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0813completeagenda CITY OF RICHFIELD, MINNESOTA MONDAY, AUGUST 13, 2012 RICHFIELD MUNICIPAL CENTER 6700 PORTLAND AVENUE REGULAR CITY COUNCIL MEETING COUNCIL CHAMBERS 7:00 P.M. AGENDA INTRODUCTORY PROCEEDINGS Call to order Roll call Open forum (15 minutes maximum) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: Pledge of Allegiance Approval of minutes of Regular City Council Meeting of July 24, 2012 PRESENTATIONS 1. Recognition of David, Brad and Sam Schrick (Council Memo No. 93 2. Presentation of 2012 Landscape Good Neighbor Award Winners (Council Memo No. 94) COUNCIL DISCUSSION 3. Council discussion • Designation of City Council attendance at National League of Cities Congress of Cities and Exposition; November 28-December 1; Boston, MA • Hats Off to Hometown Hits Notes: AGENDA APPROVAL 4. Council approval of agenda CONSENT CALENDAR 5. Consent Calendar contains several separate items,which are acted upon by the City Council in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further Council action on these items is necessary. However, any Council Member may request that an item be removed from the Consent Calendar and placed on the regular agenda for Council discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of modification in cellular telephone antenna facilities at Logan Avenue and Penn Avenue water tower sites by T-Mobile S.R. No. 135 B. Consideration of approval of transfer of funds to close out certain capital project funds S.R. No. 136 C. Consideration of approval of first reading of ordinance amending Subsection 601.25 of Richfield City Code relating to storage of garbage, refuse and recyclable containers and scheduling second reading for September 11, 2012 S.R. No. 137 D. Consideration of approval of temporary on-sale intoxicating liquor license for Church of St. Peter, 6730 Nicollet Avenue, Pig Roast event on August 18, 2012 S.R. No. 138 E. Consideration of approval of temporary on-sale intoxicating liquor license for Church of St. Peter, 6730 Nicollet Avenue, annual Fall Festival on September 28, 29 and 30, 2012 S.R. No. 139 F. Consideration of approval of new lawful gambling license for Richfield Lions Club to conduct gambling activities at The Frenchman's, 1400 East 66th Street, with resolution approving gambling activity requested by applicant S.R. No. 140 G. Consideration of approval of first reading of ordinance authorizing capital improvement project for renovation of Fire Station 2 pursuant to Richfield City Charter Section 8.04 and scheduling public hearing and second reading for September 11, 2012 S.R. No. 141 H. Consideration of approval of bid minutes and tabulation and award of contract to Castrejon, Inc. for construction of fiber optic network to connect Lyndale and Wine & Spirits liquor stores and Wood Lake Nature Center to City's existing fiber network in amount of$149,295 S.R. No. 142 Notes: 6. Consideration of item(s), if any, removed from Consent Calendar Notes: PUBLIC HEARINGS 7. Public hearing and consideration of: • Second reading of ordinance granting cable television franchise to Comcast of Arkansas/ Florida I Louisiana I Minnesota/ Mississippi/Tennessee, Inc.; and • Second reading of ordinance repealing Richfield City Code Section 726; and • Resolution authorizing summary publication of ordinance granting cable television franchise Staff Report No. 143 Notes: 8. Public hearing regarding resolution approving conditional use permit for full-service restaurant at 6439 Lyndale Avenue Staff Report No. 144 Notes: 9. Public hearing regarding resolution adopting special assessment roll for removal of diseased trees from private property for work ordered in 2011 Staff Report No. 145 Notes: 10.Public hearing regarding resolution adopting special assessment rolls for 2011 maintenance services and resolution ordering current 2013 maintenance services; 77th Street maintenance district Staff Report No. 146 Notes: 11.Public hearing regarding resolution adopting special assessment rolls for 2011 maintenance services and resolution ordering current 2013 maintenance services; Lyndale/HUB/Nicollet maintenance district Staff Report No. 147 Notes: RESOLUTIONS 12.Consideration of resolution awarding sale of$2,150,000 General Obligation Street Reconstruction Bonds, Series 2012A Staff Report No. 148 Notes: 13.Consideration of resolution awarding sale of$2,985,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B Staff Report No. 149 Notes: CITY MANAGER'S REPORT 14.City Manager's Report Notes: 15.Claims and payrolls Open forum (additional 15 minutes if more time needed after first Open Forum and by majority vote of the City Council) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: 16.Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. CITY COUNCIL MEETING MINUTES Richfield, Minnesota g‘ehilleed Regular Meeting July 24, 2012 CALL TO ORDER The meeting was called to order by Mayor Pro Tempore Fitzhenry at 7:00 p.m. ROLL CALL Members Present: Tom Fitzhenry, Mayor Pro Tempore; Pat Elliott, Sue Sandahl; and Fred Wroge. Members Absent: Debbie Goettel, Mayor. Staff Present: Pam Dmytrenko, Acting City Manager; Mike Eastling, Public Works Director; John Stark, Community Development Director, Jim Topitzhofer, Recreation Services Director; Todd Sandell, Public Safety Director, Wayne Kewitsch, Fire Services Director, Chris Regis, Finance Manager; Corrine Heine, City Attorney; and Cheryl Krumholz, Executive Coordinator. M/Fitzhenry, S/Sandahl to excuse Mayor Goettel's absence from the July 24, 2012 Regular City Council Meeting. Motion carried 4-0. OPEN FORUM Camillo DeSantis, 6508 Newton Avenue, expressed his observations and comments regarding the Pillsbury Commons housing redevelopment project that was rejected recently. PLEDGE OF ALLEGIANCE Mayor Pro Tempore Fitzhenry led the audience in the Pledge of Allegiance. APPROVAL OF MINUTES M/Wroge, S/Sandahl to approve the minutes of(1) Special City Council Worksession of July 10, 2012; and (2) Regular City Council Meeting of July 10, 2012. Motion carried 4-0. Council Meeting Minutes -2- July 24,2012 Item #1 COUNCIL DISCUSSION • HATS OFF TO HOMETOWN HITS Council Member Elliott discussed the Planning Commission's consideration of a conditional use permit for a proposed full service restaurant with liquor service at 64th Street and Lyndale Avenue. Recreation Services Topitzhofer and Tom Rublein, Penn Central Chair, announced the Open Streets Celebration on September 16 on Penn Avenue from 63rd to 76th Streets. They explained the accommodations of public safety concerns, notification of the businesses and neighborhood and traffic control. Council Member Wroge stated the Pillsbury Commons project failed for many reasons not because of the SOS neighborhood group. Council Member Wroge requested the City Council discuss at a future meeting, the reinstatement of the Neighborhood Property Maintenance Inspection Program. Council Member Sandahl announced the opening of Pizza Luce in the near future. Council Member Wroge announced the open house for the Candlewood Suites renovation. Gordon Hanson, Richfield Foundation, announced the raffle ticket winners of the Minnesota Twins Legends Club tickets. Item #2 COUNCIL APPROVAL OF AGENDA MNVroge, S/Sandahl to approve the agenda. Motion carried 4-0. Item#3 CONSENT CALENDAR A. Consideration of approval of Post-Issuance Debt Compliance Policy and updated Fund Balance Policy S.R. No. 127 B. Consideration of approval of resolution authorizing prepayment and redemption of $750,000 Taxable G.O. Improvement Bonds, Series 1997, dated December 1, 1997 S.R. No. 128 RESOLUTION NO.10675 RESOLUTION PROVIDING FOR THE PREPAYMENT AND REDEMPTION OF CERTAIN OUTSTANDING GENERAL OBLIGATION BONDS OF THE CITY This resolution appears as Resolution No. 10675. C. Consideration of approval of resolution authorizing refunding of$3,470,000 G.O. Tax Increment Bonds, Series 2003C, dated December 30, 2003 with $2,560,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B S.R. No. 129 RESOLUTION NO.10676 RESOLUTION PROVIDING PRELIMINARY APPROVAL TO THE DEFEASANCE, REDEMPTION, AND PREPAYMENT OF THE CITY'S TAXABLE GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 2003C Council Meeting Minutes -3- July 24,2012 This resolution appears as Resolution No. 10676. D. Consideration of approval of resolution authorizing submittal of grant application to Minnesota Department of Employment and Economic Development for pedestrian access improvements in Lakes at Lyndale area S.R. No. 130 RESOLUTION NO.10677 RESOLUTION AFFIRMING AND RATIFYING CITY'S STAFF SUBMITTAL OF AN APPLICATION AND COMMITTING LOCAL MATCH AND AUTHORIZING CONTRACT SIGNATURE TO THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT(DEED) FOR REDEVELOPMENT GRANT FUNDS FOR THE LAKES AT LYNDALE AREA AT 64TH STREET AND LYNDALE AVENUE This resolution appears as Resolution No. 10677. E. Consideration of approval of award of contract to Metro Elevator, Inc. for repairs to existing elevator at Richfield Community Center as required by State Code in amount of$35,335 S.R. No. 131 F. Consideration of approval of award of contract to Midwest Elevator and Drilling for installation of air conditioning unit to existing elevator at Richfield Community Center as required by State Code in amount of$15,317 S.R. No. 132 M/Elliott, S/Sandahl to approve the Consent Calendar. Motion carried 4-0. Item#4 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM CONSENT CALENDAR None. Item #5 CONSIDERATION OF: • SECOND READING OF ORDINANCE AMENDING SUBSECTION 429.05 OF RICHFIELD CITY CODE RELATED TO MINNEHAHA CREEK WATERSHED DISTRICT STORMWATER MANAGEMENT RULE; AND • RESOLUTION AUTHORIZING SUMMARY PUBLICATION OF ORDINANCE AMENDMENT SECTION 429 S.R. NO. 133 Council Member Elliott presented Staff Report No. 133. M/Elliott, S/Sandahl that this constitutes the second reading of Bill No. 2012-9 approving amending Subsection 429.05 of Richfield City Code related to Minnehaha Creek Watershed District Stormwater Management Rule, that it be published in the official newspaper and that it be made part of these minutes, and that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO.10678 RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE AMENDMENT TO SECTION 429 OF THE RICHFIELD CITY CODE WHICH PERTAINS TO STORMWATER MANAGEMENT REGULATIONS Motion carried 4-0. This resolution appears as Resolution No. 10678. Council Meeting Minutes -4- July 24,2012 Item#6 DISCIPLINARY HEARING REGARDING RESOLUTIONS IMPOSING CIVIL ENFORCEMENT ON ESTABLISHMENTS IN RICHFIELD THAT UNDERWENT ALCOHOL COMPLIANCE CHECKS CONDUCTED BY RICHFIELD PUBLIC SAFETY AND FAILED BY SELLING ALCOHOL TO UNDERAGE YOUTH S.R. NO. 134 Council Member Wroge presented Staff Report No. 134. Super America—7500 Lyndale Avenue— Bill Schnobrich, Director of Operations, admitted the violation occurred and requested the City Council consider an alternative to the five day liquor license suspension. The City Council denied consideration of an alternative. Mr. Schnobrich then stipulated to the suspension and penalty. El Jalapeno— 1430 East 66th Street—George Frost, owner, admitted the violation occurred and stipulated to the suspension and penalty. Patrick's French Bakery—2928 West 66th Street—Judy Justin, manager, admitted the violation occurred and stipulated to the suspension and penalty. MNVroge, S/Sandahl that the following resolutions be adopted and that they be made part of these minutes: RESOLUTION NO. 10679 RESOLUTION SUSPENDING THE OFF-SALE 3.2 MALT LIQUOR LICENSE FOR EL JALAPENO MARKET, 1430 EAST 66TH STREET, AND IMPOSING A CIVIL PENALTY FOR FIRST TIME ALCOHOL COMPLIANCE FAILURE This resolution appears as Resolution No. 10679. RESOLUTION NO. 10680 RESOLUTION SUSPENDING THE ON-SALE WINE AND 3.2 PERCENT MALT LIQUOR LICENSE FOR PATRICK'S FRENCH BAKERY, 2928 WEST 66TH STREET, AND IMPOSING A CIVIL PENALTY FOR FIRST TIME ALCOHOL COMPLIANCE FAILURE This resolution appears as Resolution No. 10680. RESOLUTION NO. 10681 RESOLUTION SUSPENDING THE OFF-SALE 3.2 MALT LIQUOR LICENSE FOR SUPER AMERICA, 7500 LYNDALE AVEUE SOUTH, AND IMPOSING A CIVIL PENALTY FOR FIRST TIME ALCOHOL COMPLIANCE FAILURE This resolution appears as Resolution No. 10681. Motion carried 4-0. Council Meeting Minutes -5- July 24,2012 Item #7 CITY MANAGER'S REPORT Recreation Services Director Topitzhofer announced the August 4 Urban Wildland and Half Marathon races. Acting City Manager Dmytrenko reminded the City Council the next City Council Meeting is Monday, August 13 due to Election Day on Tuesday, August 14. Item #8 CLAIMS AND PAYROLLS MNVroge, S/Sandahl that the following claims and payrolls be approved: U.S. Bank 07/24/12 A/P Checks: 214551-214947 $ 1,581,670.12 Payroll: 85387-85756 $ 618,458.27 TOTAL $ 2,200,128.39 Motion carried 4-0. OPEN FORUM None. ADJOURNMENT The City Council meeting was adjourned by unanimous consent at 7:48 p.m. Date Approved:August 13, 2012 Tom Fitzhenry Mayor Pro Tempore Cheryl Krumholz Pam Dmytrenko Executive Coordinator Acting City Manager CITY OF RICHFIELD, MINNESOTA Office of City Manager August 9, 2012 Council Memorandum No. 93 The Honorable Mayor and Members of the City Council Subject: Recognition of David, Brad and Sam Schrick (Agenda Item No. 1) Council Members: On July 9, 2012 at approximately 5:50 PM David, Brad and Sam Schrick were outside their residence on the 7600 block of Wentworth Avenue when they smelled smoke. Brad and Sam decided to investigate and discovered heavy smoke emanating from the second floor of 7626 Blaisdell Avenue. They yelled for their grandmother to call 911, leaped over the backyard fence and ran to the front of the burning building. David Schrick drove his truck around the block and parked on the street near the burning structure. Knowing that an elderly couple lived at the residence, Brad and Sam entered the house and discovered Tony Kruse in the living room and his wife Delores in the bedroom unaware that the second floor of their house was on fire. Brad and Sam assisted the Kruse's from their home while David entered the house to check for the Kruse's son who lived on the second floor. David opened the door to the second floor only to be pushed back by heavy smoke and high heat. Fortunately, the son was not home at the time. For these actions, the Schrick's will be presented with a Certificate of Appreciation from the Fire Department at the City Council meeting on Monday, August 13, 2012. Re ' u submittil:, / L. Devi h City Manager SLD cak Email: Department Directors Assistant City Manager CITY OF RICHFIELD, MINNESOTA Office of City Manager August 9, 2012 Council Memorandum No. 94 HRA Memorandum No. 37 Housing & Redevelopment The Honorable Mayor Authority Commissioners And City of Richfield Members of the City Council Subject: 2012 Landscape Good Neighbor Award Winners (Agenda Item No. 2) Council Members and Commissioners: For 14 years the Community Development Department has encouraged residents to strengthen the sense of pride and community in Richfield by coordinating the Landscape Good Neighbor Award. The award recognizes residents' efforts to add beneficial gardens and landscaping in the public spaces of residents' yards. This year, thirty-four households were nominated for the 2012 Landscaping Good Neighbor Award. Properties were nominated in one or both of two categories: "Best Overall Garden" or"Best Overall Landscaping". Five judges, including city staff, Wood Lake Nature Center staff, a local business owner, and a landscape architect evaluated the properties based on aesthetics, materials, maintenance, and neighborhood impact. A number of community businesses generously offered prizes to the Top 18 nominees and the six winners. The Richfield/Bloomington Credit Union provided funds for$10 Home Depot gift cards given to each of the Top 18 nominees. Additionally, Linder's Garden Center, and Wagner's Greenhouses each donated gift cards for the six winners. The following residents are the winners of the "Best Overall Garden": • Joe Krzyzankiak— 1920 76th Street W • Deb Kelly—6415 Wentworth Avenue • Jim & Julie Miller—6514 Irving Avenue The following residents are the winners of the "Best Overall Landscaping": • Hiller George Hibbard —7301 1st Avenue • Dale Kenney—7439 14th Avenue • Marilyn Hill—7445 Girard Avenue We offer congratulations to each of the nominees and winners of the Landscaping Good Neighbor Award. Their contributions to add beauty to the City of Richfield is sincerely app eclat=d. Re 7•ec''� Ily sub ?-d, . De----- 4 City anager SLD:cak Email: Department Directors Assistant City Manager AGENDA SECTION: CONSENT AGENDA H'EM# 5A ' REPORT# 135 STAFF REPORT RICHFIELD CITY COUNCIL MEETING Nommiammi AUGUST 13, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAME,TITLE DEPARTMENT DIRECTOR REVIEW: .(.I. / I Ad f fir m, REVIEWED BY CITY J '° MANAGER: • i ITEM FOR COUNCIL CONSIDERATION: Approve by motion a modification in cellular telephone antenna facilities at the Logan Avenue and Penn Avenue water tower sites by T-Mobile. I. RECOMMENDED ACTION: By Motion: Approve the modification in cellular antenna facilities at the Logan Avenue and Penn Avenue water tower sites. II. BACKGROUND On August 1, 1996, the City of Richfield entered into a Site Lease Agreement at the Logan Avenue water tower with APT Minneapolis, Inc., predecessor in interest to T- Mobile, the current Tenant of the lease. The lease was amended on December 31, 1998 that allowed an increase in the number of antennas from nine (9) to twelve (12). In addition, on October 15, 2008 the City entered into a Site Lease Agreement with T-Mobile at the Penn Avenue water tower to erect cellular telephone antennas on the site. The Site Lease Agreements allowed the Tenant to erect cellular telephone antennas on the Logan Avenue water tower of up to twelve (12) and at the Penn Avenue water tower up to nine (9) antennas. Currently, the Tenant has constructed an antenna configuration of three arrays of three antennas and two (2) single 0813Mob1Ie Antenna Modification antennas at the Logan Avenue site and a configuration of three arrays of three antennas at the Penn Avenue site. T-Mobile is now requesting to be allowed to replace the existing antenna configurations with three new antenna arrays of three antennas and upgrade other existing site equipment at both the Logan Avenue water tower and Penn Avenue water tower. All of the new antennas and equipment will be installed within the existing sites and would be painted to match the existing water tower(s). III. BASIS OF RECOMMENDATION A. POLICY • None. B. CRITICAL TIMING ISSUES • The Tenant, T-Mobile is working under a tight timeframe to update their network with the latest technology. C. FINANCIAL • Any costs incurred in the replacement of cellular telephone antennas will be borne by T-Mobile. • The City collects an annual rental payment from the Tenant based on the Site Lease Agreement. • The December 31, 1998 amendment to the Logan Avenue Site Agreement included an increase in the annual rent in consideration for increasing the number of antennas from nine (9) to twelve (12). D. LEGAL • The Site Lease Agreement allows the Tenant to update or replace antenna facilities, however, Tenant must notify and provide a detailed proposal to the City. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • None. V. ATTACHMENTS • Schematic drawings of the current and planned antenna configuration for the Logan Avenue and Penn Avenue sites. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None. OF . . g rc gg zn r---I c7 ON W O g V w p s g o m3 • s sa 5A �� s}�z o 9 z1 w Q s V N lA '1. it 4 2 gip= i MI oz ®°• Ali , , $ ea a a re R m 6 °d d U WWy `1 w U U K J 3 �m ° Z I I °9 w rc w _ aw 3 r i 21 2 NJ w 111 I w'4 w x° I � � I 5 All a ' 1N021d , 1 z m , _ Z ta ° E. I -z E m z a a_' w o zd i __ S°�� RiTP. cog n. 8ro ooh Eg o aa$q ly-=� �W1 &g°o= 7a ymjZ SO C - vSU ). :gzpr� tOo' gg(7y��6 It 80 Z O'ya • 4 8§g ° _ � t ��8§s Tg l rc R // %ice -- – �\\\ rc _ pry �z,,f \\\�\ w iipF A W b _- /��-I \\\\m5 t�s g &w" tr '� J o \&8g ^0 / / �g — \ V2l / &inn rc \ b m3 Et r I %6% �8 Sg� I I _1,_. 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III ?KK 8E \ '3o''�z swm nn �Ci W.� 8� w()W Q v4NWK 64 \ \ \ \ " \ ww 8'"Q�o I °s :s \ \ $`Faze8 �t .o \ g? \ aom I a 3 ,48 g2G \ \ \ \ \ o& a Li g6g ' u a " G E 6 v8 = o M4a w z . z z a .1-0 aW w 8g Fg gg 0 m ° I�4 Q y9 83gF �'? j7�� go- Et coo \m" a 0E2 tt ' 8 J `4E &R .g ,',e� VgyU RUO E 3 a §F3�tt F�jM 8 0 0 a �aLi4 N _Z U` K § U rc & , e tee gib E84 DR III a." 17 `\• i �t� \v_/Vf g A V.7 1, &I U &�M "j u_,' 0 AGENDA SECTION: CONSENT AGENDA ITEM# 5B REPORT# 136 mistiAl STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAVE b=--- DEPARTMENT DIRECTOR REVIEW L 1 / - 1 ,I REVIEWED BY CITY MANAGER: -� ITEM FOR COUNCIL CONSIDERATION: Consideration of transfer of funds to close out certain capital project funds. I. RECOMMENDED ACTION: By Motion: Approve the transfer of funds to close out certain capital project funds. II. BACKGROUND The City has two capital project funds where the projects have been completed or there has been little or no activity. For the purposes of the Engineering Division, these projects can be closed out. The two funds are the Bicycle Master Plan and 66th Street and Portland Avenue Intersection funds. III. BASIS OF RECOMMENDATION A. POLICY • The City's financial policies do not directly address the closing out of City funds. • The City's auditors have recommended that non-budgeted transfers between funds be approved by the City Council. B. CRITICAL TIMING IssUES • N/A 0813 Fund Closeout . C. FINANCIAL • The following tables reflect the funds to close and the corresponding funding sources or recipients. Fund to Close Balance Fundin• Reci•ient Amount 66th Street & Portland Ave Intersection $31,281 MSA Fund $31,281 Bicycle Master Plan $ 4 MSA Fund $ 4 D. LEGAL • N/A E. ENVIRONMENTAL CONSIDERATIONS • None IV. ALTERNATIVE RECOMMENDATION(S) • The City Council can choose to approve all, part or none of the proposed fund closings. • City Council can direct staff to seek alternative funding sources to close certain funds. V. ATTACHMENTS • None VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A AGENDA SECTION: CONSENT AGENDA ITEM# SC REPORT# 137 STAFF REPORT ;RICHFIELD ilinCITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: BETSY OSBORN, SUPPORT SERVICES MANAGER NAME,71TLE DEPARTMENT DIRECTOR a / �� LJ REVIEW: ma✓ r SIGNATURE REVIEWED BY CITY -'y MANAGER: ' / ` ITEM FOR COUNCIL CONSIDERATION: First reading of an ordinance amending subsection 601.25 of the Richfield City Code, relating to placement of waste containers, and scheduled second reading for September 11, 2012 I. RECOMMENDED ACTION: By Motion: Approve first reading of an ordinance relating storage of garbage, refuse and recyclables containers, amending subsection 601.25 of the Richfield City Code and schedule second reading for September 11, 2012. II. BACKGROUND In a recent environmental health enforcement action, a property owner contended that the City's ordinance regarding placement of waste containers included ambiguous language. The City code states that "garbage cans, refuse, and recyclables containers must be located alongside or behind the house or garage of a residential dwelling unit." The resident had placed their garbage can forward of the front line of the house and was cited for failing to have it either alongside or behind the home. The City has been enforcing this code in this way for over 30 years. The citizen challenged the citation in District Court and a Hearing Officer dismissed the citation; stating that our ordinance language was not supported by a definition for the term "alongside". This effectively rendered our current waste container 08/13/12 Garbage Container Revision placement ordinance language moot. Staff contacted the City Attorney and the City Attorney recommended that the ordinance be amended to clarify the City's intent. III. BASIS OF RECOMMENDATION A. POLICY • The City wants its ordinances to be clear and unambiguous, so that the public can readily understand what the ordinance requirements are, and so that Public Safety can effectively enforce the ordinances. B. CRITICAL TIMING ISSUES • The Public Safety Department is not enforcing the ambiguous ordinance language but is only enforcing clear violations of the existing ordinance. C. FINANCIAL • None. D. LEGAL • The City Attorney prepared the ordinance. E. ENVIRONMENTAL CONSIDERATIONS • Placement of containers behind the front plane of the principal structure reduces visual clutter and unsightly conditions. IV. ALTERNATIVE RECOMMENDATION(S) • None. V. ATTACHMENTS • Ordinance. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None '- I BILL NO. AN ORDINANCE RELATING TO STORAGE OF GARBAGE, REFUSE AND RECYCLABLES CONTAINERS; AMENDING SUBSECTION 601.25 OF THE RICHFIELD CITY CODE THE CITY OF RICHFIELD DOES ORDAIN: Section 1. Subsection 601.25 of the Richfield City Code is amended to read as follows. Storage of garbage, refuse and recyclables containers. Garbage Gans, refuse, and recyclables containers for single- and two-family residential properties must be located - - - - - - - e- '•^ * • - ^ e --= - - - - - - as provided in this subsection. Except when placed for collection, containers must be stored within an enclosed structure or in the rear or side yard of the property immediately adjacent to a principal or accessory structure. Containers may not be stored in the area that lies between the front lot line and the front line of the principal building that is farthest from the front lot line, as proiected to the side lot line(s). Sec. 2. This ordinance will be effective in accordance with Section 3.09 of the City Charter. Adopted this of , 2012. By: Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk 408735v2 CAH RC160-3 AGENDA SECTION: CONSENT AGENDA ITEM# 5D REPORT# 138 I STAFF REPORT laii:=1`ICH[ ELD CITY COUNCIL MEETING AUGUST 13, 2012 milisow REPORT PREPARED BY: BETSY OSBORN, SUPPORT SERVICES MANAGER NAME,TITLE DEPARTMENT DIRECTOR A' /i / REVIEW: 1L i i'A . A _ F ,? ./ j REVIEWED BY CITY i MANAGER: / / / ITEM FOR COUNCIL CONSIDERATION: Consideration of requests for a Temporary on-sale Intoxicating Liquor license for the Church of St. Peter, 6730 Nicollet Avenue South, for their Pig Roast event to be held August 18, 2012. I. RECOMMENDED ACTION: By Motion: Approve the request by the Church of St. Peter for a Temporary on-sale Intoxicating Liquor license for their Pig Roast event scheduled to take place on August 18, 2012. II. BACKGROUND On July 13, 2012, the Church of St. Peter submitted a request for a Temporary on- sale Intoxicating Liquor license for their Pig Roast event to be held on August 18, 2012. All required licensing fees have been received. The Church of St. Peter will also be holding a dance during this event; however Richfield City Code 1110.03 exempts the requirement of obtaining a Public Dance license when the proceeds are devoted to benevolent, fraternal, educational or charitable organizations as is the case with The Church of St. Peter. The event will take place from 5:30 p.m. to 10:00 p.m. The applicant has requested a Temporary on-sale Intoxicating Liquor license to serve wine and 3.2 percent malt liquor at this event. No other intoxicating liquor beverages will be permitted. 081312 Church of St. Peter Pig Roast They plan to serve pulled pork, potatoes, vegetables, dinner rolls and a dessert. The Church of St. Peter has contacted food sanitarians from the City of Bloomington to ensure that proper food handling practices are followed. The City has previously granted this license to The Church of St. Peter for their Pig Roast event. III. BASIS OF RECOMMENDATION A. POLICY • Richfield City Code Section 1202 requires applicants of Temporary on-sale Intoxicating Liquor licenses to comply with all of the provisions of both City Code and State Statutes. • Richfield City Code 1110.03 exempts the requirement of obtaining a Public Dance license when the proceeds are devoted to benevolent, fraternal, educational or charitable organizations. B. CRITICAL TIMING ISSUES • Service of wine and 3.2 percent malt liquor will be allowed only during the specified time of 5:30 p.m. to 10:00 p.m. on August 18. In addition, no other intoxicating liquor beverages will be permitted. C. FINANCIAL • The required licensing fees have been received. D. LEGAL • The required proof of liquor liability insurance coverage has been submitted showing The Catholic Mutual Society affording the coverage. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATIONS) • Deny the request for a Temporary on-sale Intoxicating Liquor license for The Church of St. Peter. This would mean that the applicant would not be able to serve wine or 3.2 percent malt liquor. However, the Public Safety Department has not found any basis for a denial. In addition, the Council has previously granted these licenses in conjunction with this event. V. ATTACHMENTS • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • The Church of St Peter staff has been notified of the date of this meeting. AGENDA SECTION: CONSENT AGENDA ITEM# 5E REPORT# 139 STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: BETSY OSBORN, SUPPORT SERVICES MANAGER NAME,TITLE DEPARTMENT DIRECTOR / i �/ REVIEW: ' REVIEWED BY CITY /t' j MANAGER: f , ITEM FOR COUNCIL CONSIDERATION: Consideration of a request for a Temporary on-sale Intoxicating Liquor license for the Church of St. Peter, 6730 Nicollet Avenue South, for their annual Fall Festival to be held September 28th, 29th and 30th, 2012. I. RECOMMENDED ACTION: By Motion: Approve the request by the Church of St. Peter for a Temporary on-sale Intoxicating Liquor license for their annual Fall Festival scheduled to take place September 28th, 29th, and 30th, 2012. II. BACKGROUND On July 13, 2012, the Church of St. Peter submitted a request for a Temporary on- sale Intoxicating Liquor license for their annual Fall Festival to be held September 28th, 29th, and 30th, 2012. All required licensing fees have been received. The event will take place from 6:00 p.m. to 9:00 p.m. on September 28th; 11:00 a.m. to 8:00 p.m. on September 29th; and 10:00 am to 1:00 p.m. on September 30th. The requested Temporary Intoxicating Liquor license is for the consumption of wine and 3.2 percent malt liquor only.. No other intoxicating liquor beverages will be permitted. 081312 Church of St. Peter Fall Festival Service of wine and 3.2 percent malt liquor will be available on September 28th from 6:00 p.m. to 9:00 p.m., and from 5:00 p.m. to 8:00 p.m. on September 29th. Food items such as hot dogs, turkey, brats, potatoes, coffee cake, muffins, chips, salad, juice, coffee, and ice cream will be served. The Church of St. Peter has contacted food sanitarians from the City of Bloomington to ensure that proper food handling practices are followed. The City has previously granted this license to The Church of St. Peter for their annual Fall Festival event. III. BASIS OF RECOMMENDATION A. POLICY • Richfield City Code Section 1202 requires applicants of Temporary on-sale Intoxicating Liquor licenses to comply with all of the provisions of both City Code and State Statutes. B. CRITICAL TIMING ISSUES • Service and consumption of wine and 3.2 percent malt liquor will be allowed only at the specified times of 6:00 p.m. to 9:00 p.m. on September 28th; and from 5:00 p.m. to 8:00 p.m. on September 29th. In addition, no other intoxicating liquor beverages will be permitted. C. FINANCIAL • The required licensing fees have been received. D. LEGAL • The required proof of liquor liability insurance coverage has been submitted showing The Catholic Mutual Society affording the coverage. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • Deny the request for a Temporary on-sale Intoxicating Liquor license for The Church of St. Peter. This would mean that the applicant would not be able to serve wine or 3.2 percent malt liquor at this event. However, the Public Safety Department has not found any basis for a denial. In addition, the Council has previously granted these licenses in conjunction with this event. V. ATTACHMENTS • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • The Church of St Peter staff has been notified of the date of this meeting. AGENDA SECTION: CONSENT AGENDA ITEM# 5F REPORT# 140 imall STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: BETSY OSBORN, SUPPORT SERVICES DIVISION MANAGER NAME,TITLE DEPARTMENT DIRECTOR i—�T ' I REVIEW: .1{ _, REVIEWED BY CITY r)/, - - - . MANAGER: A 1/ .!, ITEM FOR COUNCIL CONSIDERATION: Consideration of a new lawful gambling license for the Richfield Lions Club to conduct gambling activities at The Frenchman's, located at 1400 East 66th Street, with a resolution approving the gambling activity requested by the applicant. I. RECOMMENDED ACTION: By Motion: • Approve the request of a new lawful gambling license for the Richfield Lions Club to conduct gambling activities at The Frenchman's, located at 1400 East 66th Street; and • Approve the attached resolution allowing the Richfield Lions Club to conduct lawful gambling activity requested by the applicant in accordance with Richfield City Code 1100.13, subd.6. II. BACKGROUND On May 11, 2012, the Richfield Lions Club submitted an application for a new lawful gambling license. The applicant has paid the required investigation and license fees. The Public Safety Department has conducted the required background investigation and has determined that the applicant has complied with all of the licensing requirements. In addition, criminal checks were conducted on each of the two 081312 Lions Club New Gambling gambling managers, Jody Kay Rasmussen and Patti Marie Bussell, and neither was found to have any criminal record. The Richfield Lions Club organization was formed and has existed in the City of Richfield since June 2006. The Lions Club's request to conduct gambling activities at an on-sale liquor establishment (The Frenchman's) is their first request of this kind. They have never previously operated any type of charitable gambling within Richfield City limits. In 1996, the Richfield Hockey Association was approved a license to conduct pull tab operations at The Frenchmans. This was during the time the Council had recently passed an ordinance allowing for some expansion of lawful gambling. There were no complaints, Public Safety issues, or City Code violations during the time the gambling activities were conducted. The Richfield Hockey Association did not renew their gambling license for a second year. In addition, there have been no other organizations conducting gambling activities at The Frenchmans since that time. III. BASIS OF RECOMMENDATION A. POLICY • Richfield City Code 1100.13 requires the Public Safety Department to review the request for the gambling license and make its review and recommendation to the City Council. • Richfield City Code 1100.13 requires the City to approve a resolution allowing the lawful gambling activity to be conducted. B. CRITICAL TIMING ISSUES • N/A C. FINANCIAL • The applicant has paid the required investigation and licensing fees. D. LEGAL • Minnesota State Statute Section 349.213 provides authority for review of applications by local authorities. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • Deny the request for the issuance of a new lawful gambling license for the Richfield Lions Club. This would mean that the applicant would not be able to conduct gambling activities at The Frenchman's; however, the Public Safety Department has not found any basis for a denial. V. ATTACHMENTS • Resolution. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representatives/Officers of the Richfield Lions Club SUMMARY OF BACKGROUND INVESTIGATION REPORT FOR THE RICHFIELD LIONS CLUB GAMBLING REQUEST Officers: Barbara K. Shelton, Chief Executive Officer Douglas Gerhard Bergeson, Treasurer Jody Kay Rasmusson, Gambling Manager Patti Marie Bussell, Gambling Manager The following is a review of Richfield City Code as it relates to this investigation: Investigation and Permit Fee. The City of Richfield has received the required licensing and investigation fees. Violation by the gambling organization of any statute, ordinance or rule relating to gambling. • The Richfield Lions Club, as on organization, has had no police contacts on record and has never operated any type of charitable gambling within the City limits. • Criminal History Checks were conducted on the listed officers associated with the Richfield Lions Club and no criminal convictions where found on any of the officers of the organization. Violation by the on-sale establishment, or other organization leasing its premises for gambling, of any statute, ordinance or rule relating to the operation of the establishment including but not limited to laws relating to alcoholic beverages, gambling, controlled substances and protection of public safety. • Since June 1, 2011, the Richfield Police Department has had 48 calls for service to The Frenchman's. Per Resolution 9511 of the Richfield City Code, there have been no violations that would fit the criteria to warrant sanctions against the establishment's liquor license. No location for gambling shall be approved unless it complies with the applicable zoning, building, fire and health codes of the City of Richfield. • There have been no environmental health violations for The Frenchman's nor have there been any building code violations. In addition, this establishment is in compliance with all zoning and fire codes of the City of Richfield. Neither the designated gambling manager nor any of the organization's officers have been convicted of any offense which would indicate lack of suitability of the designated manager or the organization to engage in the type of gambling activity for which this license is sought. 5P-4P- • Criminal history checks were conducted on each of the Richfield Lions Club officers and none were found to have any criminal convictions. In addition, criminal checks were conducted on each of the two gambling managers, Jody Kay Rasmussen and Patti Marie Bussell, and neither was found to have any criminal record. The organization has existed in the city for at least three years prior to the date of application. • The Richfield Lions Club was formed on June 30th of 2006. The registered business address is 7201 14th Ave. S., Richfield, MN 55423. The following documents were submitted by the applicant as required by the Minnesota State Gambling Control Board: Form LG214 Lease for Lawful Gambling Activity. This form was signed by Mary Christine Blake, the owner of The Frenchman's, and Barbara Shelton, the Chief Executive Officer of the Richfield Lions Club. As per State regulations, monthly rent will be determined by the percentage of gross profits not to exceed 10% and not to exceed $1750 per month. Form LG214 Premises Permit Application. This form indicates the name of the site where the gambling activity will be conducted (The Frenchman's) and indicates that the managers of the pull-tab operations are Jody Rasmusson and Patti Bussell. The Lions Club's gambling bank account is listed as being with M&I Bank in Richfield. Form LG200A Organization License Application. This form indicates the true legal name of the organization (Richfield Lions Club) and indicates the name of the Chief Executive Officer as Barbara Shelton. The Treasurer is listed as Douglas Bergeson. As required by the State Gambling Board, a copy of the organization's official by-laws have been signed and attached to this application. In addition, a copy of the IRS letter showing that the parent organization is a nonprofit organization with a group ruling; and a charter letter from the parent organization recognizing the Richfield Lions Club as a subordinate has also been supplied. Form LG200B Organization Officers Affidavit. Indicates a change in the status of one of the organization's officers. In this case, the Treasurer, Douglas Bergeson, was appointed to this position on July 1, 2012. Summary All of the licensing requirements appear to be in order and complete. In addition, nothing was found in the investigation which would disqualify the applicant from obtaining the requested license. RESOLUTION NO. A RESOLUTION GRANTING APPROVAL FOR RICHIFELD LIONS CLUB TO CONDUCT LAWFUL GAMBLING WHEREAS, Richfield Lions Club has submitted an application for the issuance of a new lawful gambling license; and WHEREAS, the application requests pull-tab operations; and WHEREAS, Minnesota State Statute Section 349.213 provides authority for review of applications by local authorities; and WHEREAS, the Department of Public Safety has completed an investigation of the application and finds the application to be in order; NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council, City of Richfield, Minnesota, as follows: 1. That a lawful gambling license be granted to the Richfield Lions Club to conduct lawful gambling activity at The Frenchman's, 1400 E. 66th Street. Passed by the City Council, of the City of Richfield, Minnesota this 13th day of August, 2012. Debbie Goettel, Mayor Nancy Gibbs, City Clerk AGENDA SECTION: CONSENT AGENDA ITEM# 5G REPORT# 141 STAFF REPORT RICHFIELD F CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: WAYNE KEWITSCH,FIRE CHIEF NAME,This DEPARTMENT DIRECTOR ®r REVIEW: J t ° f i r .� ° YII, i w- A1, REVIEWED BY CITY �'� MANAGER: f ! _,J ' I'T'EM FOR COUNCIL CONSIDERATION: First reading and consideration of an ordinance to authorize a capital improvement to renovate Fire Station 2 and set a public hearing and second reading for September 11, 2012. I. RECOMMENDED ACTION: By Motion: Consider first reading of an ordinance to authorize expenditures for the planning and renovation of Fire Station 2 pursuant to the Richfield Charter, Section 8.04, and set the public hearing and second reading of the ordinance for September 11, 2012. II. .BACKGROUND At the present time Fire Station 2 is in need of a major renovation. The renovation would provide the following: • Alleviate gender equity issues. The current fire station was originally built in 1963 and was remodeled in 1983, on neither occasion was it deemed necessary to modify the facilities to accommodate women in the fire service. In the recent past, the department has been able to accommodate the single woman on the department by assigning her to the officer dormitory when she was assigned to Station 2. Currently the department has three women and this facility is unable to accommodate this gender make up adequately on an equitable basis. The facility only has one common locker room which does not have a door and is adjacent to a frequently traveled pathway between the firefighter dormitory and the apparatus bay. There is no adequate space that will work efficiently as a locker/changing facility for female firefighters. The renovation will create two unisex bathrooms with showers that can be used for changing with a common locker/personal item storage area. This will allow the station to be used into the future regardless of the gender makeup of the department. Additionally, four individual sleeping rooms, similar to Station 1, will be created to solve the dormitory gender issues. • It would allow the installation of energy efficient updates. Over the past several years the City has made several improvements in Station 2. A new energy efficient boiler was installed along with a new efficient water heater. These improvements will not be replaced during the renovation. However, there are several windows, doors and lighting fixtures which will be upgraded to energy efficient models along with additional air handling equipment. • Replacement of equipment that is beyond it effective operational life cycle. The main heat exchanger located in the apparatus bay does not function properly and will need to be replaced whether Station 2 is renovated or not. It requires manual adjustments which are made by government building staff on a seasonal basis, but that does not allow for adjustments if the weather suddenly gets hot or cold after the adjustment. This results in poor conditions throughout the living spaces and can result in a degradation of equipment life. • Accommodate equipment storage needs. The current facility has inadequate storage space for departmental needs. Equipment and paper goods are stored on top of lockers and some space is no longer properly utilized. The existing hose tower could be better used as storage space. The renovation will build in dedicated storage for linens, paper goods, equipment and emergency medical equipment along with creating a specific information technology closet, which will facilitate the IT needs of Station 2. • Facilitate operational needs due to increased station run volume. Run volume at Station 2 has increased 14% over the past ten years. It is anticipated that this trend will continue. As the station becomes busier, it necessitates operational modifications that the current station is incapable of accommodating. • Currently the fitness equipment at Station 2 is co-located with the dormitory. Firefighting is a strenuous job and requires a high level of individual fitness. Currently fitness equipment is co-located in the dormitory; the renovation will create new space that will be dedicated for fitness. • A new front entrance and facade will be part of the project. The architect has been tasked with adhering to the development guidelines established by the City for the Penn Avenue corridor. The estimated cost of the renovation is $900,000, with an estimated start of construction planned for the fall of 2012 and is anticipated to take six to eight months to complete. Station 2 will remain operational during the renovation. Discussion of the proposed renovation was discussed at the June 26, 2012 Special City Council Worksession. An architect's preliminary rendering of the new façade along with a proposed floor plan is attached. III. BASIS OF RECOMMENDATION A. POLICY • City Charter, Section 8.04 requires that any capital improvement on City owned property which has an estimated cost exceeding $500,000 or expenditures for design or engineering exceeding $75,000 must be approved by ordinance after a public hearing. • The attached transitory ordinance reflects the City Charter requirement pursuant to Section 8.04 and includes an estimate of the project costs as well as estimated design and engineering costs. • The public hearing is scheduled for September 11, 2012. B. CRITICAL TIMING ISSUES • Staff is requesting that the City Council consider the first reading at the August 13, 2012 meeting in order to proceed in a timely fashion with a public hearing on September 11, 2012. • Delay in acting will increase the cost of the project approximately 5% annually and may result in a project cost that would require debt financing rather than cash. C. FINANCIAL • The estimated cost to remodel Fire Station 2 is $900,000. • Design & Engineering $ 72,000 • Construction $770,000 • Information Technology/Furnishings And Contingency $ 58,000 Total $900,000 • Funding for the project will be provided from the following: • Capital Improvement Reserve Fund $500,000 • 2013 Additional LGA $300,000 • 2012 General Fund Surplus $100,000 Total $900,000 D. LEGAL • Legal Counsel has reviewed the attached transitory ordinance. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • None. V. ATTACHMENTS • Transitory ordinance. • Rendering of renovated Station 2 • Floor plan VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None. BILL NO. 5 6-I Transitory Ordinance No. AN ORDINANCE APPROVING A CAPITAL IMPROVEMENT PROJECT FOR RENOVATION OF FIRE STATION NO. 2, PURSUANT TO RICHFIELD CITY CHARTER SECTION 8.04 THE CITY OF RICHFIELD DOES ORDAIN: Section 1. Background; findings. 1.01. Section 8.04 of the Richfield City Charter requires that any capital improvement on City-owned property that has an estimated cost exceeding $500,000.00 or expenditures for design or engineering costs exceeding $75,000.00 must be approved by ordinance after a public hearing. 1.02. It is proposed that the City Council approve a capital improvement project for the renovation of Fire Station No. 2, located at 6401 Penn Avenue South in the City of Richfield. . 1.03. The capital improvement project consists of the design, engineering and construction of improvements to Fire Station No. 2, including, but not limited to renovation of bathrooms, dormitories, heating, ventilation, windows and exterior facade, the"Project"). 1.04. The estimated construction cost of the capital improvement, excluding design and engineering costs, is in excess of $500,000. The preliminary estimate for total construction cost is $770,000. The estimated cost of design and engineering is $72,000. 1.05. A public hearing was held on September 11, 2012 after due notice as required by Section 8.05 of the Richfield City Charter. 1.06. The Council finds and determines that it is in the best interests of the City and its inhabitants that Project be approved. Sec. 2. Approval; effective date. 2.01. The Project is approved, and planning, design and construction of the Project may proceed according to the procedures required by law. 2.02. The purpose of this Ordinance is to comply with the requirements of Section 8.04 of the Richfield City Charter. This Ordinance shall not be construed to require that the City proceed with the Project; nor does it vest any rights in the Project to any individual or entity. This Ordinance shall not be construed to pre-approve any contracts for the design or construction of the Project, and the City Council specifically reserves to itself the authority to approve any such contracts. The City Council reserves the right to abandon the Project or to modify elements of the Project, if the Council deems abandonment or modification to be in the public interest. 2.03. This ordinance is effective 30 days following its publication. Adopted by the City of Richfield this day of , 2012. Debbie Goettel, Mayor ATTEST: Nancy C. Gibbs, City Clerk - > sa_9. C.1 • f I • 1 1 �Y_� i i 1 O _ t^ I i r 1 -1117 0 ,- 4,7_:—.--- - _ :;;,,i) • - --, r v J p �i . LLI/ '1- L.^L f;, I ,Ir'ri — .. i 111' t3-; a t : 3 g_A : ii ttvt1: {fat: i t• Tz' } y t I:bf y 5C-3 } Z a ii ii 8 I 1 d l g i mo_-rt _ --(j________ — r 1 1 ______-- : g I 1 111 p l ( , I ,: 1 hi ,; ? 1 I. g - ' 1 l " iii'�1 171- .- 11 .6_11 ' r , i ` 4.----- 1 A ,__Y ) o '' _" - tH" "D -/ !►a a T. 4 I r L84L �--� w 841 �' ' I �- , ---- -4-- —i 1 I , L_ s 1E: t / I a cc b ci w. AGENDA SECTION: CONSENT AGENDA ITEM# 5H REPORT# 142 • STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2412 aorm REPORT PREPARED BY: SALLY MORTON,INFORMATION TECHNOLOGIES MANAGER NAME, r. DEPARTMENT DIRECTOR REVIEW: _111/11/74 / REVIEWED BY CITY ' • MANAGER: /_1�I�� n '/ ITEM FOR COUNCIL CONSIDERATION: Consideration of award of contract for the construction of a fiber optic network to connect the Lyndale and Wine & Spirits liquor stores and the Wood Lake Nature Center to the City's existing fiber network. I. RECOMMENDED ACTION: By Motion: Accept the bid minutes and tabulation and award a contract for the construction of a fiber optic network to Castrejon, Inc. in the amount of $149,295. II. BACKGROUND In 2008 the City began the first phase of the construction of a fiber optic network to interconnect City facilities. This network is part of a fiber network that is a joint effort of several metro area cities, school districts, the LOGIS consortium, and the State of Minnesota. This fiber network has provided the City with excellent high-speed, high- capacity, high-availability network service. The City facilities currently on the fiber network are the Municipal Center/Fire Station #1, Public Works, Water Treatment Facility, Community Center, Cedar Liquor Store, Fire Station #2, Ice Arena, Pool, and Mini Golf. The Penn Liquor Store is connected to the fiber network via a WiFi link to Fire Station #2. The project before the Council is the last phase of the fiber network construction and includes the Lyndale Liquor Store, Wine & Spirits Liquor Store, and Wood Lake 0813-FiberProject.doc Nature Center. The City's Voice over IP phone system (VoIP) has been installed in all facilities on the fiber network. Following the installation of fiber to these three additional facilities, VoIP will also be installed in those locations. These facilities are currently linked to the City's network via DSL service obtained from Century Link. The fiber project is divided into three sub-projects and vendors were asked to provide separate price quotes for each sub-project. The "required bid" is the core of the project and connects the Lyndale Liquor Store to the existing fiber network at the Community Center. This route runs along 70th Street from Pillsbury to Lyndale, north on Lyndale to Lake Shore Drive, along Lake Shore up to 65th Street and then to the Lyndale Store. "Alternative site#1" connects to the required bid route at 70th and Lyndale and then runs south along Lyndale to the Wine & Spirits Store. "Alternative Site#2" is a short spur that connects to the required bid route at Lake Shore Drive and runs to the Nature Center building. A map indicating these routes is attached. Staff recommends that the City Council award the contract to Castrejon, Inc. of Blaine, Minnesota. They are the low bidder and the same company that was awarded the contracts for the first and second phases of the City's fiber network construction in 2008 and 2010. Their past fiber construction work in the City has been of high quality. Staff further recommends that the construction of fiber to all three facilities be included in the contract. Castrejon's total bid for all three sites is slightly less than the City's project estimate and budget. All three sites will benefit from the higher speed, capacity, and reliability of being connected to the City's fiber optic network. • III. BASIS OF RECOMMENDATION A. POLICY • A request for bids for this project was published in the Richfield Sun- Current on July 12, 2012. Twelve companies requested specifications. • The bid opening was held on July 30, 2012. Four companies submitted bids. A copy of the tabulation for the Fiber Optic Network Bid is attached. B. CRITICAL TIMING ISSUES • Castrejon's proposed project schedule indicates construction will take 60 days from the time a contract is signed. This completion date is approaching the end of the construction season for this type of project. C. FINANCIAL • The City's Information Technologies and Liquor Fund 2012 budgets include $154,000 for the construction of this last phase of the fiber network. The $149,295 bid from Castrejon is less than the amount budgeted. • In addition to the construction costs, new network equipment will need to be purchased for these three locations. The 2012 I.T. Fund budget includes $13,400 for this purchase. The I.T. budget also contains $4,800 for the fiber network design and project management services of a LOGIS network engineer. • Funds to purchase and install the VolP phone system at these three facilities is also a part of the 2012 I.T. budget. This is a separate project but is dependant on the installation of fiber. D. LEGAL • When a contract of this nature is estimated to exceed $100,000 sealed bids must be solicited by public notice subject to the laws governing contracts by the City of Richfield. This process was followed. • Castrejon submitted the lowest bid. • Two of the bidders, including Castrejon, did not submit all of the documentation with their bids that was required by the bid specifications. All bids received included complete price quotes and bid bonds. Information that was missing included items such as references, materials list, and safety program description. Staff requested the missing information from Castrejon and it was promptly provided. The bid specifications reserved the right of the City to waive informalities and since the failure to include this information did not give Castrejon an unfair advantage over other bidders, this can be considered an informality. E. ENVIRONMENTAL CONSIDERATIONS • The fiber optic cable will be installed underground. The contractor will use boring rather than trenching to lay the conduit and cabling. This will minimize the amount of surface area that will be disturbed. Hand holes will need to be installed next to each building and approximately every 1,000 feet along the route. The hand hole covers are green in color and will be located so as to minimize their visual impact. IV. ALTERNATIVE RECOMMENDATION(S) • The Council can award a contract only for the "required bid"which connects just the Lyndale Liquor Store to the City's fiber network. Castrejon submitted the lowest bid for this portion of the project in the amount of$82,235. • The Council can award a contract for just the "required bid" and one of the two "alternate sites". Castrejon submitted the lowest bid for each of the alternate sites. Their combined bid amount for the Lyndale Liquor Store and the Nature Center is $90,295. Their combined bid amount for the Lyndale Store and the Wine & Spirits Store is $141,235. • The Council can also choose to reject all bids. V. ATTACHMENTS • Bid opening minutes and tabulation. • Proposed fiber route. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None. 51// CITY OF RICHFIELD, MINNESOTA Bid Opening July 30, 2012 2:00 p.m. Fiber Optic Network Bid No. 12-05 Pursuant to requirements of Resolution No. 1015, a meeting of the Administrative Staff was called by Nancy Gibbs, City Clerk, who announced that the purpose of the meeting was to receive, open and read aloud, bids for Fiber Optic Network, as advertised in the official newspaper on July 12, 2012. Present: Nancy Gibbs, City Clerk Sally Morton, IT Manager Jack Israel, LOGIS Representative Theresa Schyma, City Manager Representative The following bids were submitted and read aloud: Bidder's Name Bond Required Bid Alternative Alternative Site 1 Bid Site 2 Bid MP Nexlevel, LLC Provided $83,679.02 $68,745.64 $9,660.74 Maple Lake, MN Michels Corporation Provided $87,981.24 $68,407.21 $ 8,421.24 Brownsville, WI Castrejon, Inc. Provided $82,235.00 $59,000.00 $ 8,060.00 Blaine, MN Underground Piercing, Inc. 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I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: • Approve second reading of an ordinance granting cable television franchise to Comcast of Arkansas / Florida / Louisiana / Minnesota / Mississippi / Tennessee, Inc.; and • Approve second reading of an ordinance repealing Section 726 of Richfield City Code; and • Approve the resolution authorizing summary publication of ordinance granting cable television franchise. II. BACKGROUND The Southwest Suburban Cable Commission ("Commission") consists of the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield, Minnesota ("Member Cities"). The Commission administers and enforces the cable franchises on behalf of its Member Cities. On or about January 1, 1997, each of the Member Cities granted a Cable Television Franchise to KBL Cablesystems of the Southwest, Inc ("Existing Franchise"). At that same time the Member Cities each adopted a Cable Television Regulatory Ordinance ("Regulatory Ordinance") to be incorporated into the City Code of each Member City. In 2000, the Commission and Member Cities approved a transfer of the Existing Franchise to Time Warner, Inc. In June of 2005, Time Warner transferred the Existing Franchise to Comcast Communications ("Comcast"). 0813Cable Comcast currently operates the cable systems in each of the Member Cities under authority granted in the Existing Franchise. The initial term of the Existing Franchise ran for fifteen years and was extended by the Member Cities to now expire on July 31, 2012. In 2009 Comcast requested renewal of the Existing Franchise and the Commission has since been engaged in informal renewal negotiations with Comcast in an effort to reach mutually acceptable terms for a new franchise. In response to Comcast's request for franchise renewal, in 2010 the Commission retained an outside consultant to draft a Needs Assessment Report outlining the future cable-related needs and interests of the Member Cities for the next franchise term. The Commission also prepared a draft franchise which incorporated the findings of the Needs Assessment. The draft franchise incorporated most of the key provisions of the Regulatory Ordinance in an effort to consolidate all cable regulations in a single franchise with Comcast. Commission Goals The Commission's primary goals during renewal negotiations were: • Incorporate the provisions of the Regulatory Ordinance into a renewed franchise— resulting in one governing document addressing cable regulations in each Member City. • Ensure that the provision of each Member City's Code is incorporated into the renewed franchise so that the same right-of-way (ROW) regulations governing all right-of-way users will apply to Comcast. • Streamline regulation in the Comcast Franchise—eliminated unnecessary provisions that are no longer applicable to cable providers in today's regulatory environment. • Address digital migration of local government and educational channels. • Increase the level of capital support for local channels. • Maintain the 5% franchise fee as consideration for use of the City's ROW. • Eliminate the Comcast public access studio in Eden Prairie due to limited use by residents and cable subscribers and redirect the resources to other local programming options to be determined by the Member Cities. • Improve customer service standards applicable to Comcast and enforceable by the Commission and the Member Cities. • Renew for a 10 year term. • Adopt enforcement procedures and security to ensure compliance. Negotiation Process Throughout 2011 and the first half of 2012 representatives of Comcast and the Commission negotiated the terms of a new model Cable Television Franchise Ordinance ("Model Franchise"). The Model Franchise combines into a single document the provisions of the Existing Franchise and the Regulatory Ordinance. The Model Franchise is the result of extensive negotiations between the Commission and Comcast and, as is the case of many negotiations, certain concessions were made by both Comcast and the Commission in an effort to reach mutually acceptable language for a ten year franchise. On May 30, 2012 the Commission adopted Resolution 2012-1 (attached hereto) recommending that the Model Franchise be adopted by each Member City. All five Member Cities are taking action on the Model Franchise simultaneously. Any proposed revisions from one of the Member Cities may require the Commission to seek agreement not only from Comcast but also from the other four Member Cities which may have already taken action to adopt the Model Franchise. This point is raised not to suggest that further revisions are impossible, but to emphasize the complexity of the approval process and the steps which must be undertaken to complete the approval process prior to the expiration of the existing extension resolutions - July 31, 2012. Final Results of Franchise Negotiations 1997 2012 5% Franchise fee Same 5% fee "Gross Revenue" definition Stronger definition No PEG capital support fee Comcast studio closed Comcast run studio $.60 - $.65 /sub/mo PEG Fee paid to - $.25/sub/mo paid to City Comcast to support studio 15 year temm 10 year term 4 PEG channels 3 PEG channels Digital migration addressed Option for 1 high definition channel Complementary drops at Same + up to 3 digital boxes per site public buildings Maintain fiber return feeds Obligation completed, will be maintained Performance bond $100,000 per City Security fund $10,000 per City— upon notice of violation Reporting/compliance Obligations from Regulatory Ordinance merged into franchise and strengthened ROW management Operator held to City Code provisions Side Letter During renewal negotiations Comcast asked to pull two commitments out of the Model Franchise and place them in a side letter (see attached). This side letter has been included in this packet of documents for the City's review and consideration. If acceptable as drafted, Comcast will execute and forward a copy of the side letter to the Commission at the time of acceptance. First reading of the ordinances was on July 10, 2012 and the public hearing and second readings of the ordinances were scheduled for August 13, 2012. The notice of public hearing was published in the Richfield Sun Current on July 19, 2012. III. BASIS OF RECOMMENDATION A. POLICY • The City is part of the 5 city Southwest Suburban Cable Commission (SWSCC) and as such,jointly negotiates long term cable franchise agreements for the member cities. • The franchise agreement for each City must be adopted through a formal process such as a city ordinance. Such an ordinance is the process for Richfield. B. CRITICAL TIMING ISSUES • The cable television franchise renewal must be handled as soon as possible in that the current franchise extension expires on July 31, 2012. New provisions of the franchise are set to commence on August 1, 2012 including additional franchise fees. Thus it is critical that the new franchise ordinance be adopted as quickly as is possible. The current schedule as contemplated in this staff report will meet the requirements of the SWSCC and Comcast. • Each of the other four cities of the SWSCC has already adopted the attached ordinance/franchise agreement with Comcast for the next 10 year period. Richfield is the last member city to consider adoption of this franchise. C. FINANCIAL • The financial aspects of the franchise agreement have been summarized in the background section of this report and are further delineated in an attachment entitled "Annual Franchise and PEG Fees". • The PEG (Public/Educational/Governmental) fees contained in this franchise agreement are low in comparison to other cities in the metro area. However, those fees are collected directly from subscribers and the will be adequate to cover the PEG expenses contemplated by the 5 cities of the SWSCC. Historically, PEG fees for the SWSCC have been lower than most other cities in the metro. D. LEGAL • The franchise ordinance was negotiated and drafted by legal counsel for the Southwest Cable Communications Commission, Brian Grogan. • Under the City Charter, the new ordinance will not be effective until 30 days after publication of the ordinance. The SWCCC has negotiated that the new rates will be applied retroactively to September 1, 2012. • Sections 10.01 and 10.03 of the City Charter require that franchises be approved by ordinance after a public hearing. E. ENVIRONMENTAL CONSIDERATIONS • None W. ALTERNATIVE RECOMMENDATION(S) • The City Council could refuse to adopt the proposed franchise agreement, however its adoption has been recommended by the Board of the SWSCC and failure to adopt the recommended franchise ordinance would leave the City of Richfield without a cable television franchise. V. ATTACHMENTS • Cable television franchise ordinance • Ordinance repealing City's cable television regulatory ordinance • Resolution authorizing summary publication • Power Point presentation of July 10, 2012 • Staff memo to member cities of commission • Public Access Transition memo • Commission resolution 2012-1 • Side letter from Comcast to Commission • Annual franchise and PEG fee chart • Twin Cities Metro Area Cable PEG fee comparison chart VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Brian Grogan, Moss & Barnett, SWSCC Attorney I—! City of Richfield,Minnesota Ordinance Granting a Cable Television Franchise to Comcast of Arkansas/Florida/Louisiana/Minnesota I Mississippi/Tennessee,Inc. June 25,2012 2032276v2 7,d- TABLE OF CONTENTS SECTION 1 DEFINITIONS 1 SECTION 2 FRANCHISE 5 SECTION 3 OPERATION IN STREETS AND RIGHTS-OF-WAY 8 SECTION 4 REMOVAL OR ABANDONMENT OF SYSTEM 12 SECTION 5 SYSTEM DESIGN AND CAPACITY 13 SECTION 6 PROGRAMMING AND SERVICES 16 SECTION 7 PUBLIC,EDUCATIONAL AND GOVERNMENTAL ACCESS 18 SECTION 8 REGULATORY PROVISIONS 24 SECTION 9 BOND 25 SECTION 10 SECURITY FUND 26 SECTION 11 DEFAULT 28 SECTION 12 FORECLOSURE AND RECEIVERSHIP 30 SECTION 13 REPORTING REQUIREMENTS 31 SECTION 14 CUSTOMER SERVICE POLICIES 32 SECTION 15 SUBSCRIBER PRACTICES 38 SECTION 16 COMPENSATION AND FINANCIAL PROVISIONS 38 SECTION 17 MISCELLANEOUS PROVISIONS 42 EXHIBIT A FREE CABLE SERVICE TO PUBLIC BUILDINGS A-1 EXHIBIT B EXISTING FIBER RETURN LINES B-1 EXHIBIT C FRANCHISE FEE PAYMENT WORKSHEET C-1 i 2032276v2 7-3 ORDINANCE NO. AN ORDINANCE RENEWING THE GRANT OF A FRANCHISE TO COMCAST OF ARKANSAS/FLORIDA/LOUISIANA/MINNESOTA 1 MISSISSIPPI/TENNESSEE, INC. TO OPERATE AND MAINTAIN A CABLE SYSTEM IN THE CITY OF RICHFIELD; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE; PROVIDING FOR CITY REGULATION AND ADMINISTRATION OF THE CABLE SYSTEM; AND TERMINATING ORDINANCE NO. 1996-27. RECITALS The City of Richfield, Minnesota("City")pursuant to applicable federal and state law,is authorized to grant one or more nonexclusive cable television franchises to construct, operate, maintain and reconstruct cable television systems within the City limits. Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc., a Delaware corporation("Grantee")has operated a Cable System in the City,under a cable television franchise granted pursuant to Ordinance No. 1996-27. Negotiations between Grantee and the City have been completed and the franchise renewal process followed in accordance with the guidelines established by the City Code, Minnesota Statutes Chapter 238 and the Cable Act(47 U.S.C. 546). The City reviewed the legal,technical and financial qualifications of Grantee and, after a properly noticed public hearing, as determined that it is in the best interest of the City and its residents to renew the cable television franchise with Grantee. NOW,THEREFORE,THE CITY OF RICHFIELD DOES ORDAIN that a franchise is hereby granted to Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/ Tennessee, Inc.,to operate and maintain a Cable System in the City upon the following terms and conditions: SECTION 1 DEFINITIONS For the purpose of this Franchise,the following,terms,phrases,words, derivations and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future tense,words in the plural number include the singular number and words in the singular number include the plural number. In the event the meaning of any word or phrase not defined herein is uncertain,the definitions contained in applicable local, State or Federal law shall apply. "Access Channels"means any channel or portion of a channel utilized for public, educational or governmental programming. 1 2032276v2 '1-4 "Affiliate"shall mean any Person controlling, controlled by or under common control of Grantee. "Applicable Laws"means any law, statute, charter, ordinance, rule,regulation,code, license,certificate, franchise,permit,writ,ruling, award, executive order, directive,requirement, injunction(whether temporary,preliminary or permanent),judgment, decree or other order issued, executed, entered or deemed applicable by any governmental authority of competent jurisdiction. "Basic Cable Service"means any service tier which includes the lawful retransmission of local television broadcast. "Cable Act"means the Cable Communications Policy Act of 1984,47 U.S.C. §§ 521 et seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992, as further amended by the Telecommunications Act of 1996, as further amended from time to time. "Cable Service"shall mean(a)the one-way transmission to Subscribers of(i)Video Programming or(ii) Other Programming Service, and b) Subscriber interaction, if any,which is required for the selection or use of such video programming or other programming service. For the purposes of this definition, "video programming"is programming provided by, or generally considered comparable to programming provided by a television broadcast station; and, "other programming service"is information that a cable operator makes available to all Subscribers generally. "Cable System"or"System" shall have the meaning specified for"Cable System"in the Cable Act. Unless otherwise specified, it shall in this document refer to the Cable System constructed and operated in the City under this Franchise. "Channel"means a portion of the electromagnetic frequency spectrum which is used in a Cable System and which is capable of delivering a television channel as defined by the FCC by regulation. "City" shall mean the City of Richfield,a municipal corporation in the State of Minnesota. "City Code"means the Municipal Code of the City of Richfield,Minnesota,as may be amended from time to time. "Commission"means the Southwest Suburban Cable Communications Commission consisting of the cities of Edina,Eden Prairie, Hopkins, Minnetonka and Richfield,Minnesota. "Connection"means the attachment of the Drop to the television set of the Subscriber. "Converter"means an electronic device,which converts signals to a frequency not susceptible to interference within the television receiver of a Subscriber, and by an appropriate 2 2032276v2 ?.5 Channel selector also permits a Subscriber to view all signals included in the Basic Cable Service tier delivered at designated converter dial locations. "Council"shall mean the governing body of the City. "Day"unless otherwise specified shall mean a calendar day. "Drop"shall mean the cable that connects the Subscriber terminal to the nearest feeder cable of the cable. "Effective Date"shall mean August 1,2012. "Expanded Basic Service"means the next tier of service above the Basic Cable Service tier excluding premium or pay-per-view services. "FCC"means the Federal Communications Commission, or a designated representative. "Franchise" shall mean the right granted by this Ordinance and conditioned as set forth herein. "Franchise Area"means the entire geographic area within the City as it is now constituted or may in the future be constituted. "Franchise Fee"shall mean the fee assessed by the City to Grantee, in consideration of Grantee's right to operate the Cable System within the City's Streets and rights of way, determined in amount as a percentage of Grantee's Gross Revenues and limited to the maximum percentage allowed for such assessment by federal law. The term Franchise Fee does not include the exceptions noted in 47 U.S.C. §542(g)(2)(A-E). "GAAP"means generally accepted accounting principles as promulgated and defined by the Financial Accounting Standards Board("FASB"),Emerging Issues Task Force ("EITF") and/or the U.S. Securities and Exchange Commission("SEC"). "Gross Revenues"means any and all compensation in whatever form, from any source, directly or indirectly earned by Grantee or any Affiliate of Grantee or any other Person who would constitute a cable operator of the Cable System under the Cable Act, derived from the operation of the Cable System to provide Cable Service within the City. Gross Revenues include, by way of illustration and not limitation,monthly fees charged Subscribers for Cable Services including Basic Cable Service, any expanded tiers of Cable Service, optional premium or digital services;pay-per-view services;Pay Services, installation, disconnection,reconnection and change-in-service fees, Leased Access Channel fees, all Cable Service lease payments from the Cable System to provide Cable Services in the City, late fees and administrative fees,payments or other consideration received by Grantee from programmers for carriage of programming on the Cable System and accounted for as revenue under GAAP;revenues from rentals or sales of Converters or other Cable System equipment; advertising sales revenues booked in accordance with Applicable Law and GAAP; revenues from program guides and electronic guides, 3 2032276v2 additional outlet fees, Franchise Fees required by this Franchise,revenue from Interactive Services to the extent they are considered Cable Services under Applicable Law;revenue from the sale or carriage of other Cable Services,revenues from home shopping and other revenue- sharing arrangements. Grantee agrees that Gross Revenues shall include all commissions paid to the National Cable Communications and Comcast Spotlight or their successors associated with sales of advertising on the Cable System within the City allocated according to this paragraph using total Cable Service Subscribers reached by the advertising. Copyright fees or other license fees paid by Grantee shall not be subtracted from Gross Revenues for purposes of calculating Franchise Fees. Gross Revenues shall include revenue received by any entity other than Grantee where necessary to prevent evasion or avoidance of the obligation under this Franchise to pay the Franchise Fees. Gross Revenues shall not include any taxes on services furnished by Grantee,which taxes are imposed directly on a Subscriber or user by a city,county, state or other governmental unit, and collected by Grantee for such entity. The Franchise Fee is not such a tax. Gross Revenues shall not include amounts which cannot be collected by Grantee and are identified as bad debt; provided that if amounts previously representing bad debt are collected,then those amounts shall be included in Gross Revenues for the period in which they are collected. Gross Revenues shall not include payments for PEG Access capital support. The City acknowledges and accepts that Grantee shall maintain its books and records in accordance with GAAP. "Interactive Services" are those services provided to Subscribers whereby the Subscriber either(a)both receives information consisting of either television or other signal and transmits signals generated by the Subscriber or equipment under his/her control for the purpose of selecting what information shall be transmitted to the Subscriber or for any other purpose or(b) transmits signals to any other location for any purpose. "Minnesota Cable Communications Act"means the provisions of Minnesota law governing the requirements for a cable television franchise as set forth in Minn. Stat. § 238,et. seq., as amended. "Normal Business Hours"means those hours during which most similar businesses in City are open to serve customers. In all cases, "Normal Business Hours"must include some evening hours, at least one(1)night per week and/or some weekend hours. "Normal Operating Conditions"means those Service conditions which are within the control of Grantee. Those conditions which are not within the control of Grantee include,but are not limited to,natural disasters, civil disturbances,power outages,telephone network outages, and severe or unusual weather conditions. Those conditions which are ordinarily within the control of Grantee include,but are not limited to, special promotions,pay-per-view events,rate increases,regular peak or seasonal demand periods, and maintenance or upgrade of the Cable System. "Pay Service"means programming(such as certain on-demand movie channels or pay- per-view programs) offered individually to Subscribers on a per-channel,per-program or per- event basis. 4 2032276v2 "PEG"means public, educational and governmental. "Person"means any natural person and all domestic and foreign corporations, closely- held corporations, associations, syndicates,joint stock corporations,partnerships of every kind, clubs,businesses, common law trusts, societies and/or any other legal entity. "Street"shall mean the surface of and the space above and below any public Street,road, highway, freeway,lane,path,public way, alley, court, sidewalk,boulevard,parkway, drive or any easement or right-of-way now or hereafter held by City which shall,within its proper use and meaning in the sole opinion of City,entitle Grantee to the use thereof for the purpose of installing or transmitting over poles,wires, cables, conductors, ducts, conduits,vaults,man- holes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a Cable System. "Subscriber"means a Person who lawfully receives Cable Service. "Wireline MVPD"means a multichannel video programming distributor that utilizes the Streets to install cable or fiber and is engaged in the business of making available for purchase, by Subscribers,multiple Channels of video programming in the City. SECTION 2 FRANCHISE 2.1 Grant of Franchise. The City hereby authorizes Grantee to occupy or use the City's Streets subject to: 1)the provisions of this non-exclusive Franchise to provide Cable Service within the City; and 2) all applicable provisions of the City Code. Said Franchise shall constitute both a right and an obligation to provide Cable Services as required by the provisions of this Franchise. Nothing in this Franchise shall be construed to prohibit Grantee from: (1) providing services other than Cable Services to the extent not prohibited by Applicable Law; or (2)challenging any exercise of the City's legislative or regulatory authority in an appropriate forum. The City hereby reserves all of its rights to regulate such other services to the extent not prohibited by Applicable Law and no provision herein shall be construed to limit or give up any right to regulate. 2.2 Reservation of Authority. The Grantee specifically agrees to comply with the lawful provisions of the City Code and applicable regulations of the City. Subject to the police power exception below,in the event of a conflict between A)the lawful provisions of the City Code or applicable regulations of the City and B)this Franchise,the express provisions of this Franchise shall govern. Subject to express federal and state preemption,the material terms and conditions contained in this Franchise may not be unilaterally altered by the City through subsequent amendments to the City Code, ordinances or any regulation of City,except in the lawful exercise of City's police power. Grantee acknowledges that the City may modify its regulatory policies by lawful exercise of the City's police powers throughout the term of this Franchise. Grantee agrees to comply with such lawful modifications to the City Code; however, Grantee reserves all rights it may have to challenge such modifications to the City Code whether arising in contract or at law. The City reserves all of its rights and defenses to such challenges 5 2032276v2 7^S whether arising in contract or at law.Nothing in this Franchise shall(A) abrogate the right of the City to perform any public works or public improvements of any description, (B)be construed as a waiver of any codes or ordinances of general applicability promulgated by the City,or(C)be construed as a waiver or release of the rights of the City in and to the Streets. 2.3 Franchise Term. The term of the Franchise shall be ten(10)years from the Effective Date,unless extended by mutual written consent in accordance with Section 17.7 or terminated sooner in accordance with this Franchise. 2.4 Franchise Area. This Franchise is granted for the Franchise Area defined herein. Grantee shall extend its Cable System to provide Service to any residential unit in the City in accordance with Section 6.6 herein. This Franchise governs any Cable Services provided by Grantee to residential and commercial Subscribers to Grantee's Cable System. 2.5 Franchise Nonexclusive. The Franchise granted herein shall be nonexclusive. The City specifically reserves the right to grant, at any time, such additional franchises for a Cable System as it deems appropriate provided,however, such additional grants shall not operate to materially modify,revoke, or terminate any rights previously granted to Grantee other than as described in Section 17.18. The grant of any additional franchise shall not of itself be deemed to constitute a modification,revocation,or termination of rights previously granted to Grantee. Any additional cable franchise grants shall comply with Minn. Stat. Section 238.08 and any other applicable federal level playing field requirements. 2.6 Periodic Public Review of Franchise. Within sixty(60)Days of the third and sixth annual anniversary of the Effective Date of this Franchise,the City may conduct a public review of the Franchise. The purpose of any such review shall be to ensure, with the benefit of full opportunity for public comment,that the Grantee continues to effectively serve the public in the light of new developments in cable law and regulation, cable technology, cable company performance with the requirements of this Franchise, local regulatory environment, community needs and interests,and other such factors. Both the City and Grantee agree to make a full and good faith effort to participate in the review. So long as Grantee receives reasonable notice, Grantee shall participate in the review process and shall fully cooperate. The review shall not operate to modify or change any provision of this Franchise without mutual written consent in accordance with Section 17.7 of this Franchise. 2.7 Transfer of Ownership. (a) No sale,transfer, assignment or"fundamental corporate change",as defined in Minn. Stat. § 238.083,of this Franchise shall take place until the parties to the sale,transfer, or fundamental corporate change files a written request with City for its approval,provided,however,that said approval shall not be required where Grantee grants a security interest in its Franchise and assets to secure an indebtedness. (b) City shall have thirty(30)Days from the time of the request to reply in writing and indicate approval of the request or its determination that a public hearing is necessary due to potential adverse affect on Grantee's Subscribers resulting from the sale or transfer. Such approval or determination shall be expressed in writing within thirty 6 2032276v2 7J9 (30)Days of receipt of said request, or the request shall be deemed approved as a matter of law. (c) If a public hearing is deemed necessary pursuant to (b)above, such hearing shall be commenced within thirty(30)Days of such determination and notice of any such hearing shall be given in accordance with local law or fourteen(14)Days prior to the hearing by publishing notice thereof once in a newspaper of general circulation in City. The notice shall contain the date,time and place of the hearing and shall briefly state the substance of the action to be considered by City. (d) Within thirty(30)Days after the closing of the public hearing, City shall approve or deny in writing the sale or transfer request. City shall set forth in writing with particularity its reason(s) for denying approval. City shall not unreasonably withhold its approval. (e) The parties to the sale or transfer of the Franchise only,without the inclusion of the System in which substantial construction has commenced, shall establish that the sale or transfer of only the Franchise will be in the public interest. (f) Any sale or transfer of stock in Grantee so as to create a new controlling interest in the System shall be subject to the requirements of this Section 2.7. The term "controlling interest"as used herein is not limited to majority stock ownership,but includes actual working control in whatever manner exercised. (g) In no event shall a transfer or assignment of ownership or control be approved without the transferee becoming a signatory to this Franchise and assuming all rights and obligations thereunder, and assuming all other rights and obligations of the transferor to the City. (h) In the event of any proposed sale or assignment pursuant to paragraph(a) of this section, City shall have the right of first refusal of any bona fide offer to purchase the Cable System. Bona fide offer, as used in this section,means an offer received by the Grantee which it intends to accept subject to City's rights under this section. This written offer must be conveyed to City along with the Grantee's written acceptance of the offer contingent upon the rights of City provided for in this section. City shall be deemed to have waived its rights under this paragraph(h) in the following circumstances: (i) If it does not indicate to Grantee in writing,within thirty(30)Days of notice of a proposed sale or assignment,its intention to exercise its right of purchase; or (ii) It approves the assignment or sale of the Franchise as provided within this section. 2.8 Expiration. Upon expiration of the Franchise,the City shall have the right at its own election and subject to Grantee's rights under Section 626 of the Cable Act to: 7 2032276v2 7A° (a) extend the Franchise,though nothing in this provision shall be construed to require such extension; (b) renew the Franchise, in accordance with Applicable Laws; (c) invite additional franchise applications or proposals; (d) terminate the Franchise subject to any rights Grantee has under Section 626 of the Cable Act; or (e) take such other action as the City deems appropriate. 2.9 Right to Require Removal of Property. At the expiration of the term for which the Franchise is granted provided no renewal is granted, or upon its forfeiture or revocation as provided for herein,the City shall have the right to require Grantee to remove at Grantee's own expense all or any part of the Cable System from all Streets and public ways within the Franchise Area within a reasonable time. If Grantee fails to do so,the City may perform the work and collect the cost thereof from Grantee. 2.10 Continuity of Service Mandatory. It shall be the right of all Subscribers to receive all available services insofar as their financial and other obligations to Grantee are honored. In the event that Grantee elects to overbuild,rebuild,modify, or sell the system, or the City revokes or fails to renew the Franchise, Grantee shall make its best effort to ensure that all Subscribers receive continuous uninterrupted service,regardless of the circumstances, during the lifetime of the Franchise. In the event of expiration,purchase, lease-purchase, condemnation, acquisition,taking over or holding of plant and equipment, sale, lease, or other transfer to any other Person, including any other grantee of a cable communications franchise,the current Grantee shall cooperate fully to operate the system in accordance with the terms and conditions of this Franchise for a temporary period sufficient in length to maintain continuity of service to all Subscribers. SECTION 3 OPERATION IN STREETS AND RIGHTS-OF-WAY 3.1 Use of Streets. (a) Grantee may, subject to the terms of this Franchise, erect,install, construct,repair,replace,reconstruct and retain in, on, over,under,upon, across and along the Streets within the City such lines,cables, conductors, ducts, conduits,vaults, manholes,amplifiers, appliances,pedestals, attachments and other property and equipment as are necessary and appurtenant to the operation of a Cable System within the City. Without limiting the foregoing, Grantee expressly agrees that it will construct, operate and maintain its Cable System in compliance with, and subject to,the requirements of the City Code,including by way of example and not limitation,those requirements governing the placement of Grantee's Cable System; and with other applicable City Codes, and will obtain and maintain all permits and bonds required by the City Code in addition to those required in this Franchise. 8 2032276v2 7-fI (b) All wires, conduits, cable and other property and facilities,of Grantee shall be so located, constructed, installed and maintained as not to endanger or unnecessarily interfere with the usual and customary trade,traffic and travel upon, or other use of,the Streets of City. Grantee shall keep and maintain all of its property in good condition, order and repair so that the same shall not menace or endanger the life or property of any Person. Grantee shall keep accurate maps and records of all of its wires, conduits, cables and other property and facilities located,constructed and maintained in the City. (c) All wires, conduits,cables and other property and facilities of Grantee, shall be constructed and installed in an orderly and workmanlike manner. All wires, conduits and cables shall be installed,where possible,parallel with electric and telephone lines. Multiple cable configurations shall be arranged in parallel and bundled with due respect for engineering considerations. 3.2 Construction or Alteration. Grantee shall in all cases comply with the City Code, City resolutions and City regulations regarding the acquisition of permits and/or such other items as may be reasonably required in order to construct, alter or maintain the Cable System. Grantee shall,upon request,provide information to the City regarding its progress in completing or altering the Cable System. 3.3 Non-Interference. Grantee shall exert its best efforts to construct and maintain a Cable System so as not to interfere with other use of Streets. Grantee shall,where possible in the case of above ground lines,make use of existing poles and other facilities available to Grantee. When residents receiving underground service or who will be receiving underground service will be affected by proposed construction or alteration, Grantee shall provide such notice as set forth in the permit or in City Code of the same to such affected residents. 3.4 Consistency with Designated Use.Notwithstanding the above grant to use Streets,no Street shall be used by Grantee if the City, in its sole opinion, determines that such use is inconsistent with the terms, conditions or provisions by which such Street was created or dedicated, or presently used under Applicable Laws. 3.5 Undergrounding. Grantee shall place underground all of its transmission lines which are located or are to be located above or within the Streets of the City in the following cases: (a) all other existing utilities are required to be placed underground by statute, resolution,policy or other Applicable Law; (b) Grantee is unable to get pole clearance; (c) underground easements are obtained from developers of new residential areas; or (d) utilities are overhead but residents prefer underground(service provided at cost). 9 2032276v2 If an ordinance is passed which involves placing underground certain utilities including Grantee's cable plant which is then located overhead, Grantee shall participate in such underground project and shall remove poles,cables and overhead wires if requested to do so and place facilities underground. Nothing herein shall mandate that City provide reimbursement to Grantee for the costs of such relocation and removal. However, if the City makes available funds for the cost of placing facilities underground,nothing herein shall preclude the Grantee from participating in such funding to the extent consistent with the City Code or Applicable Laws. Grantee shall use conduit or its functional equivalent to the greatest extent possible for undergrounding,except for Drops from pedestals to Subscribers' homes and for cable on other private property where the owner requests that conduit not be used. Cable and conduit shall be utilized which meets the highest industry standards for electronic performance and resistance to interference or damage from environmental factors. Grantee shall use, in conjunction with other utility companies or providers, common trenches for underground construction wherever available. 3.6 Maintenance and Restoration. (a) Restoration. In case of disturbance of any Street,public way,paved area or public improvement, Grantee shall, at its own cost and expense and in accordance with the requirements of Applicable Law,restore such Street,public way,paved area or public improvement to substantially the same condition as existed before the work involving such disturbance took place. All requirements of this section pertaining to public property shall also apply to the restoration of private easements and other private property. Grantee shall perform all restoration work within a reasonable time and with due regard to seasonal working conditions. If Grantee fails,neglects or refuses to make restorations as required under this section,then the City may do such work or cause it to be done, and the cost thereof to the City shall be paid by Grantee. If Grantee causes any damage to private property in the process of restoring facilities, Grantee shall repair such damage. (b) Maintenance. Grantee shall maintain all above ground improvements that it places on City right-of-way pursuant to the City Code and any permit issued by the City. In order to avoid interference with the City's ability to maintain the right-of-way, Grantee shall provide such clearance as is required by the City Code and any permit issued by the City. If Grantee fails to comply with this provision, and by its failure, property is damaged, Grantee shall be responsible for all damages caused thereby. (c) Disputes. In any dispute over the adequacy of restoration or maintenance relative to this section, final determination shall be the prerogative of the City, Department of Public Works and consistent with the City Code and any permit issued by the City. 3.7 Work on Private Property. Grantee,with the consent of property owners, shall have the authority,pursuant to the City Code,to trim trees upon and overhanging Streets, alleys, sidewalks, and public ways so as to prevent the branches of such trees from coming in contact 10 2032276v2 1-1-5 with the wires and cables of Grantee, except that at the option of the City, such trimming may be done by it or under its supervision and direction at the reasonable expense of Grantee. 3.8 Relocation. (a) City Property. If, during the term of the Franchise,the City or any government entity elects or requires a third party to alter,repair,realign,abandon, improve,vacate,reroute or change the grade of any Street,public way or other public property; or to construct,maintain or repair any public improvement; or to replace, repair install,maintain, or otherwise alter any cable,wire conduit,pipe, line,pole,wire-holding structure, structure, or other facility, including a facility used for the provision of utility or other services or transportation of drainage, sewage or other liquids, for any public purpose, Grantee shall,upon request,except as otherwise hereinafter provided,at its sole expense remove or relocate as necessary its poles,wires, cables,underground conduits, vaults,pedestals,manholes and any other facilities which it has installed. Nothing herein shall mandate that City provide reimbursement to Grantee for the costs of such relocation and removal. However, if the City makes available funds for the cost of placing facilities underground,nothing herein shall preclude the Grantee from participating in such funding to the extent consistent with the City Code or Applicable Laws. (b) Utilities and Other Franchisees. If, during the term of the Franchise, another entity which holds a franchise or any utility requests Grantee to remove or relocate such facilities to accommodate the construction,maintenance or repair of the requesting party's facilities, or their more efficient use, or to "make ready"the requesting party's facilities for use by others, or because Grantee is using a facility which the requesting party has a right or duty to remove, Grantee shall do so. The companies involved may decide among themselves who is to bear the cost of removal or relocation, pursuant to City Code, and provided that the City shall not be liable for such costs. (c) Notice to Remove or Relocate. Any Person requesting Grantee to remove or relocate its facilities shall give Grantee no less than forty-five (45)Days' advance written notice to Grantee advising Grantee of the date or dates removal or relocation is to be undertaken;provided,that no advance written notice shall be required in emergencies or in cases where public health and safety or property is endangered. (d) Failure by Grantee to Remove or Relocate. If Grantee fails,neglects or refuses to remove or relocate its facilities as directed by the City; or in emergencies or where public health and safety or property is endangered,the City may do such work or cause it to be done, and the cost thereof to the City shall be paid by Grantee. If Grantee fails,neglects or refuses to remove or relocate its facilities as directed by another franchisee or utility,that franchisee or utility may do such work or cause it to be done, and if Grantee would have been liable for the cost of performing such work,the cost thereof to the party performing the work or having the work performed shall be paid by Grantee. (e) Procedure for Removal of Cable. Grantee shall not remove any underground cable or conduit which requires trenching or other opening of the Streets 11 2032276v2 7-H along the extension of cable to be removed, except as hereinafter provided. Grantee may remove any underground cable from the Streets which has been installed in such a manner that it can be removed without trenching or other opening of the Streets along the extension of cable to be removed. Subject to Applicable Law, Grantee shall remove, at its sole cost and expense, any underground cable or conduit by trenching or opening of the Streets along the extension thereof or otherwise which is ordered to be removed by the City based upon a determination, in the sole discretion of the City,that removal is required in order to eliminate or prevent a hazardous condition. Underground cable and conduit in the Streets which is not removed shall be deemed abandoned and title thereto shall be vested in the City. (f) Movement of Buildings. Grantee shall,upon request by any Person holding a building moving permit, franchise or other approval issued by the City, temporarily remove, raise or lower its wire to permit the movement of buildings. The expense of such removal,raising or lowering shall be paid by the Person requesting same, and Grantee shall be authorized to require such payment in advance. The City shall require all building movers to provide not less than fifteen(15)Days' notice to the cable company to arrange for such temporary wire changes. SECTION 4 REMOVAL OR ABANDONMENT OF SYSTEM 4.1 Removal of Cable System. In the event that: (1)the use of the Cable System is discontinued for any reason for a continuous period of twelve(12)months; or(2)the Cable System has been installed in a Street without complying with the requirements of this Franchise, Grantee, at its expense shall, at the demand of the City remove promptly from the Streets all of the Cable System other than any which the City may permit to be abandoned in place. In the event of any such removal Grantee shall promptly restore to a condition as nearly as possible to its prior condition the Street or other public places in the City from which the System has been removed. 4.2 Abandonment of Cable System. In the event of Grantee's abandonment of the Cable System, City shall have the right to require Grantee to conform to the state right-of-way rules, Minn. Rules, Chapter 7819. The Cable System to be abandoned in place shall be abandoned in the manner prescribed by the City. Grantee may not abandon any portion of the System without having first given three(3)months written notice to the City. Grantee may not abandon any portion of the System without compensating the City for damages resulting from the abandonment. 4.3 Removal after Abandonment or Termination. If Grantee has failed to commence removal of System, or such part thereof as was designated by City,within thirty(30) days after written notice of City's demand for removal consistent with Minn. Rules, Ch. 7819,is given, or if Grantee has failed to complete such removal within twelve (12) months after written notice of City's demand for removal is given, City shall have the right to apply funds secured by the letter of credit and performance bond toward removal and/or declare all right,title,and interest to the Cable System to be in City with all rights of ownership including,but not limited 12 2032276v2 7-13 to,the right to operate the Cable System or transfer the Cable System to another for operation by it. 4.4 City Options for Failure to Remove Cable System. If Grantee has failed to complete such removal within the time given after written notice of the City's demand for removal is given,the City shall have the right to exercise one of the following options: (a) Declare all right,title and interest to the System to be in the City or its designee with all rights of ownership including,but not limited to,the right to operate the System or transfer the System to another for operation by it; or (b) Declare the System abandoned and cause the System, or such part thereof as the City shall designate,to be removed at no cost to the City. The cost of said removal shall be recoverable from the security fund, indemnity and penalty section provided for in this Franchise or from Grantee directly. (c) Upon termination of service to any Subscriber, Grantee shall promptly remove all its facilities and equipment from within the dwelling of a Subscriber who owns such dwelling upon his or her written request,except as provided by Applicable Law. Such Subscribers shall be responsible for any costs incurred by Grantee in removing the facilities and equipment. 4.5 System Construction and Equipment Standards. The Cable System shall be installed and maintained in accordance with standard good engineering practices and shall conform,when applicable,with the National Electrical Safety Code,the National Electrical Code and the FCC's Rules and Regulations. 4.6 System Maps and Layout. Grantee shall maintain complete and accurate system maps,which shall include trunks, distribution lines, and nodes. Such maps shall include up-to- date route maps showing the location of the Cable System adjacent to the Streets. Grantee shall make all maps available for review by the appropriate City personnel. SECTION 5 SYSTEM DESIGN AND CAPACITY 5.1 Availability of Signals and Equipment. (a) Prior to the Effective Date of this Franchise, Grantee upgraded its Cable System to a fiber to the fiber node Cable System architecture, with fiber optic cable deployed from Grantee's headend to Grantee's fiber nodes,tying into Grantee's coaxial Cable System already serving Subscribers. Active and passive devices currently are passing a minimum of 750 MHz(with a minimum passband of between 50 and 750 MHz)providing to Subscribers at least two hundred(200) or more activated minimum downstream video Channels and minimum activated upstream digital Channel capacity of 35 MHz accessible from any node and any Subscriber in the Franchise Area. This upstream capacity requires no additional installation of equipment for use except on users' premises. 13 2032276v2 (b) The entire System shall be technically capable of transmitting NTSC analog, compressed digital and HDTV transmissions. The Grantee shall comply with all FCC regulations regarding carriage of digital and HDTV transmissions. (c) Grantee agrees to maintain the Cable System in a manner consistent with, or in excess of the specifications in Section 5.1 (a) and(b)throughout the term of the Franchise with sufficient capability and technical quality to enable the implementation and performance of all the requirements of this Franchise, including the exhibits hereto,and in a manner which meets or exceeds FCC technical quality standards at 47 C.F.R. § 76 Subpart K,regardless of the particular format in which a signal is transmitted. 5.2 Free Cable Service to Public Buildings. (a) Throughout the term of this Franchise Grantee shall provide,free of charge, one(1) service Drop,three(3) Converters, if necessary and requested, and Basic Cable Service and the next highest level of Service generally available to all Subscribers (as of the Effective Date referred to as Expanded Basic Cable Service) ("Complimentary Service"),to all of the sites listed on Exhibit A attached hereto. (b) If the Drop line to such building exceeds three hundred fifty(350)feet, Grantee will accommodate the Drop up to three hundred fifty(350)feet if the City or other agency provides the necessary attachment point for aerial service or conduit pathway for underground service. If the necessary pathway is not provided,the City or other agency agrees to pay the incremental cost of such Drop in excess of two hundred(200) feet for an aerial service Drop,or in excess of one hundred twenty-five(125)feet for an underground service Drop. For purposes of this paragraph, "incremental cost"means Grantee's actual cost to provide the Drop beyond the applicable distances, with no mark-up for profit. The recipient of the service will secure any necessary right of entry. (c) The City or the building occupant shall have the right to extend Cable Service throughout the building to additional outlets without any fees imposed by Grantee for the provision of Complimentary Service to such additional outlets. If ancillary equipment, such as a Converter, is required to receive the signal at additional outlets, Grantee will provide up to three (3)devices at no charge, and will provide additional devices at Grantee's lowest residential rate charged within the Twin Cities metropolitan area. (d) Notwithstanding anything to the contrary set forth in this section, Grantee shall not be required to provide Complimentary Service to such buildings unless it is technically feasible. Outlets and maintenance of said Complimentary Service shall be provided free of fees and charges. 5.3 Equal and Uniform Service. To the extent required by Applicable Law, Grantee shall provide access to equal and uniform Cable Service throughout the City. 14 2032276v2 5.4 System Specifications. (a) System Maintenance. In all its construction and service provision activities, Grantee shall meet or exceed the construction,technical performance, extension and service requirements set forth in this Franchise. (b) Emergency Alert Capability. At all times during the term of this Franchise, Grantee shall provide and maintain an Emergency Alert System(EAS) consistent with applicable federal law and regulations including 47 C.F.R.,Part 11, and any Minnesota State Emergency Alert System requirements. The City may identify authorized emergency officials for activating the EAS consistent with the Minnesota State Emergency Statewide Plan("EAS Plan"). The City may also develop a local plan containing methods of EAS message distribution, subject to Applicable Laws and the EAS Plan. Nothing in this section is intended to expand Grantee's obligations beyond that which is required by the EAS Plan and Applicable Law. (c) Standby Power. Grantee shall provide standby power generating capacity at the Cable System control center and at all hubs. Grantee shall maintain standby power system supplies,rated at least at two (2)hours' duration,throughout the trunk and distribution networks. In addition, Grantee shall have in place throughout the Franchise term a plan,and all resources necessary for implementation of the plan,for dealing with outages of more than two (2)hours. (d) Technical Standards. The technical standards used in the operation of the Cable System shall comply, at minimum,with the technical standards promulgated by the FCC relating to Cable Systems pursuant to Title 47, Section 76, Subpart K of the Code of Federal Regulations, as may be amended or modified from time to time,which regulations are expressly incorporated herein by reference. The Cable System shall be installed and maintained in accordance with standard good engineering practices and shall conform with the National Electrical Safety Code and all other Applicable Laws governing the construction of the Cable System. 5.5 Performance Testing. Grantee shall perform all system tests at the intervals required by the FCC, and all other tests reasonably necessary to determine compliance with technical standards required by this Franchise. These tests shall include, at a minimum: (a) Initial proof of performance for any construction; (b) Semi-annual compliance tests; (c) Tests in response to Subscriber complaints; (d) Tests requested by the City to demonstrate franchise compliance; and (e) Written records of all system test results performed by or for Grantee shall be maintained, and shall be available for City inspection upon request. 15 2032276v2 7-6/1 5.6 Special Testing. (a) Throughout the term of this Franchise, City shall have the right to inspect all construction or installation work performed pursuant to the provisions of the Franchise. In addition, City may require special testing of a location or locations within the System if there is a particular matter of controversy or unresolved complaints regarding such construction or installation work or pertaining to such location(s). Demand for such special tests may be made on the basis of complaints received or other evidence indicating an unresolved controversy or noncompliance. Such tests shall be limited to the particular matter in controversy or unresolved complaints. City shall endeavor to so arrange its request for such special testing so as to minimize hardship or inconvenience to Grantee or to the Subscribers caused by such testing. (b) Before ordering such tests, Grantee shall be afforded thirty(30)Days following receipt of written notice to investigate and, if necessary, correct problems or complaints upon which tests were ordered. City shall meet with Grantee prior to requiring special tests to discuss the need for such and, if possible,visually inspect those locations which are the focus of concern. If,after such meetings and inspections, City wishes to commence special tests and the thirty(30)Days have elapsed without correction of the matter in controversy or unresolved complaints,the tests shall be conducted at Grantee's expense by Grantee's qualified engineer. The City shall have a right to participate in such testing by having an engineer of City's choosing,and at City's expense, observe and monitor said testing. SECTION 6 PROGRAMMING AND SERVICES 6.1 Categories of Programming Service. Grantee shall provide video programming services in at least the following broad categories: Local Broadcast(subject to federal carriage requirements) Public Broadcast News and Information Sports General Entertainment Arts/Performance/Humanities Science/Technology Children/Family/Seniors Foreign Language/Ethnic Programming Public, Educational and Governmental Access Programming(to the extent required by the Franchise) Movies Leased Access 6.2 Changes in Programming Services. Grantee shall not delete or so limit as to effectively delete any broad category of programming within its control without the City's consent. Further, Grantee shall provide at least thirty(30)Days' prior written notice to 16 2032276v2 Subscribers and to the City of Grantee's request to effectively delete any broad category of programming or any Channel within its control,including all proposed changes in bandwidth or Channel allocation and any assignments including any new equipment requirements that may occur as a result of these changes. 6.3 Parental Control Device.Upon request by any Subscriber, Grantee shall make available for sale or lease a parental control or lockout device that will enable the Subscriber to block all access to any and all Channels without affecting those not blocked. Grantee shall inform Subscribers of the availability of the lockout device at the time of original subscription and annually thereafter. 6.4 FCC Reports. The results of any tests required to be filed by Grantee with the FCC shall also be copied to City within ten(10)Days of the conduct of the date of the tests. 6.5 Annexation. Unless otherwise provided by Applicable Law, including the City Code,upon the annexation of any additional land area by City,the annexed area shall thereafter be subject to all the terms of this Franchise upon sixty(60)Days written notification to Grantee of the annexation by City. Unless otherwise required by Applicable Laws,nothing herein shall require the Grantee to expand its Cable System to serve, or to offer Cable Service to any area annexed by the City if such area is then served by another Wireline MVPD franchised to provide multichannel video programming. 6.6 Line Extension. (a) Grantee shall construct and operate its Cable System so as to provide Cable Service within the Franchise Area where there exists a density equivalent of seven (7) dwelling units per one-quarter(1/4)mile of feeder cable as measured from the nearest active plant of the Cable System if the extension is to be constructed using aerial plant, and nine(9) dwelling units per one-quarter(1/4)mile of feeder cable as measured from the nearest active plant if the extension is to be constructed using underground plant. The City,for its part, shall endeavor to exercise reasonable efforts to require developers and utility companies to provide the Grantee with at least fifteen(15)Days advance notice of an available open trench for the placement of necessary cable. (b) Where the density is less than that specified above, Grantee shall inform Persons requesting Service of the possibility of paying for installation or a line extension and shall offer to provide them with a free written estimate of the cost,which shall be provided within fifteen(15)working days of such a request. Grantee may offer the Persons requesting Service the opportunity to"prepay"some or all of the necessary line extensions according to its regular business policies. Grantee shall at all times implement such line extension policy in a nondiscriminatory manner throughout the City. (c) Any residential unit located within one-hundred twenty-five(125)feet from the nearest point of access on the Street from which the Cable System is designed to serve the site shall be connected to the Cable System at no charge other than the standard installation charge. Grantee shall,upon request by any potential Subscriber residing in City beyond the one hundred twenty-five(125)foot limit, extend service to such 17 2032276v2 1b Subscriber provided that the Subscriber shall pay the net additional Drop costs,unless the Grantee agrees to waive said costs. To the extent consistent with Applicable Laws, Grantee agrees that it shall impose installation costs for non-standard installations in a uniform and nondiscriminatory manner throughout the City. 6.7 Nonvoice Return Capability. Grantee is required to use cable and associated electronics having the technical capacity for nonvoice return communications. SECTION 7 PUBLIC,EDUCATIONAL AND GOVERNMENTAL ACCESS 7.1 Number of PEG Access Channels. Grantee will maintain four(4)PEG Access Channels for the first twelve(12)months of the Franchise term. Twelve(12)months after the Effective Date of the Franchise,the City shall be entitled to only three (3) PEG Access Channels. 7.2 Analog,Digital and HD PEG Carriage Requirements. Grantee shall provide the Access Channels on the most basic tier of service offered by Grantee in accordance with the Cable Act, Section 611, and as further set forth in this Section 7. At such time as Grantee no longer offers Basic Cable Service in an analog format, Grantee shall carry all PEG Access Channels in a standard digital format in Grantee's Basic Cable Service package,unless the parties agree to an earlier conversion date. Thereafter, and upon ninety(90)days' notice from the City, Grantee shall make one(1) of the three(3)PEG Access Channels available in high definition(HD)format,provided that Grantee receives a satisfactory HD signal from the program originator. (a) The City acknowledges that receipt of an HD format Access Channel may require Subscribers to buy or lease special equipment, or pay additional HD charges applicable to all HD services. (b) All Access Channels may be delivered by City to Grantee in either analog or standard digital format. (c) Within twelve(12)months of the Effective Date, and with at least one hundred twenty(120)Day written notice to Grantee,the City may provide PEG Access Channels in only HD format to the demarcation point to provide the signal to Grantee, and as such the City will no longer provide the PEG Access Channels in a standard definition digital format. Grantee shall provide all necessary transmission equipment from the demarcation point and throughout Grantee's distribution system, in order to deliver the PEG Access Channels. Access Channel signals delivered in HD format to Grantee shall not require Grantee to deliver such HD signals to Subscribers except as set forth herein. 7.3 Existing PEG Studio and Playback. Within thirty(30)Days of the Effective Date, Grantee shall have no further obligation to maintain Grantee's public access studio located in Eden Prairie("Studio"). Grantee shall maintain all public access and educational access playback equipment and playback staff at the Studio for twelve(12)months from the Effective Date("Transition Period"). 18 2032276v2 7-21 7.4 Existing PEG Equipment Transfer. Grantee will transfer all existing PEG equipment,racks, lights,facilities,etc. currently in use at the Studio to the Commission. Timing for the equipment transfer will occur within sixty(60) days following close of the Studio and the equipment transfer for playback will occur shortly after the Transition Period is completed. 7.5 Control of PEG Channels. The control and administration of the Access Channels shall rest with the City and the City may delegate,from time to time over the term of this Franchise, such control and administration to various entities as determined in City's sole discretion. 7.6 Transmission of Access Channels. Access Channels may be used for transmission of non-video signals in compliance with Applicable Laws. This may include downstream transmission of data using a protocol such as TCP/IP or current industry standards. Should Grantee develop the capability to provide bi-directional data transmission, spectrum capacity shall be sufficient to allow Subscribers to transmit data to PEG facilities. 7.7 Access Channel Locations. (a) Access Channels shall be carried on the Basic Cable Service tier to the extent required by Applicable Law and as set forth in Section 7.2 herein. Nothing herein precludes the Grantee from charging for equipment needed for Basic Cable Service. Grantee shall make every reasonable effort to coordinate the cablecasting of PEG access programming on the Cable System on the same Channel designations as such programming is currently cablecast within the City. In no event shall any Access Channel reallocations be made prior to ninety(90)Days written notice to the City by Grantee, except for circumstances beyond Grantee's reasonable control. The Access Channels will be located within reasonable proximity to other commercial video or broadcast Channels, excluding pay-per-view programming offered by Grantee in the City. (b) Grantee agrees not to encrypt the Access Channels differently than other commercial Channels available on the Cable System. (c) In conjunction with any occurrence of any Access Channel(s)relocation, Grantee shall provide a minimum of Nine Thousand Dollars($9,000)of in-kind air time per event on advertiser supported Channels (e.g.USA,TNT,TBS,Discovery Channel,or other comparable Channels)for the purpose of airing City's, or its designees',pre- produced thirty(30) second announcement explaining the change in location. 7.8 Navigation to Access Channels. Grantee agrees that if it utilizes a visual interface under its control on its Cable System for all Channels,the Access Channels shall be treated in a non-discriminatory fashion consistent with Applicable Laws so that Subscribers will have ready access to Access Channels. This shall not be construed to require Grantee to pay any third party fees that may result from this obligation. 7.9 Ownership of Access Channels. Grantee does not relinquish its ownership of or ultimate right of control over a Channel by designating it for PEG use. A PEG access user— whether an individual, educational or governmental user—acquires no property or other interest 19 2032276v2 7-)2' by virtue of the use of a Channel position so designated. Grantee shall not exercise editorial control over any public, educational, or governmental use of a Channel position, except Grantee may refuse to transmit any public access program or portion of a public access program that contains obscenity, indecency, or nudity in violation of Applicable Law. 7.10 Noncommercial Use of PEG. Permitted noncommercial uses of the Access Channels shall include by way of example and not limitation: (1)the identification of fmancial supporters similar to what is provided on public broadcasting stations; or(2)the solicitation of financial support for the provision of PEG programming by the City or third party users for charitable, educational or governmental purposes; or(3)programming offered by accredited, non-profit,educational institutions which may,for example, offer telecourses over a Access Channel. 7.11 Dedicated Fiber Return Lines. Grantee will maintain all existing fiber paths in place as of the Effective Date to facilitate PEG origination/return capacity in the City. Such fiber returns paths are listed in Exhibit B attached hereto. Grantee shall not be responsible for fiber "replacement"but will handle any damage and all maintenance on the existing fiber. Grantee anticipates,but cannot guarantee,that that this will result in minimal fiber expenditures by the City over the Franchise term. 7.12 Interconnection. To the extent technically feasible, Grantee will allow necessary interconnection with any newly constructed City and school fiber for noncommercial programming to be promoted and administered by the City as allowed under Applicable Laws and at no additional cost to the City or schools. This may be accomplished through a patch panel or other similar facility and each party will be responsible for the fiber on their respective sides of the demarcation point. Grantee reserves its right to review on a case-by-case basis the technical feasibility of the proposed interconnection. Based on this review Grantee may condition the interconnection on the reasonable reimbursement of Grantee's incremental costs, with no markup for profit,to recoup Grantee's construction costs only. In no event will Grantee impose any type of recurring fee for said interconnection. 7.13 Ancillary Equipment. Any ancillary equipment operated by Grantee for the benefit of PEG Access Channels on Grantee's fiber paths or Cable System,whether referred to switchers,routers or other equipment,will be maintained by Grantee, at no cost to the City or schools for the life of the Franchise. Grantee is responsible for any ancillary equipment on its side of the demarcation point and the City or school is responsible for all other production/playback equipment. 7.14 Future Fiber Return Lines for PEG. At such time that the City determines: (a) that the City desires the capacity to allow Subscribers in the City to receive PEG programming(video or character generated)which may originate from schools, City facilities, other government facilities or other designated facilities(other than those indicated in paragraph 10); or (b) that the City desires to establish or change a location from which PEG programming is originated; or 20 2032276v2 7-)3 (c) that the City desires to upgrade the Connection to Grantee from an existing signal point of origination, the City will give Grantee written notice detailing the point of origination and the capability sought by the City. Grantee agrees to submit a cost estimate to implement the City's plan within a reasonable period of time but not later than September 1st in the year proceeding the request for any costs exceeding Twenty-five Thousand and No/100 Dollars ($25,000). The cost estimate will be on a time and materials basis with no additional markup. After an agreement to reimburse Grantee for Grantee's out of pocket time and material costs, Grantee will implement any necessary Cable System changes within a reasonable period of time. Nothing herein prevents the City, or a private contractor retained by the City, from constructing said return fiber. 7.15 Access Channel Carriage. (a) Any and all costs associated with any modification of the Access Channels or signals after,the Access Channels/signals leave the City's designated playback facilities, or any designated playback center authorized by the City shall be borne entirely by Grantee. Grantee shall not cause any programming to override PEG programming on any Access Channel, except by oral or written permission from the City,with the exception of emergency alert signals. (b) The City may request and Grantee shall provide an additional Access Channel when the cumulative time on all the existing Access Channels combined meets the following standard: whenever one of the Access Channels in use during eighty percent(80%) of the weekdays,Monday through Friday, for eighty percent(80%)of the time during a consecutive three (3)hour period for six(6)weeks running, and there is a demand for use of an additional Channel for the same purpose,the Grantee has six(6) months in which to provide a new,Access Channel for the same purpose;provided that, the provision of the additional Channel or Channels does not require the Cable System to install Converters. (c) The VHF spectrum shall be used for one(1)of the public, educational, or governmental specially designated Access Channels. (d) The City or its designee shall be responsible for developing, implementing, interpreting and enforcing rules for PEG Access Channel use. (e) The Grantee shall monitor the Access Channels for technical quality to ensure that they meet FCC technical standards including those applicable to the carriage of Access Channels,provided however,that the Grantee is not responsible for the production quality of PEG programming productions. The City, or its designee, shall be responsible for the production and quality of all PEG access programming. Grantee shall carry all components of the standard definition of Access Channel including,but not limited to, closed captioning, stereo audio and other elements associated with the programming. 21 2032276v2 -)9 7.16 Access Channel Support. (a) Within thirty(30) days of the Effective Date of this Franchise Grantee shall remit to the Commission a one-time Two Hundred Thousand and No/100 Dollar ($200,000) grant in support of PEG capital purposes ("PEG Grant"). Comcast retains all legal authority it may possess to recover the PEG Grant from Subscribers in any manner permitted by Applicable Law. (b) Effective September 1,2012, Grantee shall also collect and remit to the City Sixty cents (60¢)per Subscriber per month in support of PEG capital("PEG Fee"). (c) During the twelve(12)months following the Effective Date, Grantee shall retain Thirteen cents (130) of the Sixty cent(60¢)PEG Fee to reimburse Grantee for the costs associated with maintaining staff, equipment and space at the Studio to handle the public and educational playback obligations for the Transition Period. This will result in the City receiving a Forty-seven cent(470)PEG Fee for the first twelve(12)months of the Franchise. Thereafter the PEG Fee will revert to the Sixty cent(60¢) level for the remainder of the ten(10)year Franchise term—subject to the one-time inflation adjustment set forth in Section 7.16 (d)below. (d) At the fifth(5th)anniversary of the Effective Date of this Franchise,the City,at its discretion,may require Grantee to increase the PEG Fee to Sixty-five cents (650)per Subscriber per month for the remaining term of the Franchise. The PEG Fee shall be used by City in its sole discretion to fund PEG access capital expenditures. (e) Neither the PEG Grant nor the PEG Fee are intended to represent part of the Franchise Fee and are intended to fall within one(1) or more of the exceptions in 47 U.S.C. § 542. The PEG Grant and PEG Fee may be categorized, itemized, and passed through to Subscribers as permissible, in accordance with 47 U.S.C. §542 or other Applicable Laws. Grantee shall pay the PEG Fee to the City quarterly at the same time as the payment of Franchise Fees under Section 16.1 of the Franchise. Grantee agrees that it will not offset or reduce its payment of past,present or future Franchise Fees required as a result of its obligation to remit the PEG Funds or the PEG Fee. (f) Any PEG Access capital support amounts owing pursuant to this Franchise which remain unpaid more than twenty-five(25) Days after the date the payment is due shall be delinquent and shall thereafter accrue interest at twelve percent (12%)per annum or the prime lending rate published by the Wall Street Journal on the Day the payment was due plus two percent(2%), whichever is greater. 7.17 PEG Technical Quality. (a) Grantee shall not be required to carry a PEG Access Channel in a higher quality format than that of the Channel Signal delivered to Grantee,but Grantee shall not implement a change in the method of delivery of Access Channels that results in a material degradation of signal quality or impairment of viewer reception of Access Channels,provided that this requirement shall not prohibit Grantee from implementing new technologies also utilized for commercial Channels carried on its Cable System. 22 2032276v2 12 Grantee shall meet FCC signal quality standards when offering Access Channels on its Cable System and shall continue to comply with closed captioning pass-through requirements. There shall be no significant deterioration in an Access Channels signal from the point of origination upstream to the point of reception downstream on the Cable System. (b) Within twenty-four(24)hours of a written request from City to the Grantee identifying a technical problem with a Access Channel and requesting assistance, Grantee will provide technical assistance or diagnostic services to determine whether or not a problem with a PEG signal is the result of matters for which Grantee is responsible and if so, Grantee will take prompt corrective action. If the problem persists and there is a dispute about the cause,then the parties shall meet with engineering representation from Grantee and the City in order to determine the course of action to remedy the problem. 7.18 Access Channel Promotion. Grantee shall allow the City to place bill staffers in Grantee's Subscriber statements at a cost to the City not to exceed Grantee's out of pocket cost, no less frequently than twice per year, or at such time as a Access Channel is moved or relocated, upon the written request of the City and at such times that the placement of such materials would not materially and adversely affect Grantee's cost for the production and mailing of such statements. The City agrees to pay Grantee in advance for the actual cost of such bill staffers. 7.19 Change in Technology. In the event Grantee makes any change in the Cable System and related equipment and facilities or in its signal delivery technology,which requires the City to obtain new equipment in order to be compatible with such change for purposes of transport and delivery of the Access Channels, Grantee shall, at its own expense and free of charge to City or its designated entities,purchase such equipment as may be necessary to facilitate the cablecasting of the Access Channels in accordance with the requirements of the Franchise. 7.20 Relocation of Grantee's Headend. In the event Grantee relocates its headend, Grantee will be responsible for replacing or restoring the existing dedicated fiber connections at Grantee's cost so that all the functions and capacity remain available, operate reliably and satisfy all applicable technical standards and related obligations of the Franchise free of charge to the City or its designated entities. 7.21 Regional Channel Six. Grantee shall make available Regional Channel Six as long as it is required to do so by the State of Minnesota. 7.22 Government Access Channel Functionality. Grantee agrees to provide the capability such that the City, from its City Hall, can switch its government Access Channel in the following ways: (a) Insert live Council meetings from City Hall; (b) Replay government access programming from City Hall; and (c) Transmit character generated programming. 23 2032276v2 7)4 (d) Schedule for Grantee to replay City-provided tapes in pre-arranged time slot on the government Access Channel; and (e) Switch to C-SPAN 2 or other comparable programming provided by the Grantee at any time when not carrying live or taped government access programming. 7.23 Compliance with Minnesota Statutes Chapter 238. In addition to the requirements contained in this Section 7 of this Franchise, Grantee and City shall comply with the PEG requirements mandated by Minn. Stat. 238.084. SECTION 8 REGULATORY PROVISIONS. 8.1 Intent. The City shall have the right to administer and regulate activities under the Franchise up to the full extent permitted by Applicable Law. 8.2 Delegation of Authority to Regulate. The City reserves the right to delegate its regulatory authority wholly or in part to agents of the City, including,but not limited to,an agency which may be formed to regulate several franchises in the region in a manner consistent with Applicable Laws. This may include but shall not be limited to the Commission or other entity as City may determine in its sole discretion. Any existing delegation in place at the time of the grant of this Franchise shall remain intact unless expressly modified by City. 8.3 Areas of Administrative Authority. In addition to any other regulatory authority granted to the City by law or franchise,the City shall have administrative authority in the following areas: (a) Administering and enforcing the provisions of this Franchise, including the adoption of administrative rules and regulations to carry out this responsibility. (b) Coordinating the operation of Access Channels. (c) Formulating and recommending long-range cable communications policy for the Franchise Area. (d) Disbursing and utilizing Franchise revenues paid to the City. (e) Administering the regulation of rates,to the extent permitted by Applicable Law. (f) All other regulatory authority permitted under Applicable Law. The City or its designee shall have continuing regulatory jurisdiction and supervision over the System and the Grantee's operations under the Franchise to the extent allowed by Applicable Law. 8.4 Regulation of Rates and Charges. 24 2032276v2 7-0V (a) Right to Regulate. The City reserves the right to regulate rates or charges for any Cable Service within the limits of Applicable Law,to enforce rate regulations prescribed by the FCC, and to establish procedures for said regulation or enforcement. (b) Notice of Change in Rates and Charges. Throughout the term of this Franchise, Grantee shall give the City and all Subscribers within the City at least thirty (30)Days' notice of any intended modifications or additions to Subscriber rates or charges.Nothing in this Subsection shall be construed to prohibit the reduction or waiving of rates or charges in conjunction with promotional campaigns for the purpose of attracting Subscribers or users. (c) Rate Discrimination Prohibited. Within any category of Subscribers, Grantee shall not discriminate among Subscribers with regard to rates and charges made for any service based on considerations of race, color, creed, sex,marital or economic status,national origin, sexual preference, or(except as allowed by Applicable Law) neighborhood of residence,except as otherwise provided herein; and for purposes of setting rates and charges,no categorization of Subscribers shall be made by Grantee on the basis of those considerations.Nevertheless, Grantee shall be permitted to establish(1) discounted rates and charges for providing Cable Service to low-income,handicapped, or low-income elderly Subscribers, (2)promotional rates, and(3)bulk rate and package discount pricing. SECTION 9 BOND. 9.1 Performance Bond. Upon the Effective Date of this Franchise and at all times thereafter Grantee shall maintain with City a bond in the sum of One Hundred Thousand Dollars ($100,000.00)in such form and with such sureties as shall be acceptable to City,conditioned upon the faithful performance by Grantee of this Franchise and the acceptance hereof given by City and upon the further condition that in the event Grantee shall fail to comply with any law, ordinance or regulation,there shall be recoverable jointly and severally from the principal and surety of the bond, any damages or losses suffered by City as a result, including the full amount of any compensation, indemnification or cost of removal of any property of Grantee,including a reasonable allowance for attorneys' fees and costs(with interest at two(2%)percent in excess of the then prime rate),up to the full amount of the bond, and which bond shall further guarantee payment by Grantee of all claims and liens against City or any,public property, and taxes due to City,which arise by reason of the construction, operation,maintenance or use of the Cable System. 9.2 Rights. The rights reserved by City with respect to the bond are in addition to all other rights the City may have under this Franchise or any other law. 9.3 Reduction of Bond Amount. City may,in its sole discretion,reduce the amount of the bond. 25 2032276v2 7-)8 SECTION 10 SECURITY FUND 10.1 Security Fund. If there is an uncured breach by Grantee of a material provision of this Franchise or a pattern of repeated violations of any provision(s)of this Franchise,then Grantee shall,upon written request, establish and provide to the City, as security for the faithful performance by Grantee of all of the provisions of this Franchise, a letter of credit from a financial institution satisfactory to the City in the amount of Twenty Thousand and No/100 Dollars ($20,000.00). In no event shall Grantee fail to post a Twenty Thousand and No/100 Dollar($20,000.00) letter of credit within thirty(30) days receipt of a notice of franchise violation pursuant to this Section 10.1. Failure to post said letter of credit shall constitute a separate material violation of this Franchise,unless the breach is cured within such thirty(30) Day period or longer period allowed under the Franchise. The letter of credit shall serve as a common security fund for the faithful performance by Grantee of all the provisions of this Franchise and compliance with all orders,permits and directions of the City and the payment by Grantee of any claim,liens, costs, expenses and taxes due the City which arise by reason of the construction, operation or maintenance of the Cable System. Interest on this deposit shall be paid to Grantee by the bank on an annual basis. The security may be terminated by the Grantee upon the resolution of the alleged noncompliance. The obligation to establish the security fund required by this paragraph is unconditional. The fund must be established in those circumstances where Grantee disputes the allegation that it is not in compliance, and maintained for the duration of the dispute. If Grantee fails to establish the security fund as required,the City may take whatever action is appropriate to require the establishment of that fund and may recover its costs,reasonable attorneys' fees, and an additional penalty of Two Thousand Dollars($2,000)in that action. 10.2 Withdrawal of Funds. Provision shall be made to permit the City to withdraw funds from the security fund. Grantee shall not use the security fund for other purposes and shall not assign,pledge or otherwise use this security fund as security for any purpose. 10.3 Restoration of Funds. Within ten(10)Days after notice to it that any amount has been withdrawn by the City from the security fund pursuant to 10.4 of this section, Grantee shall deposit a sum of money sufficient to restore such security fund to the required amount. 10.4 Liquidated Damages. In addition to recovery of any monies owed by Grantee to City or damages to City as a result of any acts or omissions by Grantee pursuant to the Franchise, City in its sole discretion may charge to and collect from the security fund the following liquidated damages: (a) For failure to provide data, documents,reports or information or to cooperate with City during an application process or System review,the liquidated damage shall be One Hundred Dollars($100.00)per Day for each Day, or part thereof, such failure occurs or continues. (b) For failure to comply with any of the provisions of this Franchise for which a penalty is not otherwise specifically provided pursuant to this Paragraph 10.4, 26 2032276v2 7a9 the liquidated damage shall be One Hundred Fifty Dollars ($150.00)per Day for each Day, or part thereof, such failure occurs or continues. (c) For failure to test, analyze and report on the performance of the System following a request by City,the liquidated damage shall be Two Hundred Fifty Dollars ($250.00)per Day for each Day,or part thereof, such failure occurs or continues. (d) Forty-five Days following notice from City of a failure of Grantee to comply with construction, operation or maintenance standards,the liquidated damage shall be Two Hundred Dollars($200.00)per Day for each Day, or part thereof, such failure occurs or continues. (e) For failure to provide the services Grantee has proposed, including but not limited to the implementation and the utilization of the Access Channels the liquidated damage shall be One Hundred Fifty($150.00)per Day for each Day, or part thereof, such failure occurs or continues. 10.5 Each Violation a Separate Violation. Each violation of any provision of this Franchise shall be considered a separate violation for which separate liquidated damages can be imposed. 10.6 Maximum 120 Days. Any liquidated damages for any given violation shall be imposed upon Grantee for a maximum of one hundred twenty(120)Days. If after that amount of time Grantee has not cured or commenced to cure the alleged breach to the satisfaction of the City,the City may pursue all other remedies. 10.7 Withdrawal of Funds to Pay Taxes. If Grantee fails to pay to the City any taxes due and unpaid; or fails to repay to the City, any damages, costs or expenses which the City shall be compelled to pay by reason of any act or default of the Grantee in connection with this Franchise; or fails, after thirty(30) Days notice of such failure by the City to comply with any provision of the Franchise which the City reasonably determines can be remedied by an expenditure of the security,the City may then withdraw such funds from the security fund. Payments are not Franchise Fees as defined in Section 16 of this Franchise. 10.8 Procedure for Draw on Security Fund. Whenever the City finds that Grantee has allegedly violated one(1)or more terms, conditions or provisions of this Franchise, a written notice shall be given to Grantee. The written notice shall describe in reasonable detail the alleged violation so as to afford Grantee an opportunity to remedy the violation. Grantee shall have thirty (30)Days subsequent to receipt of the notice in which to correct the violation before the City may require Grantee to make payment of damages, and further to enforce payment of damages through the security fund. Grantee may,within ten(10)Days of receipt of notice,notify the City that there is a dispute as to whether a violation or failure has, in fact, occurred. Such notice by Grantee shall specify with particularity the matters disputed by Grantee and shall stay the running of the above-described time. (a) City shall hear Grantee's dispute at the next regularly scheduled or specially scheduled Council meeting. Grantee shall have the right to speak and introduce evidence. The City shall determine if Grantee has committed a violation and shall make 27 2032276v2 7-'3° written findings of fact relative to its determination. If a violation is found, Grantee may petition for reconsideration. (b) If after hearing the dispute,the claim is upheld by the City,then Grantee shall have thirty(30)Days within which to remedy the violation before the City may require payment of all liquidated damages due it. 10.9 Time for Correction of Violation. The time for Grantee to correct any alleged violation may be extended by the City if the necessary action to collect the alleged violation is of such a nature or character as to require more than thirty(30) Days within which to perform provided Grantee commences corrective action within fifteen(15)Days and thereafter uses reasonable diligence, as determined by the City,to correct the violation. 10.10 Grantee's Right to Pay Prior to Security Fund Draw. Grantee shall have the opportunity to make prompt payment of any assessed liquidated damages and if Grantee fails to promptly remit payment to the City,the City may resort to a draw from the security fund in accordance with the terms of this Section 10 of the Franchise. 10.11 Failure to so Replenish Security Fund. If any security fund is not so replaced, City may draw on said security fund for the whole amount thereof and hold the proceeds, without interest,and use the proceeds to pay costs incurred by City in performing and paying for any or all of the obligations,duties and responsibilities of Grantee under this Franchise that are not performed or paid for by Grantee pursuant hereto, including attorneys' fees incurred by the City in so performing and paying. The failure to so replace any security fund may also, at the option of City,be deemed a default by Grantee under this Franchise. The drawing on the security fund by City, and use of the money so obtained for payment or performance of the obligations, duties and responsibilities of Grantee which are in default, shall not be a waiver or release of such default. 10.12 Collection of Funds Not Exclusive Remedy. The collection by City of any damages or monies from the security fund shall not affect any other right or remedy available to City,nor shall any act,or failure to act,by City pursuant to the security fund,be deemed a waiver of any right of City pursuant to this Franchise or otherwise. Notwithstanding this section, however, should the City elect to impose liquidated damages,that remedy shall remain the City's exclusive remedy for the one hundred twenty(120) Day period set forth in Section 10.6. SECTION 11 DEFAULT 11.1 Basis for Default. City shall give written notice of default to Grantee if City,in its sole discretion, determines that Grantee has: (a) Violated any material provision of this Franchise or the acceptance hereto or any rule, order, regulation or determination of the City, state or federal government, not in conflict with this Franchise; (b) Attempted to evade any provision of this Franchise or the acceptance hereof; 28 2032276v2 731 (c) Practiced any fraud or deceit upon City or Subscribers; (d) Made a material misrepresentation of fact in the application for or negotiation of this Franchise; or (e) Incurred a twelve(12)month or more delay in the construction schedule. 11.2 Default Procedure. If Grantee fails to cure such default within thirty(30)Days after the giving of such notice (or if such default is of such a character as to require more than thirty(30) Days within which to cure the same, and Grantee fails to commence to cure the same within said thirty(30)Day period and thereafter fails to use reasonable diligence, in City's sole opinion,to cure such default as soon as possible),then, and in any event, such default shall be a substantial breach and City may elect to terminate the Franchise. The City may place the issue of revocation and termination of this Franchise before the governing body of City at a regular meeting. If City decides there is cause or reason to terminate,the following procedure shall be followed: (a) City shall provide Grantee with a written notice of the reason or cause for proposed termination and shall allow Grantee a minimum of thirty(30)Days subsequent to receipt of the notice in which to correct the default. (b) Grantee shall be provided with an opportunity to be heard at a public hearing prior to any decision to terminate this Franchise. (c) If, after notice is given and an opportunity to cure, at Grantee's option, a public hearing is held, and the City determines there was a violation,breach,failure, refusal or neglect,the City may declare by resolution the Franchise revoked and of no further force and effect unless there is compliance within such period as the City may fix, such period may not be less than thirty(30)Days provided no opportunity for compliance need be granted for fraud or misrepresentation. 11.3 Mediation. If the Grantee and City are unable to resolve a dispute through informal negotiations during the period of thirty(30)Days following the submission of the claim giving rise to the dispute by one (1)party to the other,then unless that claim has been waived as provided in the Franchise, such claim may be subject to mediation if jointly agreed upon by both parties. Unless the Grantee and City mutually agree otherwise, such mediation shall be in accordance with the rules of the American Arbitration Association currently in effect at the time of the mediation. A party seeking mediation shall file a request for mediation with the other party to the Franchise and with the American Arbitration Association. The request may be made simultaneously with the filing of a complaint,but, in such event,mediation shall proceed in advance of legal proceedings only if the other party agrees to participate in mediation. Mutually agreed upon Mediation shall stay other enforcement remedies of the parties for a period of ninety (90)days from the date of filing,unless stayed for a longer period by agreement of the Grantee and City. The Grantee and City shall each pay one-half of the mediator's fee and any filing fees. The mediation shall be held in the City unless another location is mutually agreed upon. Agreements reached in mediation shall be enforceable as a settlement agreement in any court 29 2032276v2 having jurisdiction thereof. Nothing herein shall serve to modify or on any way delay the franchise enforcement process set forth in Section 10 of this Franchise. 11.4 Failure to Enforce. Grantee shall not be relieved of any of its obligations to comply promptly with any provision of the Franchise by reason of any failure of the City to enforce prompt compliance, and City's failure to enforce shall not constitute a waiver of rights or acquiescence in Grantee's conduct. 11.5 Compliance with the Laws. (a) If any federal or state law or regulation shall require or permit City or Grantee to perform any service or act or shall prohibit City or Grantee from performing any service or act which may be in conflict with the terms of this Franchise,then as soon as possible following knowledge thereof, either party shall notify the other of the point in conflict believed to exist between such law or regulation. Grantee and City shall conform to state laws and rules regarding cable communications not later than one(1)year after they become effective,unless otherwise stated, and shall conform to federal laws and regulations regarding cable as they become effective. (b) If any term, condition or provision of this Franchise or the application thereof to any Person or circumstance shall,to any extent,be held to be invalid or unenforceable,the remainder hereof and the application of such term, condition or provision to Persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Franchise and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and complied with provided the loss of the invalid or unenforceable clause does not substantially alter the agreement between the parties. In the event such law,rule or regulation is subsequently repealed,rescinded, amended or otherwise changed so that the provision which had been held invalid or modified is no longer in conflict with the law, rules and regulations then in effect, said provision shall thereupon return to full force and effect and shall thereafter be binding on Grantee and City. SECTION 12 FORECLOSURE AND RECEIVERSHIP 12.1 Foreclosure. Upon the foreclosure or other judicial sale of the Cable System, Grantee shall notify the City of such fact and such notification shall be treated as a notification that a change in control of Grantee has taken place, and the provisions of this Franchise governing the consent to transfer or change in ownership shall apply without regard to how such transfer or change in ownership occurred. 12.2 Receivership. The City shall have the right to cancel this Franchise subject to any applicable provisions of state law, including the Bankruptcy Act, one hundred twenty(120)Days after the appointment of a receiver or trustee to take over and conduct the business of Grantee, whether in receivership,reorganization,bankruptcy or other action or proceeding,unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty(120)Days, or unless: 30 2032276v2 7-33 (a) Within one hundred twenty(120)Days after his election or appointment, such receiver or trustee shall have fully complied with all the provisions of this Franchise and remedied all defaults thereunder; and, (b) Such receiver or trustee,within said one hundred twenty(120)Days, shall have executed an agreement, duly approved by the Court having jurisdiction in the premises,whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this Franchise. SECTION 13 REPORTING REQUIREMENTS 13.1 Quarterly Reports. Within forty-five(45)calendar days after the end of each calendar quarter, Grantee shall submit to the City along with its Franchise Fee payment a report showing the basis for computation of such fees prepared by an officer of Grantee showing the basis for the computation of the Franchise Fees paid during that period in a form and substance substantially equivalent to Exhibit C attached hereto. This report shall separately indicate revenues received by Grantee within the City including,but not limited to such items as listed in the definition of"Gross Revenues"at Section 1 of this Franchise. 13.2 Monitoring and Compliance Reports.Upon request,but no more than once a year, Grantee shall provide a written report of any and all FCC technical performance tests for the residential network required in FCC Rules and Regulations as now or hereinafter constituted. In addition, Grantee shall provide City with copies of reports of the semi-annual test and compliance procedures established by this Franchise no later than thirty(30)Days after the completion of each series of tests. 13.3 Reports. Upon request of the City and in no event later than thirty(30)Days from the date of receipt of such request, Grantee shall, free of charge,prepare and furnish to the City, at the times and in the form prescribed, such additional reports with respect to its operation, affairs,transactions, or property, as may be reasonably necessary to ensure compliance with the terms of this Franchise. Grantee and City may in good faith agree upon taking into consideration Grantee's need for the continuing confidentiality as prescribed herein. Neither City nor Grantee shall unreasonably demand or withhold information requested pursuant with the terms of this Franchise. 13.4 Communications with Regulatory Agencies. (a) Upon written request, Grantee shall submit to City copies of any pleading, applications,notifications, communications and documents of any kind, submitted by Grantee or its Affiliates to any federal, State or local courts,regulatory agencies and other government bodies if such documents directly relate to the operations of Grantee `s Cable System within the Franchise Area. Grantee shall submit such documents to City no later than thirty (30) Days after receipt of City's request. Grantee shall not claim confidential,privileged or proprietary rights to such documents unless under federal, State, or local law such documents have been determined to be confidential by a court of competent jurisdiction, or a 31 2032276v2 7-34 federal or State agency. With respect to all other reports, documents and notifications provided to any federal, State or local regulatory agency as a routine matter in the due course of operating Grantee `s Cable System within the Franchise Area, Grantee shall make such documents available to City upon City's written request. (b) In addition, Grantee and its Affiliates shall within ten(10)Days of any communication to or from any judicial or regulatory agency regarding any alleged or actual violation of this Franchise, City regulation or other requirement relating to the System,use its best efforts to provide the City a copy of the communication,whether specifically requested by the City to do so or not. SECTION 14 CUSTOMER SERVICE POLICIES 14.1 Response to Customers and Cooperation with City. Grantee shall promptly respond to all requests for service,repair, installation and information from Subscribers. Grantee acknowledges the City's interest in the prompt resolution of all cable complaints and shall work in close cooperation with the City to resolve complaints. 14.2 Defmition of"Complaint." For the purposes of Section 14,with the exception of Subsection 14.5, a"complaint" shall mean any communication to Grantee or to the City by a Subscriber or a Person who has requested Cable Service; a Person expressing dissatisfaction with any service,performance, or lack thereof, by Grantee under the obligations of this Franchise. 14.3 Customer Service Agreement and Written Information. Grantee shall provide to Subscribers a comprehensive service agreement and information in writing for use in establishing Subscriber service. Written information shall, at a minimum, contain the following information: (a) Services to be provided and rates for such services. (b) Billing procedures. (c) Service termination procedure. (d) Change in service notifications. (e) Liability specifications. (f) Converter/Subscriber terminal equipment policy. (g) Breach of Franchise specification. (h) How complaints are handled including Grantee's procedure for investigation and resolution of Subscriber complaints. 32 2032276v2 7-33 (i) The name,address,and phone number of the Person identified by the City as responsible for handling cable questions and complaints for the City. This information shall be prominently displayed and Grantee shall submit the information to the City for review and approval as to its content and placement on Subscriber billing statements.A copy of the written information shall be provided to each Subscriber at the time of initial Connection and any subsequent reconnection. 14.4 Reporting Complaints. (a) The requirements of this Section 14.4 shall be subject to federal law regarding Subscriber privacy. Grantee shall maintain all Subscriber data available for City inspection. Subscriber data shall include the date,name, address, telephone number of Subscriber complaints as well as the subject of the complaint,date and type of action taken to resolve the complaint, any additional action taken by Grantee or the Subscriber. The data shall be maintained in a way that allows for simplified access of the data by the City. (b) Subject to federal law and upon reasonable request by the City, Grantee shall,within a reasonable amount of time,provide City with such Subscriber data for its review. 14.5 Customer Service Standards. The City hereby adopts the customer service standards set forth in Part 76, §76.309 of the FCC's rules and regulations,as amended. Grantee shall,upon request,which request shall include the reason for the request(such as complaints received or other reasonable evidence of concern),provide City with information which shall describe in detail Grantee's compliance with each and every term and provision of this Section 14.5. Grantee shall comply in all respects with the customer service requirements established by the FCC and those set forth herein. To the extent that this Franchise imposes requirements greater than those established by the FCC, Grantee reserves whatever rights it may have to recover the costs associated with compliance in any manner consistent with Applicable Law. 14.6 Local Office. Grantee shall maintain a convenient local customer service and bill payment location for matters such as receiving Subscriber payments,handling billing questions, equipment replacement and customer service information. Grantee shall comply with the standards and requirements for customer service set forth below during the term of this Franchise. 14.7 Cable System office hours and telephone availability. (a) Grantee will maintain a local,toll-free or collect call telephone access line which will be available to its Subscribers twenty-four(24)hours a Day, seven(7)Days a week. (i) Trained Grantee representatives will be available to respond to customer telephone inquiries during Normal Business Hours. (ii) After Normal Business Hours,the access line may be answered by a service or an automated response system, including an answering machine. 33 2032276v2 7-34 Inquiries received after Normal Business Hours must be responded to by a trained Grantee representative on the next business Day. (b) Under Normal Operating Conditions,telephone answer time by a customer representative, including wait time, shall not exceed thirty(30) seconds when the connection is made. If the call needs to be transferred,transfer time shall not exceed thirty(30) seconds. These standards shall be met no less than ninety percent(90%)of the time under Normal Operating Conditions,measured on a quarterly basis. (c) Grantee shall not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless an historical record of complaints indicates a clear failure to comply. (d) Under Normal Operating Conditions,the customer will receive a busy signal less than three percent(3%)of the time. (e) Customer service center and bill payment locations will be open at least during Normal Business Hours and will be conveniently located. 14.8 Installations,Outages and Service Calls. Under Normal Operating Conditions, each of the following standards will be met no less than ninety-five percent(95%) of the time measured on a quarterly basis: (a) Standard Installations will be performed within seven(7)business days after an order has been placed. "Standard"Installations are those that are located up to one hundred twenty-five(125)feet from the existing distribution system as more specifically set forth in Section 6.6(c). (b) Excluding conditions beyond the control of Grantee, Grantee will begin working on"Service Interruptions"promptly and in no event later than twenty-four(24) hours after the interruption becomes known. Grantee must begin actions to correct other Service problems the next business Day after notification of the Service problem. (c) The"appointment window"alternatives for Installations, Service calls, and other Installation activities will be either a specific time or, at maximum, a four(4) hour time block during Normal Business Hours. (Grantee may schedule Service calls and other Installation activities outside of Normal Business Hours for the express convenience of the customer.) (d) Grantee may not cancel an appointment with a customer after the close of business on the business Day prior to the scheduled appointment. (e) If Grantee's representative is running late for an appointment with a customer and will not be able to keep the appointment as scheduled,the customer will be contacted. The appointment will be rescheduled, as necessary, at a time which is convenient for the customer. 34 2032276v2 7 37 14.9 Communications between Grantee and Subscribers. (a) Refunds. Refund checks will be issued promptly, but no later than either: (i) The customer's next billing cycle following resolution of the request or thirty(30) Days,whichever is earlier,or (ii) The return of the equipment supplied by Grantee if Cable Service is terminated. (b) Credits. Credits for Cable Service will be issued no later than the customer's next billing cycle following the determination that a credit is warranted. 14.10 Billing: (a) Consistent with 47 C.F.R. § 76.1619,bills will be clear, concise and understandable. Bills must be fully itemized,with itemizations including,but not limited to, Basic Cable Service and premium Cable Service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges,rebates and credits. (b) In case of a billing dispute, Grantee must respond to a written complaint from a Subscriber within thirty(30)Days. 14.11 Subscriber Information. Grantee will provide written information on each of the following areas at the time of Installation of Service, at least annually to all Subscribers, and at any time upon request: (a) Products and Services offered; (b) Prices and options for programming services and conditions of subscription to programming and other services; (c) Installation and Service maintenance policies; (d) Instructions on how to use the Cable Service; (e) Channel positions of programming carried on the System; and (f) Billing and complaint procedures,including the address and telephone number of the City's cable office. Subscribers shall be advised of the procedures for resolution of complaints about the quality of the television signal delivered by Grantee, including the address of the responsible officer of the City. Subscribers will be notified of any changes in rates,programming services or Channel positions as soon as possible in writing. Notice must be given to Subscribers a minimum of thirty(30)Days in advance of such changes if the change is within the control of 35 2032276v2 7-3Y Grantee. In addition, Grantee shall notify Subscribers thirty(30)Days in advance of any significant changes in the information required by this Section 14.11. 14.12 Notice or Rate Programming Change. In addition to the requirement of this Section 14.12 regarding advance notification to Subscribers of any changes in rates, programming services or Channel positions, Grantee shall give thirty(30)Days written notice to both Subscribers and the City before implementing any rate or Service change. Such notice shall state the precise amount of any rate change and briefly explain in readily understandable fashion the cause of the rate change(e.g., inflation, change in external costs or the addition/deletion of Channels). When the change involves the addition or deletion of Channels, each Channel added or deleted must be separately identified. For purposes of the carriage of digital broadcast signals, Grantee need only identify for Subscribers,the television signal added and not whether that signal may be multiplexed during certain dayparts. 14.13 Subscriber Contracts. Grantee shall,upon written request,provide the City with any standard form residential Subscriber contract utilized by Grantee. If no such written contract exists, Grantee shall file with the City a document completely and concisely stating the length and terms of the Subscriber contract offered to customers. The length and terms of any standard form Subscriber contract(s) shall be available for public inspection during Normal Business Hours. A list of Grantee's current Subscriber rates and charges for Cable Service shall be maintained on file with City and shall be available for public inspection. 14.14 Refund Policy. If a Subscriber's Cable Service is interrupted or discontinued, without cause, for twenty-four(24)or more consecutive hours, Grantee shall,upon request by the Subscriber, credit such Subscriber pro rata for such interruption. For this purpose,every month will be assumed to have thirty(30)Days. 14.15 Late Fees. Grantee shall comply with all applicable state and federal laws with respect to any assessment, charge, cost, fee or sum,however characterized,that Grantee imposes upon a Subscriber for late payment of a bill. The City reserves the right to enforce Grantee's compliance with all Applicable Laws to the maximum extent legally permissible. 14.16 Disputes. All Subscribers and members of the general public may direct complaints,regarding Grantee's Service or performance to the chief administrative officer of the City or the chief administrative officer's designee,which may be a board or Commission of the City. 14.17 Customer Bills. Customer bills shall be designed in such a way as to present the information contained therein clearly and comprehensibly to Customers, and in a way that(A)is not misleading and(B) does not omit material information.Notwithstanding anything to the contrary in Section 14.10, above, Grantee may, in its sole discretion, consolidate costs on Customer bills as may otherwise be permitted by Section 622(c) of the Cable Act(47 U.S.C. §542(c)). 14.18 Failure to Resolve Complaints. Grantee shall resolve a complaint within thirty (30)Days in a manner deemed reasonable by the City under the terms of the Franchise. 36 2032276v2 7. 39 14.19 Maintain a Complaint Phone Line. Grantee shall maintain a local or toll-free telephone Subscriber complaint line, available to its Subscribers twenty-four(24)hours per Day, seven(7)Days a week. 14.20 Notification of Complaint Procedure. Grantee shall have printed clearly and prominently on each Subscriber bill and in the customer service agreement provided for in Section 14.3,the twenty-four(24)hour Grantee phone number for Subscriber complaints. Additionally, Grantee shall provide information to customers concerning the procedures to follow when they are unsatisfied with measures taken by Grantee to remedy their complaint. This information will include the phone number of the City office or Person designated to handle complaints.Additionally,Grantee shall state that complaints should be made to Grantee prior to contacting the City. 14.21 Subscriber Privacy. (a) To the extent required by Minn. Stat. §238.084 Subd. 1(s) Grantee shall comply with the following: No signals including signals of a Class IV Channel may be transmitted from a Subscriber terminal for purposes of monitoring individual viewing patterns or practices without the express written permission of the Subscriber. The request for permission must be contained in a separate document with a prominent statement that the Subscriber is authorizing the permission in full knowledge of its provisions. Such written permission shall be for a limited period of time not to exceed one(1)year which may be renewed at the option of the Subscriber. No penalty shall be invoked for a Subscriber's failure to provide or renew such permission. The permission shall be revocable at any time by the Subscriber without penalty of any kind whatsoever. (b) No information or data obtained by monitoring transmission of a signal from a Subscriber terminal,including but not limited to lists of the names and addresses of Subscribers or any lists that identify the viewing habits of Subscribers shall be sold or otherwise made available to any party other than to Grantee or its agents for Grantee's business use, and also to the Subscriber subject of that information,unless Grantee has received specific written permission from the Subscriber to make such data available. The request for permission must be contained in a separate document with a prominent statement that the Subscriber is authorizing the permission in full knowledge of its provisions. Such written permission shall be for a limited period of time not to exceed one(1)year which may be renewed at the option of the Subscriber. No penalty shall be invoked for a Subscriber's failure to provide or renew such permission. The permission shall be revocable at any time by the Subscriber without penalty of any kind whatsoever. (c) Written permission from the Subscriber shall not be required for the conducting of system wide or individually addressed electronic sweeps for the purpose of verifying System integrity or monitoring for the purpose of billing. Confidentiality of such information shall be subject to the provision set forth in subparagraph(b) of this section. 37 2032276v2 7-0 14.22 Grantee Identification. Grantee shall provide all customer service technicians and all other Grantee employees entering private property with appropriate picture identification so that Grantee employees may be easily identified by the property owners and Subscribers. SECTION 15 SUBSCRIBER PRACTICES 15.1 Subscriber Rates. There shall be no charge for disconnection of any installation or outlet. If any Subscriber fails to pay a properly due monthly Subscriber fee, or any other properly due fee or charge, Grantee may disconnect the Subscriber's service outlet,provided, however,that such disconnection shall not be effected until after the later of: (i)forty-five(45) Days after the original due date of said delinquent fee or charge; or(ii)ten(10)Days after delivery to Subscriber of written notice of the intent to disconnect. If a Subscriber pays before expiration of the later of(i) or(ii), Grantee shall not disconnect. After disconnection,upon payment in full of the delinquent fee or charge and the payment of a reconnection charge, Grantee shall promptly reinstate the Subscriber's Cable Service. 15.2 Refunds to Subscribers shall be made or determined in the following manner: (a) If Grantee fails,upon request by a Subscriber,to provide any service then being offered, Grantee shall promptly refund all deposits or advance charges paid for the service in question by said Subscriber. This provision does not alter Grantee's responsibility to Subscribers under any separate contractual agreement or relieve Grantee of any other liability. (b) If any Subscriber terminates any monthly service because of failure of Grantee to render the service in accordance with this Franchise, Grantee shall refund to such Subscriber the proportionate share of the charges paid by the Subscriber for the services not received. This provision does not relieve Grantee of liability established in other provisions of this Franchise. (c) If any Subscriber terminates any monthly service prior to the end of a prepaid period, a proportionate amount of any prepaid Subscriber service fee,using the number of days as a basis, shall be refunded to the Subscriber by Grantee. SECTION 16 COMPENSATION AND FINANCIAL PROVISIONS. 16.1 Franchise Fees. During the term of the Franchise, Grantee shall pay to the City a Franchise Fee of five percent(5%)of Gross Revenues. If any such law,regulation or valid rule alters the five percent(5%)Franchise Fee ceiling enacted by the Cable Act,then the City shall have the authority to (but shall not be required to) increase the Franchise Fee accordingly, provided such increase is for purposes not inconsistent with Applicable Law. In the event Grantee bundles or combines Cable Services (which are subject to the Franchise Fee)with non- Cable Services(which are not subject to the Franchise Fee) so that Subscribers pay a single fee for more than one(1) class of service resulting in a discount on Cable Services, Grantee agrees that for the purpose of calculation of the Franchise Fee, it shall allocate to Cable Service revenue 38 2032276v2 7- 1 no less than a pro rata share of the revenue received for the bundled or combined services. The pro rata share shall be computed on the basis of the published charge for each service in the bundled or combined classes of services when purchased separately. (a) Franchise Fees shall be paid quarterly not later than forty-five(45)Days following the end of a given quarter. In accordance with Section 16 of this Franchise, Grantee shall file with the City a Franchise Fee payment worksheet, attached as Exhibit C, signed by an authorized representative of Grantee,which identifies Gross Revenues earned by Grantee during the period for which payment is made.No acceptance of any payment shall be construed as an accord that the amount paid is, in fact,the correct amount,nor shall such acceptance of payment be construed as a release of any claim which the City may have for further or additional sums payable under the provisions of this section. (b) Neither current nor previously paid Franchise Fees shall be subtracted from the Gross Revenue amount upon which Franchise Fees are calculated and due for any period,unless otherwise required by Applicable Law. (c) Any Franchise Fees owing pursuant to this Franchise which remain unpaid more than forty-five(45) Days after the dates specified herein shall be delinquent and shall thereafter accrue interest at twelve percent(12%)per annum or two percent(2%) above prime lending rate as quoted by the Wall Street Journal, whichever is greater. 16.2 Auditing and Financial Records. Throughout the term of this Franchise,the Grantee agrees that the City, upon reasonable prior written notice of twenty(20)Days to the Grantee,may review such of the Grantee's books and records regarding the operation of the Cable System and the provision of Cable Service in the Franchise Area which are reasonably necessary to monitor and enforce Grantee's compliance with the provisions of this Franchise. Grantee shall provide such requested information as soon as possible and in no event more than thirty(30) Days unless Grantee explains that it is not feasible to meet this timeline and provides a written explanation for the delay and an estimated reasonable date for when such information will be provided. All such documents pertaining to financial matters that may be the subject of an inspection by the City shall be retained by the Grantee for a minimum period of seven(7) years,pursuant to Minnesota Statutes Section 541.05. The Grantee shall not deny the City access to any of the Grantee's records on the basis that the Grantee's records are under the control of any parent corporation,Affiliated entity or a third party. The City may request in writing copies of any such records or books that are reasonably necessary, and the Grantee shall provide such copies within thirty(30)Days of the receipt of such request. One(1) copy of all reports and records required under this or any other section shall be furnished to the City at the sole expense of the Grantee. If the requested books and records are too voluminous, or for security reasons cannot be copied or removed,then the Grantee may request, in writing within ten(10)Days of receipt of such request,that the City inspect them at the Grantee's local offices or at one of Grantee's offices more convenient to City or its duly authorized agent. If any books or records of the Grantee are not kept in such office and not made available in copies to the City upon written request as set forth above, and if the City determines that an examination of such records is necessary for the enforcement of this Franchise,then all reasonable travel expenses incurred in making such examination shall be paid by the Grantee. 39 2032276v2 7,4? 16.3 Review of Record Keeping Methodology. Grantee agrees to meet with representative of the City upon request to review its methodology of record-keeping, fmancial reporting, computing Franchise Fee obligations,and other procedures the understanding of which the City deems necessary for understanding the meaning of reports and records. 16.4 Audit of Records. The City or its authorized agent may at any time and at the City's own expense conduct an independent audit of the revenues of Grantee in order to verify the accuracy of Franchise Fees paid to the City. Grantee and each parent company of Grantee shall cooperate fully in the conduct of such audit. In the event it is determined through such audit that Grantee has underpaid Franchise Fees in an amount of five percent(5%)or more than was due the City,then Grantee shall reimburse the City for the entire cost of the audit within thirty (30) days of the completion and acceptance of the audit by the City. 16.5 Records to be reviewed. The City agrees to request access to only those books and records, in exercising its rights under this section,which it deems reasonably necessary for the enforcement and administration of the Franchise. 16.6 Indemnification by Grantee. Grantee shall, at its sole expense,fully indemnify, defend and hold harmless the City,and in their capacity as such,the officers and employees thereof, from and against any and all claims, suits, actions, liability and judgments for damage or otherwise except those arising wholly from negligence on the part of the City or its employees; for actual or alleged injury to persons or property, including loss of use of property due to an occurrence,whether or not such property is physically damaged or destroyed, in any way arising out of or through or alleged to arise out of or through the acts or omissions of Grantee or its officers, agents,employees, or contractors or to which Grantee's or its officers, agents, employees or contractors acts or omissions in any way contribute, and whether or not such acts or omissions were authorized or contemplated by this Franchise or Applicable Law; arising out of. or alleged to arise out of any claim for damages for Grantee's invasion of the right of privacy, defamation of any Person,firm or corporation, or the violation of infringement of any copyright, trademark,trade name, service mark or patent, or of any other right of any Person, firm or corporation; arising out of or alleged to arise out of Grantee's failure to comply with the provisions of any Applicable Law.Nothing herein shall be deemed to prevent the City,its officers, or its employees from participating in the defense of any litigation by their own counsel at such parties' expense. Such participation shall not under any circumstances relieve Grantee from its duty of defense against liability or of paying any judgment entered against the City,its officers, or its employees. 16.7 Grantee Insurance. Upon the Effective Date, Grantee shall, at its sole expense take out and maintain during the term of this Franchise public liability insurance with a company licensed to do business in the state of Minnesota with a rating by A.M. Best&Co. of not less than"A-"that shall protect the Grantee, City and its officials, officers, directors, employees and agents from claims which may arise from operations under this Franchise, whether such operations be by the Grantee, its officials, officers, directors, employees and agents or any subcontractors of Grantee. This liability insurance shall include,but shall not be limited to, protection against claims arising from bodily and personal injury and damage to property, resulting from Grantee's vehicles,products and operations. The amount of insurance for single 40 2032276v2 7-43 limit coverage applying to bodily and personal injury and property damage shall not be less than Three Million Dollars($3,000,000). The liability policy shall include: (a) The policy shall provide coverage on an"occurrence"basis. (b) The policy shall cover personal injury as well as bodily injury. (c) The policy shall cover blanket contractual liability subject to the standard universal exclusions of contractual liability included in the carrier's standard endorsement as to bodily injuries,personal injuries and property damage. (d) Broad form property damage liability shall be afforded. (e) City shall be named as an additional insured on the policy. (f) An endorsement shall be provided which states that the coverage is primary insurance with respect to claims arising from Grantee's operations under this Franchise and that no other insurance maintained by the Grantor will be called upon to contribute to a loss under this coverage. (g) Standard form of cross-liability shall be afforded. (h) An endorsement stating that the policy shall not be canceled without thirty (30)Days notice of such cancellation given to City (i) City reserves the right to adjust the insurance limit coverage requirements of this Franchise no more than once every three(3)years. Any such adjustment by City will be no greater than the increase in the State of Minnesota Consumer Price Index(all consumers)for such three(3)year period. (j) Upon the Effective Date, Grantee shall submit to City a certificate documenting the required insurance, as well as any necessary properly executed endorsements. The certificate and documents evidencing insurance shall be in a form acceptable to City and shall provide satisfactory evidence that Grantee has complied with all insurance requirements. Renewal certificates shall be provided to City prior to the expiration date of any of the required policies. City will not be obligated,however,to review such endorsements or certificates or other evidence of insurance, or to advise Grantee of any deficiencies in such documents and receipt thereof shall not relieve Grantee from,nor be deemed a waiver of, City's right to enforce the terms of Grantee's obligations hereunder. City reserves the right to examine any policy provided for under this paragraph or to require further documentation reasonably necessary to form an opinion regarding the adequacy of Grantee's insurance coverage. 41 2032276v2 7-44 SECTION 17 MISCELLANEOUS PROVISIONS. 17.1 Posting and Publication. Grantee shall assume the cost of posting and publication of this Franchise as such posting and publication is required by law and such is payable upon Grantee's filing of acceptance of this Franchise. 17.2 Guarantee of Performance. Grantee agrees that it enters into this Franchise voluntarily in order to secure and in consideration of the grant from the City of a ten(10)year Franchise. Performance pursuant to the terms and conditions of this Franchise is guaranteed by Grantee. 17.3 Entire Agreement. This Franchise contains the entire agreement between the parties, supersedes all prior agreements or proposals except as specifically set forth herein,and cannot be changed orally but only by an instrument in writing executed by the parties. This Franchise is made pursuant to Minnesota Statutes Chapter 238 and the City Code and is intended to comply with all requirements set forth therein. 17.4 Consent. Wherever the consent or approval of either Grantee or the City is specifically required in this agreement, such consent or approval shall not be unreasonably withheld. 17.5 Prior Franchise Terminated. The cable television franchise as originally granted by Ordinance No. 1996-27 is hereby terminated. 17.6 Franchise Acceptance. No later than forty-five(45)Days following City Council approval of this Franchise, Grantee shall execute and return to the City three(3)original franchise agreements. The executed agreements shall be returned to the City accompanied by performance bonds, security funds, and evidence of insurance, all as provided in this Franchise. In the event Grantee fails to accept this Franchise, or fails to provide the required documents,this Franchise shall be null and void. The Grantee agrees that despite the fact that its written acceptance may occur after the Effective Date,the obligations of this Franchise shall become effective on August 1,2012. 17.7 Amendment of Franchise. Grantee and City may agree, from time to time,to amend this Franchise. Such written amendments may be made subsequent to a review session pursuant to Section 2.6 or at any other time if City and Grantee agree that such an amendment will be in the public interest or if such an amendment is required due to changes in federal, state or local laws;provided,however, nothing herein shall restrict City's exercise of its police powers. 17.8 Notice. Any notification that requires a response or action from a party to this Franchise,within a specific time-frame or would trigger a timeline that would affect one or both parties' rights under this Franchise, shall be made in writing and shall be sufficiently given and served upon the other party by hand delivery, first class mail,registered or certified,return receipt requested,postage prepaid, or by reputable overnight courier service and addressed as follows: 42 2032276v2 74s To the City: City Manager, City of Richfield 6700 Portland Avenue Richfield,MN 55423 To the Grantee: Comcast Regional Vice President of Operations 10 River Park Place St. Paul, MN 55107 Recognizing the widespread usage and acceptance of electronic forms of communication, emails and faxes will be acceptable as formal notification related to the conduct of general business amongst the parties to this contract, including but not limited to programming and price adjustment communications. Such communication should be addressed and directed to the Person of record as specified above. 17.9 Force Majeure. In the event that either party is prevented or delayed in the performance of any of its obligations,under this Franchise by reason of acts of God,floods, fire, hurricanes,tornadoes, earthquakes,or other unavoidable casualties, insurrection,war,riot, vandalism, strikes, delays in receiving permits where it is not the fault of Grantee,public easements, sabotage, acts or omissions of the other party, or any other similar event beyond the reasonable control of that party, it shall have a reasonable time under the circumstances to perform such obligation under this Franchise, or to procure a substitute for such obligation to the reasonable satisfaction of the other party. 17.10 Work of Contractors and Subcontractors. Work by contractors and subcontractors is subject to the same restrictions, limitations and conditions as if the work were performed by Grantee. Grantee shall be responsible for all work performed by its contractors and subcontractors, and others performing work on its behalf as if the work were performed by it and shall ensure that all such work is performed in compliance with this Franchise,the City Code and other Applicable Law,and shall be jointly and severally liable for all damages and correcting all damage caused by them. It is Grantee's responsibility to ensure that contractors, subcontractors or other Persons performing work on Grantee's behalf are familiar with the requirements of this Franchise,the City Code and other Applicable Laws governing the work performed by them. 17.11 Abandonment of System. Grantee may not abandon the System or any portion thereof without having first given three(3)months written notice to City and conforming to the City Code,as well as the state right-of-way rules,Minn. Rules, Chapter 7819. To the extent required by Minn. Stat. §238.084 Subd. 1 (w), Grantee shall compensate City for damages resulting from the abandonment. 17.12 Removal After Abandonment. In the event of Grantee's abandonment of the System, City shall have the right to require Grantee to conform to the City Code, as well as the state right-of-way rules, Minn. Rules, Chapter 7819. If Grantee has failed to commence removal of System, or such part thereof as was designated by City,within thirty(30)Days after written notice of City's demand for removal consistent with City Code and Minn. Rules, Ch. 7819,is given,or if Grantee has failed to complete such removal within twelve (12)months after written notice of City's demand for removal is given City shall have the right to apply funds secured by 43 2032276v2 7-4 the performance bond toward removal and/or declare all right,title, and interest to the System to be in City with all rights of ownership including,but not limited to,the right to operate the System or transfer the System to another for operation by it. 17.13 Governing Law. This Franchise shall be deemed to be executed in the State of Minnesota, and shall be governed in all respects, including validity, interpretation and effect, and construed in accordance with,the laws of the State of Minnesota, as applicable to contracts entered into and performed entirely within the State. 17.14 Nonenforcement by City. Grantee shall not be relieved of its obligation to comply with any of the provisions of this Franchise by reason of any failure of the City or to enforce prompt compliance. 17.15 Captions. The paragraph captions and headings in this Franchise are for convenience and reference purposes only and shall not affect in any way the meaning of interpretation of this Franchise. 17.16 Calculation of Time. Where the performance or doing of any act, duty,matter, payment or thing is required hereunder and the period of time or duration for the performance is prescribed and fixed herein,the time shall be computed so as to exclude the first and include the last Day of the prescribed or fixed period or duration of time. When the last Day of the period falls on Saturday, Sunday or a legal holiday,that Day shall be omitted from the computation and the next business Day shall be the last Day of the period. 17.17 Survival of Terms. Upon the termination or forfeiture of the Franchise, Grantee shall no longer have the right to occupy the Streets for the purpose of providing Cable Service. However, Grantee's obligations to the City(other than the obligation to provide service to Subscribers) shall survive according to their terms. 17.18 Competitive Equity If any other Wireline MVPD enters into any agreement with the City to provide multi channel video programming or its equivalent to residents in the City, the City,upon written request of the Grantee, shall permit the Grantee to construct and/or operate its Cable System and provide multi channel video programming or its equivalent to Subscribers in the City under the same agreement as applicable to the new MVPD. Within one hundred twenty(120)Days after the Grantee submits a written request to the City,the Grantee and the City shall enter into an agreement or other appropriate authorization(if necessary) containing the same terms and conditions as are applicable to the new Wireline MVPD. Passed and adopted this day of 2012. ATTEST CITY OF RICHFIELD, MINNESOTA By: By: Its: City Clerk Its: Mayor 44 2032276v2 741 ACCEPTED: This Franchise is accepted, and we agree to be bound by its terms and conditions. COMCAST OF ARKANSAS /FLORIDA/ LOUISIANA/MINNESOTA/ MISSISSIPPI/TENNESSEE, INC. Date: By: Its: SWORN TO BEFORE ME this _day of , 2012. NOTARY PUBLIC 45 2032276v2 Exhibit A Free Cable Service to Public Buildings 1. ADM1N SERV DEPT,RICHFIELD 6700 PORTLAND AVE APT ASD 2. ELEMENTARY,SHERIDAN 6400 SHERIDAN AVE S 3. FIRE STATION 2,RICHFIELD 6401 PENN AVE S 4. LUTHERAN SCHOOL,MT CALVRY 6541 16TH AVE S 5. SCHOOL,HOLY ANGELS 6600 NICOLLET AVE 6. CITY HALL,RICHFIELD 6700 PORTLAND AVE APT HALL 7. FIRE STATION,RICHFIELD 6700 PORTLAND AVE APT 1 8. PUB SAFETY,RICHFIELD 6700 PORTLAND AVE APT EOC 9. ICE ARENA,RICHFIELD 636 E 66TH ST 10. HIGH SCHOOL,RICHFIELD 7001 HARRIET AVE 11. COMMUNITY CENTER,RICHFIELD 7000 NICOLLET AVE 12. LIBRARY,AUGSBERG 7100 NICOLLET AVE 13. STEM,RICHFIELD 7020 12TH AVE S 14. RDLS DUAL LAN,RICHFIELD ED 7001 ELLIOT AVE S 15. ELEM SCHOOL,CENTENNIAL 7315 BLOOMINGTON AVE 16. JUNIOR HIGH,RICHFIELD 7461 OLIVER AVE S 17. EXTENDED CAMPUS,SEC 7450 PENN AVE S 18. SCHOOL,BLESSED T CATHOLIC 7540 PENN AVE S 19. SCHOOL GARAGE,RICHFIELD 300 W 72ND ST 20. ACADEMY,ZOE 7101 NICOLLET AVE 21. MAINT FACILITY,RICHFIELD 1901 E 66TH ST 22. SPECIAL ED,CENTRAL SCHOOL 7145 HARRIET AVE A-1 2032276v2 Exhibit B Existing Fiber Return Lines m v ��€ i� 6� .. ihTTe Home t ---��aath-:; ._�_ " {`f__�tt 1'1 ..__"`. °.tra l� �- E 64th t �� ate 7::- s 1" _ • te, El,-.,,r"at - gy _ E a �,.� 1 Sar4et Nr ■ as , u . __ k:*. h''''''•*-',...* +t, ev w.. ' font i € it a � Culle- 1. � �yj 3 1 8, ,.+r , ,r ,.�„�.. �C�jth St n 6 t it 5 : 9 c 1,4 p G € Demal Health . .1. f }4J§ 'Cs '\e.nter I i 'gym I I } x .. Cl F tF » ,il� At""9 _ h i --- f- ,ll t -t �EOiih Si-�^ ^.^--� 5 th 1 t a,st s sVc } _ a e` y N B-1 2032276v2 7-5D Exhibit C Franchise Fee Payment Worksheet TRADE SECRET—CONFIDENTIAL Month/Year Month/Year Month/Year Total A la Carte Video Services Audio Services Basic Cable Service Installation Charge Bulk Revenue Expanded Basic Cable Service Pay Service Pay-per-view Guide Revenue Franchise Fee Revenue Advertising Revenue Home Shopping Revenue Digital Services Inside Wiring Other Revenue Equipment Rental Processing Fees PEG Fee FCC Fees Bad Debt Late Fees REVENUE Fee Calculated Fee Factor: 5% C-1 2032276v2 1'5) ORDINANCE NO. AN ORDINANCE REPEALING SECTION 726 OF THE RICHFIELD CITY CODE Whereas, the City Code at Section 726 currently contains a Cable Television Regulatory Ordnance ("Regulatory Ordinance") which governs the provision of cable services by cable operators in the City of Richfield, Minnesota ("City"); and Whereas, on August 13, 2012, the City adopted Ordinance No. granting a Cable Television Franchise ("Franchise") to Comcast of Arkansas / Florida / Louisiana / Minnesota / Mississippi /Tennessee, Inc., ("Comcast") to provide cable services and maintain and operate a cable communications system within the City; and Whereas, the Franchise incorporates all of the key provisions of the Regulatory Ordinance that the City may still enforce under applicable law, thereby eliminating the need to maintain the Regulatory Ordinance as part of the City Code. Now,therefore, the City of Richfield does ordain: Section 1. Section 726 the Richfield City Code is hereby repealed in its entirety. Section 2. This ordinance is effective in accordance with Section 3.09 of the Richfield City Charter. Passed by the City Council of the City of Richfield, Minnesota this 13th day of August, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk 407050v1 CAH RC160-2 RESOLUTION NO. 7-0 RESOLUTION APPROVING SUMMARY PUBLICATION OF ORDINANCE NO. WHEREAS, the City has adopted the above referenced ordinance; and WHEREAS, the verbatim text of the ordinance is cumbersome, and the expense of publication of the complete text is not justified; and WHEREAS, the following summary clearly informs the public of the intent and effect of the ordinance. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield that the following summary is hereby approved for official publication: SUMMARY PUBLICATION ORDINANCE NO. AN ORDINANCE GRANTING A FRANCHISE TO COMCAST OF ARKANSAS/ FLORIDA I LOUISIANA/MINNESOTA I MISSISSIPPI/TENNESSEE, INC. ("GRANTEE" OR"COMCAST") TO CONSTRUCT, OPERATE AND MAINTAIN A CABLE SYSTEM IN THE CITY OF RICHFIELD, MINNESOTA SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF THE FRANCHISE; PROVIDING FOR REGULATION AND USE OF THE SYSTEM AND THE PUBLIC RIGHTS-OF-WAY; AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS HEREIN. On August 13, 2012, the Richfield City Council adopted an ordinance designated as Ordinance No. , the title of which is stated above. This summary of the ordinance is published pursuant to Section 3.12 of the Richfield City Charter. The ordinance grants a cable television franchise to Comcast. The ordinance serves two purposes. First, it is intended to provide for and specify the means to attain the best possible cable service for the public by providing requirements for cable with respect to technical standards, customer service obligations, and related matters. Second, it grants a non-exclusive cable franchise to Comcast to operate, construct and maintain a cable system within the City and contains specific requirements for Comcast to do so. The Ordinance includes the following: 1) requires Comcast to maintain a 750 MHz capacity cable system; 2) imposes on Comcast a franchise fee of five percent (5%) of Comcast's annual gross revenues; 3)establishes a franchise term of ten (10) years; 4) provides a list of schools and public buildings entitled to receive complimentary cable service; 5) requires Comcast to dedicate channel capacity for public, educational and governmental programming and provides capital support of such channels; 6) mandates customer service standards regarding Comcast's provision of cable services; and 7) requires a performance bond and security fund to enforce Comcast's compliance with the Ordinance. Copies of the ordinance are available for public inspection in the office of the City Clerk during normal business hours or upon request by calling 612-8619738. Nancy Gibbs, City Clerk 407059v1 CAHRC160-2 BE IT FURTHER RESOLVED, that the City Clerk is directed to keep a copy of the ordinance in her office at City Hall for public inspection and to post a full copy of the ordinance in a public place in the City for a period of two weeks. Adopted by the City Council of the City of Richfield, Minnesota this 13th day of August, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk 407059v1 CAH RC160-2 1-5/ a3 (1) ( c 0 U W To C cn J _,G) .(/) cil . c CT oce o W E (0)• V ea NI ■ e E 1 ra L o S c. a� U Q o m a, a o U co u a,c u) o c ir= LlL ID W = Xi 4-; a S.. c (0 ca g •: m U _c o U, 0 M -'s 7-S N ,a) V) 1E V RS L IV u_ C W a) z lin (in u) 0 0 U Cn O c (0 a. 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'‘..':-.' 3. :P: .} _ fit:p" _ . , :� a + •°� r y iY I "? . -.,.'-t .,Y 1 t s _ i w._ l4' - � 1 1_.mot�, . . � ; h tt f r.i � r ?n a i1Y5_.._.p, _" t 4 e:''-'4 1L��,, ¢K l s1 :. yp•.C : :.A w v P;i t 3t Yr z :-`-‘1A-,..a t F ,%,,-.":...."1--,,.. „sa..t ._ ,� .>. _: , _ ZS' 3-63 ... Moss & Barnett A Professional Association Memorandum To: Member Cities of the Southwest Suburban Cable Commission From: Brian T. Grogan Date: June 22, 2012 Re: Cable Television Franchise Ordinance Background The Southwest Suburban Cable Commission ("Commission") consists of the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield, Minnesota ("Member Cities"). The Commission administers and enforces the cable franchises on behalf of its Member Cities. On or about January 1, 1997, each of the Member Cities granted a Cable Television Franchise to KBL Cablesystems of the Southwest, Inc ("Existing Franchise"). At that same time the Member Cities each adopted a Cable Television Regulatory Ordinance ("Regulatory Ordinance") to be incorporated into the City Code of each Member City. In 2000, the Commission and Member Cities approved a transfer of the Existing Franchise to Time Warner, Inc. In June of 2005, Time Warner transferred the Existing Franchise to Comcast Communications ("Comcast"). Comcast currently operates the cable systems in each of the Member Cities under authority granted in the Existing Franchise. The initial term of the Existing Franchise ran for fifteen years and was extended by the Member Cities to now expire on July 31, 2012. In 2009 Comcast requested renewal of the Existing Franchise and the Commission has since been engaged in informal renewal negotiations with Comcast in an effort to reach mutually acceptable terms for a new franchise. In response to Comcast's request for franchise renewal, in 2010 the Commission retained an outside consultant to draft a Needs Assessment Report outlining the future cable-related needs and interests of the Member Cities for the next franchise term. The Commission also prepared a draft franchise which incorporated the findings of the Needs Assessment. The draft franchise incorporated most of the key provisions of the t Member Cities of the Southwest Suburban Cable Commission 7402/ June 22, 2012 Page 2 Regulatory Ordinance in an effort to consolidate all cable regulations in a single franchise with Comcast. Commission Goals The Commission's primary goals during renewal negotiations were: 1. Incorporate the provisions of the Regulatory Ordinance into a renewed franchise — resulting in one governing document addressing cable regulations in each Member City. 2. Ensure that the provision of each Member City's Code is incorporated into the renewed franchise so that the same right-of-way (ROW) regulations governing all right-of-way users will apply to Comcast. 3. Streamline regulation in the Comcast Franchise — eliminated unnecessary provisions that are no longer applicable to cable providers in today's regulatory environment. 4. Address digital migration of local government and educational channels. 5. Increase the level of capital support for local channels. 6. Maintain the 5% franchise fee as consideration for use of the City's ROW. 7. Eliminate the Comcast public access studio in Eden Prairie due to limited use by residents and cable subscribers and redirect the resources to other local programming options to be determined by the Member Cities. 8. Improve customer service standards applicable to Comcast and enforceable by the Commission and the Member Cities. 9. Renew for a 10 year term. 10. Adopt enforcement procedures and security to ensure compliance. Negotiation Process Throughout 2011 and the first half of 2012 representatives of Comcast and the Commission negotiated the terms of a new model Cable Television Franchise Ordinance ("Model Franchise"). The Model Franchise combines into a single document the provisions of the Existing Franchise and the Regulatory Ordinance. The Model Franchise is the result of extensive negotiations between the Commission and Comcast and, as is the case of many negotiations, certain concessions were made by both Comcast and the Commission in an effort to reach mutually acceptable language for a ten year franchise. On May 30, 2012 the Commission adopted Resolution 2012-1 (attached hereto) recommending that the Model Franchise be adopted by each Member City. Member Cities of the Southwest Suburban Cable Commission June 22, 2012 Page 3 All five Member Cities are taking action on the Model Franchise simultaneously. Any proposed revisions from one of the Member Cities may require the Commission to seek agreement not only from Comcast but also from the other four Member Cities which may have already taken action to adopt the Model Franchise. This point is raised not to suggest that further revisions are impossible, but to emphasize the complexity of the approval process and the steps which must be undertaken to complete the approval process prior to the expiration of the existing extension resolutions - July 31, 2012. Final Results of Franchise Negotiations, 1997 2012 5% Franchise fee Same 5% fee "Gross Revenue"definition Stronger definition No PEG capital support fee Comcast studio closed Comcast run studio $.60 - $.65 /sub/mo PEG Fee paid to City - $.25/sub/mo paid to Comcast to support studio 15 year term 10 year term 4 PEG channels 3 PEG channels Digital migration addressed Option for 1 high definition channel Complementary drops at public Same + up to 3 digital boxes per site buildings Maintain fiber return feeds Obligation completed, will be maintained Performance bond $100,000 per City Security fund $10 000 per City— upon notice of violation Reporting/compliance Obligations from Regulatory Ordinance merged into franchise and strengthened ROW management Operator held to City Code provisions Side Letter During renewal negotiations Comcast asked to pull two commitments out of the Model Franchise and place them in a side letter (see attached). This side letter has been included in this packet of documents for the City's review and consideration. If acceptable as drafted, Comcast will execute and forward a copy of the side letter to the Commission at the time of acceptance. End Of Memorandum 2010360v2 -��11��-R_kgn,��, - . . ' ' ••••• Moss & Barnett A Professional Association MEMORANDUM To: Rick Getschow, Scott Neal, Jim Genellie, Patty Latham and Steve Devich From: Brian T. Grogan, Esq. cc: Ron Case, Southwest Cable Commission Chair Date: August 1, 2012 Re: Public Access Transition - Southwest Suburban Cable Commission I understand many City representatives have received questions from public access producers regarding the proposed transition of public access programming in the Southwest Suburban Cable Commission ("Commission"). Several cities have requested a written reply that summarizes the franchise EPG requirements and responds to the many questions that have been circulated. Let me begin by summarizing exactly what the proposed Franchise requires for PEG programming. 1. 3 PEG channels, including the option for each City to move at least one of these PEG channels into a high definition format at such time as the technology dictates. One of these channels (today channel 16) will be for governmental programming and will be received by subscribers in each member city. This is known as"narrowcasting"because the cable operator can limit the distribution of the channel within a given jurisdiction as opposed to the franchise area of the entire Commission. The other two PEG channels (public access channel 15 and either channel 14 or 17 —the educational access channels) will have their programming carried throughout the five member cities. However, the system is configured to allow for narrowcasting of these channels as well if the member cities chose to dedicate the channel capacity for different PEG uses—each City can decide that. There is no fear that Comcast will seek to exercise editorial control over these PEG channels because federal law at 47 U.S.C. 631(e) prohibits such control. 2. The PEG access"studio"located in Eden Prairie and operated by Comcast will be closed effective August 31, 2012. Comcast and the Commission recently agreed to extend the closing date through August to further accommodate public access producers and provide additional notice to impacted producers. 3. Comcast will continue to handle the"playback"obligations for PEG at the Eden Prairie facility for a 12 month transition period after which the Commission and member cities will take on that responsibility. Michelle Glynn, Comcast's facility manager at the Eden 4800 WELLS FARGO CENTER I 90 South Seventh Street Minneapolis, MN 55402 P:612-877-5000 F:612-877-5999 W:moss-barnett.com 2071258v1 1'61 August 1, 2012 Page 2 prairie facility will continue in her current position for the duration of the 12 month transition period. 4. A$200,000 PEG capital grant will be paid by Comcast to the Commission which will be used by the Commission to take over the"playback"responsibilities for PEG programming. The $200,000 capital grant will be utilized for the purchase of equipment and necessary consulting assistance to address playback issues. The Commission will determine how best to use these funds—each member city has a staff member and elected official on the Commission to help make that decision. 5. A $.60 per subscriber, per month fee will be collected and paid by Comcast to each member city. This money is earmarked for PEG capital purposes and cannot be used as part of the member cities'general revenue fund in the same way that the 5% franchise fee can be used. 6. During the 12 month transition period, $.13 of this fee $.60 PEG fee will be retained by Comcast to finance the ongoing "playback"responsibilities during the transition period and to fund the position held by Michelle Glynn. 7. During the second half of the franchise term the PEG fee will increase from $.60 to $.65 to keep pace with anticipated inflation and increased costs. - By way of comparison, Comcast, under the franchise held for the last 15 years, collected $.25 per subscriber, per month from subscribers in all five member cities to finance the Eden Prairie "studio"and related playback obligations. The key distinction under the new franchise is that these PEG funds will now go directly to the member cities with each City Council having the discretion to utilize these funds for local programming in the manner that best fits each member city's needs. As mentioned above I have confirmed with Comcast that the public access"studio"in Eden Prairie will allow producers to utilize the studio for production through the month of August 2012. Originally the proposal had been for the studio to close August 1st; however, two of the five cities have not yet taken final action on the proposed franchise and therefore Comcast is willing to accommodate producers until all five cities have reached a decision regarding the proposed franchise. Comcast has informed all of the public access producers for which they have contact information about the closing of the public access studio and Comcast has been working with the producers to arrange for scheduling modifications to accommodate their programs. I anticipate that if the franchise is approved by all five cities, the Commission will quickly move forward to develop a transition plan to accommodate the"playback"needs of the member cities and address the interests of the public access producers. Michelle Glynn has personally spoken with many of the public access producers, in particular the small number of active public access users who seek to use the studio to produce their regular programs. Ms. Glynn has explained that nothing will change for public access playback over the 12 month transition period through August of 2013. The exact same functionality for 2071258v1 August 1, 2012 74�p Page 3 "playback"of public access programming will be available and Ms. Glynn's office will remain at the Eden Prairie facility. Ms. Glynn will have access to the same headend technicians that she has always had and there will be no impact on the technical quality of the public access programming to be carried on Comcast's system. The exact same playback rules that are in place today will remain for the one-year transition. This includes Comcast's services to encode playback programming even when Ms. Glynn is away from her office. Because there is no immediate change in the playback facilities, there is no immediate need to communicate with producers who submit programming for playback. All producers that use the"studio"have been informed of the closing of the studio, pending action by the five member cities. What is clearly changing is that the "studio,"if the franchises are adopted by all five cities, will close at the end of August 2012. As referenced above, the Commission will immediately begin working on a transition plan to address policy recommendations for the five cities to consider regarding"public"access programming. It is possible that all five cities may agree on one plan for public access programming or some cities may determine to approach public access in different ways. I anticipate a meeting of the Commission's Managers'Committee in early September to begin that process. I have attached hereto contact information for a number of nearby public access studios, several of which have production facilities that may be available for the producers displaced by the closing of the"studio." This is not the only option being explored by the Commission. If the proposed franchise is approved by all five member cities, then the Commission will have in place the funding model to allow for decisions to be made regarding the level of financial resources to be dedicated to public access programming and studio productions. I hope this email is responsive to the questions that have been raised. If I can provide any additional information please feel free to contact me. End of Memorandum 2071258v1 . �Tl�,,-;RTI�� _� � _ �, .. �, 4W 11 , h I & , . mi�.".- ��..;_ " ,- �' ft'j. F.; ,,.`�! _.,'.`��-Y!�'�.'_";,-f ��, . � lrt_1,A_ 7,21 z A; *1 -,.!I' .�,:"� Z , .1. - "'._1 � X-,4 �k .-I 1-411,11i ... - Vpe'L K;--", " ' , ,� ,�-e. '? 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Q, � .., -Z .- ... t _ �o ��lffl 3. . 11-1 ... � � . I 1� --- - � P, .. . 1� 11 _. �i:O-,- - I �� - -11 t, 6 . - -It - : '. � . �,,��',' o - . ; , �� 1. I , 1. .1 .. ... I . : I . 11 ; f. a . - . . , � I - I RESOLUTION NO. I RECOMMENDATION OF THE SOUTHWEST SUBURBAN CABLE COMMISSION REGARDING THE ADOPTION OF A CABLE FRANCHISE TO COMCAST OF ARKANSAS/ FLORIDA/LOUISIANA/MINNESOTA/MISSISSIPPI/TENNESSEE, INC. Recitals 1. The Southwest Suburban Cable Commission ("Commission") consists of the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield, Minnesota ("Member Cities"). 2. The Commission administers and enforces cable franchises on behalf of its Member Cities. 3. Comcast of Arkansas / Florida / Louisiana / Minnesota / Mississippi / Tennessee, Inc. ("Comcast") currently operates a cable system in each of the Member Cities under cable television franchises granted on or about January 1, 1997("Existing Franchises"). 4. In 2009 Comcast contacted each of the Member Cities seeking renewal of the Existing Franchises. 6. The Commission's legal counsel, the law firm of Moss & Barnett, a Professional Association,assisted the Commission in conducting the franchise renewal process. 7. Extensive informal franchise renewal negotiations between Comcast and the Commission have been completed and a new model Cable Television Franchise Ordinance("Model Franchise") has been finalized. 8. The Commission finds that the Model Franchise will benefit the Member Cities and will protect the rights and interests of residents and cable subscribers in each of the Member Cities. NOW THEREFORE,the Commission hereby resolves as follows: 1. The May 30,2012 Model Franchise will protect the Member Cities and its residents and cable Subscribers regarding the provision of cable services by Comcast. 2. The Commission recommends that each Member City take action to adopt the Model Franchise. PASSED AND ADOPTED this day of y , 2012. 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't,' ,t!: 3r1'.i7x 'Rim' .,, , .x4 7,7° (to appear on Comcast letterhead) July ,2012 Brian Grogan Attorney, SW Suburbs Cable Commission Moss&Barnett 4800 Wells Fargo Center 90 South Seventh Street Minneapolis,MN 55402 Dear Mr. Grogan: The purpose of this letter agreement is to set forth commitments between Comcast of Arkansas/ Florida / Louisiana / Minnesota / Mississippi / Tennessee, Inc., a Delaware corporation ("Comcast") and the Southwest Suburban Cable Communications Commission ("Commission") consisting of the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota (hereinafter collectively the "Cities") that are in addition to the obligations contained in the Franchise Agreement, to be adopted by the Cities and executed by Comcast to take effect on August 1, 2012 (hereinafter the "Franchise"). These items set forth herein: 1) have been negotiated in good faith and mutually agreed to by the parties as part of the informal franchise renewal process pursuant to 47 U.S.C. 546(h);2)are provided by Comcast in consideration of the grant of the Franchise in each of the Cities; and 3) specifically relate to unique community needs that exist in the Cities. 1. Use of$200,000 PEG Capital Grant Comcast acknowledges and understands that some or all of$200,000 PEG Capital Grant provided for in the Franchise may be used to lease facilities to house Access operations, or to pay for installation, set up and training related to PEG equipment. Without determining whether these activities constitute"capital" or"operating" expenditures for franchise compliance purposes, and subject to the Indemnity provisions of the Franchise, Comcast agrees not to pursue any action against the Commission or the Cities asserting that such expenditures violate Section 7.16(a) of the Franchise. 2. PEG Fee from residential multiple dwelling units With regard to the monthly PEG Fee referenced in Section 7.16(b)of the Franchise,Comcast will collect the PEG Fee from residential multiple dwelling units(i.e. apartments and condominiums) using an "equivalent billing unit - EBU" calculation as that term is commonly defined under industry standards. The exact PEG Fee for multiple dwelling units may vary slightly from location to location based upon individually negotiated contracts. PEG Fees shall not be collected from free and/or complimentary service accounts. Mr. Brian Grogan Attorney, SW Suburbs Cable Commission July ,2012 Page Two The terms and conditions of this letter agreement are binding upon the Cities and Comcast and their successors and assigns. Enforcement of the terms of this letter agreement shall be consistent with the enforcement procedures set forth in the Franchise. 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N 0 s •0 O .c W IL •.a C.) 0- AGENDA SECTION: PUB.HEARING AGENDA ITEM# 8 REPORT# 144 STAFF REPORT RICHFIELD END CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: MELISSA POEHLMAN, CITY PLANNER NAME.TITLE DEPARTMENT DIRECTOR REVIEW: ,r��-e� _ 7 _--- v REVIEWED BY CITY �„r--° o.-{'" 'r..., , MANAGER: �/! - , • ITEM FOR COUNCIL CONSIDERATION: Public hearing to consider a request for a Conditional Use Permit for a full-service restaurant at 6439 Lyndale Avenue. I. RECOMMENDED ACTION: Conduct and close a public hearing and by motion: Approve a Conditional Use Permit to allow a full-service restaurant at 6439 Lyndale Avenue. II. BACKGROUND The owner of 6439 Lyndale Avenue has requested permission to operate a full- service (food and intoxicating beverage service) restaurant. The proposed restaurant would occupy approximately 2,000 square feet of the existing strip mall and the primary changes would be internal to the building. A tenant has not been determined, but approval of this Conditional Use Permit will allow the owner to more effectively market the site. The applicant is aware of the fact that there are Building and Health Code requirements that will have to be addressed once a tenant is selected and interior specifics are provided. 081312 - 6439 Lyndale CUP III. BASIS OF RECOMMENDATION A. POLICY Full-service restaurants with alcohol service are conditionally permitted in the General Commercial (C-2) District so long as the lot abuts an arterial or collector street. This requirement is met (lot abuts Lyndale Avenue). In order to grant a Conditional Use Permit, the Council must find that all of the following conditions will be met: a) The proposed use is consistent with the goals, policies and objectives of the City's Comprehensive Plan. The 66th Street and Lyndale Avenue area is designated as "Mixed Use" in the Comprehensive Plan. The stated intent of this designation is "to focus on creating a city center in Richfield that would serve as a `downtown.'" One of the ways in which this is to be achieved is through providing additional commercial opportunities in the area. b) The proposed use is consistent with the purposes of the Zoning Code and the purposes of the zoning district in which the applicant intends to locate the proposed use. The General Commercial (C-2) District is intended to provide space for a wide variety of retail and service businesses. The "City expects [these businesses] to have an attractive appearance from all sides, to be compatible with nearby residential properties, to minimize adverse effects on surface waters, and to not significantly degrade the level of service or safety on nearby roads." c) The proposed use is consistent with any officially adopted redevelopment plans or urban design guidelines. The mission of the Lakes at Lyndale Plan is to make this area "Richfield's thriving urban center"through "upgrade[s to] commercial properties..." The proposal will utilize currently vacant space and includes additional landscaping that will improve the look of the existing building. d) The proposed use is or will be in compliance with the performance standards specified in Section 544 of this Code. This site is considered legally nonconforming. The applicant has worked to make improvements in order to approach the intent of the Code where possible and practical. Staff recommends that approval be conditioned upon: 1) Combination of the parcels located at 6439 and 6463 Lyndale Avenue or execution of a permanent parking agreement between the two. The submitted Parking Capacity Study completed by Spack Consulting (attached) is based on shared parking between the two parcels. 2) Final approval of trash enclosure plans by the Community Development Director. 3) Screening of all mechanical and utilitarian items from public areas. 4) Restriping of parking stalls and crosswalks. 5) Provision of both accessible parking spaces and routes in accordance with the Minnesota Building Code. 6) Final approval of landscaping plans by the Community Development Director. 7) Installation of all new utilities must be underground. 8) Odor control is required. e) The proposed use will not have undue adverse impacts on government facilities, utilities, services or existing or proposed improvements. The submitted plans have been reviewed by the Public Works Department and no undue adverse impacts are anticipated. t) The use will not have undue adverse impacts on the public health, safety or welfare. No undue adverse impacts are anticipated. g) There is a public need for such use at the proposed location. The rehabilitation/re-use of vacant buildings is an integral part of enhancing Richfield's "downtown." h) The proposed use meets or will meet all the specific conditions set by this Code for the granting of such conditional use permit. This requirement is met. B. CRITICAL'TIMING ISSUES • 60-DAY RULE: The 60-day clock `started' when a complete application was received on July 9, 2012. A decision is required by September 7, 2012 OR the Council must notify the applicant that it is extending the deadline (up to a maximum of 60 additional days or 120 days total) for issuing a decision. • If approved, the applicants must record the Conditional Use Permit with Hennepin County. Proof of recording is required prior to the opening of the business. • Conditional Use Permits expire one year from issuance if the use for which they were granted has not commenced or building permits issued and substantial work performed. C. FINANCIAL • The required application fee has been paid. D. LEGAL • A public hearing to consider the proposed request was held before the Planning Commission on July 23, 2012. • Notice of the public hearing was sent to properties within 350 feet in accordance with State and Local requirements. • One resident spoke in favor of the proposal. • The Planning Commission recommended approval of the proposal (6- 0). • Ordinarily a public hearing is only held before the Planning Commission. Due to a publishing error, this meeting has also been published as a public hearing for the City Council. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATIONS) • Deny the Conditional Use Permit with a finding that it does not meet the necessary requirements. V. ATTACHMENTS • Resolution • Plans • Parking study • Planning &zoning maps VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Bruce Hinks, HNC Properties LLC RESOLUTION NO. RESOLUTION APPROVING A CONDITIONAL USE PERMIT FOR A FULL-SERVICE RESTAURANT AT 6439 LYNDALE AVENUE WHEREAS, an application has been filed with the City of Richfield which requests a conditional use permit to a full-service restaurant with a floor area of 1,980 square feet at property commonly known as 6439 Lyndale Avenue, property legally described as: Lots 4, 5, 19, 20 and all of Lot 18, except the Northwesterly 25 feet of said Lot 18, Block 6, Lyndale Oaks; together with those parts of the vacated alleys in Block 6, Lyndale Oaks described as follows: Beginning a the most Northwesterly corner of Lot 19, said Block 6, thence Northeasterly along the Northwesterly line of said Lot 19 and its extension to the Northerly line of Lot 5 in said Block 6; thence Easterly along said Northerly line 114.28 feet, more or less, to the Northeasterly corner of said Lot 5; thence Westerly passing through the Southwesterly corner of Lot 6 in said bock 6 to the centerline of the vacated alley adjoining the Northeasterly line of Lot 18 in said Block 6; thence Northwesterly along said centerline to its intersection with the Northeasterly extension of the Southeasterly line of the Northwesterly 25 feet of said Lot 18; thence Southwesterly along said extension to the Northeasterly line of said Lot 18 thence Southeasterly along Said Northeasterly line to the most Easterly corner of said Lot 18; thence Southwesterly along the Southeasterly line of said Lot 18 to the Southerly corner of said Lot 18; thence Southeasterly to the point of beginning, according to the recorded plat thereof, Hennepin County, Minnesota. WHEREAS, the Planning Commission of the City of Richfield recommended approval of this requested conditional use permit at its July 23, 2012 meeting; and WHEREAS, this requested conditional use permit meets the requirements necessary for issuing a conditional use permit as specified in Richfield's Zoning Code, Section 547.09; and WHEREAS, this requested conditional use permit meets the requirements necessary for issuing a conditional use permit for a full-service restaurant with intoxicating beverage service as specified in Richfield's Zoning Code, Section 534.07, Subdivision 6; and WHEREAS, the City has fully considered the request for approval of the conditional use permit; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Richfield, Minnesota, as follows: 1. A conditional use permit is issued to allow a full-service restaurant with a floor area of 1,980 square feet, as described in City Council Letter No. , on the Subject Property legally described above. 2. This conditional use permit is subject to the following conditions in addition to those specified in Section 547.09 of the City's Zoning Ordinance: • 6439 and 6463 Lyndale Avenue must be combined into a single property or a permanent parking agreement between the two must be executed and proof provided to the City; • Odor control is required; Y-J • Final approval of trash enclosure plans by the Community Development Director; • Final landscaping plans shall be submitted to and approved by the Community Development Director; • Final site plans addressing accessible parking spaces and accessible routes be submitted to and approved by the Community Development Director and Building Official; • All parking stalls and crosswalks must be restriped; • All mechanical and utilitarian items must be screened from public areas; • Any new utilities must be installed underground; • Sign permits must be applied for separately. This approval does not constitute approval of any signs; • That the recipient of this conditional use permit record this Resolution with the County, pursuant to Minnesota Statutes Section 462.36, Subd. 1 and the City's Zoning Ordinance Section 546.05, Subd. 7. • Prior to the issuance of an occupancy permit, the Developer shall: a) Submit a copy of the recorded conditional use permit; and b) Submit a surety equal to 125% of the value of any landscaping improvements not yet complete. 3. This conditional use permit shall expire one year after it has been issued unless 1) The use for which the permit was granted has commenced; or 2) Building permits have been issued and substantial work performed; or 3) Upon written request of the applicant, the Council extends the expiration date for an additional period not to exceed one year. Expiration is governed by the City Zoning Ordinance, Section 547.09, Subdivision 9. 4. This conditional use permit shall remain in effect for so long as conditions regulating it are observed, and the conditional use permit shall expire if normal operation of the use has been discontinued for 12 or more months, as required by the City's Zoning Ordinance, Section 547.09, Subd. 10. Adopted by the City Council of the City of Richfield, Minnesota this 13th day of August 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk P C`ys it t.6 N-' ,$ Ea IhFIftp 1 ,, : c)._.„ ,Egg p.lg.z;.. 'z' $sp. lip■ 0 ,i='" "� aCo9t. %I��;44: l''''. i ' 'f !Y ,. °�r2,x ,,,,.‘,' te, x -. l'...f'■ /,., F,4 Al* nY oz , ,Y'�,( s f9u`.,+yn QG 9 I Si 11. ; ��y ,� � � #19/0; HARRIET Al ,, ® ttW '10 - fir.'4'`z '4' �„ t1 .< ® l Pang co -,:',. ''' -- - --- ;,..e , ,t--% )r ,, 0 IA 4) N,„„,.. , c, II; x '`.. I ¢ Ty PRUJ6c6 ." ' wn n ii6u� -r i 65th & LYNDALE SHOPS tlfa 6.61.12 Kroll �I ii i :,sue '0612 &Associates gura:C:"' Improvements = ..` Architecture ai• 111.3-i O 6665 LyMab Aw.6 SITE PLAN REVIEW M __-__�_ µpm...In MOM ... EiB'� w'cnt4a.■M 55423 4112.06.12 11._!2622— 612.925.36.30/)16.36.1606 �� i i�- �_" eo 1 ...,.---firz- 1 if flit z ill {,', aC.v�P'c �tt a s a gs sgI y �� a�;, G % 3 3 .� _ 411014‘11 0 gyp. �' ' d�� :'6 y,,; F i .q4. ..i.:, 4',f a'i] ., t7 o 1 FA•V' r'`tA } �C r ; " z A • • `' may`'' n . )r ;:t 4-�® ''ms`„1 'i} if I Z r, ;r �r '. 4y �1�� ,ii` HARRIET A�ji yz fir m (---- s, ._ 1 ice,`: j V � . B N .i` o is r i s } 1 MO-CC, °616 ■■ ■■ ■ 65th & LYNDALE SHOPS _ _ _ 5.°'•'� ■■ ■ii i■i Kroll ■■' ■ ■-■■■■ "° ∎=orir rre: 7.06.19 &Associates ii■iii■iiiii i°' 'm`°”"'"' ArChitectUre ■ i■ ■i■ ■ ' — Improvements SITE PLAN REVIEW __ �6.an•,15.. x,016 I iiiii I��1 �s9 m�woi i ■ ■ 11:666.1d.Lyn dole 55423 s. finl 55,]3 x•.'/.90.,1 m..,„“ __ 612.925.3630/7,3.361.1699 ■ . ■■ THE TRAFFIC STUDY COMPANY Technical Memorandum To: Bruce Hinks From: Mike Spack, P.E., P.T.O.E. Date: February 15, 2012 Re: Parking Capacity Study for 65th & Lyndale Shopping Center A 2,100 square foot restaurant is proposed to be built within the existing shopping center building located on the northeast corner of 65th Street & Lyndale Avenue in Richlfield, MN. The purpose of this study is to determine if the existing parking lot is adquate to accommodate the increased parking demand. Results The 65th & Lyndale shopping center currently has 97 usable parking stalls for customers and employees. The peak parking demand on a typical weekday at the shopping center with the proposed restaurant fully operational is forecast to be 80 parked vehicles. Meaning approximately 83% of the available parking stalls will be occupied during the peak parking demand, leaving 17% of the site's parking stalls unoccupied at the peak. Based on the data collected and the forecasted parking demand, there is adequate parking on site to accommodate the proposed restaurant. Parking Forecasts The parking forecasts were prepared by collecting existing parking usage data at the shopping center and then adding the forecast parking demand for the proposed restaurant to the existing parking data. To collect the existing parking data; the parking lot was divided into four zones (as shown in Figure 1) and a visual count was made every half hour during the midday and evening peak periods to determine how many cars were parked in each of the four zones. The data was collected on Friday, February 10, 2012. Friday was selected as the day with the highest potential parking demand based on preliminary parking usage data collected by the shopping center owner on a Tuesday, Friday, and Saturday. The four zones contain a total of 97 usable parking stalls (there are approximately ten more stalls on site that are either poorly marked or occupied by trash cans). Detailed existing parking data by zones and in total is contained in Figure 1. The most stalls occupied (43 vehicles parked) occurred at 1:00 p.m., which represents 44% occupancy of the available parking. A parking generation analysis was performed for the proposed redevelopment based on the methods and rates published in the ITE Parking Generation Manual, 4th Edition. The Manual is a compilation of data collected at existing facilities throughout the United States. The 85th percentile peak period parking demand (meaning the peak rate at 85% of sites surveyed are less than this rate, it's more conservative than using the average peak rate) for the proposed .,t.3_<.2 6 8 k'te Tr l woa.d n l i ttenue Smith •'St 1,941s # s443. . 9V``-4* 0 1, 5.'' .Sp4 A c.k � - . », r s r} /T Spack Consulting 2 of 2 65`n&Lyndale Shopping Center Parking Study 2,100 square foot high-turnover, sit-down restaurant is 37 parked vehicles (ITE Code 932 at 17.40 parked vehicles per 1,000 sq ft). Based on the descriptions in the Manual, it is assumed the high-turnover, sit-down restaurant has no parking during the morning peak, but has peak parking demand during both the midday and evening peak periods. Utilizing midday and evening peak periods assures the most conservative approach for an urban or suburban location and for a restaurant with or without a bar. These forecasts along with the surplus parking available after redevelopment are shown in Figure 1. Figure 1 shows there is adequate parking provided to accommodate the parking needs of the proposed redevelopment. Recommendations As a result of the proposed restaurant location in the northeastern portion of the building, it is assumed that all customers will utilize parking zone A. Currently, parking zone A has 42 usable stalls and approximately 7 unusable stalls (due to lack of pavement markings and the locations of several trash containers). Although the shopping center's parking capacity should be adequate for the proposed development, more spaces could be added to zone A by consolidating trash containers in a non-parking area and repainting the parking lot to be more efficient. Also, employees could be encouraged to park in the underutilized zone B. No actions are recommended at this time because the site should have ample parking to accommodate the proposed restaurant; however these measures are identified as ways to maximize the site's parking capacity in case there are future parking problems. V N L. C E >+ 7 a 0. ' p C) 0 O co tf) c— ti (c) to co O) O C ). = O N N N (V r N CO CO (N J m O Q CC 'O = d a) to c C� () V a) o4; Q g $ 4 LL C Y L2 C ,a L'�i.5 ` " i 0) Ld O as co co co CO CO CO CO CO 111 ``! (E�- t { $ d CL •10 1j 03 CD 0- pi�, Q bA 1, o C N c j ,5 < r,_ > Q) 47, Q O N CO CO O CO r— v - „ a) V O ,y CO co tiMti r �, , C) uJ i?- '1 i C al ▪ (� U) a) Q. L V 'C • Q .Q t N _ N/1��'1 r cn .� > Y M M M N rn l�J t - a 0 ' 15 , to • 0 tm t" J Q ° co is-) co c-- -r c��'i1, n C • ) +�+ Q� N © fn ii a) • = ,L 6 m V' CO N CO CO CO .-- r- d- r- a i i - Tip Q G) f6 Q N-- x— co M rn r r O M M M (` _,,-,-'''';''''' 7:'...,.C1J was 5 r . �i/ r..y L N o c 0 0 0 O O 0 0 0 0 0 Q i- O M O M O M O M O M t �• � CV NM 6 � � ao � U c Cn . u) L t6 a 6439 LYNDALE AVENUE - 7/12 Surrounding Zoning 1 iI MR-2 R R R I �I 6, STREET WEST — R e - �- R PMR - -PMR R R R PMR R PMR ----- --- - R R R R It R - - PC-2 R '9<� # * 354 C-2 R R R , M- 00011.10, MR-2 M 2 I 65TH STREET MR-3 ` 4 C-2 PC-2 il P 2 PMR 0 60 120 240 360 48Feet M 6439 Lyndale Ave R -Single-Family Residential MR-2 - Multi-Family Residential N MR-3 - High Density Multi-Family Residential A PMR - Planned Multi-Family Residential C-2 -General Commercial PC-2 - Planned General Commercial I:\GIS\Community Development\Staff\Melissa\Projects\Zoning Cases\6501 Lyndale -Z.mxd ' 6439 LYN DALE AVENUE - 7/12 0 Comprehensive Plan Designation � _ MHD LDR LDR LDR 6, STREET WEST MIXED LDR - iMIXED - --------- MIXED MIXED LDR LDR LDR MIXED — MIXED LDR LDR LDR --LDR— LDR IXED MIXED do DR -99, ' S5)VC- '9/�� - - — Lp . ■ 1 MIXED 4' MIXED MIXED MIXED MH MI D �/ / — e MIXED MIXED M • MIXED 65TH STREET MIXED i I MIXED 4 MIXED 1 i MIXED MI D 111, MIXED I • 0 60 120 240 360 480 p/ Feet M 6439 Lyndale Ave MIXED - Mixed Use MHD - Medium-High Density Residential N LDR - Low Density Residential I:\GIS\Community Development\Staff\Melissa\Projects\Zoning Cases\6439 Lyndale -CP.mxc AGENDA SECTION: PUB.HEARING AGENDA ITEM# 9 REPORT# 145 STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2012 CHRIS LINK, REPORT PREPARED BY: OPERATIONS SUPERINTENDENT NAME,TITLE DEPARTMENT DIRECTOR ,� REVIEW: .: REVIEWED BY CITY � tet MANAGER: ��; ��1 ITEM FOR COUNCIL CONSIDERATION: Public hearing regarding the special assessment roll for removal of diseased trees from private property for work ordered in 2011. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: Approve the attached resolution adopting the assessment for removal of diseased trees from private property for work ordered from January 1, 2011 through December 31, 2011. II. BACKGROUND The City of Richfield has an aggressive diseased tree removal policy. This policy includes time limits for diseased tree removals. This is needed to maintain a healthy and attractive environment. Notification to Property Owners The following procedures were used to notify the property owners listed on the assessment roll. • At time of marking for removal, paperwork is left at the property which includes: o Removal deadline o Why the tree was marked for removal 08132012treeassess.doc o Assessment Information o Information regarding private contractors o Card informing City of owners removal plans o City Staff contacts for more information • If the tree becomes hazardous or is past the removal time limit an additional deadline letter is sent to the property owner. • The letter is sent to the last known owner, obtained from Hennepin County Property Records and verified with Richfield Utility Billing records. Occupied Properties Property owners of diseased trees have four options available for private tree removal: 1. Remove the tree themselves. 2. Hire and pay their own contractor. 3. Hire the City's contractor and pay for the removal. 4. Request the cost of the tree removal be assessed against their property tax. In the period from January 1, 2011 through December 31, 2011, twenty (20) property owners chose the fourth option and requested that the cost of the tree removal be assessed. Vacant Properties In cases where the property is vacant and no owner can be found, removals must be ordered when trees have passed the removal time limit or become hazardous. Removals were ordered at one property after repeated attempts were made to contact the property owner. This property was: • 7229 Aldrich Ave Total Assessment The total amount to be assessed for the 2011 diseased tree removal is $43,701.52. On July 10, 2012 City Council scheduled this public hearing regarding this assessment roll. Appeal of Mr. Lester Dale Hahs, 7021 Park Ave. Mr. Lester Dale Hahs is expected at the August 13 Council Meeting. He will be appealing the assessment to 7021 Park Ave. (see attached letter). Mr. Hahs believes that the tree was on City property and the payment is too cumbersome. City staff verified that the tree was on private property. Also staff received postcard from Mr. Hahs requesting removal and disposal of tree to be assessed to his property taxes (copy of postcard attached). III. BASIS OF RECOMMENDATION A. POLICY • Most work has been done with prior approval from the affected residents. • Forced removals are sometimes necessary consistent with Richfield's Diseased Tree Removal Policy. • The proposed assessment was properly filed with the City Clerk. • The Public Hearing Notice was published in the official newspaper on July 26, 2012. • Notices of the assessment hearing were mailed to the owner of each parcel described in the assessment roll on July 11, 2012, meeting the two-week notification requirement. B. CRITICAL TIMING ISSUES • On or before September 1st of each year, the City shall list the total unpaid charges for current services against each separate lot or parcel to which they are attributable under Section 825 of the City Code. C. FINANCIAL • The costs to be assessed for the removal of diseased trees on private property for work ordered during the period January 1, 2011 through December 31, 2011 have been determined to be $43,701.52. • City ordinance provides that special assessments for current services may be certified to the County Auditor for collection along with taxes. This certification may provide that the assessments be completely paid in the first year or in annual installments. It is past practice such payments be due and payable over a five-year period due to the increased cost of removals. • No interest will be charged if the entire assessment is paid before September 12, 2012. After that date, the City has the right to charge interest on the amount assessed in that the City provided the funds for the initial expense. It is recommended that the interest rate be established at five percent (5%). D. LEGAL • No legal issues are apparent at this time. The City Attorney will be in attendance at the Council meeting should a legal question arise. E. ENVIRONMENTAL CONSIDERATIONS • None. IV. ALTERNATIVE RECOMMENDATION(S) • Council may revise the special assessment roll as deemed necessary following the public hearing. V. ATTACHMENTS • Resolution • Assessment Roll • Notice of Assessment Hearing mailed to residents • Mr. Hah's letter of appeal to be presented at Public Hearing • Copy of postcard from Mr. Hahs VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Lester Dale Hahs - 7021 Park Ave • Residents on assessment roll R-I RESOLUTION NO. RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT FOR REMOVAL OF DISEASED TREES FROM PRIVATE PROPERTY FOR THE PERIOD OF JANUARY 1, 2011 TO DECEMBER 31, 2011. WHEREAS, costs have been determined for the removal of diseased trees from private properties in the City of Richfield and the expenses incurred or to be incurred for such work ordered during the period of January 1, 2011 through December 31, 2011 amount to $43,701.52. Address PID # Amount 6301 Bloomington Ave. S. 26-028-24-11-0032 $1,984.59 6309 Wentworth Ave. S. 27-028-24-21-0058 $2,225.96 6319 Nicollet Ave. S. 27-028-24-12-0018 $935.16 6330 Blaisdell Ave. S. 27-028-24-21-0077 $1,815.60 6404 Humboldt Ave. S. 27-028-24-24-0002 $2,038.23 6417 14th Ave. S. 26-028-24-13-0070 $493.83 6438 Morgan Ave. S. 28-028-24-23-0052 $2,261.00 6612 5th Ave. S. 27-028-24-41-0026 $1,496.25 6618 Humboldt Ave. S. 28-028-24-31-0082 $1,469.53 6749 Lyndale Ave. S. 27-028-24-32-0054 $1,335.93 6812 Harriet Ave. S. 27-028-24-33-0094 $1,491.13 6814 Oliver Ave. S. 28-028-24-33-0039 $4,221.56 6815 VI Ave. S. 27-028-24-44-0081 $1,750.32 6827 14th Ave. S. 26-028-24-43-0051 $2,137.50 6856 Oliver Ave. S. 28-028-24-33-0145 $4,350.00 6914 10th Ave. S. 26-028-24-34-0098 $1,282.50 6945 12th Ave. S. 26-028-24-43-0097 $1,984.59 7021 Park Ave. S. 35-028-24-22-0022 $5,202.84 7100 Park Ave. S. 35-028-24-22-0048 $950.00 7229 Aldrich Ave. S. 33-028-24-14-0088 $4,275.00 TOTAL $43,701.52 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota: 1. Such proposed assessment roll, in the amount of$43,701.52, is hereby accepted and shall constitute the special assessment against the lands named herein, and each tract of land therein included is hereby found to be benefited by the proposed current services in the amount of the assessment levied against it. 6('). 2. Such assessment shall be payable in no more than five annual installments and shall bear interest at the rate of five (5%) percent from the date of adoption of this assessment resolution. 3. The owner of any property so assessed may, at any time prior to certification of the assessment to the County Auditor, pay the whole of the assessment on such property to the City's Assessing Division, and may at any time thereafter, pay to the City's Assessing Division the entire amount of the assessment remaining unpaid, with interest accrued to December 31st of the year in which such payment is made. Such payment must be made before November 15th or interest will be charged through December 31st of the next succeeding year. 4. The City Clerk shall forthwith transmit a certified duplicate of this assessment roll to the County Auditor to be extended on the property tax lists of the County and such assessments shall be collected and paid over in the same manner as other municipal taxes. Passed by the City Council of the City of Richfield, Minnesota this 13th day of August, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk R,3 m T l v W . Z L Cn ` O m D D W X D L 6 A) > O - CO D A o" = . ) 0 S. go g_ o CD 0_ m no) • t � CnOw � . . 'O > r5- CD P c co D .. 3 m v 2 = `� 0 m = co - m @ C7 c m r CD C7 C m O m = d N 0 = tin O y CD l�/ in (fl .- ► CD CA m 0) O Q0 n rt m C_ CD o O 73 CD 3 co O O 0 • v V 0 0 0 0 0 O O O CA 0, -P -A 0)03 0) 0) 0) 0O < N -% O CO CO 03 03 OO CO CO —A! 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N -a -a -a -a N -P N .. CO N E N 00 N CO N W V !V -A• W P N w co co •CA) 03 0 -.1 - co 00 01 CA) C3, N CO W CO O W O C3, O pNp co OD N O O -, ;. V, CO cm -� 00 co C3, j U7 ;P C in O O 0o COO O O O N 00) W CO W C3, O W W O O co CCOO -I N q-4 Date Name Address City/State/Zip Property ID: Property Address: NOTICE OF ASSESSMENT HEARING NOTICE OF HEARING ON PROPOSED ASSESSMENT FOR CERTAIN SERVICES OF THE CITY FOR REMOVAL OF DISEASED TREES ON PRIVATE PROPERTY (JANUARY 1, 2011- DECEMBER 31, 2011) NOTICE IS HEREBY GIVEN that the Richfield City Council will hold an assessment hearing on the date and at the time and place given below, to pass upon the proposed assessment for the removal and disposal of diseased trees on private property. DATE, TIME AND PLACE OF HEARING: Monday, August 13, 2012 at 7:00 p.m. or as soon thereafter as the matter can be reached on the agenda, at Richfield City Hall, 6700 Portland Avenue South, Richfield, Minnesota 55423. NATURE OF IMPROVEMENT AND AREA TO BE ASSESSED: Costs incurred for removal of diseased trees from private property with the consent and approval of the property owners for work ordered from the City of Richfield, January 1, 2011 through December 31, 2011. The City proposes to assess the costs for this work, which totaled $43,701.52. THE SPECIAL ASSESSMENT TO YOUR PROPERTY IS: $xxxxxxxxxx . THIS IS THE ONLY NOTICE YOU WILL RECEIVE OF THIS ASSESSMENT. NO SEPARATE BILLING WILL OCCUR. PLEASE DO NOT MAIL PAYMENT BEFORE THE ASSESSMENT HEARING ON MONDAY, AUGUST 13, 2012. A copy of the proposed assessment roll is on file for public inspection at the City Clerk's office, 6700 Portland Avenue South, Richfield, Minnesota. PAYMENT OF ASSESSMENT: You may pay your assessment at any time after the assessment has been adopted by presenting a check to the City Treasurer at the Assessor's office, 6700 Portland Avenue South, Richfield, Minnesota 55423. Unpaid assessments accrue interest at the rate of five percent (5%) per year. The amount of interest payable depends upon when your payment is made, and the following deadlines apply: Payment within 30 days of adopted assessment: The property owner may pay the original principal amount without interest within 30 days from the date the Council adopts the assessment, scheduled for Monday, August 13, 2012. If the original principal amount is not paid, the assessment will be charged five percent (5%) interest. Payment on or after 9/12/2012: Payments received on or after 9/12/2012 but before 11/15/2012 will be charged interest at the rate of 5% through the date of payment. Payments are not accepted between November 15, 2012 and January 1, 2013. After January 1, 2013 payments can be made on the outstanding balance not certified to the current year taxes anytime with interest through December 31st of the year in which payment is made. If no prepayment is made, the tree assessments are spread over five years. Interest will be charged at the rate of five percent (5%) annually. Interest is calculated for 16 months on the first year of the assessment and 12 months thereafter. There is a $2.50 surcharge per year over the five year life of the assessment when certified to the property tax. Questions regarding the assessment payment procedure should be directed to Debbie Guiher at 612-861-9710. DEFERRED ASSESSMENTS: Under Minnesota Stat. Secs. 435.193 to 435.195, the Council may, in its discretion, defer the payment of this special assessment for any homestead property owned by a person who meets certain age or disability restrictions and for whom it would be a hardship to make the payments. The policy and procedure for deferment is set forth in City Resolution No. 9531, which may be obtained from the City Clerk. When deferment of the special assessment has been granted and is terminated for any reason provided in law, all amounts accumulated plus applicable interest become due. Any assessed property owner meeting the requirements of the law and the resolution may, within 30 days of the confirmation of the assessment, apply to the City Clerk for the prescribed form for deferral of this special assessment. HEARING PROCEDURE AND OBJECTIONS: The City Council will conduct a public hearing on the proposed assessment on the date and time listed. Written and oral objections will be considered at the meeting, but the Council may consider any objection to the amount of a proposed individual assessment at an adjourned meeting upon further notice to the affected property owners as the Council deems advisable. The Council may adopt the proposed assessment at the same meeting as the hearing. RIGHT TO APPEAL: You have the right to appeal the City Council's adoption of the assessment. To appeal, you must serve notice of an appeal upon the Mayor or City Clerk within 30 days after the adoption of the assessment, and you must also file the notice of appeal with the Hennepin County District Court within ten days after service upon the Mayor or City Clerk. You may not appeal unless you file a written obiection, signed by you, with the City Clerk prior to the hearing on August 13, 2012 or present the written obiection to the presiding officer at the hearing on August 13, 2012. BY ORDER OF THE CITY COUNCIL THIS 10th DAY OF JULY, 2012. Questions? 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Indicate below your choice of d , , remov i procedures for your marked tree(s): (One Choice Please) • -y rhereby request that removal and disposal of my tree(s) be assessed to my property taxes. g I andle -rem nd-dispesaf-ef:.my trees) theatt eity titamelatoement. C4,`-a, Cs\C\ clA"\ ) . Name� \\ ��,\� Phone c1� `��r e� k C�fr'"� Please Print Address 70 2 d 1°,6244 /1)4F-3 Signature of \lk r Homeowner. +_-� ' Name of Contnador.�O M� t G� ® � " • • • • s AGENDA SECTION: PUB.HEARING AGENDA ITEM# 10 REPORT# 146 STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: CHRIS LINK, OPERATIONS SUPERINTENDENT NAME,TITLE DEPARTMENT DIRECTOR n/ REVIEW: /441 SIGNATURE REVIEWED BY CITY f MANAGER: 7 / _ Aj ITEM FOR COUNCIL CONSIDERATION: Public hearing regarding the attached resolutions pertaining to the annual 77th Street maintenance district assessment process. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: 1. Adopt the attached resolution proposing to assess commercial properties in the 77th Street assessment district for costs incurred to maintain the area for 2011. 2. Adopt the attached resolution proposing a similar assessment process to be implemented for 2013. II. BACKGROUND Since the 1988 construction of the short section of 77th Street, the City has been performing special maintenance along 77th Street. The special maintenance services include irrigation, weeding and mowing of the landscaping on both sides of the 77th Street wall. The maintenance functions, known as current services, are funded through the maintenance assessment on the 77th Street businesses. Staff is recommending that the City Council approve resolutions that: 1. Assess $71,766.34 against the 77th Street properties for work done in 2011. 2. Propose a similar assessment process for 2013. 08132012-77th 1113assess.doc III. BASIS OF RECOMMENDATION A. POLICY • Resolution No. 7405, adopted in 1988, established a policy for assessing the costs. • Staff has calculated the proper amounts to be assessed against every assessable lot, piece or parcel of land specially benefited. • The City does not assess residential properties for maintenance • The proposed assessment was properly filed with the City Clerk. • The Public Hearing Notice was published in the official newspaper on July 26, 2012. • Notice of the public hearing for the proposed maintenance costs in 2011 was mailed to all owners of described on the assessment roll on July 30, 2012 meeting the two-week notification requirement. B. CRITICAL TIMING ISSUES • On or before September 1 of each year, the City must list the total unpaid charges for current services against each separate lot or parcel to which they are attributable under section 825 of the City Code. C. FINANCIAL • Total cost for 77th Street Maintenance is $71,766.34 for 2011. Assessment costs are determined on a square footage basis. • Estimated and actual costs for the 77th Street maintenance services from 2002 - 2012 are: Year Estimate Actual 2002 $80,000 $75,490.39 2003 $80,000 $59,831.07 2004 $80,000 $63,842.79 2005 $80,000 $64,841.54 2006 $80,000 $69,606.52 2007 $80,000 $77,441.46 2008 $80,000 $77,000.01 2009 $80,000 $62,894.55 2010 $80,000 $64,894.55 2011 $80,000 $71,766.34 2012 $80.000 • City ordinance provides that special assessments for current services may be certified to the County Auditor for collection along with taxes. This certification may provide that the assessments be completely paid in the first year. • No interest will be charged if the entire assessment is paid before September 12, 2012. After that date, the City has the right to charge interest on the amount assessed in that the City provided the funds for the initial expense. It is recommended that the interest rate be established at five percent (5%). • The estimated maintenance cost for the period January 1, 2013 through December 31, 2013 is $80,000. All commercial properties would be assessed on a square foot basis. All residential properties, plus the two churches in the area, would be exempt from the special assessment levy. D. LEGAL • The City Attorney will be in attendance at the Council meeting should a legal question arise. E. ENVIRONMENTAL CONSIDERATIONS • None IV. ALTERNATIVE RECOMMENDATIONS) • Council may make any changes to the assessment roll as a result of the public hearing by adding the phrase "and has amended such proposed assessment as it deems just." V. ATTACHMENTS • Resolution adopting assessments for 77th Street Maintenance in 2011 • Resolution proposing to specially assess for current services in 2013 • The 2011 assessment roll • The 2013 assessment roll • Copy of letter sent to assessed property owners • Graphic displaying 77th Street special assessment district VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Property owners on assessment roll. RESOLUTION NO. RESOLUTION ADOPTING ASSESSMENT ON 77TH STREET MAINTENANCE FOR THE PERIOD JANUARY 1, 2011 - DECEMBER 31, 2011 WHEREAS, pursuant to proper notice duly given as required by law, the council has met and passed upon all objections to the proposed assessment for current services related to maintenance of the 77th Street Redevelopment Project, which is approximately bounded east of I-35W and west of Cedar Avenue. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota as follows: Such proposed assessment roll in the total amount of$71,766.34 is hereby accepted and shall constitute the special assessment against the lands named therein, and each tract of land therein included is hereby found to be benefited by the proposed current services in the amount of assessment levied against it. Such assessment shall be payable before or during 2012 and shall bear interest at the rate of five percent (5%) from the date of adoption of this assessment resolution. The owner of any property so assessed may, at any time prior to certification of the assessment to the County Auditor, pay the whole of the assessment on such property to the City's Finance Division and may, at any time thereafter, pay to the City's Finance Division the entire amount of the assessment remaining unpaid, with interest accrued to December 31st of the year in which payment is made. Such payment must be made before November 15th or interest will be charged through December 31st of the succeeding year. The City Clerk shall forthwith transmit a certified duplicate of this assessment roll to the County Auditor to be extended on the proper tax lists of the County and such assessment shall be collected and paid over in the same manner in other municipal taxes. Passed by the City Council of the City of Richfield, Minnesota, this 13th day of August 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk RESOLUTION NO. RESOLUTION ORDERING UNDERTAKING OF CURRENT SERVICE PROJECT 77TH STREET PROJECT AREA JANUARY 1, 2013 - DECEMBER 31, 2013 WHEREAS, pursuant to ordinance, the City Council of the City of Richfield did establish a special assessment district and did propose that certain current services be undertaken by the City in the 77th Street Project Area, approximately bounded by I- 35W, 77th Street, 1-434 and Cedar Avenue and that the cost of such services be specially assessed against benefited property; and WHEREAS, the City Council of the City of Richfield did also by such resolution set the date of the public hearing on the undertaking of such current service project and the levying of special assessment to bear the cost thereof; and WHEREAS, following due notice, such public hearing was held on August 13, 2012 at which time all interested parties desiring to be heard were given an opportunity to be heard. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota as follows: 1. That the following examples of current services of the City shall be undertaken by the City within the 77th Street Project Area, which area constitutes the special assessment district with the exception of residential properties, plus the two churches in the area, with the cost of such services to be specially assessed against the benefited property within the district: a. Snow, ice or rubbish removal; b. Weed elimination; c. Elimination or removal of public health or safety hazards from private property, excluding any structure included under the provisions of Minnesota Statutes Section 463.1-5 to 463.26; d. Street sprinkling or other dust treatment of streets; e. Trimming and care of trees and the removal of unsound trees; f. Repair of sidewalks, crosswalks and other pedestrian walkways; g. Operation of the street lighting system; h. Maintenance of landscaped areas and other public amenities on or adjacent to street right-of-way; i. Snow removal and other maintenance of streets; j. General maintenance, including repairs and replacement. 2. The work to be performed may be by day labor, by City force, by contract or by any combination thereof. 3. The designated period of the project shall be from January 1, 2013 through December 31, 2013. Costs of the project shall be in the manner provided in the Richfield Ordinance Code. Passed by the City Council of the City of Richfield, Minnesota this 13th day of August, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk 1bi3 2011 Actual Charges - 77th St Maintenance PID Parcel Address Owner Amount So Ft 33-028-24-43-0019 1401 76th St.W. MSB Holdings Richfield LLC $2,267.98 115200.00 33-028-24-43-0049 2 Meridian Crossings Meridian Crossings LLC $3,907.34 198470.00 33-028-24-43-0050 1 Meridian Crossings Meridian Crossings LLC $4,278.82 217339.00 33-028-24-44-0110 7610 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $270.18 13723.50 33-028-24-44-0112 7600 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $958.00 48661.00 33-028-24-44-0113 7630 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $237.68 12073.00 33-028-24-44-0114 address unassigned 7600-7644 Lyndale Ave S.Holdings $20.69 1051.00 33-028-24-44-0115 7644 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $199.63 10140.00 33-028-24-44-0231 1000 78th St.W. CSM Corporation $7,380.68 374895.00 33-028-24-44-0232 710 78th St.W. CSM Shops Inc. $6,432.04 326710.00 33-028-24-44-0233 7700 Lyndale Ave So City of Richfield $463.70 23553.00 33-028-24-44-0234 700 78th St.W. CSM Shops Inc. $243.28 12357.00 33-028-24-44-0235 980 78th St.W. CSM Shops Inc. $235.30 11952.00 33-028-24-44-0236 address unassigned CSM Shops Inc. $460.78 23405.00 34-028-24-21-0004 7100 Pleasant Ave.S. Soo Line Railroad $497.66 25278.00 34-028-24-33-0003 520 78th St.W. Lamettry Properties LLC $1,214.61 61695.00 34-028-24-33-0004 501 77th St.W. Lamettry Properties LLC $664.49 33752.00 34-028-24-33-0005 7724 Harriet Ave.S. Lamettry Properties LLC $118.97 6043.00 34-028-24-33-0006 500 78th St.W. Lamettry Properties LLC $410.97 20875.00 34-028-24-33-0007 401 77th St.W. Richfield Bloomington Honda $118.97 6043.00 34-028-24-33-0080 400 78th St.W. Richfield Bloomington Honda $2,823.18 143401.00 34-028-24-33-0081 7745 Lyndale Ave.S. 7745 Lyndale LLC $1,430.87 72680.00 34-028-24-33-0082 7701 Lyndale Ave.S. 7745 Lyndale LLC $130.59 6633.00 34-028-24-33-0087 301 77th St.W. City of Richfield $971.10 49326.00 34-028-24-33-0088 351 77th St.W. Thomson Reuters Prop Tax Svc $2,061.75 104725.00 34-028-24-33-0150 7645 Lyndale Ave.S. Richfield Senior Housing Inc. $280.63 14254.20 34-028-24-33-0151 7645 Lyndale Ave.S.#2 Richfield Senior Housing Inc. $141.82 7203.50 34-028-24-33-0152 7645 Lyndale Ave.S,#3 Main Street Office LLC $138.69 7044.70 34-028-24-33-0153 7645 Lyndale Ave.S,#4 Main Street Office LLC $151.02 7670.80 34-028-24-33-0154 7645 Lyndale Ave.S,#5 Main Street Office LLC $129.61 6583.40 34-028-24-33-0155 7645 Lyndale Ave.S,#6 Main Street Office LLC $280.63 14254.20 34-028-24-34-0001 84 78th St.W. Sherwin Williams Co. $283.10 14380.00 34-028-24-34-0053 200 78th St.W. Shurgard Storage Centers Inc. $1,824.42 92670.00 34-028-24-34-0054 7700 Wentworth Ave.S. Leighton Partners LLC $398.14 20223.00 34-028-24-34-0055 7720 Wentworth Ave.S. Hilmer M.Hovelson $397.53 20192.00 34-028-24-34-0056 100 78th St.W. Viking Paints Inc $459.80 23355.00 34-028-24-34-0057 7721 Pillsbury Ave.S. Viking Paints Inc $667.66 33913.00 34-028-24-34-0058 7715 Pillsbury Ave.S. Williams Properties MN LLC $99.38 5048.00 34-028-24-34-0059 7717 Pillsbury Ave.S. Robert A.George $99.38 5048.00 34-028-24-34-0060 7709 Pillsbury Ave.S. Kerker Properties LLC $199.08 10112.00 34-028-24-34-0061 7701 Pillsbury Ave.S. Bruce Walter Kienke $199.10 10113.00 34-028-24-34-0065 7700 Nicollet Ave.S. 7700 Nicollet LLC $367.72 18678.00 34-028-24-34-0066 7720 Nicollet Ave.S. Realty Income Props 3 LLC $346.42 17596.00 34-028-24-34-0073 7700 Pillsbury Ave.S. City of Richfield $808.03 41043.00 34-028-24-43-0005 140 78th St.E. Richfield Fast Food $790.86 40171.00 34-028-24-43-0077 7745 2nd Ave.S. Robert Lurtsema $450.86 22901.00 34-028-24-43-0078 7701 Nicollet Ave.S. Menard Inc $7,972.98 404980.00 34-028-24-44-0006 7700 Portland Ave.S. Donald L.Eisen $287.55 14606.00 34-028-24-44-0007 7730 Portland Ave.S. Eisen Brothers Inc. $458.93 23311.00 34-028-24-44-0023 500 78th St.E. A.G.Bogen Company $569.57 28931.00 34-028-24-44-0024 7708 5th Ave.S. TBG LLC $199.45 10131.00 34-028-24-44-0025 7714 5th Ave.S. Gary Wiberg $195.81 9946.00 34-028-24-44-0027 7701 5th Ave.S. A.G.Bogen Company $262.20 13318.00 34-028-24-44-0028 415 77th St.E. Richfield Wheel Alignment $200.14 10166.00 34-028-24-44-0029 7731 4th Ave.S. Blaylock Plumbing $409.40 20795.00 34-028-24-44-0030 7715 4th Ave.S. Richfield Bloomington Credit Union $314.11 15955.00 34-028-24-44-0031 7744 5th Ave.S. DJ&DJ LLC $602.79 30618.00 34-028-24-44-0032 345 77th St.E. Richfield Bloomington Credit Union $723.19 36734.00 35-028-24-33-0006 7701 Portland Ave.S. Asian Direct Oriental Mkt Inc. $441.57 22429.00 35-028-24-33-0007 7727 Portland Ave.S. Homes Re 1 LLC $581.64 29544.00 35-028-24-33-0008 7733 Portland Ave.S. LMMS Properties LLC $535.14 27182.00 35-028-24-33-0009 616 78th St.E. University Auto Prop LLLP $488.68 24822.00 35-028-24-34-0002 7744 12th Ave.S. B&S Land Development LLC $487.30 24752.00 35-028-24-43-0006 7711 14th Ave.S. A.G.Bogen Company $812.87 41289.00 35-028-24-43-0008 1200 78th St.E. PMB Hospitality LLC $926.52 47062.00 35-028-24-43-0073 1400 78th St.E. A.G.Bogen Company $315.92 16047.00 35-028-24-43-0074 1420 78th St.E. A.G.Bogen Company $972.67 49406.00 35-028-24-43-0076 1500 78th St.E. A.G.Bogen Company $1,206.24 61270.00 35-028-24-44-0004 7636 Cedar Ave.S. Motel 6 Operating LP $1,091.72 55453.00 35-028-24-44-0007 1640 78th St.E. Jerry E.Mathwig $816.31 41464.00 35-028-24-44-0008 1620 78th St.E. Jerry E.Mathwig $1,092.15 55475.00 35-028-24-44-0010 1550 78th St.E. Adler Graduate School $2,768.29 140613.00 35-028-24-44-0031 1600 78th St.E. 494 Building Partnership LLC $683.21 34703.00 35-028-24-44-0032 address unassigned Clear Channel Outdoor Inc. $36.85 1872.00 $71,766.34 3678890.30 (b'4 2011 Proposed Charges - 77th St Maintenance PID Parcel Address Owner Amount So Ft 33-028-24-43-0019 1401 76th St.W. MSB Holdings Richfield LLC $2,528.18 115200.00 33-028-24-43-0049 2 Meridian Crossings Meridian Crossings LLC $4,355.63 198470.00 33-028-24-43-0050 1 Meridian Crossings Meridian Crossings LLC $4,769.73 217339.00 33-028-24-44-0110 7610 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $301.18 13723.50 33-028-24-44-0112 7600 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $1,067.92 48661.00 33-028-24-44-0113 7630 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $264.95 12073.00 33-028-24-44-0114 address unassigned 7600-7644 Lyndale Ave S.Holdings $23.07 1051.00 33-028-24-44-0115 7644 Lyndale Ave.S. 7600-7644 Lyndale Ave S.Holdings $222.53 10140.00 33-028-24-44-0231 1000 78th St.W. CSM Corporation $8,227.45 374895.00 33-028-24-44-0232 710 78th St.W. CSM Shops Inc. $7,169.98 326710.00 33-028-24-44-0233 7700 Lyndale Ave So City of Richfield $516.89 23553.00 33-028-24-44-0234 700 78th St.W. CSM Shops Inc. $271.19 12357.00 33-028-24-44-0235 980 78th St.W. CSM Shops Inc. $262.30 11952.00 33-028-24-44-0236 address unassigned CSM Shops Inc. $513.65 23405.00 34-028-24-21-0004 7100 Pleasant Ave.S. Soo Line Railroad $554.75 25278.00 34-028-24-33-0003 520 78th St.W. Lamettry Properties LLC $1,353.96 61695.00 34-028-24-33-0004 501 77th St.W. Lamettry Properties LLC $740.72 33752.00 34-028-24-33-0005 7724 Harriet Ave.S. Lamettry Properties LLC $132.62 6043.00 34-028-24-33-0006 500 78th St.W. Lamettry Properties LLC $458.12 20875.00 34-028-24-33-0007 401 77th St.W. Richfield Bloomington Honda $132.62 6043.00 34-028-24-33-0080 400 78th St.W. Richfield Bloomington Honda $3,147.08 143401.00 34-028-24-33-0081 7745 Lyndale Ave.S. 7745 Lyndale LLC $1,595.04 72680.00 34-028-24-33-0082 7701 Lyndale Ave.S. 7745 Lyndale LLC $145.57 6633.00 34-028-24-33-0087 301 77th St.W. City of Richfield $1,082.51 49326.00 34-028-24-33-0088 351 77th St.W. Thomson Reuters Prop Tax Svc $2,298.30 104725.00 34-028-24-33-0150 7645 Lyndale Ave.S. Richfield Senior Housing Inc. $312.82 14254.20 34-028-24-33-0151 7645 Lyndale Ave.S.#2 Richfield Senior Housing Inc. $158.09 7203.50 34-028-24-33-0152 7645 Lyndale Ave.S,#3 Main Street Office LLC $154.60 7044.70 34-028-24-33-0153 7645 Lyndale Ave.5,#4 Main Street Office LLC $168.34 7670.80 34-028-24-33-0154 7645 Lyndale Ave.S,#5 Main Street Office LLC $144.48 6583.40 34-028-24-33-0155 7645 Lyndale Ave.5,#6 Main Street Office LLC $312.82 14254.20 34-028-24-34-0001 84 78th St.W. Sherwin Williams Co. $315.58 14380.00 34-028-24-34-0053 200 78th St.W. Shurgard Storage Centers Inc. $2,033.74 92670.00 34-028-24-34-0054 7700 Wentworth Ave.S. Leighton Partners LLC $443.81 20223.00 34-028-24-34-0055 7720 Wentworth Ave.S. Hilmer M.Hovelson $443.13 20192.00 34-028-24-34-0056 100 78th St.W. Viking Paints Inc $512.55 23355.00 34-028-24-34-0057 7721 Pillsbury Ave.S. Viking Paints Inc $744.26 33913.00 34-028-24-34-0058 7715 Pillsbury Ave.S. Williams Properties MN LLC $110.78 5048.00 34-028-24-34-0059 7717 Pillsbury Ave.S. Robert A.George $110.78 5048.00 34-028-24-34-0060 7709 Pillsbury Ave.S. Kerker Properties LLC $221.92 10112.00 34-028-24-34-0061 7701 Pillsbury Ave.S. Bruce Walter Kienke $221.94 10113.00 34-028-24-34-0065 7700 Nicollet Ave.S. 7700 Nicollet LLC $409.91 18678.00 16-L 34-028-24-34-0066 7720 Nicollet Ave.S. Realty Income Props 3 LLC $386.16 17596.00 34-028-24-34-0073 7700 Pillsbury Ave.S. City of Richfield $900.73 41043.00 34-028-24-43-0005 140 78th St.E. Richfield Fast Food $881.59 40171.00 34-028-24-43-0077 7745 2nd Ave.S. Robert Lurtsema $502.59 22901.00 34-028-24-43-0078 7701 Nicollet Ave.S. Menard Inc $8,887.70 404980.00 34-028-24-44-0006 7700 Portland Ave.S. Donald L.Eisen $320.54 14606.00 34-028-24-44-0007 7730 Portland Ave.S. Eisen Brothers Inc. $511.58 23311.00 34-028-24-44-0023 500 78th St.E. A.G.Bogen Company $634.92 28931.00 34-028-24-44-0024 7708 5th Ave.S. TBG LLC $222.34 10131.00 34-028-24-44-0025 7714 5th Ave.S. Gary Wiberg $218.28 9946.00 34-028-24-44-0027 7701 5th Ave.S. A.G.Bogen Company $292.28 13318.00 34-028-24-44-0028 415 77th St.E. Richfield Wheel Alignment $223.10 10166.00 34-028-24-44-0029 7731 4th Ave.S. Blaylock Plumbing $456.37 20795.00 34-028-24-44-0030 7715 4th Ave.S. Richfield Bloomington Credit Union $350.15 15955.00 34-028-24-44-0031 7744 5th Ave.S. DJ&DJ LLC $671.94 30618.00 34-028-24-44-0032 345 77th St.E. Richfield Bloomington Credit Union $806.17 36734.00 35-028-24-33-0006 7701 Portland Ave.S. Asian Direct Oriental Mkt Inc. $492.23 22429.00 35-028-24-33-0007 7727 Portland Ave.S. Homes Re 1 LLC $648.37 29544.00 35-028-24-33-0008 7733 Portland Ave.S. LMMS Properties LLC $596.54 27182.00 35-028-24-33-0009 616 78th St.E. University Auto Prop LLLP $544.74 24822.00 35-028-24-34-0002 7744 12th Ave.S. B&S Land Development LLC $543.21 24752.00 35-028-24-43-0006 7711 14th Ave.S. A.G.Bogen Company $906.13 41289.00 35-028-24-43-0008 1200 78th St.E. PMB Hospitality LLC $1,032.82 47062.00 35-028-24-43-0073 1400 78th St.E. A.G.Bogen Company $352.17 16047.00 35-028-24-43-0074 1420 78th St.E. A.G.Bogen Company $1,084.26 49406.00 35-028-24-43-0076 1500 78th St.E. A.G.Bogen Company $1,344.63 61270.00 35-028-24-44-0004 7636 Cedar Ave.S. Motel 6 Operating LP $1,216.97 55453.00 35-028-24-44-0007 1640 78th St.E. Jerry E.Mathwig $909.97 41464.00 35-028-24-44-0008 1620 78th St.E. Jerry E.Mathwig $1,217.46 55475.00 35-028-24-44-0010 1550 78th St.E. Adler Graduate School $3,085.90 140613.00 35-028-24-44-0031 1600 78th St.E. 494 Building Partnership LLC $761.59 34703.00 35-028-24-44-0032 address unassigned Clear Channel Outdoor Inc. $41.08 1872.00 $80,000.00 3645308.30 101 Public Works Department Date Name Address City, State Zip Property ID: Property Address: NOTICE OF ASSESSMENT HEARING NOTICE OF HEARING ON PROPOSED ASSESSMENT FOR CERTAIN SERVICES OF THE CITY WITHIN THE 77th STREET REDEVELOPMENT AREA FROM JANUARY 1, 2011- DECEMBER 31, 2011 NOTICE IS HEREBY GIVEN that the Richfield City Council will hold an assessment hearing on the date and at the time and place given below, to pass upon the proposed assessment for the maintenance services to that area known as the 77th Street Redevelopment Area in the City. • DATE, TIME AND PLACE OF HEARING: Monday, August 13, 2012, at 7:00 p.m. or as soon thereafter as the matter can be reached on the agenda, at the Richfield Municipal Center, 6700 Portland Avenue South, Richfield, Minnesota 55423. • NATURE OF IMPROVEMENT AND AREA TO BE ASSESSED: From January 1, 2011 through December 31, 2011 the City of Richfield incurred costs for maintenance of the 77th Street project area, including such work as landscape maintenance of common properties, including mowing, fertilizing, irrigation repair and other maintenance services. The City proposes to assess the costs for maintenance in the 77th Street project area, which totaled $71,766.34, against the properties that benefited from this work. • PROPOSED AMOUNT OF ASSESSMENT: The total amount to be assessed against all properties is $71,766.34. The amount to be assessed against your particular property is: $x,xxx.xx. Payment can be made after the assessment is adopted and before September 12, 2012 at the City of Richfield Assessor's office, 6700 Portland Avenue, Richfield, MN 55423. Please make your check payable to the City of Richfield. A copy of the proposed assessment roll is on file for public inspection at the City Clerk's office, 6700 Portland Avenue South, Richfield, Minnesota. THIS IS THE ONLY NOTICE YOU WILL RECEIVE OF THIS ASSESSMENT. NO SEPARATE BILLING WILL OCCUR. PLEASE DO NOT MAIL PAYMENT BEFORE THE ASSESSMENT HEARING ON AUGUST 13, 2012. 6700 PORTLAND AVENUE, RICHFIELD, MINNESOTA 55423 612.861.9700 FAX: 612.861.9749 Public Works Department PAYMENT OF ASSESSMENT: You may pay your assessment at any time after the assessment has been adopted by presenting a check to the City Treasurer at the Assessor's office, 6700 Portland Avenue South, Richfield, Minnesota 55423. Unpaid assessments accrue interest at the rate of five percent (5%) per year. The amount of interest payable depends upon when your payment is made, and the following deadlines apply: Payment within 30 days of adopted assessment: The property owner may pay the original principal amount without interest within 30 days from the date the Council adopts the assessment, scheduled for Monday, August 13, 2012. If the original principal amount is not paid, the assessment will be charged five percent (5%) interest. Payment on or after 9/12/2012: Payments received on or after 9/12/2012 but before 11/15/2012 will be charged interest at the rate of 5% through the date of payment. Payments are not accepted between November 15, 2012 and January 1, 2013. After January 1, 2013 payments can be made on the outstanding balance not certified to the current year taxes anytime with interest through December 31 of the year in which payment is made. If no prepayment is made, the assessments are spread over five years. Interest will be charged at the rate of five percent (5%) annually. Interest is calculated for 16 months on the first year of the assessment and 12 months thereafter. There is a $2.50 surcharge per year over the five year life of the assessment when certified to the property tax. Questions regarding the assessment payment procedure should be directed to Debbie Guiher at 612-861-9710. DEFERRED ASSESSMENTS: Under Minnesota Stat. Secs. 435.193 to 435.195, the Council may, in its discretion, defer the payment of this special assessment for any homestead property owned by a person who meets certain age or disability restrictions and for whom it would be a hardship to make the payments. The policy and procedure for deferment is set forth in City Resolution No. 9531, which may be obtained from the City Clerk. When deferment of the special assessment has been granted and is terminated for any reason provided in law, all amounts accumulated plus applicable interest become due. Any assessed property owner meeting the requirements of the law and the resolution may, within 30 days of the confirmation of the assessment, apply to the City Clerk for the prescribed form for deferral of this special assessment. HEARING PROCEDURE AND OBJECTIONS: The City Council will conduct a public hearing on the proposed assessment on the date and time listed. Written and oral objections will be considered at the meeting, but the Council may consider any objection to the amount of a proposed individual assessment at an adjourned meeting upon further notice to the affected property owners, as the Council deems advisable. The Council may adopt the proposed assessment at the same meeting as the hearing. RIGHT TO APPEAL: You have the right to appeal the City Council's adoption of the assessment. To appeal, you must serve notice of an appeal upon the Mayor or City Clerk within 30 days after the adoption of the assessment, and you must also file the notice of appeal with the Hennepin County District Court within ten days after service upon the Mayor or City Clerk. You may not appeal unless you file a written obiection, signed by you, with the City Clerk prior to the hearing on Monday, August 13th, 2012, or present the written obiection to the presiding officer at the hearing on August 13th, 2012. BY ORDER OF THE CITY COUNCIL THIS 10th DAY OF JULY 2012. Questions concerning this assessment amount should be directed to Chris Link, Operations Superintendent, at 612-861-9174. 6700 PORTLAND AVENUE, RICHFIELD, MINNESOTA 55423 612.861.9700 FAX: 612.861.9749 coi 0 Al i 1 AP< [1 r _ = ( it,1 IM■ Z O m _ /1111 z 4111111 --1 m O i - B N i m o al N i Ctn fli ' 111 � ,. — — /� co . E9 :.. -.3 F,_ .1 J\ . .. , , , ,-,------- _, _ A� —1 GARFIELD AVE 5 W NM O - -I- Q 0 = HARRIET AVE S GRAND AVE _ S D z _ Z D 1 Z ti I 1- fA m : a m z i x p h Y x z = rn N z • = z . M� H C") 11m - rn - z - �� o D J N . illml (D m _ z P 7:3 111111111 _ _ __ _ O Ti om o ' _ m Z `` - C) ,I1� _ ,... 1 V o - y a =�;■ � c ' EEJ M O = � h z AGENDA SECTION: PUB.HEARING AGENDA ITEM# 11 REPORT# 147 STAFF REPORT RICHFIELD CITY COUNCIL MEETING AUGUST 13, 2012 CHRIS LINK, REPORT PREPARED BY: OPERATIONS SUPERINTENDENT DEPARTMENT DIRECTOR 0 REVIEW: i SIGNATURE _ Y REVIEWED BY CITY / MANAGER: ITEM FOR COUNCIL CONSIDERATION: Public hearing regarding the attached resolutions pertaining to the annual Lyndale/HUB/Nicollet (LHN) maintenance assessment rocess. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: 1. Adopt the attached resolution proposing to assess commercial properties in the Lyndale/HUB/Nicollet (LHN) assessment district for costs incurred to maintain the area for 2011. 2. Adopt the attached resolution proposing a similar assessment process to be implemented for 2013. II. BACKGROUND The Lyndale/HUB/Nicollet (LHN) maintenance assessment was established to recover special maintenance expenses in the LHN (Lyndale, Hub, Nicollet) area in 1981. The special maintenance services include irrigation and weeding and mowing of landscaped areas. The LHN Redevelopment Area is approximately bounded by 64th Street, First Avenue, 67th Street and Emerson Avenue. Staff is recommending that the City Council approve resolutions that: 1. Assess $39,090.86 against the LHN properties for work done in 2011. 2. Propose a similar assessment process for 2013. 08132012Ihn1113assess.doc III. BASIS OF RECOMMENDATION A. POLICY • Resolution No. 6372, adopted in 1981, established a policy for assessing the costs. • Staff has calculated the proper amounts to be assessed against every assessable lot, piece or parcel of land specially benefited. • The City does not assess residential properties for maintenance costs in the LHN maintenance district. • The proposed assessment was properly filed with the City Clerk. • The Public Hearing Notice was published in the official newspaper on July 26, 2012. • Notice of the public hearing for the proposed maintenance costs in 2011 was mailed to all owners of described on the assessment roll on July 30, 2012 meeting the two-week notification requirement. B. CRITICAL TIMING ISSUES • On or before September 1 of each year, the City shall list the total unpaid charges for current services against each separate lot or parcel to which they are attributable under section 825 of the City Code. C. FINANCIAL • Total cost for the LHN maintenance services is $39,090.86 for 2011. Assessment costs are determined on a square footage basis. • Estimated and actual costs for the 77th Street maintenance services from 2002 - 2012 are: Year Estimated Actual 2002 $50,000 $35,136.62 2003 $52,000 $37,785.67 2004 $50,000 $44,031.39 2005 $50,000 $45,385.31 2006 $50,000 $45,648.56 2007 $50,000 $51,605.29 2008 $50,000 $49,999.99 2009 $50,000 $49,747.02 2010 $50,000 $32,459.40 2011 $50,000 $39,090.86 2012 $50,000 • City ordinance provides that special assessments for current services may be certified to the County Auditor for collection along with taxes. This certification may provide that the assessments be completely paid in the first year. • No interest will be charged if the entire assessment is paid before September 12, 2012. After that date, the City has the right to charge interest on the amount assessed in that the City provided the funds for the initial expense. It is recommended that the interest rate be established at five percent (5%). • The estimated maintenance cost for the period January 1, 2013 through December 31, 2013 is $50,000. All commercial properties would be assessed on a square foot basis. All residential properties, plus the two churches in the area, would be exempt from the special assessment levy. D. LEGAL • No legal issues are apparent at this time. The City Attorney will be in attendance at the Council meeting should a legal question arise. E. ENVIRONMENTAL CONSIDERATIONS • None. IV. ALTERNATIVE RECOMMENDATIONS) • Council may make any changes to the assessment roll as a result of the public hearing by adding the phrase "and has amended such proposed assessment as it deems just." V. ATTACHMENTS • Resolution adopting assessments for LHN Maintenance in 2011. • Resolution proposing to specially assess for current services in 2013. • The 2011 assessment roll • The 2013 assessment roll • Copy of letter sent to assessed property owners • Graphic displaying LHN special assessment district VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Property owners on assessment roll. 11-I RESOLUTION NO. RESOLUTION ADOPTING ASSESSMENT FOR LYNDALE/HUB/NICOLLET (LHN) MAINTENANCE FOR THE PERIOD JANUARY 1, 2011 THROUGH DECEMBER 31, 2011 WHEREAS, pursuant to proper notice duly given as required by law, the Council has met and passed upon all objections to the proposed assessment for current services related to maintenance of the Lyndale/Hub/Nicollet (LHN) Redevelopment Area, which is approximately bounded by 64th Street, First Avenue, 67th Street and Emerson Avenue in the City of Richfield. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota as follows: Such proposed assessment roll, in the total amount of$39,090.86 is hereby accepted and shall constitute the special assessment against the lands named therein, and each tract of land therein included is hereby found to be benefited by the proposed current services in the amount of assessment levied against it. Such assessment shall be payable before or during 2012 and shall bear interest at the rate of five percent (5%) from the date of adoption of this assessment resolution. The owner of any property so assessed may, at any time prior to certification of the assessment to the County Auditor, pay the whole of the assessment on such property to the City's Finance Division, and may, at any time thereafter, pay to the City's Finance Division the entire amount of the assessment remaining unpaid, with interest accrued to December 31st of the year in which payment is made. Such payment must be made before November 15th or interest will be charged through December 31st of the succeeding year. The City Clerk shall forthwith transmit a certified duplicate of this assessment roll to the County Auditor to be extended on the proper tax lists of the County and such assessment shall be collected and paid over in the same manner as other municipal taxes. Passed by the City Council of the City of Richfield, Minnesota, this 13th day of August, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk RESOLUTION NO. RESOLUTION ORDERING UNDERTAKING OF CURRENT SERVICE PROJECT LYNDALE/HUB/NICOLLET (LHN) MAINTENANCE JANUARY 1, 2013 THROUGH DECEMBER 31, 2013 WHEREAS, pursuant to ordinance, the City Council of the City of Richfield did establish a special assessment district and did propose that certain services be undertaken by the City in the Lyndale/HUB/Nicollet Redevelopment Area approximately bounded by 64th Street, First Avenue, 67th Street and Emerson Avenue and that the cost of such services be specially assessed against benefited property; and WHEREAS, the City Council of the City of Richfield did also by such resolution set the date of public hearing on the undertaking of such current service project and the levying of special assessment to bear the cost thereof; and WHEREAS, following due notice, such public hearing was held on August 13, 2012 at which time all interested parties desiring to be heard were given an opportunity to be heard. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota, as follows: 1. That the following examples of current services of the City shall be undertaken by the City within the LHN Redevelopment Project Area, which area constitutes the special assessment district with the exception of single family, two family and multifamily residential properties, with the cost of such services to be specially assessed against the benefited property within the district: a. Snow, ice or rubbish removal; b. Weed elimination; c. Elimination or removal of public health or safety hazards from private property, excluding any structure included under the provisions of Minnesota Statutes Section 463.15 to 463.26; d. Installation and repair of water service lines; e. Street sprinkling or other dust treatment of streets; f. Trimming and care of trees and the removal of unsound trees; g. Repair of sidewalks, crosswalks and other pedestrian walkways; h. Operation of the street lighting system; i. Maintenance of landscaped areas and other public amenities on or adjacent to street right-of-way; j. Maintenance of civic plaza; k. Snow removal and other maintenance of streets; I. repair of furniture; and m. General maintenance, including repairs and replacement. 2. The work to be performed may be by day labor, by City force, by contract or by any combination thereof. ii'S 3. The designated period of the project shall be from January 1, 2013 through December 31, 2013. Costs of the project shall be collected in the manner provided in the Richfield Ordinance Code. Passed by the City Council of the City of Richfield, Minnesota, this 13th day of August, 2012. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk • (1-ZI 2011 Actual Charges - LHN Maintenance PID Parcel Address Owner Amount SciFootage 27-028-24-13-0001 6445 Nicollet Ave.So. Wells Fargo Bank $658.81 40016.70 27-028-24-13-0052 6401 Nicollet Ave.So. Huyen Tang Nguyen $223.26 13560.94 27-028-24-13-0053 6425 Nicollet Ave.So. Headway Emotional Health Svcs $484.83 29449.02 27-028-24-13-0115 16 66th St. E. John Lee $57.48 3491.44 27-028-24-13-0116 6501 Nicollet Ave.So. Richfield Shoppes LLC $2,332.18 141658.00 27-028-24-23-0010 6467 Lyndale Ave.So. HNC Properties LLC $503.88 30605.83 27-028-24-23-0064 6430 Lyndale Ave.So. Lyndale Gardens LLC $467.30 28384.20 27-028-24-23-0074 6439 Lyndale Ave.So. HNC Properties LLC $695.83 42265.23 27-028-24-23-0079 6501 Lyndale Ave.So. Lyndale Station LLC $3,564.55 216513.40 27-028-24-23-0082 300 66th St.W. Century Link $2,053.45 124727.99 27-028-24-23-0084 6436 Lyndale Ave.So. Woodlake Vet Hospital $133.70 8121.00 27-028-24-23-0085 6438 Lyndale Ave.So. Katherine Jahn $100.16 6084.00 27-028-24-23-0086 6440 Lyndale Ave.So. Katherine Jahn $204.57 12426.00 27-028-24-23-0087 6444 Lyndale Ave.So. City of Richfield $356.18 21634.41 27-028-24-23-0088 6444 Lyndale Ave.So. City of Richfield $379.19 23032.00 27-028-24-23-0090 6500 Lyndale Ave.So. Nearco II LLC $373.31 22675.00 27-028-24-23-0105 6501 Woodlake Dr. Silver Crest Properties LLC $148.55 9023.00 27-028-24-23-0106 700 66th St.W. Silver Crest Properties LLC $35.64 2164.70 27-028-24-23-0107 704 66th St.W. Silver Crest Properties LLC $3,104.57 188573.80 27-028-24-24-0040 6410 Nicollet Ave.So. Kim Mai Properties LLC $168.75 10250.00 27-028-24-24-0057 6440 Nicollet Ave.So. Richfield Med Bldg Ptrshp LLC $243.78 14807.40 27-028-24-24-0060 6500 Nicollet Ave.So. Bremer Bank National Assoc $1,271.72 77245.00 27-028-24-24-0061 199 65th St.W. Centro Bradley Spe 1 LLC $9,537.21 579295.70 27-028-24-24-0063 220 66th St.W. Wagstaff Properties MN LLC $456.32 27717.00 27-028-24-24-0064 100 66th St.W. Centro Bradley Spe 1 LLC $2,339.76 142118.50 27-028-24-32-0126 6701 Lyndale Ave.So. Paul J Zilka $260.52 15824.00 27-028-24-32-0127 6645 Lyndale Ave.So. Marshall &Isley Corp $834.04 50660.00 27-028-24-32-0130 400 67th St.W. Pines Investments LLC $1,041.49 63261.00 27-028-24-32-0132 address unassigned Woodlake VEF IV LLC $160.86 9771.00 27-028-24-32-0133 address unassigned Pines Investments LLC $423.60 25730.00 27-028-24-32-0137 6601 Lyndale Ave.So. Woodlake VEF IV LLC $2,490.13 151252.00 27-028-24-32-0138 407 66th St.W. Woodlake VEF IV LLC $302.02 18345.00 27-028-24-32-0451 6640 Lyndale Ave.So. City Bella Commercial LLC $599.88 36437.00 27-028-24-42-0078 6601 Nicollet Ave.So. Richfield Shoppes LLC $1,253.95 76165.96 28-028-24-11-0002 6330 Lyndale Ave.So. Lyndale Gardens LLC $322.51 19589.75 28-028-24-14-0010 800 66th St.W. JBB Properties LLC $859.82 52225.84 28-028-24-41-0039 826 66th St.W. Realty Income Props 3 LLC $647.06 39302.61 $39,090.86 2374404.42 I 'S 2013 Proposed Charges - LHN Maintenance PID Parcel Address Owner Amount SciFootaee 27-028-24-13-0001 6445 Nicollet Ave.So. Wells Fargo Bank $842.67 40016.70 27-028-24-13-0052 6401 Nicollet Ave.So. Huyen Tang Nguyen $285.57 13560.94 27-028-24-13-0053 6425 Nicollet Ave.So. Headway Emotional Health Svcs $620.13 29449.02 27-028-24-13-0115 16 66th St. E. John Lee $73.52 3491.44 27-028-24-13-0116 6501 Nicollet Ave.So. Richfield Shoppes LLC $2,983.02 141658.00 27-028-24-23-0010 6467 Lyndale Ave.So. HNC Properties LLC $644.49 30605.83 27-028-24-23-0064 6430 Lyndale Ave.So. Lyndale Gardens LLC $597.71 28384.20 27-028-24-23-0074 6439 Lyndale Ave.So. HNC Properties LLC $890.02 42265.23 27-028-24-23-0079 6501 Lyndale Ave.So. Lyndale Station LLC $4,559.32 216513.40 27-028-24-23-0082 300 66th St.W. Century Link $2,626.51 124727.99 27-028-24-23-0084 6436 Lyndale Ave.So. Woodlake Vet Hospital $171.01 8121.00 27-028-24-23-0085 6438 Lyndale Ave.So. Katherine Jahn $128.12 6084.00 27-028-24-23-0086 6440 Lyndale Ave.So. Katherine Jahn $261.67 12426.00 27-028-24-23-0087 6444 Lyndale Ave.So. City of Richfield $455.58 21634.41 27-028-24-23-0088 6444 Lyndale Ave.So. City of Richfield $485.01 23032.00 27-028-24-23-0090 6500 Lyndale Ave.So. Nearco II LLC $477.49 22675.00 27-028-24-23-0105 6501 Woodlake Dr. Silver Crest Properties LLC $190.01 9023.00 27-028-24-23-0106 700 66th St.W. Silver Crest Properties LLC $45.58 2164.70 27-028-24-23-0107 704 66th St.W. Silver Crest Properties LLC $3,970.97 188573.80 27-028-24-24-0040 6410 Nicollet Ave.So. Kim Mai Properties LLC $215.84 10250.00 27-028-24-24-0057 6440 Nicollet Ave.So. Richfield Med Bldg Ptrshp LLC $311.81 14807.40 27-028-24-24-0060 6500 Nicollet Ave.So. Bremer Bank National Assoc $1,626.62 77245.00 27-028-24-24-0061 199 65th St.W. Centro Bradley Spe 1 LLC $12,198.76 579295.70 27-028-24-24-0063 220 66th St.W. Wagstaff Properties MN LLC $583.66 27717.00 27-028-24-24-0064 100 66th St.W. Centro Bradley Spe 1 LLC $2,992.72 142118.50 27-028-24-32-0126 6701 Lyndale Ave.So. Paul J Zilka $333.22 15824.00 27-028-24-32-0127 6645 Lyndale Ave.So. Marshall &Isley Corp $1,066.79 50660.00 27-028-24-32-0130 400 67th St.W. Pines Investments LLC $1,332.14 63261.00 27-028-24-32-0132 address unassigned Woodlake VEF IV LLC $205.76 9771.00 27-028-24-32-0133 address unassigned Pines Investments LLC $541.82 25730.00 27-028-24-32-0137 6601 Lyndale Ave.So. Woodlake VEF IV LLC $3,185.05 151252.00 27-028-24-32-0138 407 66th St.W. Woodlake VEF IV LLC $386.31 18345.00 27-028-24-32-0451 6640 Lyndale Ave.So. City Bella Commercial LLC $767.29 36437.00 27-028-24-42-0078 6601 Nicollet Ave.So. Richfield Shoppes LLC $1,603.90 76165.96 28-028-24-11-0002 6330 Lyndale Ave.So. Lyndale Gardens LLC $412.52 19589.75 28-028-24-14-0010 800 66th St.W. JBB Properties LLC $1,099.77 52225.84 28-028-24-41-0039 826 66th St.W. Realty Income Props 3 LLC $827.63 39302.61 $50,000.00 2374404.42 Date Name Address City/State/Zip Property ID: Property Address: NOTICE OF ASSESSMENT HEARING NOTICE OF HEARING ON PROPOSED ASSESSMENT FOR CERTAIN SERVICES OF THE CITY WITHIN THE LYNDALE/HUB/NICOLLET REDEVELOPMENT AREA FROM JANUARY 1, 2011- DECEMBER 31, 2011 NOTICE IS HEREBY GIVEN that the Richfield City Council will hold an assessment hearing on the date and at the time and place given below, to pass upon the proposed assessment for the maintenance services to that area known as the Lyndale/Hub/Nicollet (UH/N) Redevelopment Area in the City. DATE, TIME AND PLACE OF HEARING: Monday, August 13, 2012 at 7:00 p.m. or as soon thereafter as the matter can be reached on the agenda, at the Richfield Municipal Center, 6700 Portland Avenue South, Richfield, Minnesota 55423. NATURE OF IMPROVEMENT AND AREA TO BE ASSESSED: From January 1, 2011 through December 31, 2011, the City of Richfield incurred costs for maintenance of the L/H/N area, including such work as landscape maintenance of common properties, including mowing, fertilizing, irrigation repair and other maintenance services. The City proposes to assess the costs for maintenance in the UH/N area, which totaled $39,090.86, against the properties that benefitted from this work. PROPOSED AMOUNT OF ASSESSMENT: The total amount to be assessed against all properties is $39,090.86. The amount to be assessed against your particular property is: $x,xxx.xx. Payment can be made after the assessment is adopted and before September 12, 2012 at the City of Richfield Assessor's office, 6700 Portland Avenue, Richfield, MN 55423. Please make your check payable to the City of Richfield. A copy of the proposed assessment roll is on the file for public inspection at the City Clerk's office, 6700 Portland Avenue South, Richfield, Minnesota. THIS IS THE ONLY NOTICE YOU WILL RECEIVE OF THIS ASSESSMENT. NO SEPARATE BILLING WILL OCCUR. PLEASE DO NOT MAIL PAYMENT BEFORE THE ASSESSMENT HEARING ON MONDAY, AUGUST 13, 2012. I1,1 PAYMENT OF ASSESSMENT: You may pay your assessment at any time after the assessment has been adopted by presenting a check to the City Treasurer at the Assessor's office, 6700 Portland Avenue South, Richfield, Minnesota 55423. Unpaid assessments accrue interest at the rate of five percent (5%) per year. The amount of interest payable depends upon when your payment is made, and the following deadlines apply: Payment within 30 days of adopted assessment: The property owner may pay the original principal amount without interest within 30 days from the date the Council adopts the assessment, scheduled for Monday, August 13, 2012. If the original principal amount is not paid, the assessment will be charged five percent (5%) interest. Payment on or after 9/12/2012: Payments received on or after 9/12/2012 but before 11/15/2012 will be charged interest at the rate of 5% through the date of payment. Payments are not accepted between November 15, 2012 and January 1, 2013. After January 1, 2013 payments can be made on the outstanding balance not certified to the current year taxes anytime with interest through December 31st of the year in which payment is made. If no payment is made, the assessments are spread over five years. Interest will be charged at the rate of five percent (5%) annually. Interest is calculated for 16 months on the first year of the assessment and 12 months thereafter. There is a $2.50 surcharge per year over the five year life of the assessment when certified to the property tax. Questions regarding the assessment payment procedure should be directed to Debbie Guiher at 612-861-9710. DEFERRED ASSESSMENTS: Under Minnesota Stat. Secs. 435.193 to 435.195, the Council may, in its discretion, defer the payment of this special assessment for any homestead property owned by a person who meets certain age or disability restrictions and for whom it would be a hardship to make the payments. The policy and procedure for deferment is set forth in City Resolution No. 9531, which may be obtained from the City Clerk. When deferment of the special assessment has been granted and is terminated for any reason provided in law, all amounts accumulated plus applicable interest become due. Any assessed property owner meeting the requirements of the law and the resolution may, within 30 days of the confirmation of the assessment, apply to the City Clerk for the prescribed form for deferral of this special assessment. HEARING PROCEDURE AND OBJECTIONS: The City Council will conduct a public hearing on the proposed assessment on the date and time listed. Written and oral objections will be considered at the meeting, but the Council may consider any objection to the amount of a proposed individual assessment at an adjourned meeting upon further notice to the affected property owners as the Council deems advisable. The Council may adopt the proposed assessment at the same meeting as the hearing. RIGHT TO APPEAL: You have the right to appeal the City Council's adoption of the assessment. To appeal, you must serve notice of an appeal upon the Mayor or City Clerk within 30 days after the adoption of the assessment, and you must also file the notice of appeal with the Hennepin County District Court within ten days after service upon the Mayor or City Clerk. You may not appeal unless you file a written obiection, signed by you, with the City Clerk prior to the hearing on August 13, 2012 or present the written obiection to the presiding officer at the hearing on August 13, 2012. BY ORDER OF THE CITY COUNCIL THIS 10th DAY OF JULY, 2012. Questions? Questions concerning this assessment amount should be directed to Chris Link, Operations Superintendent @ 612-861-9174. O 0 in 1IIIIII .iii AVE S 1\) , 1111111111111 DUPOi 1 gill * rm 4/1/4/# At, ,-, COL o • r/r ro Z a a o CO \ova- �' n7 b dr ' BRY em n co....,04 0 :IV '� A ._ - z I oa) -d11711 n °;\ LYNE ink ,.. y_0 , , rn SI -1' D HARRIET 7 H j -7 BM Z NM S I GRAND E U M IIIIIIIIII I PLEASANT 0 rn -H II rn rn x x (/) PILLSBURY AVE S I ° W NIIIII • a ,, ,TH Z � AVE S 76:3 I -1 0t. I Z BLAISDELL AVE S 0 ^Z 0 l J 0 m 0 _ O 0 NICOLLET AVE S ') —I I g n H 1ST AVE S \1 I 1 i k LEMMA III t AGENDA SECTION: RESOLUTION AGENDA ITEM# 12 REPORT# 148 STAFF REPORT RIO I f i i l.l_) CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAME,TITLE DEPARTMENT DIRECTOR REVIEW: RE REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of the attached resolution awarding the sale of$2,150,000 General Obligation Street Reconstruction Bonds, Series 2012A. I. RECOMMENDED ACTION: By Motion: Approval of the attached resolution awarding the sale of General Obligation Street Reconstruction Bonds, Series 2012A, in the original aggregate principal amount of $2,150,000; Fixing their form and specifications; Directing their execution and delivery; and providing for their payment. II. BACKGROUND • On August 9, 2011 the City Council approved a Five Year Street Reconstruction Plan and the use of street reconstruction bonds for the reconstruction of 76th Street East from 12th Avenue to Cedar Avenue. • The condition of 76th Street East from 12th Avenue has deteriorated to the point of reconstruction. • The City Council approved a reimbursement resolution for the project on September 13, 2011, which allowed City staff to incur costs for the project prior to the issuance of bonds. • Award of contract for the project was accepted by the City Council on May 8, 2012 to Redstone Construction Co, Inc. in the amount of$1,562,501.92. • The project will also replace old water, sanitary sewer, and storm sewer mains. 0813 2012A Bond Award of Sale • At the July 10, 2012 City Council meeting, the City Council approved a resolution calling for the sale of$2,150,000 General Obligation Street Reconstruction Bonds, Series 2012A. The issuance of the 2012A bonds will fund the reconstruction of 76th Street East from 12th Avenue to Cedar Avenue. • The debt service of the portion of the 2012A bonds will be supported through a debt service tax levy over the life of the bonds. • Bids on the 2012A General Obligation Street Reconstruction Bonds are due in the offices of Ehlers &Associates, Inc. on Monday August 13, 2012. A representative from Ehlers &Associates, Inc. will be at the City Council meeting to recommend the successful bidder and review attached documents, and provide information that is absent from the resolution and available only after the bidding on the capital notes has closed. • Following Ehlers &Associates, Inc. recommendation it would be appropriate for the City Council to award the bond sale to the qualified buyer and undertake other related actions as necessary as delineated in the approving resolution. The anticipated closing on the 2012A Bonds is scheduled for September 6, 2012. III. BASIS OF RECOMMENDATION A. POLICY • At the August 9, 2011 City Council meeting, the Council approved the Five Year Street Reconstruction Plan prepared in compliance with Minnesota Statute 475.58, subdivision 3b • The reconstruction of 76th Street from 12th Avenue to Cedar Avenue has been identified as a priority in the City's Five Year Reconstruction Plan. B. CRITICAL TIMING ISSUES • The condition of 76th Street east of 12th Avenue has deteriorated to the point of reconstruction. • The call for sale of bonds at this time is necessary in order to issue the bonds within the project timeframe so as to cash flow the project. C. FINANCIAL • The project is budgeted to cost$2,090,000,with cost estimates as follows: • Construction $1,562,500 • Change Orders $ 60,000 • Engineering $ 360,000 • Contingency $ 107,500 $2,090,000 • The debt service of the bonds will be funded entirely by a debt service tax levy. The average annual tax levy would be approximately $148,700 • The tax impact of the bond on a $150,000 home in Richfield, after market value exclusion would be approximately$6.60 per year. D. LEGAL • Legal Counsel has been involved in the bond sale transactions as bond counsel to the City. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S) • None. V. ATTACHMENTS • Resolution Providing for the Sale of$2,150,000 General Obligation Street Reconstruction Bonds, Series 2012A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Rebecca Kurtz, Ehlers &Associates, Inc. a- � Extract of Minutes of Meeting of the City Council of the City of Richfield,Hennepin County,Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Richfield, Minnesota, was duly held in the City Hall in said City on Monday, August 13,2012, commencing at 7:00 P.M. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's General Obligation Street Reconstruction Bonds, Series 2012A,to be issued in the aggregate principal amount of$2,150,000. The City Manager presented a tabulation of the proposals which had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals were as set forth in EXHIBIT A attached. After due consideration of the proposals,Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 408934v1 JAE RC145-641 RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION STREET RECONSTRUCTION BONDS, SERIES 2012A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $2,150,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY;AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council of the City of Richfield, Hennepin County, Minnesota (the"City")as follows: Section 1. Sale of Bonds. 1.01. Background;Authorization. (a) Pursuant to Minnesota Statutes, Chapter 475, as amended, specifically Section 475.58, subdivision 3b(collectively,the "Act"),the City is authorized to finance all or a portion of the cost of street reconstruction projects by the issuance of general obligation street reconstruction bonds of the City payable from ad valorem taxes. (b) The City held a public hearing on August 9, 2011, regarding a five-year street reconstruction plan (the "Plan") that describes the streets to be reconstructed, estimated costs, and any planned reconstruction of other streets in the City, and approved the plan and issuance of obligations by vote of all of the members of the City Council, all pursuant to the Act. The Plan authorizes issuance of bonds to pay the cost of reconstruction of various streets in the City(the "Street Reconstruction"). The City estimates that the total cost of the Street Reconstruction is $2,150,000,including capitalized interest,costs of issuance,and bond discount. (c) The City Council has determined that, within 30 days after the hearing, no petition for a referendum on the issuance of bonds to pay costs of the Street Reconstruction was received by the City in accordance with the Act. (d) It is necessary and expedient to the sound financial management of the affairs of the City to issue its General Obligation Street Reconstruction Bonds, Series 2012A (the "Bonds"), in the original aggregate principal amount of $2,150,000, pursuant to the Act to provide fmancing for the Street Reconstruction. (e) The City is authorized by Section 475.60, subdivision 2(9) of the Act to negotiate the sale of the Bonds, it being determined that the City has retained an independent financial advisor in connection with such sale. The actions of the City staff and fmancial advisor in negotiating the sale of the Bonds are ratified and confirmed in all aspects. 1.02. Award to the Purchaser and Interest Rates. The proposal of (the"Purchaser") to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $ (par amount of $2,150,000, [plus original issue premium of$ ,] [less original issue discount of$ ,] less underwriter's discount of$ ), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: 408934v1 JAE RC145-641 2 Year Interest Rate Year Interest Rate 2014 2024 2015 2025 2016 2026 2017 2027 2018 2028 2019 2029 2020 2030 2021 2031 2022 2032 2023 2033 True interest cost: 1.03. Purchase Contract. The sum of$ ,being the amount proposed by the Purchaser in excess of$2,124,200, shall be credited to the accounts in the Debt Service Fund hereinafter created or deposited in the Construction Fund hereinafter created,as determined by the Finance Manager of the City in consultation with the City's financial advisor. The Finance Manager is directed to retain the good faith check of the Purchaser,pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act, in the total principal amount of$2,150,000, originally dated September 6,2012, in the denomination of$5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth,and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2014 2024 2015 2025 2016 2026 2017 2027 2018 2028 2019 2029 2020 2030 2021 2031 2022 2032 2023 2033 1.05. Optional Redemption. The City may elect on February 1,2021, and on any day thereafter to prepay Bonds due on or after February 1,2022. Redemption may be in whole or in part and if in part,at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption,the City will notify DTC(as defined in Section 7 hereof)of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. 408934v1 JAE RC145-641 3 [1.06. Term Bonds; Mandatory Redemption. To be completed if Term Bonds are requested by the Purchaser.] Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and,upon surrender of each Bond,the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates;Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment,unless(i)the date of authentication is an interest payment date to which interest has been paid or made available for payment,in which case the Bond will be dated as of the date of authentication,or(ii)the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1,2013, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month,whether or not such day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent(the"Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered,transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith,to make transfers which it,in its judgment,deems improper or unauthorized. 408934v1 JAE RC145-641 4 (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not,for the purpose of receiving payment of, or on account of,the principal of and interest on the Bond and for all other purposes,and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax,fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid)to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints U.S.Bank National Association, Saint Paul, Minnesota, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business,the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days'notice and upon the appointment of a successor Registrar,in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date,without further order of this Council,the Finance Manager must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution,Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer 408934v1 ME RC145-641 5 \VP before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes,the same as if the officer had remained in office until delivery. Notwithstanding such execution,a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been so prepared,executed and authenticated,the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed defmitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of defmitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form set forth in EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Payment:Security:Pledges and Covenants. 4.01. Debt Service Fund. The Bonds will be payable from the General Obligation Street Reconstruction Bonds, Series 2012A Debt Service Fund (the"Debt Service Fund") hereby created. The Debt Service Fund shall be administered and maintained by the Finance Manager as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Finance Manager shall timely deposit in the Debt Service Fund the ad valorem taxes levied under Section 4.03 hereof(the"Taxes")and allocated to the payment of debt service on the Bonds,which Taxes are pledged to the Debt Service Fund. There is also appropriated to the Debt Service Fund(i)capitalized interest fmanced from the proceeds of the Bonds, if any; (ii) amounts over the minimum purchase price paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03; and(iii)accrued interest paid by the Purchaser upon closing and delivery of the Bonds,if any. If a payment of principal of or interest on the Bonds shall become due when there is not sufficient money in the Debt Service Fund to pay the same, the Finance Manager is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for such advances out of the proceeds of the Taxes when received. 4.02. Construction Fund. Proceeds of the Bonds, less the appropriations made in Section 4.01, together with Taxes and any other funds appropriated for the Street Reconstruction collected during the Street Reconstruction, will be deposited in a separate construction fund (the "Construction Fund") to be used solely to defray expenses of the Street Reconstruction. When the Street Reconstruction is completed and the cost thereof paid,the Construction Fund is to be closed and any funds remaining may be deposited in the Debt Service Fund. 408934v1 JAE RC145-641 6 4.03. Debt Service Coverage. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Debt Service Fund above provided and will be in the years and amounts as attached hereto as EXHIBIT C. 4.04. Certification to Taxpayer Services Division Manager as to Debt Service Fund Amount. It is hereby determined that the estimated collections of Taxes will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levy herein provided is irrepealable until all of the Bonds are paid,provided that at the time the City makes its annual tax levies the Finance Manager may certify to the Taxpayer Services Division Manager of Hennepin County,Minnesota,the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. 4.05. Registration of Resolution. The City Manager is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the fmancial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor and City Manager are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 5.03. Other Certificates. The Mayor, City Manager, and Finance Manager are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers,at the closing the Mayor,the City Manager,and the Finance Manager shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation,and the Finance Manager shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 5.04. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses (other than amounts payable to Kennedy& Graven, Chartered, as Bond Counsel) to KleinBank, Chaska, Minnesota on the closing date for further distribution as directed by the City's fmancial advisor,Ehlers&Associates,Inc. Section 6. Tax Covenant. 408934v1 JAE RC145-641 7 6.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the"Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 6.02. No Rebate Required. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2012) exceed the small-issuer exception amount of$5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements,the City hereby fords, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City(and all subordinate entities of the City)during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D)of the Code. 6.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds"within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as"qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not"private activity bonds"as defined in Section 141 of the Code; (b) the City designates the Bonds as"qualified tax-exempt obligations"for purposes of Section 265(b)(3)of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City)during calendar year 2012 will not exceed$10,000,000;and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2012 have been designated for purposes of Section 265(b)(3)of the Code. 6.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Book-Entry System;Limited Obligation of City. 408934v1 JAE RC145-641 8 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance,the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede&Co.,as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede&Co., as nominee of DTC,the City,the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers,banks and other fmancial institutions from time to time for which DTC holds Bonds as securities depository (the"Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds,(ii)the delivery to any Participant or any other person(other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption,or(iii)the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of,premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal,premium and interest with respect to such Bond,for the purpose of registering transfers with respect to such Bonds,and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of,premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede&Co.,the words"Cede&Co."will refer to such new nominee of DTC;and upon receipt of such a notice,the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the"Representation Letter") which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent,respectively,to be complied with at all times. 7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council,determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants,of the availability through DTC of Bond certificates. In such event the City will issue,transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer,exchange and method of payment thereof. 408934v1 JAE RC145-641 9 GAD 7.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 8.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution,failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank) 408934v1 JAE RC145-641 10 .1c The motion for the adoption of the foregoing resolution was duly seconded by Member ,and upon vote being taken thereon,the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 408934v1 JAE RC145-641 11 Passed and adopted this 13th day of August,2012. CITY OF RICHFIELD,MINNESOTA Mayor City Manager Attest: City Clerk 408934v1 JAE RC145-641 12 EXHIBIT A PROPOSALS Error!Unknown document property name. A_1 I EXHIBIT B FORM OF BOND No.R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD GENERAL OBLIGATION STREET RECONSTRUCTION BOND SERIES 2012A Date of Rate Maturity Original Issue CUSIP February 1,20_ September 6,2012 Registered Owner: Cede&Co. The City of Richfield, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the"City"), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns,the principal sum of$ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above,payable February 1 and August 1 in each year,commencing August 1,2013, to the person in whose name this Bond is registered at the close of business on the fifteenth day(whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, Saint Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due,the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1,2021, and on any day thereafter to prepay Bonds due on or after February 1,2022. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company ("DTC") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of$2,150,000 all of like original issue date and tenor,except as to number,maturity date,redemption privilege,and interest rate,all issued pursuant to a resolution adopted by the City Council on August 13,2012 (the"Resolution"), for the purpose of providing money to aid in fmancing certain street reconstruction improvements in the City, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 475, as amended, specifically Section 475.58, subdivision 3b, and the principal hereof and interest hereon are payable primarily from Error!Unknown document property name. B-1 G ad valorem taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency in taxes pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of$5,000 or any integral multiple thereof of single maturities. The City Council has designated the issue of Bonds of which this Bond forms a part as"qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended(the"Code")relating to disallowance of interest expense for fmancial institutions and within the$10 million limit allowed by the Code for the calendar year of issue. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax,fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof,whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done,to exist,to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, charter,or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Richfield, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: September 6,2012 CITY OF RICHFIELD,MINNESOTA (Facsimile) (Facsimile) Mayor City Manager Error!Unknown document property name. B-2 CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S.BANK NATIONAL ASSOCIATION By Authorized Representative ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM--as tenants in common UNIF GIFT MIN ACT Custodian (Cust) (Minor) TEN ENT--as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond,with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Error!Unknown document property name. B-3 NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange,Inc.Medallion Signatures Program("MSP")or other such"signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STEMP, SEMP or MSP,all in accordance with the Securities Exchange Act of 1934,as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Officer of Registrar Cede&Co. Federal ID#13-2555119 Error!Unknown document property name. B-4 EXHIBIT C TAX LEVY SCHEDULE YEAR* TAX LEVY 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 *Year tax levy collected. Error!Unknown document property name. C-1 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF RICHFIELD ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Richfield, Hennepin County, Minnesota(the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on August 13,2012 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's General Obligation Street Reconstruction Bonds, Series 2012A, in the original aggregate principal amount of$2,150,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day of ,2012. City Clerk City of Richfield,Minnesota (SEAL) Error!Unknown document property name. AGENDA SECTION: RESOLUTION AGENDA ITEM# 13 REPORT# 149 STAFF REPORT RIO IFIILD' CITY COUNCIL MEETING AUGUST 13, 2012 REPORT PREPARED BY: CHRIS REGIS,FINANCE MANAGER NAME,TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: t/A ik ITEM FOR COUNCIL CONSIDERATION: Consideration of the attached resolution awarding the sale of$2,985,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution awarding the sale of Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B, in the original aggregate principal amount of $2,985,000; Fixing their form and specifications; Directing their execution and delivery; Providing for their payment; Providing for the escrowing and investment of the proceeds thereof; And providing for the redemption of bonds refunded thereby. II. BACKGROUND In 2003 the City issued the $3,470,000 Taxable G.O. Tax Increment Bonds, Series 2003C to refund the City's $4,840,000 Taxable General Obligation Temporary Tax Increment Bonds, Series 2003A. The 2003A bonds were issued to provide financing for various public improvements within the Lyndale Gateway West Tax increment Financing District. With interest rates continuing to be at historical lows, staff has requested Ehlers & Associates, Inc. to review this bond issue to determine if refunding was feasible at 0813 Award of Sale Refunding 2003C Bonds this time. Upon review of this bond issue, Ehlers &Associates, Inc. recommends undertaking a bond refunding to take advantage of the low interest rates. At the July 24, 2012 City Council meeting, the Council approved the refunding of the 2003C bonds with the $2,560,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B. The type of refunding originally presented to the City Council was an Advance Crossover refunding. In an advance crossover refunding, bonds are issued in advance of a specified call date. The proceeds of the issue are invested in government securities and held in escrow. The money in the escrow account is used to pay interest on the new issue until the call date. At the call date, the funds in the escrow are then used to prepay the bonds to be called. The City would then begin to make payments on the newly issued "refunding bonds." However, subsequent to the initial approval the City's fiscal consultant, Ehlers & Associates, Inc. recommended an alternative advance refunding option in form of a net cash advance refunding. This option funds an escrow that is responsible for funding the payments on the 2003C Bonds rather than the new bonds. The net cash advance refunding option is Ehlers' preferred approach for advance refunding taxable obligations and typically results in a similar level of present value savings. Consequently, Ehlers still recommends refunding the Series 2003C bonds using a net cash advance refunding. The City will begin making payments on the 2012B bonds on February 1, 2013, and have no additional obligations with respect to the 2003C Bonds. The outcome of utilizing a net cash advance refunding is a $425,000 increase in the principal amount of the new bonds, from the initial $2,560,000 to $2,985,000. This increase is the result of increased escrow requirements related to the higher interest rates on the 2003C Bonds versus those of the 2012B Bonds. Despite the increase in the principal of the new bonds, the estimated savings in debt service with the refunding will be $322,241. This compares favorably to the original savings estimate of$219,615. The new savings amount represents a present value savings of 10.50% of the refunded principal. Bids on the 2012B Taxable G.O. Tax Increment Refunding Bonds are due in the offices of Ehlers &Associates, Inc. on Monday August 13, 2012. A representative from Ehlers &Associates, Inc. will be at the City Council meeting to recommend the successful bidder and review attached documents, and provide information that is absent from the resolution and available only after the bidding on the capital notes has closed. Following Ehlers &Associates, Inc. recommendation it would be appropriate for the City Council to award the bond sale to the qualified buyer and undertake other related actions as necessary as delineated in the approving resolution. The anticipated closing on the 2012B Bonds is scheduled for September 6, 2012. III. BASIS OF RECOMMENDATION A. POLICY • N/A B. CRITICAL TIMING ISSUES • The sale of the refunding bonds at this time will allow the City to take advantage of the low interest rates and realize savings. C. FINANCIAL • On the basis of Ehlers &Associates, Inc. review, it appears that the current interest rate climate makes it feasible to refund the bond issue. • The current outstanding principal balance of the 2003C bonds is $2,705,000. With the net cash advance refunding, proceeds of the new bonds will pay the principal and interest of the 2003C bonds. • The $2,985,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B are being issued to provide funds for a net cash advance refunding of the City's Taxable G.O. Tax Increment Bonds, Series 2003C. The par amount of the Series 2003C bonds which will be callable on February 1, 2014 total $2,555,000. • It is estimated that this refinancing under current rates would reduce the debt service costs of paying this debt by approximately $322,241. • This savings expressed in present value terms is around 10.50% of the refunded principal. The minimum savings required by Minnesota state law for a refunding is a present value savings of 3.00%. • It is the intent of the City to continue to use tax increment revenues from the Lyndale Gateway West Tax Increment Financing District to pay the debt service. • The bonds are being issued for a 13-year period; this does not extend the term of the original issue. The maturity date of the new refunding issue will be the same as the current outstanding issue. D. LEGAL • None. IV. ALTERNATIVE RECOMMENDATION(S) • Disregard the current refunding option, continue to retire the bonded debt as presently scheduled, and forego the projected savings. V. ATTACHMENTS • Resolution Awarding the Sale of the Series 2012B Bonds. • Advance Refunding Escrow Agreement related to the Series 2003C Bonds. • Amended and Restated Tax Increment Pledge Agreement between the City and HRA • Presale Report VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representative from Ehlers &Associates, Inc. r3' Extract of Minutes of Meeting of the City Council of the City of Richfield,Hennepin County,Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Richfield, Minnesota, was duly held in the City Hall in said City on Monday, August 13,2012, commencing at 7:00 P.M. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's Taxable General Obligation Tax Increment Refunding Bonds,Series 2012B,to be issued in the aggregate principal amount of$2,985,000. The City Manager presented a tabulation of the proposals which had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals were as set forth in EXEIIBIT A attached. After due consideration of the proposals,Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 408950v1 JAE RC145-641 RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2012B, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $2,985,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY BE IT RESOLVED By the City Council of the City of Richfield, Hennepin County, Minnesota (the"City")as follows: Section 1. Sale of Bonds. 1.01. Background;Authorization. (a) The City and the Housing and Redevelopment Authority in and for the City of Richfield (the "Authority") have duly established the Lyndale Gateway West Tax Increment District (the "TIF District") within the Richfield Redevelopment Project Area (the "Project Area") pursuant to Minnesota Statutes, Sections 469.001 to 469.047, as amended and Sections 469.174 to 469.1799,as amended(collectively,the"TIF Act"). (b) Pursuant to Section 469.178 of the TIF Act and Minnesota Statutes,Chapter 475, as amended (the "Municipal Debt Act"), the City previously agreed to fmance certain public redevelopment costs to be incurred by the Authority or the City in the Project Area through the issuance of the City's Taxable General Obligation Tax Increment Bonds, Series 2003C (the "Refunded Bonds"), dated December 30, 2003, in the original aggregate principal amount of $3,470,000, of which $2,705,000 in principal amount is currently outstanding, $2,400,000 of which will be callable on or after February 1, 2014. Proceeds of the Refunded Bonds were used to (i) refund a portion of the City's Taxable General Obligation Temporary Tax Increment Refunding Bonds, Series 2003A,issued in the original aggregate principal amount of$4,840,000, and(ii)finance certain additional public redevelopment costs related to the Project Area. (c) The City is authorized by Section 475.67, subdivisions 4 through 12 of the Municipal Debt Act to issue and sell its general obligation bonds to refund outstanding bonds when determined by the City Council to be necessary and desirable for the reduction of debt service or interest cost or the adjustment of maturities of outstanding issues of bonds. (d) The City finds that it is necessary and desirable for the reduction of debt service or interest cost or the adjustment of maturities of the Refunded Bonds that the City issue its Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B (the"Bonds"), in the original aggregate principal amount of$2,985,000, pursuant to the TIF Act and the Municipal Debt Act (together, the "Act") to (i) pay the principal of and interest on the Refunded Bonds through February 1, 2014; and (ii) pay the outstanding principal amount of the Refunded Bonds on February 1,2014. 408950v1 JAE RC145-641 2 (e) The City is authorized by Section 475.60, subdivision 2(9) of the Municipal Debt Act to negotiate the sale of the Bonds, it being determined that the City has retained an independent fmancial advisor in connection with such sale. The actions of the City staff and financial advisor in negotiating the sale of the Bonds are ratified and confirmed in all aspects. 1.02. Award to the Purchaser and Interest Rates. The proposal of (the"Purchaser") to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $ (par amount of $2,985,000, [plus original issue premium of$ ,] [less original issue discount of$ ,] less underwriter's discount of$ ), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2013 2020 2014 2021 2015 2022 2016 2023 2017 2024 2018 2025 2019 True interest cost: 1.03. Purchase Contract. The sum of$ ,being the amount proposed by the Purchaser in excess of$2,949,180, shall be credited to the accounts in the Debt Service Fund hereinafter created or deposited in the Escrow Fund hereinafter created, as determined by the Finance Manager of the City in consultation with the City's financial advisor. The Finance Manager is directed to retain the good faith check of the Purchaser,pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the TIE' Act and the Municipal Debt Act (together, the "Act"), in the total principal amount of$2,985,000, originally dated September 6,2012, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2013 2020 2014 2021 2015 2022 2016 2023 2017 2024 2018 2025 2019 408950v1 JAE RC145-641 3 i3)-C 1.05. Optional Redemption. The City may elect on February 1,2021, and on any day thereafter to prepay Bonds due on or after February 1,2022. Redemption may be in whole or in part and if in part,at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption,the City will notify DTC(as defined in Section 7 hereof)of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [1.06. Term Bonds; Mandatory Redemption. To be completed if Term Bonds are requested by the Purchaser.] Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and,upon surrender of each Bond,the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates;Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment,unless (i)the date of authentication is an interest payment date to which interest has been paid or made available for payment,in which case the Bond will be dated as of the date of authentication,or(ii)the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1,2013,to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month,whether or not such day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent(the"Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered,transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. 408950v1 JAE RC145-641 4 I.5 (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith,to make transfers which it,in its judgment,deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not,for the purpose of receiving payment of, or on account of,the principal of and interest on the Bond and for all other purposes,and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid)to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints U.S.Bank National Association, Saint Paul, Minnesota, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business,the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days'notice and upon the appointment of a successor Registrar,in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or 408950v1 JAE RC145-641 5 interest due date,without further order of this Council,the Finance Manager must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution,Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes,the same as if the officer had remained in office until delivery. Notwithstanding such execution,a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been so prepared,executed and authenticated,the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form set forth in EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Payment Security;Pledges and Covenants. 4.01. Debt Service Fund. The Bonds will be payable from the Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B Debt Service Fund (the"Debt Service Fund") hereby created. The Debt Service Fund shall be administered and maintained by the Finance Manager as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. All tax increment revenues resulting from increases in taxable valuation of real property in the TIF District(the "Tax Increment Revenues")received by the City from the TIF District pursuant to the Pledge Agreement(as defined herein)are pledged to the Debt Service Fund. There is also appropriated to the Debt Service Fund (i)amounts over the minimum purchase price paid by the Purchaser,to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03;and(ii)accrued interest paid by the Purchaser upon closing and delivery of the Bonds,if any. If a payment of principal of or interest on the Bonds shall become due when there is not sufficient money in the Debt Service Fund to pay the same,the Finance Manager is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for such advances out of the proceeds of the Tax Increment Revenues when received. 408950v1 JAERC145-641 6 011 The debt service fund heretofore established for the Refunded Bonds pursuant to the resolution authorizing the issuance and sale of the Refunded Bonds (the "Refunded Bonds Resolution") is hereby terminated, and all monies therein are hereby transferred to the Debt Service Fund herein created;provided, however, that the Finance Manager is hereby authorized and directed to transfer from said Debt Service Fund those amounts determined by actuarial calculation at the time of delivery of the Bonds to be necessary to properly fund the Escrow Fund established by Section 4.02 hereof. 4.02. Escrow Fund. Proceeds of the Bonds in the amount of$ shall be deposited in an escrow fund (the "Escrow Fund") to be maintained with U.S. Bank National Association, Saint Paul, Minnesota, and said financial institution is hereby designated escrow agent(the "Escrow Agent") for the Escrow Fund. Such funds will be received by the Escrow Agent and applied to fund the Escrow Fund and to pay costs of issuing the Bonds. Proceeds of the Bonds, less the proceeds of the Bonds used to pay costs of issuance and less the appropriations made in Section 4.01 hereof, are hereby irrevocably pledged and appropriated to the Escrow Fund, together with all investment earnings thereon. The Escrow Fund will be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as will be required to provide sufficient funds,together with any cash or other funds retained in the Escrow Fund, to (i) pay principal of and interest on the Refunded Bonds through February 1,2014(the"Refunded Bonds Redemption Date"); and(ii)pay the remaining principal outstanding on the Refunded Bonds on the Refunded Bonds Redemption Date. The monies in the Escrow Fund will be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Fund may be remitted to the City, all in accordance with the Escrow Agreement (hereafter defined)by and between the City and the Escrow Agent. Any monies remitted to the City upon termination of the Escrow Agreement shall be deposited to the Debt Service Fund. 4.03. Pledge Agreement An Amended and Restated Tax Increment Pledge Agreement between the City and the Authority, to be dated on the date of issuance and delivery of the Bonds (the "Pledge Agreement"),is hereby approved and shall be executed in substantially the form on file with the City,with such additions, deletions, and other changes as are approved by the City Manager. The Pledge Agreement is to be executed and delivered in order to satisfy the requirements of Section 469.178, subdivision 2 of the TIF Act and Sections 475.58, subdivision 1, and 475.61, subdivision 1, of the Municipal Debt Act. The Pledge Agreement creates rights in the City and the Authority but is not intended to create duties or obligations of the City or the Authority to any other persons (including the beneficial or registered owners of the Bonds) with respect to the Tax Increment Revenues or other revenues described or referenced in the Pledge Agreement, except to the extent required by applicable law, and is not intended to create rights in or claims by any other persons (including the beneficial or registered owners of the Bonds)with respect to the Tax Increment Revenues or other revenues described or referenced in the Pledge Agreement,except to the extent required by applicable law. 4.04. No Tax Levy Needed. It is determined that the estimated collection of Tax Increment Revenues for the payment of principal of and interest on the Bonds will produce at least five percent in excess of the amount needed to meet when due,the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.05. Registration of Resolution. The City Manager is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager and to obtain the certificate required by Section 475.63 of the Municipal Debt Act. Section 5. Refunding;Findings;Redemption of Refunded Bonds. 408950v1 JAE RC145-641 7 5.01. Purpose of Refunding. It is hereby found and determined that based upon information presently available from the City's financial advisers,the issuance of the Bonds will result in a reduction of debt service or interest cost to the City or the extension or adjustment of the maturities in relation to the resources available for their payment. 5.02. Proceeds Pledged to the Escrow Fund. As of the date of delivery of and payment for the Bonds, proceeds of the Bonds in the amount of$ are hereby pledged and appropriated and will be deposited in the Escrow Fund for the purposes of (i) paying principal of and interest on the Refunded Bonds through the Refunded Bonds Redemption Date; and(ii)redeeming and prepaying all of the outstanding principal of the Refunded Bonds on the Refunded Bonds Redemption Date. Proceeds of the Bonds in the amount of $ will be deposited in the Escrow Fund to pay the costs of issuance of the Bonds. 5.03. Payment at Maturity or Redemption of Refunded Bonds. It is hereby found and determined that the proceeds of the Refunding Bonds and funds available and appropriated to the Escrow Fund will be sufficient, together with the permitted earnings on the investment of the Escrow Fund, to pay at maturity or redemption all of the principal of, interest on and redemption premium,if any, on the Refunded Bonds. 5.04. Purchase of Securities and Compliance with the Act. Securities purchased from the monies in the Escrow Fund will be limited to securities specified in Section 475.67, subdivision 8 of the Municipal Debt Act. Ehlers &Associates, Inc. and/or U.S. Bank National Association, as agent for the City, is hereby authorized and directed to purchase for and on behalf of the City and in its name, appropriate securities to fund the Escrow Fund. Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited in the Escrow Fund established herein and held pursuant to the terms of the Escrow Agreement and this resolution. 5.05. Escrow Agreement On or prior to the delivery of the Bonds, the Mayor and the City Manager are hereby authorized and directed to execute on behalf of the City the Advance Refunding Escrow Agreement (the "Escrow Agreement"). The Escrow Agreement is hereby approved in substantially the form on file with the City on the date hereof, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor and City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and City Manager shall be conclusive evidence of such determination. 5.06. Notice of Redemption. The Refunded Bonds maturing on February 1,2015,and thereafter will be redeemed and prepaid on February 1, 2014, in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as EXHIBIT C, which terms and conditions are hereby approved and incorporated herein by reference. The registrar for the Refunded Bonds is authorized and directed to send a copy of the Notice of Call for Redemption to the registered holder of the Refunded Bonds. Section 6. Authentication of Transcript. 6.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the fmancial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the 408950v1 JAE RC145-641 8 validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. Certification as to Official Statement. The Mayor and City Manager are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 6.03. Other Certificates. The Mayor, City Manager, and Finance Manager are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers,at the closing the Mayor,the City Manager,and Finance Manager shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation,and the Finance Manager shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 6.04. Payment of Costs of Issuance. Costs of issuance of the Bonds will be paid by the Escrow Agent pursuant to the Escrow Agreement. Section 7. Book-Entry System;Limited Obligation of City. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance,the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede&Co.,as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede&Co., as nominee of DTC,the City,the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers,banks and other fmancial institutions from time to time for which DTC holds Bonds as securities depository (the"Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds,(ii)the delivery to any Participant or any other person(other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption,or(iii)the payment to any Participant or any other person, other than a registered owner of Bonds,of any amount with respect to principal of,premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal,premium and interest with respect to such Bond,for the purpose of registering transfers with respect to such Bonds,and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of,premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds,as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place 408950v1 JAERC145-641 9 of Cede&Co.,the words"Cede&Co."will refer to such new nominee of DTC;and upon receipt of such a notice,the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the"Representation Letter") which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent,respectively,to be complied with at all times. 7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council,determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants,of the availability through DTC of Bond certificates. In such event the City will issue,transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer,exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 8.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution,failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 408950v1 JAE RC145-641 10 (The remainder of this page is intentionally left blank) 408950v1 JAE RC145-641 11 r3/° The motion for the adoption of the foregoing resolution was duly seconded by Member ,and upon vote being taken thereon,the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 408950v1 JAE RC145-641 12 1 5iiJ Passed and adopted this 13th day of August,2012. CITY OF RICHFIELD,MINNESOTA Mayor City Manager Attest: City Clerk 408950v1 JAE RC145-641 13 1tA t3 EXHIBIT A PROPOSALS Error!Unknown document property name. A_1 t EXHIBIT B FORM OF BOND No.R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND SERIES 2012B Date of Rate Maturity Original Issue CUSIP February 1,20_ September 6,2012 Registered Owner: Cede&Co. The City of Richfield, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the"City"), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns,the principal sum of$ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing February 1,2013, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S.Bank National Association, Saint Paul,Minnesota,as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due,the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1,2021, and on any day thereafter to prepay Bonds due on or after February 1,2022. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company ("DTC") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of$2,985,000 all of like original issue date and tenor,except as to number,maturity date,redemption privilege,and interest rate,all issued pursuant to a resolution adopted by the City Council on August 13,2012 (the"Resolution"), for the purpose of providing money to refund in advance of maturity of the outstanding principal amount of certain general obligation bonds of the City,pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 469 and 475, as amended, specifically Section 475.67, subdivisions 4 through 12, and the Error!Unknown document property name. B-1 principal hereof and interest hereon are payable primarily from tax increment revenues resulting from increases in taxable valuation of real property in a tax increment financing district within the Project Area, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in tax increment revenues pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of$5,000 or any integral multiple thereof of single maturities. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax,fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof,whether this Bond is overdue or not,for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done,to exist,to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional,charter,or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Richfield, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: September 6,2012 CITY OF RICHFIELD,MINNESOTA (Facsimile) (Facsimile) Mayor City Manager Error!Unknown document property name. B_2 [9/1'1 CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S.BANK NATIONAL ASSOCIATION By Authorized Representative ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM--as tenants in common UNTIE GIFT MIN ACT Custodian (Cust) (Minor) TEN ENT--as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond,with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular,without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a fmancial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the Error!Unknown document property name. B-3 l`t r� New York Stock Exchange,Inc.Medallion Signatures Program("MSP")or other such"signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STEM?, SEMP or MSP,all in accordance with the Securities Exchange Act of 1934,as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Officer of Registrar Cede&Co. Federal ID#13-2555119 Error!Unknown document property name. B-4 7Y11 1 EXHIBIT C NOTICE OF CALL FOR REDEMPTION $3,470,000 CITY OF RICHFIELD,MINNESOTA TAXABLE GENERAL OBLIGATION TAX INCREMENT BONDS SERIES 2003C NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Richfield, Hennepin County,Minnesota(the"City"),there have been called for redemption and prepayment on February 1,2014 all outstanding bonds of the City designated as Taxable General Obligation Tax Increment Bonds, Series 2003C, dated December 30,2003, having stated maturity dates of February 1 in the years 2015 through 2025, both inclusive, totaling $2,400,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2015 $165,000 763325 N29 2016 175,000 763325 N37 2017 185,000 763325 N45 2018 195,000 763325 N52 2019 205,000 763325 N60 2020 215,000 763325 N78 2021 225,000 763325 N86 2022 240,000 763325 N94 2023 250,000 763325 P27 2024 265,000 763325 P35 2025 280,000 763325 P43 The bonds are being called at a price of par plus accrued interest to February 1, 2014, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, Saint Paul,Minnesota,on or before February 1,2014,at the following address: If by mail: If by hand: U.S.Bank National Association U.S.Bank National Association Corporate Trust Services 60 Livingston Avenue 60 Livingston Avenue 3`d Floor—Bond Drop Window EP-MN-WS3C St.Paul,MN 55107 St.Paul,MN 55107 Error!Unknown document property name. C-1 • i3,P Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003,the City is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the City is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements of this paragraph. Additional information may be obtained from: U.S.Bank National Association Corporate Trust Division Bondholder Relations(800)934-6802 Dated: BY ORDER OF THE CITY COUNCIL By /s/ Steve Devich City Manager City of Richfield,Minnesota Errors Unknown document property name. C-2 I1)')` STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF RICHFIELD ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Richfield, Hennepin County, Minnesota(the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on August 13,2012 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B, in the original aggregate principal amount of $2,985,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day of ,2012. City Clerk City of Richfield,Minnesota (SEAL) Error!Unknown document property name. (91 ADVANCE REFUNDING ESCROW AGREEMENT Relating to: $3,470,000 City of Richfield,Minnesota Taxable General Obligation Tax Increment Refunding Bonds Series 2003C THIS ADVANCE REFUNDING ESCROW AGREEMENT (the "Agreement"), is made this 6th day of September, 2012, pursuant to Minnesota Statutes, Section 475.67, subdivisions 4 through 12 (the"Act"), and executed by and between the City of Richfield, Minnesota (the"City"), and U.S. Bank National Association(the"Escrow Agent"): WITNESSETH: That the parties hereto recite and, in consideration of the mutual covenants contained herein,covenant and agree as follows: 1. The City previously issued its Taxable General Obligation Tax Increment Bonds, Series 2003C (the "Refunded Bonds"), dated December 30, 2003, in the original aggregate principal amount of$3,470,000. The Refunded Bonds are currently outstanding in the aggregate principal amount of$2,705,000, and$2,400,000 in principal amount of the Refunded Bonds is subject to redemption on or after February 1, 2014. Pursuant to a resolution adopted by the City Council of the City on August 13, 2012 (the "Resolution"), the City has provided for the issuance of its Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B (the `Bonds"), in the original aggregate principal amount of $2,985,000. A portion of the proceeds of the Bonds will be applied to the defeasance and refunding of the City's Refunded Bonds. A portion of the proceeds of the Refunding Bonds will be placed in escrow pursuant to this Agreement to(i)pay when due the principal of and interest on the Refunded Bonds through February 1, 2014 (the "Redemption Date"); and (ii) on the Refunded Bonds Redemption Date pay the principal of and premium,if any,due on the Refunded Bonds maturing on and after February 1,2015. 2. The City, in accordance with the Resolution, issued and sold the Refunding Bonds in the principal amount of$2,985,000 and received a purchase price for the Bonds of$ (par amount of $2,985,000, [plus original issue premium of$ ,] [less original issue discount of$ ,] less underwriter's discount of$ ), plus accrued interest, if any. On the date hereof,the Escrow Agent has received,on behalf of the City,proceeds of the Bonds in the amount of$ . Such funds shall be applied as follows: (i)$ will be deposited in the Escrow Fund established herein for the defeasance and redemption of the Refunded Bonds; and (ii)$ will be used to pay the costs of issuance, as described in paragraph 3 hereof. Pursuant to this Agreement, the Escrow Agent will invest funds deposited in the Escrow Fund in the amount of$ in securities (the "Securities"), as described in the schedule which is attached hereto, marked EXHIBIT A and made a part hereof, and $ will remain on deposit in the Escrow Fund in cash. It is understood and agreed that the dates and amounts of payments of principal and interest due on the securities so deposited are as indicated in EXHIBIT B, and that the cash deposited and the principal and interest payments due on such securities are such as to provide the funds required to pay all principal and interest payable on the Refunded Bonds, on and prior to their respective maturity dates, or to the date on which any of the Refunded Bonds have been directed to be prepaid,as stated in the Resolution. 3. The Escrow Agent acknowledges receipt of the cash and Securities and agrees that it will hold such cash and Securities in a special escrow account(the"Escrow Fund") created in the name of the 408963v1 JAE RC145-641 045. City, and will collect and receive on behalf of the City all payments of principal of and interest on such securities and will remit from the Escrow Fund to the paying agent for the Refunded Bonds the funds required from time to time for the payment of(i)principal of and interest on the Refunded Bonds through February 1, 2014, which is the Redemption Date; and (ii) all outstanding principal of, interest on, and premium, if any, on the Refunded Bonds on the Redemption Date. After provision for payment of all remaining Refunded Bonds,with interest accrued thereon,the Escrow Agent will remit any remaining funds in the Escrow Fund to the City. The sum of$ deposited to the Escrow Fund shall be used by the Escrow Agent for the payment of the costs of issuance of the Bonds and payments to the City as set forth in EXHIBIT C attached hereto. 4. The Escrow Agent expressly waives any lien upon or claim against the monies and investments in the Escrow Fund. 5. If at any time it shall appear to the Escrow Agent that the money in the Escrow Fund allocable for such use hereunder will not be sufficient to make any payment due to the holders of any of the Refunded Bonds, the Escrow Agent shall immediately notify the City. The City thereupon shall forthwith deposit in the Escrow Fund from funds on hand and legally available to it such additional funds as may be required to meet fully the amount to become due and payable. The City acknowledges its obligation to levy ad valorem taxes on all taxable property in the City to the extent required to produce monies necessary for this purpose. The City and Escrow Agent acknowledge receipt of a verification report from Grant Thornton LLP, Minneapolis, Minnesota, certified public accountants, dated September 6, 2012, certifying that such cash and Securities are sufficient to comply with the requirements of the Act. 6. The City will not repeal or amend the Resolution that calls the Refunded Bonds for redemption on their respective Redemption Date. The Escrow Agent shall cause the Notice of Call for Redemption attached hereto as EXHIBIT D to be mailed not less than 30 days prior to the Redemption Date to the registered owners of the Refunded Bonds to be redeemed, at their addresses appearing on the bond register;but failure to give such notice shall not affect the validity of the call for redemption. 7. Within thirty(30)days of December 31,2012, and within thirty(30)days of December 31 of each year thereafter until termination of the Escrow Fund, the Escrow Agent shall submit to the City a report covering all money it shall have received and all payments it shall have made or caused to be made hereunder during the preceding twelve months. Such report shall also list all obligations held in the Escrow Fund and the amount of money on hand in the Escrow Fund on December 31 of each year. 8. It is recognized and agreed that title to the Securities and cash held in the Escrow Fund from time to time shall remain vested in the City but subject always to the prior charge and lien thereon of this Agreement and the use thereof required to be made by this Agreement. The Escrow Agent shall hold all such money and obligations in a special trust fund and account separate and wholly segregated from all other funds and securities of the Escrow Agent, and shall never commingle such money or securities with other money or securities;provided,however,that nothing herein contained shall be construed to require the Escrow Agent to keep the identical monies, or any part thereof,received for the Escrow Fund on hand,but monies of an equal amount(except to the extent such are represented by investments permitted under this Agreement)shall always be maintained on hand as funds held by the Escrow Agent as trustee,belonging to the City, and a special account shall at all times be maintained on the books of the Escrow Agent,together with such investments. In the event of the Escrow Agent's failure to account for any money or obligations held by it in the Escrow Fund,such money and obligations shall be and remain the property of the City,and if for any reason such money or obligations cannot be identified, all other assets of the Escrow Agent shall be impressed with a trust for the amount thereof, and the City shall be entitled to a preferred claim upon such assets. It is understood and agreed that the responsibility of the Escrow Agent under this Agreement is 408963v1 JAE RC145-641 2 'I)11 limited to the safekeeping and segregation of the funds and securities deposited with it in the Escrow Fund, and the collection of and accounting for the principal and interest payable with respect thereto. 9. This Agreement is made by the City for the benefit of the holders of the Refunded Bonds, and is not revocable by the City, and the investments and other funds deposited in the Escrow Fund and all income therefrom have been irrevocably appropriated for the payment of the Refunded Bonds and interest thereon in accordance with this Agreement. 10. This Agreement shall be binding upon and shall inure to the benefit of the City and the Escrow Agent and their respective successors and assigns. In addition, this Agreement shall constitute a third-party beneficiary contract for the benefit of the holders of the Refunded Bonds and said third-party beneficiaries shall be entitled to enforce performance and observance by the City and the Escrow Agent of the respective agreements and covenants herein contained as fully and completely as if said third-party beneficiaries were parties hereto. Any bank into which the Escrow Agent may be merged or with which it may be consolidated or any bank resulting from any merger or consolidation to which it shall be a party or any bank to which it may sell or transfer all or substantially all of its corporate trust business shall, if the City approves, be the successor agent without the execution of any document or the performance of any further act. 11. The Escrow Agent hereby certifies that it is a financial institution whose deposits are insured by the Federal Deposit Insurance Corporation and whose capital and surplus is not less than $500,000. 12. The Escrow Agent may at any time resign and be discharged of its obligations hereunder by giving to the City Manager of the City written notice of such resignation not less than 60 days before the date when the same is to take effect, provided that the Escrow Agent shall return to the City the pro rata portion of its fee which is allocable to the period of time commencing on the effective date of such resignation. Such resignation shall take effect upon the date specified in the notice,or upon the appointment and qualification of a successor prior to that date. In the event of such resignation, a successor shall promptly be appointed by the City, and the City Manager of the City shall immediately give written notice thereof to the predecessor escrow agent and publish the notice in the manner described in this paragraph 12. If,in a proper case,no appointment of a successor agent is made within 45 days after the receipt by the City of notice of such resignation,the Escrow Agent or the holder of any Refunded Bond may apply to any court of competent jurisdiction to appoint a successor escrow agent, which appointment may be made by the Court after such notice, if any, as the Court may prescribe. Any successor escrow agent appointed hereunder shall execute, acknowledge and deliver to its predecessor escrow agent and to the City a written acceptance of such appointment, and shall thereupon without any further act, deed or conveyance become fully vested with all moneys, properties, duties and obligations of its predecessor,but the predecessor shall nevertheless pay over,transfer, assign and deliver all moneys, securities or other property held by it to the successor escrow agent, shall execute, acknowledge and deliver such instruments of conveyance and do such other things as may reasonably be required to vest and confirm more fully and certainly in the successor escrow agent all right,title and interest in and to any property held by it hereunder. Any bank into which the Escrow Agent may be merged or with which it may be consolidated or any bank resulting from any merger or consolidation to which it shall be a party or any bank to which it may sell or transfer all or substantially all of its corporate trust business shall, if the City approves, be the successor escrow agent without the execution of any document or the performance of any further act. 13. The Escrow Agent acknowledges receipt of the sum of$ as its sole compensation for its services to be performed under this Agreement. 408963v1 JAE RC145-641 3 044 14. The duties and obligations of the Escrow Agent shall be as prescribed by the provisions of this Agreement and the Escrow Agent shall not be liable hereunder except for failure to perform its duties and obligations as specifically set forth herein or to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by the Escrow Agent other than those specified herein. 15. Any notice, authorization, request or demand required or permitted to be given in accordance with the terms of this Agreement shall be in writing and sent by registered or certified mail addressed: If to the City: City of Richfield 6700 Portland Avenue Richfield,MN 55423 Attention: City Manager If to the Escrow Agent: U.S. Bank National Association 60 Livingston Avenue EP-MN-WS3C St. Paul, MN 66107-2292 Attention: Corporate Trust Services 16. The exhibits which are part of this Agreement are as follows: EXHIBIT A Securities EXHIBIT B Principal and Interest Payments on Securities EXHIBIT C Costs of Issuance EXHIBIT D Notice of Call for Redemption (The remainder of this page is intentionally left blank.) 408963v1 JAE RC145-641 4 IN WITNESS WHEREOF the parties hereto have caused Advance Refunding Escrow Agreement to be duly executed by their duly authorized officers, in counterparts, each of which is deemed to be an original agreement,as of the date and year first written above. CITY OF RICHFIELD,MINNESOTA By Its Mayor By Its City Manager (Signature Page of City to the Advance Refunding Escrow Agreement) Error!Unknown document property name. S-1 13,)'1 Execution page of the Escrow Agent to the Refunding Escrow Agreement,dated as of the date and year first written above. U.S.BANK NATIONAL ASSOCIATION By Its Assistant Vice President (Signature Page of the Escrow Agent to the Advance Refunding Escrow Agreement) Error!Unknown document property name. S-2 I EXHIBIT A SECURITIES Error!Unknown document property name. A-1 13 e EDIT B PRINCIPAL AND INTEREST PAYMENTS ON SECURITIES Error!Unknown document property name. B-1 &t50 EXHIBIT C COSTS OF ISSUANCE Payee Amount Financial Advisor Bond Counsel Rating Agency Verification Agent Financial Advisor(Post-Issuance Compliance Policy) Paying Agent Escrow Agent Total: Error!Unknown document property name. C-1 (5;1' 1 EDIT D NOTICE OF CALL FOR REDEMPTION FOR $3,470,000 CITY OF RICHFIELD, MINNESOTA TAXABLE GENERAL OBLIGATION TAX INCREMENT BONDS SERIES 2003C NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Richfield, Hennepin County, Minnesota (the "City"), there have been called for redemption and prepayment on February 1, 2014 all outstanding bonds of the City designated as Taxable General Obligation Tax Increment Bonds, Series 2003C, dated December 30, 2003, having stated maturity dates of February 1 in the years 2015 through 2025, both inclusive, totaling $2,400,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2015 $165,000 763325 N29 2016 175,000 763325 N37 2017 185,000 763325 N45 2018 195,000 763325 N52 2019 205,000 763325 N60 2020 215,000 763325 N78 2021 225,000 763325 N86 2022 240,000 763325 N94 2023 250,000 763325 P27 2024 265,000 763325 P35 2025 280,000 763325 P43 The bonds are being called at a price of par plus accrued interest to February 1, 2014, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, Saint Paul, Minnesota, on or before February 1, 2014, at the following address: Error!Unknown document property name. D-1 I1) If by mail: If by hand: U.S. Bank National Association U.S. Bank National Association Corporate Trust Services 60 Livingston Avenue 60 Livingston Avenue 3rd Floor—Bond Drop Window EP-MN-WS3C St. Paul, MN 55107 St. Paul, MN 55107 Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the City is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the City is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements of this paragraph. Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934-6802 Dated: BY ORDER OF THE CITY COUNCIL By /s/ Steve Devich City Manager City of Richfield, Minnesota Error!Unknown document property name. D-2 (3; I AMENDED AND RESTATED TAX INCREMENT PLEDGE AGREEMENT between CITY OF RICHFIELD,MINNESOTA and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD,MINNESOTA THIS AGREEMENT is made and entered into on or as of the 6th day of September, 2012,by and between the City of Richfield, Minnesota(the "City") and the Housing and Redevelopment Authority in and for the City of Richfield,Minnesota(the"HRA"). WHEREAS, the HRA has established the Richfield Redevelopment Project Area (the "Project Area"),and approved a Redevelopment Plan(the"Project Plan")for the Project Area;and WHEREAS, the HRA and City have established the Lyndale Gateway West Tax Increment Financing District (the "TIF District") within the Project Area in accordance with Minnesota Statutes, Sections 469.174 to 469.1799; and WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and Minnesota Statutes, Chapter 475, as amended, the City previously agreed to finance certain public redevelopment costs to be incurred by the HRA or the City in the Project Area(the"Project")through the issuance of general obligation bonds of the City in the principal amount of$4,840,000, designated the Taxable General Obligation Temporary Tax Increment Bonds, Series 2003A(the"Series 2003A Bonds"); and WHEREAS, in order to repay the Series 2003A Bonds and provide permanent financing for the Project and to provide fmancing for additional redevelopment costs, the City issued its Taxable General Obligation Tax Increment Bonds, Series 2003C (the "Refunded Bonds"), in the original aggregate principal amount of$3,470,000; and WHEREAS,pursuant to a resolution adopted by the City Council of the City on August 13,2012, the City has provided approval for the issuance of refunding bonds to defease, redeem, and prepay the Refunded Bonds,the issuance of which refunding bonds is expected to occur on September 6,2012; and WHEREAS, the City has determined to issue its Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B (the"Refunding Bonds"), in the approximate aggregate principal amount of$2,985,000, and apply proceeds of the Refunding Bonds to (i)pay the principal of and interest on the Refunded Bonds through February 1, 2014 (the "Redemption Date"), and (ii) pay the outstanding principal amount of the Refunded Bonds on the Redemption Date, pursuant to an Advance Refunding Escrow Agreement, to be dated on September 6, 2012, between the City and the escrow agent named therein;and WHEREAS, the HRA has agreed to pledge certain tax increment revenues to the City for the payment of the principal of and interest on the Refunding Bonds;and 408966v1 JAB RC145-641 1 t l WHEREAS, pursuant to Minnesota Statutes, Section 469.178, subdivision 2, any agreement to pledge tax increment revenues must be made by written agreement by and between the HRA and the City and must be filed with the Taxpayer Services Division Manager of Hennepin County; NOW,THEREFORE,the City and the BRA mutually agree to the following: (1) The City has issued the Refunding Bonds and will use a portion of the proceeds of the Refunding Bonds to (i)pay the principal of and interest on the Refunded Bonds through the Refunded Bonds Redemption Date; and (ii) pay the outstanding principal amount of the Refunded Bonds on the Refunded Bonds Redemption Date. (2) The HRA hereby pledges to the payment of the principal of and interest on the Refunding Bonds the tax increments derived from property in the TIF District and received by the HRA,which pledge is in an amount sufficient to pay 105%of such principal and interest due on the Refunding Bonds from time to time(the"Pledged Tax Increment"). (3) Not less than three (3) business days prior to each debt service payment date for the Refunding Bonds, there shall be transferred from the account for the TIF District to the Debt Service Fund maintained by the City for the payment of the Refunding Bonds, an amount of Pledged Tax Increment which when taken together with amounts already on deposit in such Debt Service Fund, is equal to the principal of and interest on the Refunding Bonds to become due on the subject payment date. Any Pledged Tax Increment in excess of 105% of the principal and interest due with respect to the Refunding Bonds on any payment date may be retained by the BRA in the tax increment account for the TIF District and applied to any public redevelopment costs of the Project Area in accordance with law. (4) Without regard to anything in this Agreement to the contrary, Pledged Tax Increment shall be available (at the HRA's option on a parity, superior or subordinate basis)to pay principal of and interest on both the Refunding Bonds and any other obligations issued by the City, HRA or any other public body to finance public redevelopment costs paid or incurred by the HRA in the Project Area. (5) An executed copy of this Agreement shall be filed with the Taxpayer Service Division Manager of County pursuant to the requirement contained in Minnesota Statutes, Section 469.178,subdivision 2. (The remainder of this page is intentionally left blank.) 408966v1 JAE RC145-641 2 13/IP IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly executed on their behalf and such signatures to be attested,as of the day and year first above written. ATTEST: CITY OF RICHFIELD,MINNESOTA By By City Manager Mayor Error!Unknown document property name. S-1 0112 Execution page of the HRA to the Amended and Restated Tax Increment Pledge Agreement, dated as of the date and year first written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Chair By Its Executive Director Error!Unknown document property name. S-2 STATE OF MINNESOTA CERTIFICATE OF TAXPAYER COUNTY OF HENNEPIN SERVICES DIVISION MANAGER I,the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that an Amended and Restated Tax Increment Pledge Agreement by and between the City of Richfield, Minnesota(the "City"), and the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, dated as of September 6, 2012, relating to the City's Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B,in the original aggregate principal amount of$2,985,000, has been filed in my office. WITNESS my hand and official seal this_day of ,2012. Taxpayer Services Division Manager (SEAL) Hennepin County,Minnesota By Deputy Error!Unknown document property name. V3;) Debt issuance Services — — Updated August 6, 2012 Pre-Sale Report for $2,985,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B City of Richfield, Minnesota Prepared and Presented by Rebecca Kurtz RICHFIELD Financial Advisor, CIPFA And Brian Reilly Financial Advisor, CIPFA www.ehlers-inc.COM 9 E H L E RS Minnesota phone 651-697-8500 3060 Centre Pointe Drive LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Minos fax 651-697-8555 Roseville,MN 551131122 toll free 800-552-1171 0:21‘ Debt Issuance Services Executive Summary of Proposed Debt Proposed Issue: $2,985,000 Taxable General Obligation Tax Increment Refunding Bonds,Series 2012B Authority: The TIF Bonds are being issued pursuant to Minnesota Statues, Chapter 469 and 475. Because the City is paying for at least 20% of the project costs with TIF from the Lyndale Gateway West Tax Increment Financing District(Kennsington development), the Bonds can be a general obligation without a referendum and will not count against the City's debt limit. In the past, tax increment has paid 100 percent of the debt service, and based on current conditions, it is projected that the TIF District will continue to generate increment sufficient to support all debt service. Purposes/Funding Sources: The proposed issue includes financing for the following purposes: • Refunding the $3,470,000 Taxable General Obligation Tax Increment Bonds,Series 2003C for interest savings Interest rates on the obligations proposed to be refunded are 5.0% to 5.5%. The refunding is expected to reduce interest expense by approximately $322,242 over the next 13 years. The Net Present Value Benefit of the refunding is estimated to be $284,153, equal to 9.52%of the refunded principal. This refunding is considered an Advance Refunding as the new Bonds will be issued more than 90 days prior to the call date of the obligations being refunded. Term/Call Feature The Bonds are being issued for a 13 year term. Principal on the Bonds will be due on February 1 in the years through 2013 - 2025. Interest is payable every six months beginning February 1,2013.The term of the Bonds is not being extended. The Bonds maturing February 1, 2022, and thereafter will be subject to prepayment at the discretion of the City on February 1,2021 or any date thereafter. Bank Qualification Because the Bonds are taxable obligations they will not be designated as"bank qualified"obligations. Presale Report Updated August 6, 2012 City of Richfield, Minnesota Page 1 3A'1) Debt issuance Services Rating: The City's most recent bond issues were rated"AA+"by Standard& Poor's. The City completed a rating call with Standard &Poor's on August 2 for the Bonds. If the winning bidder on the Bonds elects to purchase bond insurance, the rating for the issue may be higher than the City's bond rating in the event that the bond rating of the insurer is higher than that of the City. Method of Sale/Placement: In order to obtain the lowest interest cost to the City, we will solicit competitive bids for purchase of the Bonds from local banks in your area and regional underwriters. We have included an allowance for discount bidding equal to 1.2%of the principal amount of the issue. The discount is treated as an interest item and provides the underwriter with all or a portion of its compensation in the transaction. If the Bonds are purchased at a price greater than the minimum bid amount (maximum discount), the unused allowance may be used to lower your borrowing amount. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are no other refunding opportunities at this time. We will continue to monitor the market and the call dates for the City's outstanding debt and will alert you to any future refunding opportunities. Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this issue) and this issue is over$1,000,000, the City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually as well as providing notices of the occurrence of certain "material events" to the Municipal Securities Rulemaking Board (the "MSRB"), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide such reports for its existing bonds,and has contracted with Ehlers to prepare and file the reports. Arbitrage Monitoring: The Bonds are taxable obligations and are therefore not subject to IRS arbitrage and yield restriction requirements. Presale Report Updated August 6, 2012 City of Richfield, Minnesota Page 2 OA\ Debt Issuance Services Proposed Debt Issuance Schedule Pre-Sale Review by Council: July 24,2012 Conference with Rating Agency: August 2,2012 Distribute Official Statement: August 6,2012 Updated Pre-Sale Report August 6,2012 City Council Meeting to Award Sale of the Bonds: August 13,2012 Estimated Closing Date: September 6,2012 Attachments Sources and Uses of Funds Proposed Debt Service Schedule Refunding Savings Analysis Ehlers Contacts: Financial Advisors: Rebecca Kurtz (651)697-8516 Brian Reilly (651)697-8541 Bond Analyst: Wendy Lundberg (651)697-8540 Bond Sale Coordinator: Alicia Aulwes (651)697-8523 Financial Analyst: Brian Shannon (651)697-8515 The Official Statement for this financing will be mailed to the City Council at their home address or e- mailed for review prior to the sale date. Presale Report Updated August 6, 2012 City of Richfield, Minnesota Page 3 l City of Richfield $2,985,000 Taxable G.O. Refunding Bonds, Dated: September 6, 2012 Proposed Net Cash Refunding of Taxable G.O.TIF Bonds, Series 2003C Current"AA"Taxable Rates Table of Contents Report Sources&Uses 1 Debt Service Schedule 2 Debt Service Comparison —_ 3 Escrow Fund Cashflow 4 Escrow Summary Cost 5 2012 Net CeshRef Ser 03C 1 10 sever Ser 03C$3.47M T 7/25/2012 1 10:18 AM EHLERS LEADERS IN PUBLIC FINANCE () AI) 1 City of Richfield $2,985,000 Taxable G.O. Refunding Bonds, Dated: September 6, 2012 Proposed Net Cash Refunding of Taxable G.O. TIF Bonds, Series 20030 Current"AA"Taxable Rates Sources & Uses Dated 09/06/2012 I Delivered 09/06/2012 Sources Of Funds Par Amount of Bonds $2,985,000.00 Total Sources $2,985,000.00 Uses Of Funds Total Underwriter's Discount(1.200%) 35,820.00 Costs of Issuance 40,000.00 Deposit to Net Cash Escrow Fund 2,904,310.57 Rounding Amount _ 4,869.43 Total Uses $2,985,000.00 2012 Net CeahRef Ser 03C 1 10 xover Ser 03C$3.47M T 7/2512012 1 10:18 AM 0 EHLERS LEADERS IN PUBLIC FINANCE Page 1 13-ELI City of Richfield $2,985,000 Taxable G.O. Refunding Bonds, Dated: September 6, 2012 Proposed Net Cash Refunding of Taxable G.O. TIF Bonds, Series 2003C Current"AA"Taxable Rates Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 09/06/2012 - - - - - 02/01/2013 175,000.00 0.600% 22,236.35 197,236.35 197,23635 08/01/2013 - .. 27,078.75 27,078.75 - 02/01/2014 210,000.00 0.800% 27,078.75 237,078.75 264,157.50 08/01/2014 - - 26,238.75 26,238.75 - 02/01/2015 215,000.00 1.000% 26,238.75 241,238.75 267,477.50 08/01/2015 - - 25,163.75 25,163.75 - 02/01/2016 220,000.00 1.100% 25,163.75 245,163.75 270,32750 08/01/2016 - - 23,953.75 23,953.75 - 02/01/2017 225,000.00 1.350% 23,953.75 248,953.75 272,907.50 08/01/2017 - - 22,435.00 22,435.00 - 02/01/2018 225,000.00 1.600% 22,435.00 247,435.00 269,870.00 08/01/2018 - - 20,635.00 20,635.00 - 02/01/2019 230,000.00 1.950% 20,635.00 250,635.00 271,270.00 08/01/2019 - - 18,392.50 18,392.50 - 02/01/2020 235,000.00 2.150% 18,392.50 253,392.50 271,785.00 08/01/2020 - - 15,866.25 15,866.25 - 02/01/2021 235,000.00 2.250% 15,86625 250,866.25 266,73250 08/01/2021 - - 13,222.50 13,222.50 - 02/01/2022 245,000.00 2.350% 13,222.50 258,222.50 271,445.00 08/01/2022 - - 10,343.75 10,343.75 - 02/01/2023 250,000.00 2.500% 10,343.75 260,343.75 270,68750 08/01/2023 - - 7,218.75 7,218.75 - 02/01/2024 255,000.00 2.700% 7,218.75 262,218.75 269,437.50 08/01/2024 - - 3,77625 3,77625 - 02/01/2025 265,000.00 2.850% 3,77625 268,776.25 272,552.50 Total $2,985,000.00 - $450,88635 $3,435,88635 - Yield Statistics Bond Year Dollars $20,12229 Average Life 6.741 Years Average Coupon 22407306% Net Interest Cost(NIC) 2.4187421% True Interest Cost(TIC) 2.4202905% Bond Yield for Arbitrage Purposes 22232919% All Inclusive Cost(AIC) 2.6443744% IRS Form 8038 Net Interest Cost 2.2407306% Weighted Average Maturity 6.741 Years 2012 Net CeshRef Ser 03C 110 xover Ser 03C$3.47M T 1 7/25/2012 I 10:18 AM al EHLERS LEASERS IN PUBLIC FINANCE Page 2 1544 City of Richfield $2,985,000 Taxable G.O. Refunding Bonds, Dated: September 6, 2012 Proposed Net Cash Refunding of Taxable G.O. TIF Bonds, Series 2003C Current"AA"Taxable Rates Debt Service Comparison Date Total PO Net New D/S Old Net D/S Savings 02/01/2013 197,236.35 192,366.92 221,278.75 28,911.83 02/01/2014 264,157.50 264,157.50 290,057.50 25,900.00 02/01/2015 267,477.50 267,477.50 292,307.50 24,830.00 02/01/2016 270,327.50 270,327.50 294,057.50 23,730.00 02/01/2017 272,907.50 272,907.50 295,307.50 22,400.00 02/01/2018 269,870.00 269,870.00 295,826.26 25,956.26 02/01/2019 271,270.00 271,270.00 295,686.26 24,416.26 02/01/2020 271,785.00 271,785.00 294,923.76 23,138.76 02/01/2021 266,732.50 266,732.50 293,528.76 26,796.26 02/01/2022 271,445.00 271,445.00 296,435.00 24,990.00 02/01/2023 270,687.50 270,687.50 293,475.00 22,787.50 02/01/2024 269,437.50 269,437.50 294,975.00 25,537.50 02/01/2025 272,552.50 272,552.50 295,400.00 22,847.50 Total $3,435,886.35 $3,431,016.92 $3,753,258.79 $322,24187 PV Analysis Summary(Net to Net) Gross PV Debt Service Savings 279,283.08 Net PV Cashflow Savings @ 2.223%(Bond Yield)..... 279,283.08 Contingency or Rounding Amount._ 4,869.43 Net Present Value Benefit $284,152.51 Net PV Benefit/$3,264,283.08 PV Refunded Debt Service 8.705% Net PV Benefit/$2,705,000 Refunded Principal... 10.505% Net PV Benefit/$2,985,000 Refunding Principal.. 9.519% Refunding Bond Information Refunding Dated Date 9/06/2012 Refunding Delivery Date 9/062012 2012 Net CashRef Ser 03C 110 xover Ser 03C$3.47M T I 7/25/2012 I 10:18 AM a y EHLins E LEADERS IN PUBLIC FENANCE Page 3 13-449 City of Richfield $2,985,000 Taxable G.O. Refunding Bonds, Dated: September 6, 2012 Proposed Net Cash Refunding of Taxable G.O. TIF Bonds, Series 2003C Current"AA"Taxable Rates Escrow Fund Cashflow Date Principal Rate Interest Receipts Disbursements Cash Balance 09/06/2012 - - - 34125 - 34125 01/15/2013 - - 13,035.00 13,035.00 - 13,37625 01/17/2013 207,000.00 0.130% - 207,000.00 - 220,376.25 01/31/2013 - - 945.00 945.00 - 221,32125 02/01/2013 - - - - 221,278.75 4250 07/15/2013 - - 13,035.00 13,035.00 - 13,07750 07/31/2013 56,000.00 3.375% 945.00 56,945.00 - 70,022.50 08/01/2013 - - - - 67,528.75 2,493.75 01/15/2014 2,607,000.00 1.000% 13,035.00 2,620,035.00 - 2,622,528.75 02/01/2014 - - - - 2,622,528.75 - Total $2,870,000.00 - $40,995.00 $2,911,336.25 $2,911,336.25 - Investment Parameters Investment Model[PV,GIC,or Securities Securities Default investment yield target Bond Yield Cash Deposit 341.25 Cost of Investments Purchased with Bond Proceeds 2,903,969.32 Total Cost of Investments $2,904,310.57 Target Cost of Investments at bond yield $2,827,948.56 Actual positive or(negative)arbitrage (76,362.01) Yield to Receipt 0.1901182% Yield for Arbitrage Purposes 2.2232919% 2012 Net CashRef Ser 03C 110 xover Ser 03C$3.47M T I 7/252012 1 10:18 AM EHLERS Page 4 LEADERS IN PUBLIC FINANCE )3-41 City of Richfield $2,985,000 Taxable G.O. Refunding Bonds, Dated:September 6,2012 Proposed Net Cash Refunding of Taxable G.O.TIF Bonds,Series 2003C Current"AA"Taxable Rates Escrow Summary Cost +Accrued Maturity Type Coupon Yield $Price Par Amount Principal Cost Interest =Total Cost Cusip Escrow 01/17/2013 T-B1LL 0.130% 0.132% 99.9519722% 207,000 206,900.58 - 206,900.58 912795781 07/31/2013 T-NOTE 3.375% 0.172% 102.8750000% 56,000 57,610.00 190.03 57,800.03 912828JG6 01/15/2014 T-NOTE 1.000% 0.187% 101.0937500% 2,607,000 2,635,514.06 3,754.65 2,639,268.71 912828907 Subtotal - - - $2,870,000 $2,900,024.64 $3,944.68 $2,903,969.32 Total - - - $2,870,000 $2,900,024.64 $3,944.68 $2,903,969.32 Escrow Cash Deposit 341.25 Cost of Investments Purchased with Bond Proceeds 2,903,969.32 Total Cost of Investments $2,904,310.57 Delivery Date 9/06/2012 2012 Net CashRef Ser 03C 110 raver 8er 03C$3.47M T 1 7252012 1 10:18 AM 0 EHLERS .....IN PUe18 PENANCE Page 5