesom Statutes. Sections 273.1399, Subdivision 6, the City or HRA may choose an option to the LGA-HACA penalty. District No. 1-22 is exempt from the LGA-HACA reduction if the City or HRA elects to make a qualifying local conuibution at the time of approving the tax increment financing plan. To qualify for the exemption in each year, the City or HRA must make a qualifying local contribution to the project of a certain percentage. The local contribution for a redevelopment district is 5 peroenL The maximum local contribution for all districts in the City in any year is limited to two percent of the City's net tax capacity, after which point the City or HRA must make an additional contribution equal to the lesser of (a) 0.25 percent of the City's net tax capacity or (b) 3 percent of tax increment revenues for that year. The amount of the local contribution must be made out of unrestricted money of the City or HRA, such as the general fund, a property tax levy, or o federal or state grand -in -aid which may be spent for general govemmeni purposes. The local contribution may not be made, directly or indirectly, with tax increments or developer payments. The local contribution must be used to pay project costs and cannot be used for general government purposes. The HRA elects to make the annual local contribution to the project to exempt itself from the LGA-HACA penalty. The City or HRA will pay for costs of the project described in this Plan, in an amount equal to 10 percent of annual tax increment for District No. 1-22, subject to the limitations described above, in any year in which such amount exceeds 2 percent of the City's net tax capacity. Such contribution tray be in form of either lump sum or annual payments (in addition to tax increment payments) towards costs identified in this Plan or other costs related to that development or redevelopment. The contribution may also be made in the form of public improvements financed by the City or HRA or other unit of government with unrestricted funds. Suhccctlon 23.27, Countv Road Coxtq Pursuant to Minnesota Statutes, Sections 469.175. Subdivision I a the county board may require the authority to pay for all or part of the cost of county road improvements if, the proposed development to be assisted by ax increment will in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other toad costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or other county plan. In the opinion of the City and HRA and consultants. the proposed development will have little or no impact upon county rods. If the county elects to use increments to improve county roads, it must notify the City or HRA within thirty days of receipt of this plan. Cuhsn9Mn 23 28, Frnnnmk Deve omnvnl a )oh CrmtMn fhy of MCWAKeao Tu txremmr Ra iq P1m kr Tu Incrass gaaauy Oise No 1.22 23-14 To the extent appticabk, the City or HRA agrees to comply with Minnesota Statutes, Section 1161.991, which states that a business receiving state or local government assistance for economic development or job growth purposes, including tax increment financing, must create a net increase in jobs and meet wage level goals in Minnesota within two year of receiving assistance (See Appendix D). Subsection 23-29, Summary The City of Monticello is establishing Tax Increment Financing District No. 1-22 to preserve and enhance the tax base, redevelop substandard arms, and provide employment opportunities in the City. The Tax Increment Financing Plan for Tax Increment Financing District No. 1.22 was prepared by Ehlers and Associates, Inc., 2950 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota 55402.4100, telephone (612) 339- 8291. C91r d Momkew Tu Woemm Rood" Pbs ON Tu lenmrr Nomckq Dwat, No 1.21 73-15 $GC.0 APPENDIX A BOUNDARY MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. I AND TAX INCREMENT FINANCING DISTRICT NO. 1-22 arwax A-1 � < : f � \ ti ham••'`' ^'� cF� h.+>, , � tea. ; y ;'.`� :�: �'.` �Z,,, �,fi ., ' l 1°",, .. '".� r 1•^�:;.p,.....,r,.rR,.•F::,•.,:.,1t,:�„>...�.. :aa�l.ir. �.�il.r �`3,1 i,.`, a� ,�';:1 - "�• � � z• ' +` c %.fN'" t f• .• '� i ..._. is :-i>w ,�� / •• �y%.1#� Z'•,. 11. 'ti fl t '�'ti -_Fn'• .�� �Z d rr '-�� "T'•• A. +L`r 'C'••l• 4� '! ;i:r t •t -..w�' ...... i t..j•1 03 ! 1 ' _ i~ l i' •' ca Ar •• 1 !udy Annexation Study 1=- �' - ;:.;,.� t.. • �,:,,. City of Monticello :i• ..`"`� ^ j• g ter': ''�? •', . .'!,,i'h�1e'Cbvlay "tIMMtO#O 4 }'il•�'.rt !/+ 4�, 1 �./� f"� �.� r AI1its deleting zoning It*:i'4; ' , w.•..I��;.�.I.�r•..�wi,.rVW ww...w.. R3PAIV- .� City lilittt Redevelopment erne Oil" of M0 ,ticeUo r f t;„ � .r 3 • i� C s FEB 28 '97 12:03;1 EH -ERS a ASSOCIATE= P.2/3 Ehhn andhm LEADERS la PUBLIC FINANCE February 28, 1997 011ie Kuopchak Ex=dve Director Monticello HRA PO Box 1147 Monticello, MN 33362 Dear 011ie: As advisor to the City ofMonticello and the Mont:wllo HRA on the modification of the Fay -Mat (No. 1- 17) Tax increment District and the establishment of a downtown redevelopment tax increment financing district (No. 1-22). we Nought a short letter outlining the policy issues would be helpful. FAy-Mar It is our understanding thn Fay -Mar is planting a 20,000 s.f. expansion to its existing facility to be built in 1997. The original tax Increment district was established in 1994 as an economic development district. with a maximum life of I 1 years or nine years of increment. The first increment fiom the original construction is expected in 1997 with additional increment from the expansion expected in 1999. The district has a potential duration through 2003. However, no agreement on the second phase has been negotiated yet and, therefore, the duration will dc;K-nd u, Pon ate actual amount of assistance. Please mote that this district still does tarty a LC: AMACA penalty. The annual increase In the PC ralty' could be up to $14.000 per year due to the expamiot. Please also nota that the HRA does need--) assert that this expansion would not occur without the uta, of tax increment (the "but for' test) and that ,tee addition will :m primarily manufacturing and wareht using uses. DowoW Il The proposed downtown tax inctemes district differs from the qty's previous tax bsatwat districts In that it includes a significant number of parcels (over 600) rather am being site specific to one development. The direction given to us from the HRA was to include any potential Nreas of redevelopment which may occur in the Shan tem. The City should be aware that other levels of government may criticize the size of the district because the tendency across the State has been to create smaller districts with immediate development proposals. It is important to nae tun if no redevelopme u or ares rcconsauxlon occurs adjacent to any one parcel within four years, the parcel will be eliminated from the tax irwrement district. In addition, all financing for the district must be completed within five years. Tdeefaa if Boy redevelopment does occur after five years and increment is necessary for the project the parcels will likely need to be decertified and a new district established. Four of the parcels proposed to be in this district at currently in District No. 1-2 (Metcalf-Lnon). No upificant development has aeeurted on these parcels and their removal should not affect the cash flow for dust district. We have prepared the tax Increment financing plan with very general budgets and rather high estimates for indebtedness and impacts on other jurisdictions to allow nutzimum flaxibility for the HRA and City. Pleur review the enclosed draft docunnent and contact us with any comments. OFFICU IN MDEMlA000/, WE AND lNOORFIEW. tall 2960 Norwau Center. 90 SOutn 6avenln SOW. Wnneepotla, MN 66602.410D Talapnone 6174"4291. FAX 612.379-09ba 0 ('20, G FEB 28 '97 12:03PM EN -ERS 8 ASSOCIATES P. 3/3 To approve the tax increment ph u, the City Coumdl must make certain lindiagd regarding the district including the following: a. The proposed development would not occur without tax increment: assistance. b. No development with a market valise of greater than $17400AM would occur without tau increment assistance on this site within 25 years, based upon a total maker valor of ' $33.000.000. C. Parcels emsisting of at Inst I S% of the am are occupied by improvements. d. At least 50% of the carseat buildings are structurally substandard oaf kimt to quality the aces as a redevelopment tax increment district The City building inspector has reviewed the site and hu prepared a letter for the last two fincliegs. The fins two findings are difficult to gauge without specific development, but they do indkw that drc City must be prepared to nuke the finding that for every S2 of growth, no more than $I would have occurred without any tax increment. This tax increment district does not carry a local government aid penalty if die City or HRA makes a local contribution to the developments out of unrestricted nr geaetal food sources equal to 5% of the aanaal tax iter ement Finally, die Office of the State Auditor has become very active in rax incrummt is the last year. Pelt of their ismas include the typo of costs for which tax increment can be used. Their intespnaation is chat increment can only be used for acquiring land, demolma4 site clemoce, and instill om of utilities and patidtg. Other anomeys bave interpreted die statue mase broadly. Mr. Bubul can ag= these issues at your meetir •g. Please call me with any questions or comments. Sincerely EHLM AND ASSOCIATES, INC. Mark Ruff 1'inaocial Advisor cc: Steve Bubul, K&O Council Agenda - 3/10/97 •1 , :1 1 f: 1 1 1 1 11 1 7 1' 1 ,1 ,1 iii Y, YI K:: 1,1 A. RFFF.RF.NCF AND BACKGROUND: City Council is asked to consider adopting amendments to the storm sewer access fee policy that were reviewed and tabled at the August 26, 1996, meeting of the City Council. In tabling the matter, Council requested that City staff survey other communities regarding storm water policies. City staff has completed its research, and we also have had the opportunity to meet on three occasions with members of the commercial community regarding the stone water fee program. The meetings have been very productive by providing City staff with important perspectives regarding the impact of the program on commercial development. I believe that the property owners have a better understanding of the benefits that are obtained for the entire community through development of a comprehensive storm sewer development and financing policy. Although the program presented today has imperfections, it was the consensus of the interest group to support the storm sewer access fee policy as presented to the City Council on August 6, 1996. It was the perception of the group that the system is designed to a standard that exceeds the need, thus driving up cost. A separate memo regarding this issue is provided for your review. The memo attempts to clarify the actual design standards used and may sufficiently address the concerns of the interest group involved in reviewing the policy. Upon reviewing the memo, Council may or may not wish to review design standards further. A special thanks should go to Brad Barger for hosting the meetings and to those that attended, which include the following: Rick Wolfsteller; Bill Fair; Jon Bogart, registered engineer; John Bondhus, Bondhus Corporation; Bill Tapper, Tappers Inc.; Kevin Doty, Marquette Bank; Steve Schoen, Aroplax; Bill Demeules, Standard Iron; Steve Johnson, Monticello Ford; Kent Kjellberg; Brian Dobie; Brad Barger, Suburban Machine & Manufacturing; John Michaelis, Could Brothers Chevrolet; and Nancy Spivak, Bondhus Corporation. The following section outlines concerns with the current program as adopted on August a26,1996. As you may know, City staff has suspended tLll implementation of the current program pending consideration of the amendments being reviewed today. The concerns noted below were expressed at a series of meetings prior to August 26, 1996. The nmendments to the program were geared to address these concerns. 13 Council Agenda - 3/10197 Concerns by Interest Group that the Amendments are Designed to Address The concerns expressed by industrial property owners at meetings prior to August 26, 1996, regarding the existing plan focused in the following areas: A. It was felt by some that the design standards may be excessive, thus driving up the cost for storm sewer service per acre. B. The trunk fee program results in an unexpected fee for existing industrial developments. They felt they owned completely developed, "assessment -free" property. Applying this unexpected fee retroactively to the entire industrial site is an impediment to existing expansion plans. It is also not consistent with treatment of existing residential development. For example, in the case of Tappers, Inc., the trunk storm sewer fee is applied to the existing acreage encompassed by the existing building and parking area (3 acres). The trunk fee requires that a fee be paid for the 3 acres that are already developed and the fee must also cover the expansion area of 3 more acres. C. The trunk storm sewer fee should be based on only that portion of a parcel that is actually being developed and not based on the size of the entire parcel on which a development occurs. For example, under the current plan, industrial development is required to pay for trunk storm sewer service based on full development of the parcel even though only half the parcel is actually being developed. There was a concern that the City should not be collecting fees based on undeveloped land areas that are not contributing toward an increase in storm water runoff. D. Requiring full payment of the trunk storm sewer fee at the time of acquisition of a building permit is a problem. The program does not provide for a method of financing this feo or spreading the cost over a period of time. E. Undeveloped areas of the community have not been studied; therefore, they are not included in the program. TRUNK STORM SEWER POLICY In response to the concerns above, the following policy outline was prepared, which identifies goals and identifies program modifications, Council Agenda - 3/10/97 Goals and Purpose A. The trunk storm sewer program should include engineering design standards that will assure cost-effective construction and maintenance, thereby assuring the greatest value per dollar spent. B. The trunk storm sewer improvement program should prevent serious storm water problems caused by urbanization while limiting premature capital improvement expense. The program should strive to achieve timely acquisition of land and timely construction of facilities at a pace even with the rate of land development. C. The funding program should rely only on general taxes when assessment and storm sewer revenue is unavailable to pay for storm sewer construction at the time of construction. D. The funding program should include assessments against properties benefiting from storm sewer development. E. New development should pay its share of the cost associated with managing storm water created by new development. Therefore, the program applies only to watershed areas that will need now trunk facilities resulting from development. (This is especially important given the potential reduction in tax base due to pending legislation.) F. The funding program should be designed and administered in a manner that supports business expansion and development. G. The trunk fee program is not intended to apply to "built out" areas that will not be served by new trunk service resulting from new development. Proposed Program Modifications or Clarifications City staff proposes maintaining certain aspects and changing others. Following is our recommendation. A. DESIGN STANDARDS The design proposed is based on centralization of pond systems which will result in long-term maintenance coat savings and will assure productive and efficient use of land. Continued discussions may bo needed to resolve design issues. The perception in the community is that the system is "overbuilt." Council Agenda - 3/10/97 C B. TRUNK FEE CALCULATION AMENDMENT Currently, the program requires that the trunk storm sewer fee be based on the entire area of the F rcel being developed even if the parcel is large and the portion of the parcel developed is small. This should be changed by basing the fee on the actunl area developed and not on the potential area. For example, if only half a 5 -acre parcel is developed, then the trunk fee associated with that particular parcel would be limited to 2.5 acres X the trunk fee. The portion of a parcel determined as being developed would be measured based on the footprint of the building, parking, and setbacks for the zoning district in which the building is located. At such time that 85% of a parcel is developed, including setbacks, the parcel would be deemed fully developed, and the fee would then be based on development of the full parcel. C. ASSESSMENT PROGRAM Under the current program, the fee is charged against the entire site at the time of expansion. It is proposed that the trunk storm sewer fee would not be charged against the portion of the site that is already developed. Instead, existing development would be subject to the standard assessment process. Future trunk storm sewer projects would then be assessed against parcels based on what was developed as of the date of the inception of the trunk storm sewer program. In calculating the assessment rate, the entire acreage of the area benefited by the trunk storm sewer improvement would be used in calculating the rate. Individual parcel assessments would be based on the area within that parcel developed as of August 1998. This area would be measured based on the footprint of the building area, parking lot, outside storage, and setbacks. For each storm sewer project, an assessment roll would be prepared. The amount paid by each parcel would be dependent on the level of development of the parcel as of August 1996. For example, a 10 -acre parcel that is 49 developed and 'A vacant will pay as follows: The portion developed will only pay assessments based on projects completed over time. The other 5 -acro portion of the site will pay a trunk No at time of development and will never pay an assessment. Thus, the total cost of trunk storm sewer improvements will be paid via assessment for all existing developed areas and trunk fees for expansion and newly - developing areas. This program is actually very similar to what we ultimately adopted for financing the Meadow Oak storm sewer improvement. Council Agenda - 3/10/97 D. It is proposed that the City allow the property owner to place the cost of the trunk storm sewer fee against the property as an assessment. Thus, the City will collect this trunk storm sewer fee over time. This option improves options for project financing. The major implication for the changes in the policy are as follows: 1. Trunk storm sewer design standards relating to pond centralization. This will result in long-term benefits in terms of use of land and storm sewer maintenance. Standards relating to capacity would continue to be reviewed, which could result in a future reduction in fees. 2. The changes will not limit the City's ability to complete storm sewer projects on a timely basis. 3. The proposed changes will result in a shifting of the cost to upfront city improvements to general taxes and away from industrial development because the City will be collecting funds based on only the area encompassed by development and not the area encompassed by development + future expansion areas. It is the view of City staff that this alternative, though resulting in greater upfront cost for the City, is more fair and, therefore, justifiable. C 4. The original funding program did include assessments in addition to the trunk storm sewer fee program; however, under the proposed modification that calls for existing developed industrial land to pay an assessment rather than a trunk fee at the time of expansion, it is possible that the potential for obtaining revenue from such sites would be slightly diminished due to difficulties in establishing benefit equal to assessment cost. b. The proposed changes to the program are consistent with the goal of requiring that development pay for its share of trunk storm sewer expenses. Linking the fee per acre to the actual developed area and providing an alternative method for financing the fee are changes that will help support business expansion and development. 6. Finally, the trunk storm sewer fee relies on user fees and assessments to pay for capital expense associated with development of the trunk storm sewer system. If Council believes that the Inst per acre for trunk storm sewer will impact the City's ability to compete with other communities, the Council could lower the trunk storm sower fee by committing general funds to pay for a percentage of the trunk storm sewer expenses. Currently, under this program, the City's expenses aro limited to the holding cost associated with completing projects prior to collection of sufficient Dunk storm sower and assessment Council Agenda - 3/10/97 funds. Council may wish to consider contributing even more to the program by paying for a portion of the cost to complete these projects right off the top. It is not recommended by staff that the City fund a portion of the trunk storm sewer coat because it is our view that the trunk storm sewer coat Rho ld be reflected .n the price of the land, which is ultimately dictated by the marketplace. We are concerned that subsidizing expense of the trunk storm sewer fee would not result in a reduction in the cost of land, thus would have no effect on making Monticello desirable for industry. It might be better to leave the fee at a higher level, then provide incentives to deBray the expense on a case- by-case basis. Motion to adopt the proposed modifications to the trunk storm sewer program retroactive to the date when the fees were established and review costs of unstudied areas so that such areas can be incorporated into the program. Motion to include authorization to analyze the potential of reducing design standards. Under this alternative, the City Council believes that the proposed modifications are reasonable and that they represent a positive refinement of the trunk storm sewer policy and that City staff should proceed to make adjustments to agreements and to fees that have already been paid relating to the trunk storm sewer fee and make them consistent with this action. If it is found that design standards should change, resulting in a reduced fee, then parties that have paid the fee would be provided a rebate. Motion to approve the proposed modifications with further modifications as established by the City Council. Based on Council discussion, there may be other aspects of the policy that need clarification or modifications. Perhaps the City Council desires to pay for a portion of trunk storm sewer expenses out-of- pocket, etc. Motion to abandon the trunk storm aower policy and direct City staff to develop an alternative method for funding trunk storm sewer projects. Under this alternative, the assessment program becomes the primary method for obtaining revenues for trunk storm sewer improvements. As noted in provious discussions, relying entirely on assessments to Council Agenda - 3/10/97 collect trunk storm sewer funds is quite difficult and will likely result in the City paying a major portion of the principal expense associated with trunk storm sewer improvements. Council may wish to direct staff to investigate establishment of special taxing districts for each watershed. Under this alternative, each parcel pays taxes based on the cost to build storm sewer facilities in the watershed in which a parcel is located. This alternative was not selected previously because such a high percentage of the areas being served are occupied by school district or church property, which would not be contributing taxes toward their respective watershed districts. C'_ STAFF F..O MF.NDATION: As in August of 1996, it continues to be the recommendation of the Assistant Administrator, Public Works Director, and City Engineer to adopt the proposed modifications to the trunk storm sewer policy as outlined. We believe that concerns put forth by affected property owners had validity, and we believe that the proposed modifications are justiEable and represent a good compromise. We also believe that the basic reasons for the trunk storm sewer policy justify the continuation of the policy. Many cities in the metro area use similar policies to collect trunk storm sewer fees, and many have higher costs per acre. Again, there has been a huge level of discussion and input on this matter. Thanks to all those that have contributed. On behalf of City staff, we look forward to a decision on this matter so that we can move on to complete other important projects. D. SUPPORTING DATA: Storm water trunk fee justification report; Storm sewer trunk fee application examples; Storm water program survey; Storm water fee development chronology. Mar -07-97 09:OOA P.02 a BA!M..6—h. P.F. W Westwond Lake Office B,a w ma... Pt 9441 Wayzata Pav R w P.F. KAN:55Boulevard26 ��� Minneapolis. MN,55426 tom., m.. P.P. B y. au,JJ B. &,y. P.F. 812-541.4800 &Astotiates, Int. FAX 541-1700 MEMORANDUM TO: Jeff O'Neill The City of Monticello FROM: Pete Wlpenbring. RE '_ WSB & Associates, Inc DATE:': March 6,1997 RE. Response to questions regarding anticipated design for storm rater bunk system WSs Project 1010.06 This merr,orandum has peen prepared to respond to questions or comments that ttavc been raised rclgLrding the proposed deign criteria for the Sturm water trunk system and its impact on the awhlishmeni of stotm water tttatk fees in the City of Monticello. Please f it.d outlined below a r: statement of a question or comments. along with a response to the is::.es raised: COMMS VT.• TI.: proposed design criteria for the storm water system anticipates Uccummuduting on;y a 100 -year, 10 -day rainfall or snow melt event. This design criten.. is overly aggressive and the City should only ut&x a 100 -year. 24-hour duration event for design purposes. RESPONSE: 'Iriis comment reflects a misintetpretatti.m of the design criteria outlined in the repon amt/or a misinterpretation of storm, water management design procedures as they relate to critical duration analyses. The 'procedures and methods followed' section of the storm watch trunk fee jubtilication report specifically Rta1 • "charm water storage will need to bre provided fit areas in their hilly -developed condition for a I00•year return frequency critical duration rainfall want" (This event could more appropriately be delined as a rainfall event having a 1% chance of occur=cc in any given year.) In order to design a system for this probability of oucurrence event, 1% chance rainfall events having durations ranging fl+om 13 miautn to 30•1 days need to he analyzed in order lafreraucture Eviwn Planes" •.u••O,.,•� •1 cuuu. onr,unt�m wrcoru 11*4 Mar -07-97 09:OOA ..03 .h fJY)'Neill Ory ujMunticello March h, 1997 Page 2 to provide this common level of protection. Depending: on specific watershed chardcteristics, the cost associated with accommodating a 100 -year, 10 -day rainfall event could he considerably greater or less than the cost assmi:nted with accommodating a 100 -year event having a shorter duration. When a 100 -year high water elevation is established, this high water elevation should only be expected to have a 1% chance of occurring in any given year. Ignoring a 100 -year, l0 -day rainfall scenario may, in many cases, result in the 100 -year elevation being reached or exceeded very @cqucrttly. Typically, drainage systems having large tributary drainage areas and low capacity outlets may find that the 10 -day storm is critical for design purposes. In cases where the outlet capacity is high, and the tributary drainage system is small and highly developed, a 100 -year, 307minute to une-hour duration event may be critical and result in high water elevations for a given pond exceeding that of other 100 -year return frequency events having longer durations (ic. 24 hours or 10 days). COM.VEN7 c The Ciry is intentionally designing the system to provide storage for the lots -year, 10 - day event throughout the system. RAZPO NSE. .I his comment rellects u misinterpretation of the design criteria, and in fact, the reverse is true. The procedures and methods section of the trunk fee justification report states "The trunk storm sewer conveyance system capacity will be limited to that required to allow punding areas to draw down to approach tate nun out elevation in no greater than a 10 -day period following a critical duration rainfall event." If the draw down exceeds a 10 -day penal, a 104ay event will likely he critical. if this suggested approach is shown to he ant effective and is adhered to, the system will be designed to limit the critical duration event to less than a 10 -day event. In designing any of the tnrnk drainage systems within the City, a cost benefit analysis will he undertaken to determine the most cost-effective way to design the trunk .rystem and upstream storage ureas. If it is more cost effective to construct larger rrauds and a smaller trunk piping system, this alternative will be given consideration. I f it is more cost effective to design a largo trunk piping system and smaller roods, this alternative will be given cunsideration. Mar -07-97 09:OOA C Jeff O -Neill P.04 City of MunriceUa March G, /997 Page 3 In summary, we continue to believe that the design parameters and storm water ha fees � n nwramcndcd in the justification report are reasonable and implementation of the fees is in the best interest of the m%idenu of the City of Monticello. Mar -07-97 09:37A - 350 Westwood Lake Office 0 S 8441 Wayzata Boulevard Minneapolis, MN 55426 612-541-4900 &Amotiahr, Inc. FAX 541.1700 To: Jeff O'NeiU Gry of MondeeUo From: Pelee It WMenbring, AL WSB A Associates, Inc. Date: March 7, 1997 Re: Addldonal Trunk Fee Survey L{formallon P.02 SA wad„adr. P.r a,Q ti mom. PT_ P,,,, K v jk.6d. P.E. r*—Id W. Src .. ^.E. Rm .td R. P,,�, P.E. Memorandum As requested. an additional survey was recently completed to evaluate trunk lbes charged by the Cities of Buffalo, talk River, Big Lake and Rogers. this information yielded the following: City of B41falo, The City of Buffalo hinds storm water management activities by requiring the developer to construct all needed improvements as pan of their development activities. Thcy also charge a storm water utility fee of approximately $2.30 per month for a residential lot having less than 35% impervious surface. and up to five tittles this omount for contmercial, industrial and institutional lots having greater than 60% impervious. Other lunds for shorn water management activities come from the city general fluid, as well as the City's HKA. City of EIA River The City of F.lk River charges new development a storm water management impact tee of $65 for rural residential lot. $131 for an urban single-family residential lot, and $7116 per acre for multi -family, commercial and industrial lots. This rmly savors trunk aystcm constructinn. All ponding and lateral system costs must be paid for by the develnper. Thera is also a 7.6% addition to the City's general tax levy to covet general maintenance and repair of cxlsting storm water systema. This represents a fee of approximately $23.50 per year on a S I UUNOU residential lot, and $55 per year for a commercial lot having a $100,(M assessed valuation. � ur�twu�,u.a,•.•.a Ixf-r& ft- Emstne— Pil-- Ww*sn,s w rwstma e 9 r u�►u Mar -07-97 09:37A P.03 ' f Jef alveill City of Manticella March 7. 1997 Page 2 t C'Uy of Big Lake The City of Dig Lake funds general maintenance and repair of existing systems by taking money 1'rum the overall general fund. New development activity is required to fund all storm water management improvements, including construction of lateral systrtns and the construction of retention and treatment facilities: Due to the City's limited sire and the presence of natural drainage systems (ie. lakes), the City has no trunk system in place that needs to be maintained or for which a trunk fee would need to be levied at this time. City of cogen The City of Hogan fimds the maintenance and upkeep of existing systems by taking money from the brcneral find. At the present time, the City of Rogers has no defined trunk systems ' in place to acwmmodate storm water runoff from properties having multiple owners. As new development takes place, the developer is responsible for funding the constructiun of all lateral systems, and the construction of all requited retention and treatment areas. Storm water manugement impw%ernents that benefit more than one party are funded by direct assessments. (Three projects have been undertaken in the past five years.) bOnm i .i allate seleCtea the C qty Ax - .y Mar -07-97 09%OOA STORM WATER MANAGEMENT FINANCING METHODS UTILIZED BY SELECTED COMMUNITIES IN THE TWIN CITY METROPOLITAN AREA December, 1998 Prepared by: WS9 a Associates, Inc. 360 Westwood Lake Office Park 8441 Waysata Boulevard Minneapolis. MN 66426 CERTIFICATION I hereby certify, that this plan, specification or report was prepared by me or under my direct supervision and that I em a duty registered professional engineer under the laws of the State of Minnesota. Peter R. Wilenbrinp, a Date: December, 1898 Reg. No. 15998 0 P.06 storm Waw Yampama,t nnmwna YMttaea was Pr*C1 No. IMM a 9E Mar -07-97 09:01A P.07 TABLE OF CONTENTS , C Pace No. f i 1. INTRODUCTION ........................................... 1-1 !I. PROCEDURES AND METHODS FOLLOWED .................... 11-2 I Ill. DISCUSSION OF RESULTS ................................. III - 3 IV. TABULATION OF RESULTS ................................ IV -5 � �oMa Na �OtO.a 9F Mar -07-97 09:01A I. INTRODUCTION This report provides information on the approaches various cities are utilizing in order to fund storm water management activities. These activities typically include; 1) the construction of trunk storm drainage systems 2) the construction of regional storm water storage and/or treatment areas 3) the construction of lateral storm drainage systems 4) the maintenance and replacement of existing systems. This information was prepared in response to requests from a number of City staff members, as well as Council members who have an Interest In evaluating the appropriateness of the systems they are utilizing and the relative coat associated with the Implementation of storm water management activities in their community compared to others. In order to gatherthis Information, a questionnaire was sent out to approximately 30 communities to gain perspectives on their practices and approaches toward funding these activities. Respondents were also given the opportunity to generally comment and/or evaluate how well the various financing systems are working. The information received was complled.and summarized in this repot. It must be noted that the financing systems utlllzed in many of the cities were fairy complex and as a resuh, utilUtion of this Information for purposes other than general comparison may not be warranted. If specific information Is required for a given municipality, it is recommended staff members from this City be contacted for additional Information. slam Mani MWQPWAM M"rA 0 4K"ft 1-1 wsa h*t w ase.n P.09 Mar -07-97 09:01A II. PROCEDURES AND METHODS FOLLOWED A Stone Water Management Financing Questionnaire wes prepared and sent out to approximately 30 dues within the Twin City Metropolitan area. This financing questionnaire asked for the following general information: • Identify the funding sources that the City utilizes to pay for storm water management activities and/or improvements. • List the fees charged by each of the funding sources that are utilized. • Identify what storm water management activities are covered by these fees. • Identity when the fees are required to be paid. • If the fees can be paid over a period of time. desaibe the structure regarding payment of fees. • Provide any additional comments. suggestions or Insights you have regarding these matters. The Information collected was reviewed and compared. A summary of" Information Is provided in Table 1. Follow-up contacts were made with many of the respondents of the survey to gather additional information and answer questions that may have come up regarding the information submided. General obssnrations and/or findings of the survey were described and provided in the discusaicn section of the report. Siam Waft? MONOWN r Fba" IIMMb 4.1 1b.18oAs qff Mar -07-97 09:01A 111. DISCUSSION OF RESULTS Based on a review of the information submitted, personal discussions with respondents, and a general interpretation of the information, the following general observations were made: 1. Developing communities tend to rely more heavily on generating revenues through implementation of a trunk fee or utilization of direct assessments. As communities become more fully developed, they tend to rely more heavily on revenue sources originating from a more general cross-section of the City. Fully -developed communities tend to utilize storm drainage utility funds, general funds, or sanitary sewer funds for ongoing operation and maintenance of existing systems. 2. The fees charged through the various sources of revenue vary greatly from one community to the next. The scope of activities or improvements funded by these various sources of revenue also vary greatly. 3. Most developing communities (Savage, Maple Grove, Woodbury, Burnsville, Apple Valley, and Shakopee) charge a storm water management or trunk fee to pay for storm water management improvements that are required as part of new development. These fees may be limited and oniy cover trunk stone water conveyance system Improvementsar be expanded to Include Improvements that also Include centralized storm water retention and treatment facilities, as well as the construction of lateral systems to collect water from a given developing parcel. 4. The fees associated with the construction of these systems vary greatly and can range from 7¢ per square foot for trunk system Improvements to greater than 400 per net developable square foot for commerctaOndustrial areas that are developing and not providing on-aite storm water ponding. 5. In addition to trunk fees, a storm water utility fee is sometimes charged against all developed lend. Coat for these fees verbs based on land use. For single-family residential property, this fee has been found to typically range from $2.00 to $9.70 per lot per Quarter. Property having land use other than residential Is commonly charged at a rate based on a residential equtvelent factor or on the number of acres owned. Please refer to Section IV faf additional details on these rates In the communities surveyed. 6. The cost for the irnprovements from one community to the next vary widely based on topography, physical futures, the amount of oww wwr dwdow M FbWK44 mooft W-2 ware ►ry a"teu.a P-10 9r Mar -07-97 09:02A C IV. TABULATION OF RESULTS A more detailed tabulation of the information collected for each of the communities is provided In this section of the report. It is noted that the financing system for many of these communities can be fairy complex and If it is necessary to use this Information for more than comparison purposes. the staff members from this City should be contacted for additional information. e10M WOW IiMr/wAt Ri1Mp41e 01O1M N. a carie) A IM. IOle.a P.22 Mar -07-97 09:02A developable land within the watershed, the anticipated land use, and other considerations. Communities anticipating a significant percentage of their development in the coming years also anticipate considerably higher storm water management costs than those experienced by communities that have already been developed in an environment having less restrictive regulatory controls and requirements. 7. In general, City staff and Council members were most focused on developing storm water management financing systems that were responsive to three major concerns. These concerns were: The system needs to be fair and legally defendable. In regard to being fair, it was generally fell that developing property should pay for the cost of constructing new Improvements required as a result of their development and these costs should not be spread out to all property owners In the City. The costs associated with maintenance and replacement of existing systems should be spread out to all property owners within the City. It was also noted that in order for any funding mechanism to be legally defendable, the fees charged must be closely related to the cost of the improvements constructed. The system must be reasonably easy to administer. Concems were expressed regarding systems that- were complex to administer. It was also important to be able to calculate fees for a giver development without ambiguity. As the systems become more complex, the opportunity for all partles concerned to interpret the funding formula differently Increases. This leads to a greater opportunity for conflict and potential manipulation of the system. The system or systems utilized must provide revenue that will cover the cost of the improvements required, and the revenue must be generated In a timoy fashion so that bonding for these improvements can be limited as much as possible. It was also noted. however, that some type of financing arrangement for new development may be necessary In order to allow many of these improvements to be constructed. 6MM w.w NWAOMewb FiWsby 1Wlmw 01.4 cup PnMp"10,10.05 P.12 1 ---- -- ---- - -- ----- — — SECCTIONIV•TABULATION OFRESULTS Summary of hdormaeimr Complfsd From Stam "fatlanagement Financing Questionnaire I Sources of Revenuer - I City Drainage I 1 Trunk Gendra/ Direct Special I Sterevrloper Ssniho ftt;. Natss I UNNfy Fee Fund Assns Purpose Tax Seaw Aid Construction I Districts Fund-- Funds _ FurWs - -- _ --- -- --- --- Al We valey S% Sox Sx ox Sturm water wrtiy be is 63.98 per residmKlal I eq ivalanl Trunk fees range dam $3.070 per acre for . dngb-famiq reaidentlel to 14.910 per ace for c0arererciaYadusdW. The General Fund levy $19.000 pm year to drainage $yuan contram"Df m actfvillas. red assessents are typkA*y utilized to fund a* the cansbuction of new lateral syslems. Fees are paid of the time of platting. - -- -- Ooomanglal B2% tx 1% 1% 3% 2% Ston water trunk bre is B cants per aquae bol. Annual stain water uUWy lees range dom $83 b 1283 I per acre per yer la tae use rargig from parks 10 mmmordW and Yiclusn al. Revenue gonwWW ban the ether sources varies baled on Oe Improvement proposed. yo0kgn 85% 3511 A0 shank water managomom SCly4les aro o0vared W hese loos. Discs mmanerlts can be W—trad aver I a porlod of 10 yam, Ouartmly storm drainage utility rates range ham {8.00 per lot ter single-family reslderaial to between 48.00 pa aro ON gotl colaees to I $160 per eras for canrnerciaYklOusbul land use. I Break" Geer also conpleted a surrey at 1998 I residential drainage tANy rates In eight of- oonararrtlss and bund the raft to range from 12,00 10 - - $9 70 per residental let pr quarter. Iprra�lle 60% 20% I For haw cantwr]kn. dred sawaalents ranngs bsm Mone ftgtar ranagssawd FluWAlq WOW$ fame 1.6 .12 cents per sWare loot to residential lard uses to.1 J ' cents per .Pure bol far commercial properly. 81am drainage U011ry change Is $22 30 per Yale per utak• fesmlly, urdl Cly staff bake vas ►Ism waftn utility approach is Oro anal equitable and any lo admiister, 11 Wse frolecl No. 101,06 3 d 1 r O V r rD V O O N D 0 r W 3 store Warr waWoment FirrandIM wrtnods table 11 • T waw rryra filo. 4010.04 SECTION N - TABULATION OF RESULTS Table f Summary of Information Compiled v From Storm Water Management Financing OuesNonnaln - - - - O I Sources of Revenue I 0 Gty Drainage Tnt" ' "neral Okwt Special Sardtay i 8bte Developer Notes O N Ut1111y Fee Fund Assess Purpose Tax Sewer Aid Construction D . t Districts Fund Funds — -` — — Funds Hopkins 100% Sloan saver utility tees rwge from i3.00funit for sings . family to 12.251mm for churtirslparks to $45,0010cre —~ — - - - for commercial iulusbial uses. Mapb 100% Rollins of pial rinpres devebpa agreement. New Grove doveloprnena Bra requLad b pay 83.000 pen auo for I singlo-bmily residential, 84,500 pw acre for medkan• dlensky residential. and 80,000 for commercial and I Indu" developmenl. Fees ran eO over years for residential daveloprrwtl and 10 years for ranrrorclal and irnduetnal rd nd 10 or I dovelopmoM. Maplewood i 55% 33% »% Direct auesanteme are typically :525 per reeidenWl red end •10 cents par square bot to commercial and Indtaeid flea. Some mru111 UM adMty is uaDsWtaed by auto ad hadhp and devebpos ere reWlred b I and pry thea own contractors to bnull Ynpwemenu. It is Ifo !motion of the Cay Council OW they do not want I a storm water utility. I Minneapolis 25% 75% I These revenue sources pay for cortanrc0on lot storm , and setae! storm drainage system►, as wd as regional I I storm water bsatmerd buns. I rllrtnalonks 10% 90% i Fees ro npinp rem 3.3 cab to 0.9 carts per aquas bot are bled for Ionil uses raslging from residenlial u I I I commaxisgisisfusin3l Charges bvied sgalrW poparWs I within berwMed was when a given prascl is ordered I within cite woo 3 store Warr waWoment FirrandIM wrtnods table 11 • T waw rryra filo. 4010.04 3 a SECTION It'• TABULAIfON OFRESULTS - --- -- - - — - - 0 TathA f v Summary of Information Compiled From Stam Water Hanagernent Financing OwstlennaM - -- - - ---- ---- - - - -- - — 0 Sources of Revenue I. - - 0 City Oratnargs Trunk GeneralI Dbxt Spada/ I Sanidry I State I Devekper Notes D Udtity, Fee Fund A»su Pwpwa Tar I So~ Aid Consauctlon ..Neve - .. .-X - - -.. _ - - - Olsblccs Farad Funds Funds ... .- - --- - - - R X I Utility fees range horn $3.10 per lot per qusnor fa arighton I ingb•farNly development b 85 cards Der arae for parks I I I Of courses, to $311--ae for i cornmercLU dmntnal tand uses. Vacant lots are not charged a utility lea. The city stall indicated that' are - I - -- - - - - ped with utility fee approer�h. has Roseville K I 75% I 25% I I I INow pr4eclb are turdDd by the General Fund j I 25% Dwoughntenance and Offed AueSssrnenb. Mai I renovations to ensGng systems are funded 100% W the I Storm Drainage Utility. DieC assoeamems we I I over 1 arshvi of 11%. UGLry fes for I aornmer I roddenlusf fare i t is a@ corrrrorrLl property b lea Wnos the _ - - - - - - -• _ - - .. _ - . I which is $4.90 per quarter per Id. Savage 2591 75% These lees cover at aspocb of sbmm water I I I m—Ngcmenl erJMtlles. including, ai�Yrho ntenance. Far new I I suhdivbions, boa are obtained at al pta06hg Fa I I older existing lots. fares are obtained at the time at the Brio l uldhg permits ars kaucA. Slarm abler ulilty leas raiVo tram $1.60 per mmM for each not developable I feskential e. to IM60 par �camhada ion. al" an I elopatla i which W&o include the coat o1 ' construWon range from sena cerda per aquae few lo 20.7 cents ter square bet dep.,dnhg on Land r,ae. It developers do not provide n, provide Ohs City willcondn otf•aio penciling for a fee ranging horn 0.9 cams to 23 tl rums pot net devslopa er square foal uoperdwQ on land use. There is 9w aero vnudidn n W based on essmated coat for urpovannnts in I I sebdad watersheds adjacant b the Cwedd Riverand in I the downtown rasa a N Naris duan 14rsapararml cWnckq MNMda Tum. t • i wase pro)sch area 10110 of - — - -- - - - ---- ------ - — SECTION IV • TABULATION OF RESULTS _ - Table 1 1 Summary d/nformtelion Compiled From Storm Wstef Management Financfng Questionnaire Sources of Revenue City Drainage TrunkGerrersl Olnu I Special Samury -I Stats -- Dowto er - - Notes - UVAlly Fee Fund Assess Purpose Tu Sewer Aid Construction Dfstdcts I Fund Funds Funds Shakopee - — x I-- x X --.-- x - - - — — - — - ( - - - Storm water utility lee structure is currently set up, to pry for munlenowe and replacamorti of existing systa ns. ` I Developers are required so pmvlde on-site I ponding to limit their discharge roto to those requied in the Chy's Storm Water ManagemsM III r I Plan Trunk drainage system Improvements ora I Anwiced by charging T cents per rod developade square fool regardless of land use. h on•ado retention and trestme'I le net provided on•sde, and regional systems ere available, Uro City will charge betweon 4 and 13 cards per not developable equate led so construO regional I I systems ler dhrs purpose. r Fees we paid a1 the time of patting ler sirglo- fsmsy roddentld, and at Oro time bugling permils are issued for cornmorcal and industrial 1 development. S1. Cloud 1 SM I J3% I I I I Aewsamante range tram 22 cents per square loot for . slrtpbfamily residential to 30.11 cents per square led for I cwvnerW and Industrial. City is corteidaring irnpiernents wn o1 a storm water utility Ise to Pay fa owhionsnw of sysiom. SI. louts I IW% I ' All atom owater managemero eulvltioa aro f pried by Park I SarAwy &war Favus t two Beer x x Il I ( Stam velem w provemords Wojods are Md ed Buough Lelia I I apodal assessments. state aid fes. and city hods I I i OW are appacabfe to specific protects. TypcAl I I asaasuroni pored is 10 to 15 years. store, weter wne omwe Frwwro Methods Table 1 •a wse Prol"t No. solo." D SECTION IV- TABULATION OF RESULTS TWO I Summary of Information Compiled From Storm Water Management Financing Questionnaire Sources of Revenue City Drainage Trunk General Direct Special Sanitary State Develop. Notes ' Utgity Foo Fund Assess Purpose Tax Sewer Aid Construction I I Dfstrkb Fund Funds Funds Wood Wry '- 20% • ' 50%— -- ---% - -- -- - - - - - - - -w — - Trunk syslem improvements are paid for Ovough frank teas or utility fees Lateral syslem improvements are paid br through died assessments and Mose uwasmenls we equal to the actual cost at Om lateral facility construcbon. Trunk lees vary from one area to I Ow next based on coal of irrplormnting Irrlprovemerds i the area. Slomn mater %Aft rates are based on spedf¢ fro pear pogrom tow kdentUkd projects andlor programs. Moan waw tabs 1 • 10 wsD Prowl No 1010.0+ -