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041415CompleteAgenda-BOOKMARK SPECIAL CONCURRENT CITY COUNCIL AND HOUSING AND REDEVELOPMENT AUTHORITY WORKSESSION RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM APRIL 14, 2015 5:30 PM Call to order 1. Discussion regarding Cedar Point Housing Area Proposals. (Council Memo No. 24/HRA Memo No. 13) 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. REGULAR CITY COUNCIL MEETING RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS APRIL 14, 2015 7:00 PM INTRODUCTORY PROCEEDINGS Call to order 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. Pledge of Allegiance Approval of the minutes of the (1) Regular City Council Meeting of March 24, 2015. PRESENTATIONS 1. Presentation of proclamation designating Public Health Week. 2. Presentation of proclamation designating Earth Day/Arbor Month. COUNCIL DISCUSSION 3. Hats off to hometown hits AGENDA APPROVAL 4. Approval of the agenda. 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 the approval of the first reading of an ordinance amending the City's Zoning Code to conditionally permit school-based health centers as accessory uses within currently operating schools. Staff Report No. 49 B. Consideration of the approval of a Resolution Modifying a Health Care Savings Plan for the International Union of Operating Engineers, Local 49 Bargaining Unit Employees. Staff Report No. 50 C. Consideration of the approval of a resolution reappointing Pat Brekken to the Richfield Tourism Promotion Board to a three-year term ending December 31, 2017 or until a successor has been chosen, whichever is later. Staff Report No. 51 D. Consideration of the approval of a resolution providing for the sale of$2,690,000 General Obligation Street Reconstruction Bonds, Series 2015 for the Portland Avenue Reconstruction Project. Staff Report No. 52 E. Consideration of the approval of a resolution providing for the sale of$1,660,000 General Obligation Street Reconstruction Bonds, Series 2015 for the 69th Street Reconstruction Project. Staff Report No. 53 F. Consideration of the approval of a resolution providing for the sale of$5,085,000 General Obligation Street Reconstruction Bonds, Series 2015 for mill and overlay projects. Staff Report No. 54 G. Consideration of the approval of resolutions for reimbursement of certain expenditures from the proceeds of reconstruction bonds to be issued by the City for the following projects: • Reconstruction of 69th Street from Knox to Humboldt Avenue • Reconstruction of Portland Avenue from 67th to 77th Street • 6-Year Mill and Overlay project Staff Report No. 55 6. Consideration of items, if any, removed from Consent Calendar PUBLIC HEARINGS 7. Public hearing for the consideration of a resolution giving host approval for the City of Landfall Village to issue conduit bonds for the benefit of Progress Valley, Inc. in order to finance an expansion and renovation of their facility located at 308 78th Street East. Staff Report No. 56 8. Public hearing to consider a request for resolutions authorizing a Comprehensive Plan amendment, conditional use permit and variances to allow an auto body repair shop (Maaco Collision Repair and Auto Painting)at 6244 Cedar Avenue. Staff Report No. 57 PROPOSED ORDINANCES 9. Consideration of the first reading of an ordinance rezoning 1400, 1420 and 1500-78th Street East and 7711 - 14th Avenue from Mixed Use -Community(MU-C)to Planned Mixed Use (PMU). Staff Report No. 58 CITY MANAGER'S REPORT 10. City Manager's Report CLAIMS AND PAYROLLS 11. Claims and payrolls 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. 12. 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 OF RICHFIELD, MINNESOTA Office of City Manager April 9, 2015 Council Memorandum No. 24 HRA Memorandum No.13 Housing and Redevelopment The Honorable Mayor Authority Commissioners and City of Richfield Members of the City Council Subject: Cedar Point Housing Area Proposals Council Members and Commissioners: At the April 14, 2015 City Council and Housing and Redevelopment Authority (HRA) worksession, six development teams will be presenting preliminary proposals for the development of the Cedar Point Housing redevelopment area. The following chart provides a summary overview of the proposals to be presented in the following order (corresponding to the order in which site plans for the specific project area were submitted): Developer Team Housing Type Number of Units Kristi Olson -Market-rate Ownership Gary Tushie Townhomes 26 units -Assisted Living 80 units -Memory Care 60 units Anderson Companies -Market-rate non-age- Kent Carlson restricted rental apartments 144 units Steve Schwanke -Market-rate non-age- restricted rental brownstones - 99 units Mesaba Capital - Market-rate non-age- Della Kolpin, Bo Nickoloff restricted rental 180 units David Dye -Assisted Living 80 units -Memory Care 40 units Pablo Murillo -Market-rate non-age-restricted Kathleen Loucks rental apartments 237 units Michael Moline -Affordable non-age-restricted rental apartments 60 units Sperry Van Ness/Northco, -Tentatively 80% Market Rate Theresa Carr, Boisclair and 20% Affordable non-age- Undetermined Corporation restricted rental apartments Sand Companies -Market-rate non-age-restricted Megan Sand Carr rental apartments 170 units The project area is a two-block area bounded by 63rd Street to the north, 65th Street to the south, Richfield Parkway to the east, and 16th Avenue to the west (see attached map). The area consists of approximately 6.9 acres and is currently occupied by 14 single-family houses fronting 16th Avenue. The City and HRA have acquired and demolished 14 properties fronting Richfield Parkway and one property fronting 16th Avenue. The HRA has purchase agreements for two additional houses fronting 16th Avenue. The project area is zoned MR-3, high density multi-family residential which allows for a minimum of 24 units per acre. A senior housing market study completed by Maxfield Research, Inc., on the HRA's behalf in January of 2014 indicated a demand for: • 66 Market-rate Senior Ownership Units • 168 Market-rate Senior Rental Units • 224 Assisted Living Units • 206 Memory Care Units Maxfield Research also conducted a rental housing study on the HRA's behalf earlier this year. That study indicated a demand for: • 262 Market Rate Non-age-restricted rental units • 53 Affordable non-age-restricted rental units Given the number of proposals to be presented and the limited time available for the worksession, the development teams have been asked to keep their presentations to 10-12 minutes or less. The goal of the worksession is to provide an introductory overview of the proposed projects and to garner feedback from the policy-makers as to which proposals should move forward. it is anticipated that selected proposals would be refined and presented at a future Council/HRA worksession (tentatively scheduled for May 12, 2015). �,Re ectf ly submitt , ven L. Devich City Manager SLD:kcb Attachment Email: Department Directors Assistant City Manager Cedar Point II Housing Redevelopment v ,iN M1.d W t Err r a I a y, C r ,'rc6 r ` � 1 ;'•�® III ® � � �a wa,�;,� b Cedar Point II Housing Redevelopment Richfield City Limit Future Richfield Parkway (2014) CITY COUNCIL MEETING MINUTES Richfield, Minnesota e� Regular Meeting March 24, 2015 CALL TO ORDER The meeting was called to order by Mayor Goettel at 7:00 p.m. in the Council Chambers. Council Members Debbie Goettel, Mayor; Michael Howard; Pat Elliott; and Present: Tom Fitzhenry. Council Member Edwina Garcia. Absent: Staff Present: John Stark, Acting City Manager/Community Development Director; Mike Eastling, Public Works Director; Jay Henthorne, Public Safety Director; Chris Regis, Finance Manager; Mary Tietjen, City Attorney; and Cheryl Krumholz, Executive Coordinator. OPEN FORUM None. PLEDGE OF ALLEGIANCE Mayor Goettel led the audience in the Pledge of Allegiance. APPROVAL OF MINUTES M/Fitzhenry, S/Elliott to approve the minutes of the (1) Special City Council and School Board Worksession of March 2, 2015; (2) Special City Council Worksession of March 10, 2015; (3) Regular City Council Meeting of March 10, 2015; and (4) Special City Council Worksession of March 16, 2015. Motion carried 4-0. Item #1 PRESENTATION REGARDING THE COMMUNITY EMERGENCY RESPONSE TEAM (CERT) Public Safety Director Henthorne and Charlie O'Brien, CERT Coordinator, made the presentation and introduced the CERT members. Council Meeting Minutes -2- March 24,2015 Item #2 COUNCIL DISCUSSION • Hats Off to Hometown Hits Council Member Fitzhenry acknowledged the efforts of CERT. Council Member Fitzhenry provided a Noise Oversight Committee (NOC) update. Council Member Howard acknowledged the March 14 Mental Health Forum for Youth. Mayor Goettel announced the April 24 Friends of Wood Lake (FOWL) Gala. Mayor Goettel provided an update on the recent National League of Cities conference in Washington, DC. She also discussed attending the N.O.I.S.E. conference. M/Fitzhenry, S/Goettel to renew the City's membership in the National Organization to Insure a Sound Controlled Environment (N.O.I.S.E). Motion carried 4-0. Item #3 COUNCIL APPROVAL OF AGENDA M/Howard, S/Elliott to approve the agenda. Motion carried 4-0. Item #4 CONSENT CALENDAR A. Consideration of the approval of authorizing the City Manager to Publish a Notice of Intent to Franchise (cable television) S.R. No. 42 Consideration of the approval of a resolution amending the allocation of the 2014 General Fund Budget S.R. No. 43 RESOLUTION NO. 11057 RESOLUTION AUTHORIZING REVISION OF 2014 BUDGETS OF VARIOUS DEPARTMENTS This resolution appears as Resolution No. 11057. B. Consideration of the approval of the renewal of the contract with Adesa Minneapolis for 2015/2016 for auctioning forfeited vehicles from Public Safety/Police S.R. No. 44 C. Consideration of the approval of the continuation of the agreement with the City of Bloomington for the provision of public health services for the City of Richfield for the year 2015 S.R. No. 45 M/Goettel, S/Fitzhenry to approve the Consent Calendar. Motion carried 4-0. Item #5 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR Council Meeting Minutes -3- March 24,2015 None. Item #6 CONSIDERATION OF THE SECOND READING OF AN ORDINANCE AMENDING THE CITY'S ZONING CODE AND A RESOLUTION APPROVING SUMMARY PUBLICATION OF SAID ORDINANCE. THE PROPOSED ORDINANCE WOULD ALLOW THE FOLLOWING IN THE SINGLE-FAMILY RESIDENTIAL DISTRICTS: (1) CONSTRUCTION OF UP TO TWO-STORY GARAGES (WITH CONDITIONS) AND (2) CONSTRUCTION OF ACCESSORY DWELLING UNITS S.R. NO. 46 Council Member Elliott presented Staff Report No. 46. M/Elliott, S/Fitzhenry that this constitutes the second reading of Bill No. 2015-4, amending various sections of the Richfield City Zoning Code related to two-story garages and accessory dwelling units in Single-Family Residential Districts, 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. 11058 RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE ALLOWING CONSTRUCTION OF TALLER ACCESSORY GARAGES AND ACCESSORY DWELLING UNITS IN THE SINGLE-FAMILY RESIDENTIAL DISTRICTS Motion carried 4-0. This resolution appears as Resolution No. 11058. Item #7 CONSIDERATION OF THE SECOND READING OF AN ORDINANCE AMENDING THE CITY'S ZONING CODE AND A RESOLUTION AUTHORIZING SUMMARY PUBLICATION OF SAID ORDINANCE. THE PROPOSED ORDINANCE WOULD PROHIBIT RECREATIONAL MARIJUANA SALES OUTLETS AND MARIJUANA PRODUCTION, AND ESTABLISH CONDITIONS RELATED TO THE LOCATION AND OPERATION OF MEDICAL MARIJUANA DISPENSARIES S.R. NO. 47 Council Member Fitzhenry presented Staff Report No. 47. M/Fitzhenry, S/Howard that this constitutes the second reading of Bill No. 2015-5, amending various sections of the Richfield City Zoning Code related to prohibiting recreational marijuana sales outlets and marijuana production and establishing conditions related to the location and operation of medical marijuana dispensaries, 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. 11059 RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE ALLOWING MEDICAL MARIJUANA DISPENSARIES AS A CONDITIONAL USE IN THE GENERAL BUSINESS DISTRICT Motion carried 4-0. This resolution appears as Resolution No. 11059. Council Meeting Minutes -4- March 24,2015 Item #8 CONSIDERATION OF THE FINAL PLANS AND SPECIFICATIONS FOR THE PORTLAND AVENUE RECONSTRUCTION PROJECT (CP 41008) AND STAFF AUTHORIZATION TO ADVERTISE FOR BIDS S.R. NO. 47 Council Member Howard presented Staff Report No. 47. Public Works Director Eastling discussed the reconstruction timeline. M/Howard, S/Fitzhenry to approve the final plans and specifications for the Portland Avenue Reconstruction Project (CP 41008) and staff authorization to advertise for bids. Motion carried 4-0. Item #9 CITY MANAGER'S REPORT Acting City Manager Stark stated that he testified at the Senate today regarding the extension for the Cedar Avenue TIF District. Item #10 CLAIMS AND PAYROLLS M/Fitzhenry, S/Elliott that the following claims and payrolls be approved: U.S. Bank 03/24/15 A/P Checks: 239206-239539 792,552.34 Payroll: 108623-108954 $ 564,312.15 TOTAL $ 1,356,864.49 Motion carried 4-0. OPEN FORUM None. ADJOURNMENT The City Council open meeting was adjourned by unanimous consent at 7:33 p.m. Date Approved: April 14, 2015 Debbie Goettel Mayor Cheryl Krumholz John Stark, Executive Coordinator Acting City Manager AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.A. -wood STAFF REPORT NO. 49 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Melissa Poehlman, City Planner DEPARTMENT DIRECTOR REVIEW: John Stark, Community Development Director OTHER DEPARTMENT REVIEW: None CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of the first reading of an ordinance amending the City's Zoning Code to conditionally permit school-based health centers as accessory uses within currently operating schools. EXECUTIVE SUMMARY: Richfield Public Schools has requested a text amendment to the Zoning Code that would allow school-based health centers within public and/or private schools. The proposed ordinance would conditionally permit school-based health centers as an accessory or subordinate use to existing schools so long as certain conditions related to size, hours of operation, parking, and signage are met. The Richfield School District is proposing to develop such a center at Richfield High School. Along with consideration of a second reading of the attached ordinance, the Council will be asked to consider the School's application for an amended conditional use permit to allow the health center on April 28th. RECOMMENDED ACTION: By motion: Approve a first reading of the attached ordinance amending the Richfield City Code to allow accessory school-based health centers as a conditional use. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: The Richfield School District is proposing to open a school-based health center at Richfield High School. The purpose of the health center is to improve student access to affordable health care services. Primary health care along with dental,vision and mental health services would be provided. According to the attached"Case Statement" provided by the applicant,school-based health centers are considered one of the most effective and efficient ways to provide needed health care to children. Similar school-based health centers operate in Brooklyn Center and St. Louis Park. While the primary focus is on students,the clinic will be open to all children (and their families)within the District. Most schools within the City are located within residential districts which would not currently permit a medical clinic. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): • The proposed text amendment is intended to allow school-based health centers with limitations that will ensure compatibility with surrounding residential development. Summary of proposed Ordinance: School-based health centers shall be permitted as an accessory use to existing schools with the following conditions: • The health center must primarily serve students; • In residential districts, hours of operation may not extend beyond the regular operational hours of the school by more than one hour in the morning and 6:00 p.m. in the evening; • Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total building square footage,whichever is less; Designated parking equal to staff plus one per exam room must be provided and identified for clinic use; • Signs: In residential zones, sign area and height may not exceed the limits set for the MR-2 and MR- 3 Zoning Districts per Subsection 549.23.Total square footage of freestanding signage for the property shall remain limited to 100 square feet. In commercial and mixed use zones, sign area and height may not exceed limits set for nonresidential uses per Subsection 549.23.Total square footage of freestanding signs shall be governed by the underlying zoning district. C. CRITICAL TIMING ISSUES: • 60-DAY RULE: The 60-day clock'started'when a complete application was received on March 9, 2015. A decision is required by May 8, 2015 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. - A second reading of the proposed ordinance is scheduled for April 28, 2015. D. FINANCIAL IMPACT: None E. LEGAL CONSIDERATION: • A public hearing was held before the Planning Commission on March 23,2015 . • Notice of the public hearing was published in the Sun Current newspaper and mailed to properties within 350 feet of the site. • No members of the public spoke before the Planning Commission. • The Planning Commission recommended approval of the ordinance(6-0). ALTERNATIVE RECOMMENDATION(S): • Approve a first reading with amendments. • Reject the proposed ordinance. PRINCIPAL PARTIES EXPECTED AT MEETING: Michael Schwartz, Executive Director of Finance&Operations, Richfield Public Schools ATTACHMENTS: Description Type F) Ordinance Ordinance D Applicant Case Statement Backup Material BILL NO. AN ORDINANCE AMENDING THE RICHFIELD CITY CODE TO ALLOW ACCESSORY SCHOOL-BASED HEALTH CENTERS AS A CONDITIONAL USE THE CITY OF RICHFIELD DOES ORDAIN: Section 1 A new Subsection 514.07, Subdivision 10 of the Richfield City Code related to accessory school-based health centers as a conditionally permitted use in the Single-Family Residential (R) District to read as follows is added, and by now renumbering all following subdivisions accordingly: Subd. 10. "School-based health centers as accessory uses within currently operating schools provide the following conditions are met: a) The health center must primarily serve students; b) Hours of operation may not extend beyond the regular operational hours of the school by more than one hour in the morning or 6:00 p.m. in the evening; c) Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total building square footage, whichever is less; d) Designated parking equal to staff plus one per exam room must be provided and designated for clinic use; e) Because of the focus on students and the associated sharing of parking, advertising shall be limited to directional and identification signs. The maximum sign area and height shall not exceed the limits set for residential uses in the MR-2 and MR-3 Zoning Districts per Subsection 549.23. The total square footage of all freestanding signage for the property shall remain limited to 100 square feet in accordance with the established rules for nonresidential uses in the residential districts. Section 2 A new Subsection 522.07, Subdivision 7 of the Richfield City Code related to accessory school-based health centers as a conditionally permitted use in the Two-Family Residential (MR-1) District to read as follows is added, and by now renumbering all following subdivisions accordingly: Subd. 7. "School-based health centers as accessory uses within currently operating schools provide the following conditions are met: a) The health center must primarily serve students; b) Hours of operation may not extend beyond the regular operational hours of the school by more than one hour in the morning or 6:00 p.m. in the evening; c) Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total building square footage, whichever is less; d) Designated parking equal to staff plus one per exam room must be provided and designated for clinic use; e) Because of the focus on students and the associated sharing of parking, advertising shall be limited to directional and identification signs. The maximum sign area and height shall not exceed the limits set for residential uses in the MR-2 and MR-3 Zoning Districts per Subsection 549.23. The total square footage of all freestanding signage for the property shall remain limited to 100 square feet in accordance with the established rules for nonresidential uses in the residential districts. Section 3 A new Subsection 525.07, Subdivision 8 of the Richfield City Code related to accessory school-based health centers as a conditionally permitted use in the Multi-Family Residential (MR-2) District to read as follows is added, and by now renumbering all following subdivisions accordingly: Subd. 8. "School-based health centers as accessory uses within currently operating schools provide the following conditions are met: a) The health center must primarily serve students; b) Hours of operation may not extend beyond the regular operational hours of the school by more than one hour in the morning or 6:00 p.m. in the evening; c) Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total building square footage, whichever is less; d) Designated parking equal to staff plus one per exam room must be provided and designated for clinic use; e) Because of the focus on students and the associated sharing of parking, advertising shall be limited to directional and identification signs. The maximum sign area and height shall not exceed the limits set for residential uses in the MR-2 and MR-3 Zoning Districts per Subsection 549.23. The total square footage of all freestanding signage for the property shall remain limited to 100 square feet in accordance with the established rules for nonresidential uses in the residential districts. Section 4 A new Subsection 527.07, Subdivision 8 of the Richfield City Code related to accessory school-based health centers as a conditionally permitted use in the High-Density Residential (MR-3) District to read as follows is added, and by now renumbering all following subdivisions accordingly: Subd. 8. "School-based health centers as accessory uses within currently operating schools provide the following conditions are met: a) The health center must primarily serve students; b) Hours of operation may not extend beyond the regular operational hours of the school by more than one hour in the morning or 6:00 p.m. in the evening; c) Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total building square footage, whichever is less; d) Designated parking equal to staff plus one per exam room must be provided and designated for clinic use; e) Because of the focus on students and the associated sharing of parking, advertising shall be limited to directional and identification signs. The maximum sign area and height shall not exceed the limits set for residential uses in the MR-2 and MR-3 Zoning Districts per Subsection 549.23. The total square footage of all freestanding signage for the property shall remain limited to 100 square feet in accordance with the established rules for nonresidential uses in the residential districts. Section 5 A new Subsection 534.07, Subdivision 20 of the Richfield City Code related to accessory school-based health centers as a conditionally permitted use in the General Business (C-2) District to read as follows is added, and by now renumbering all following subdivisions accordingly: Subd. 20. "School-based health centers as accessory uses within currently operating schools provide the following conditions are met: a) The health center must primarily serve students; b) Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total buildinq square footage, whichever is less; c) Designated parking equal to staff plus one per exam room must be provided and designated for clinic use; d) Because of the focus on students and the associated sharing of parking, advertising shall be limited to directional and identification signs. The maximum sign area and height shall not exceed the limits set for nonresidential uses per Subsection 549.23. The total square footage of all freestanding signage for the property shall be governed by the underlying zoning district. Section 6 A new Subsection 537.05, Subdivision 11 of the Richfield City Code related to accessory school-based health centers as a conditionally permitted use in the Mixed Use (MU-N, MU-C, MU-R) Districts to read as follows is added, and by now renumbering all following subdivisions accordingly: Subd. 11. "School-based health centers as accessory uses within currently operating schools provide the following conditions are met: a) The health center must primarily serve students; b) Total square footage of the health center may not exceed 3,000 square feet or 10 percent of the total building square footage, whichever is less; c) Designated parking equal to staff plus one per exam room must be provided and designated for clinic use; d) Because of the focus on students and the associated sharing of parking, advertising shall be limited to directional and identification signs. The maximum sign area and height shall not exceed the limits set for nonresidential uses per Subsection 549.23. The total square footage of all freestanding signage for the property shall be governed by the underlying zoning district. Section 7 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 day of , 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk Richfield School-Based Health Center - Case Statement Introduction Richfield High School staff and community partner organizations have identified a need to improve student access to affordable health care services. Students and families have reported specific needs for health services to address immediate health needs, pregnancy and sexually transmitted disease prevention, and support for mental and emotional health. An advisory group has been established to discuss needs; identify potential resources and partnerships; and explore models of best practice.The following case statement outlines the information that is known and provides direction for future work. Vision Statement Accessible and affordable healthcare is available to all Richfield youth, infancy through high school,through a school-based health center operated at Richfield High School. Richfield School-Based Health Center Advisory Group Marie Abele—Graduation Specialist, Richfield High School Phoebe Anderson—School Nurse Richfield High School & District Health Services Coordinator Eric Paulson -Assistant Secondary Principal, Richfield High School Cassie Acostacano—Counselor, RCEP Christina Gonzalez- Director of Student Support Services, Richfield School District Michael Schwartz - Richfield District Business Manager Nikki Monette—Health Educator,The Family Partnership Rita Molestina—Health Educator, Planned Parenthood MN, ND, SD Lisa Turnham -TP3 Project Manager, Hennepin County Libby Lincoln - Program Officer, Park Nicollet Foundation Rita Cortese, M.D.— Medical Director, Park Nicollet School-Based Health Centers Molly Snuggerud - Family Health Program Manager, Bloomington Public Health Rationale Our goal of the Richfield SBHC is to provide resolution of students' health care needs that may impact their educational achievement. School-based health centers are considered by experts as one of the most effective and efficient ways to provide needed health care to children. Few programs are as successful in delivering health care to children at no cost or little cost to the patient, and where they are, in school (Children's Aid Society, 2014). Schools- based health centers (SBHCs) ensure that students can be treated for acute illnesses, get a flu shot, have an annual physical, or speak to a mental health counselor—all in a safe, affordable, easily-accessible location. Many SBHCs also offer dental, vision and hearing screening as well as health education. SBHCs Positively Impact Student's Health • SBHCs increase access to health care. • SBHC users are likely to use primary care - both medical and behavioral health - more consistently. • SBHC users are more likely to have yearly dental and medical check-ups. • SBHC users are less likely to go to the emergency room or be hospitalized. Source: www.sbh4all.org With an emphasis on early intervention, school-based health centers prevent health issues from becoming acute concerns at home or in the emergency room. As a result, students receive healthcare when they need it, miss fewer school days (and parents miss fewer days at work), and academic performance improves. SBHCs Positively Impact Student's Educational Achievement • SBHCs have demonstrated positive impact on absences, dropout rates, disciplinary problems and other academic outcomes. • Students receiving SBHC mental health services improve their grades more quickly than their peers. • States with SBHCs that serve as Medicaid providers have higher student achievement results. Source: www.sbh4all.org Need The following overview provides data on the city of Richfield and the Richfield School District.This data demonstrates that the Richfield community is diverse and has a large number of families in poverty. Sources: www.city-data.com and Richfield School District. City of Richfield Population 26,307 = Number of Family Households in District $50,352 = Median Household 13%of residents living in poverty 20%of residents are foreign born District Enrollment (Richfield Residents) = 3865 out of 5275 students living within the district (73% Market Share) Richfield Public Schools(Enrollment) Total District Enrollment (4,405) 32% EL's/LEP Enrollment Richfield High School: 9-12 (1,130) 63% Free & Reduced Lunch Richfield Middle School: 6-8 (917) Student race/ethnicity: STEM (748) 37% Latino Centennial: K-5 (479) 31%White Sheridan Hills: K-5 (505) 18% Black Richfield Dual Language: K-8 (463) 7%Asian RCEP (43) 1%American Indian ECSE (103) 6% 2 or More Races Transitions (17) Comparing the above population data with state data on health insurance, it is evident that there are many Richfield families at risk for being uninsured and underinsured. For example,the Latino and foreign-born populations in Richfield are larger than the statewide average. And, according to statewide data, Latino and foreign-born individuals have much lower rates of health insurance coverage. Source: M D H, 2013 Minnesota Population Uninsurance Rates Latino 35% Foreign Born 26% Proposed Model In collaboration with Richfield district staff the Richfield SBHC will incorporate the common characteristics of quality SBHCs: • Located on school grounds at Richfield High School • Work cooperatively within the district to become an integral part of the school environment • Provide a comprehensive range of services that meet the specific physical and behavioral health needs of the young people in the community • Employ a multidisciplinary team of providers to care for the students: physicians, nurses, social workers, counselors, educators and other health professionals • Provide clinical services through a qualified health provider • Require parents/guardians to sign written consent for their children to receive the full scope of services provided at the SBHC, except confidential services provided under Minnesota "Minors Consent" law • Have an advisory board that includes community representatives, parents,youth, and family organizations,to provide planning and oversight The following healthcare services will be provided at the Richfield SBHC: • Medical • Mental Health • Dental • Vision • Health Insurance Referrals Cost Build Out: The health center will be located in the lower level of Richfield High School. The space needs to be reconfigured for appropriate clinical use. The District has offered the space,the build out costs need to be subsidized through community grants and/or partnerships. Operations: Richfield District will provide support for daily operations costs (i.e.telephone lines, internet access, utilities, waste disposal, and accessible parking) Clinical Services:The partner health providers would support the provision and maintenance of health services. Staffing: A dedicated part-time staff position is imperative for success with the clinic start-up and long- term management and coordination.This position could be supported through grant funds but should be a district position. Sustainability According to the National School-based Health Alliance -sustainable SBHCs share three common characteristics: 1. Develop and nurture strong partnerships with school and community stakeholders committed to SBHCs. 2. Create a sound business model that relies on a variety of stable and predictable funding sources. 3. Operate health care practices that meet the comprehensive needs of students and demonstrate a high quality practice. In an effort to work towards sustainability, even in this early phase of development planning,the Richfield SBHC Advisory Group has considered the following to respond to the above sustainability characteristics. Partners from non-profit and government organizations are engaged in the Advisory Group. A larger representation from Richfield business leaders, faith-organizations, parents, and youth will serve on the Community Advisory Board to strengthen partnerships in all levels of the community. The Richfield SBHC Advisory Group has explored the Health Resource Center at Brooklyn Center Schools as a model for replication. The Brooklyn Center Health Resource Center(HRC) has been successful at raising necessary funds for clinic operations and overhead costs. Efforts are being explored to garner similar partnerships and resources to support efforts in Richfield. One unique consideration for sustainability is that as a result of services provided at the Brooklyn Center HRC, families are choosing to enroll and remain in the school district as a result of the accessible and affordable care provided in the HRC. Richfield will work to model the services and care provided so that Richfield families choose to enroll students in the Richfield District Schools. In regards to patient utilization, if the Richfield clinic were to perform as the BCHRC has,the following clinic visits and dental visits could be estimated. Clinic Clinic Visits Dental Visits District Student Enrollment Brooklyn 875 1,235 Center (actual) (actual) 1,700 Richfield 2202 3215 4,405 (estimated) (estimated) The Richfield SBHC will abide by the highest standards of pediatric health care practice, including standards of best practice for provision of adolescent health care services. AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.B. -wood STAFF REPORT NO. 50 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Jesse Swenson, Assistant HR Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich, City Manager OTHER DEPARTMENT REVIEW: None CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a Resolution Modifying a Health Care Savings Plan for the International Union of Operating Engineers, Local 49 Bargaining Unit Employees. EXECUTIVE SUMMARY: In 2001, the Minnesota legislature granted authority to the Minnesota State Retirement System (MSRS)to offer a post-employment Health Care Savings Plan (HCSP) to eligible employees of the State of Minnesota and other governmental subdivisions. A post-employment HCSP is an employer-sponsored program that allows employees to save money to pay towards medical expenses and/or health insurance premiums after termination of employment. Employees are able to choose among different investment options provided by the State Board of Investment. Assets contributed into the program are tax-free, accumulate tax free, and if used for medical expenses, remain tax-free. The IUOE bargaining unit has now agreed upon a modification to the plan that modifies the bi-weekly contribution. Staff is recommending amending the Post Employment Health Care Savings Plan for IUOE employees. RECOMMENDED ACTION: By motion: Adopt a resolution modifying a Health Care Savings Plan for eligible International Union of Operating Engineers (IUOE), Local 49 bargaining unit employees. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: Legal authority to establish a HCSP is provided through Minn. Stat. 352.98 and Internal Revenue Service rulings. The establishment of each plan, including contribution formulae, must be negotiated when dealing with a collective bargaining unit or personnel policy where non-union employees are involved. Once established,the plan must be filed with MSRS to initiate or modify the plan. Participation for each individual employee within a bargaining unit or employee group is mandatory once the plan is established for that respective group. Moreover,the amounts contributed for or by each employee in a particular group must be the same for every employee of the group. Contributed amounts between employee groups will vary however. A Health Care Savings Plan was established by the City Council for the IUOE bargaining unit on February 14, 2006. Under state statute, plan modifications may be made no more frequently than once every two years. B. POLICIES(resolutions, ordinances, regulations,statutes.excl: - Minnesota Statutes have been amended to provide the opportunity for a very valuable benefit to city employees. The City of Richfield has offered this benefit to employee groups that are interested in such a mandatory plan. • Approval by the City Council of the attached resolution will provide the City authority to proceed with this modified program for the IUOE employees. Plan modifications can be made every two years. C. CRITICAL TIMING ISSUES: • There is no time critical issue pertaining to the timing of this modification. However,the majority of IUOE members have expressed a desire to implement the modified program,so it should be pursued at the City's earliest opportunity. • After City approval,this plan must be submitted to MSRS for filing and implementation. D. FINANCIAL IMPACT: • There is no cost to the City in this version of the plan since the City makes no contribution. In fact,there is a cost savings to the City in that wages and severance pay that the employee contributes to the Health Care Savings plan are not subject to Social Security or Medicare contributions. • The plan provides a great tax savings to the participating employees and provides a tax mechanism to fund post- employment medical costs. E. LEGAL CONSIDERATION: • There is legal authority for this plan in Minnesota Statutes and IRS Code. • The plan modification has been sent to the State for review and has received informal approval. ALTERNATIVE RECOMMENDATION(S): • The City Council could decide not to approve this plan modification. In that case,the current plan would remain in effect. However, this decision contradicts the wishes of the majority of this employee bargaining unit. PRINCIPAL PARTIES EXPECTED AT MEETING: None ATTACHMENTS: Description Type ❑ Resolution Resolution Letter ❑ HCSP L&T 2015 Backup Material RESOLUTION NO. RESOLUTION AMENDING THE POST EMPLOYMENT HEALTH CARE SAVINGS PLAN FOR INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 49 EMPLOYEES WHEREAS, Laws of Minnesota 2001, chapter 352.98, authorizes the Minnesota State Retirement System (MSRS) to offer a Post Employment Health Care Savings Plan (Plan) program to state employees, as well as, other governmental subdivisions, and WHEREAS, the Internal Revenue Service Code provides for such Plans, and WHEREAS, the City of Richfield currently offers such a Plan to eligible City employees as a tax free method for employees to set aside money to cover the ever increasing costs of health insurance and medical costs after termination of public employment, and WHEREAS, such plans must be established by employee group, either through a collective bargaining agreement for union employees or a personnel policy for employees not covered by a collective bargaining agreement, and WHEREAS, modification to the provisions of an established Plan for the IUOE bargaining group have been agreed to by the IUOE bargaining group of employees and the City of Richfield, and WHEREAS, the proposed plan is a net savings to the City of Richfield and a benefit to the individual employees covered by the plan. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Richfield hereby authorizes the City Manager to amend the Health Care Savings Plan for the IUOE group of employees in the City of Richfield. Adopted by the City Council of the City of Richfield, Minnesota this 14th day of April 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk Policy: International Union of Operating Engineers, Local 49 Post Employment Health Care Savings Plan Approved by: Richfield City Council on April 14, 2015 Effective Date: May 1, 2015 Page: 1 of 2 Plan Purpose The City of Richfield is interested in establishing a means for eligible employees to participate in a mandatory program to help defray some of the costs of post employment health related expenses, including health insurance premiums using pre-tax dollars. Participation in the Post Employment Health Care Savings Plan, administered by the Minnesota State Retirement System (MSRS), is intended to provide an opportunity to accomplish that goal. Post Employment The Post Employment Health Care Savings Plan (HCSP) is an Health Care Employer sponsored program that allows eligible employees to: Savings Plan 1) defer payment of a portion of unused vacation and personal leave as a severance payment at the time of termination to pay for eligible health insurance premiums and/or health expenses after separation from City service: and 2) defer a portion of an Employee's biweekly salary for deposit into their HCSP for the payment of qualified healthcare related expenses after separation from City service. Employees will be able to choose among several different investment options provided by the Minnesota State Board of Investment. Under the Plan, amounts contributed into the HCSP are tax-free and not subject to FICA contributions. Assets in the HCSP will accumulate tax- free and since payouts are used for qualifying medical expenses, they will also remain tax-free. Eligibility to Participation in the WOE, Local 49 HCSP is mandatory for all Participate employees that are members of the Richfield IUOE, Local 49 Pay Classification Plan at the time of termination of employment. Contribution Mandatory participation in the HCSP shall be in accordance with, and Formula limited to the following formulas for contributions: I. Biweekly Contribution 1. An eligible Employee will contribute $45 of their base biweekly wage to the Employee's account in the IUOE, Local 49 HCSP. II. Severance Contribution 1. The first 40 hours of accumulated but unused Vacation Leave or Personal Leave or a combination thereof shall be paid as a credit to the Employee's account in the HCSP. 2. All severance payments based upon Vacation Leave and/or Personal Leave are calculated as described above, by multiplying the number of hours by the applicable rate of pay at the time of termination. 3. Contributions authorized under this Plan shall continue until such time as this policy is amended or repealed by the City of Richfield. HCSP The HCSP is authorized under the Internal Revenue Code and is Administration administered by the Minnesota State Retirement System. AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.C. -wood STAFF REPORT NO. 51 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Steven L. Devich, City Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich, City Manager OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a resolution reappointing Pat Brekken to the Richfield Tourism Promotion Board to a three-year term ending December 31, 2017 or until a successor has been chosen, whichever is later. EXECUTIVE SUMMARY: On June 25, 1990 the City Council approved an ordinance to levy a 3% tax on gross receipts of lodging from Richfield Hotels and Motels pursuant to Minnesota Statutes. The establishment of the Richfield Tourism Promotion Board, Inc. (RTPB) and the appointment of directors were also a part of the resolution. Currently there are five director positions on the RTPB. The term of each appointment is for three years. The current appointments to the RTPB and the ending dates of their terms are as follows: 1. Pat Brekken, representing the Richfield Chamber of Commerce, term ended on December 31, 2014. 2. Abisola Omiwade, General Manager of Candlewood Suites, term ending December 31, 2015. 3. Raj Bhakta, General Manager of Americlnn, term ending December 31, 2015. 4. Adam Selby, Hampton Inn, term ending December 31, 2015. 5. Vacant, General Manager of Motel 6. Pat Brekken has been a representative of the Chamber of Commerce to the RTPB for the past few years. His term expired on December 31, 2014 and he has indicated his wish to be considered for reappointment. RECOMMENDED ACTION: By Motion: Adopt a resolution reappointing Pat Brekken to the Richfield Tourism Promotion Board to a three-year term ending December 31, 2017 or until a successor has been chosen, whichever is later. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: This information is contained in the Executive Summary. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): • The City Council has the authority to make appointments to the RTPB. • The RTPB has typically included a representative from each of the hotel properties and a member of the Richfield Chamber of Commerce. C. CRITICAL TIMING ISSUES: The term of the Richfield Chamber of Commerce representative expired on December 31,2014 so his reappointment should be made at the April 14,2015 City Council meeting. D. FINANCIAL IMPACT: There is no cost to the City. E. LEGAL CONSIDERATION: The appointment conforms to City ordinance and bylaws of the RTPB. ALTERNATIVE RECOMMENDATION(S): • The City Council could decide not to make this reappointment to the RTPB. • The City Council could choose to review this matter at a future date. PRINCIPAL PARTIES EXPECTED AT MEETING: None ATTACHMENTS: Description Type ❑ RTPB Resolution Resolution Letter RESOLUTION NO. RESOLUTION APPOINTING A REPRESENTATIVE TO THE BOARD OF DIRECTORS OF THE RICHFIELD TOURISM PROMOTION BOARD, INC. WHEREAS, the City of Richfield has levied a 3% tax on the gross receipts of lodging from hotels and motels in the City pursuant to Minnesota Statute Section 169.190; and WHEREAS, Minnesota Statute Section 169.190 authorizes the proceeds of the tax to fund a Tourism Promotion Board for the purpose of marketing and promoting the City as a tourist or convention center; and WHEREAS, the articles and bylaws of the Richfield Tourism Promotion Board, Inc. provide the City Council of the City of Richfield appoint five (5) directors to the Board representing the Richfield hotel-motel properties and the Richfield Chamber of Commerce; and WHEREAS, each director shall serve as a director until his or her successor has been appointed and has qualified, or until his or her earlier disqualification, death, resignation, or removal; and WHEREAS, the terms of the Richfield Chamber of Commerce representative, Pat Brekken, has expired and he has indicated a desire to be reappointed to the Richfield Tourism Promotion Board. WHEREAS, this representative has been active in the Richfield Tourism Promotion Board and seeks reappointment. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota, that the Richfield Tourism Promotion Board directors be modified as follows: Re-appoint Pat Brekken, Richfield Chamber of Commerce representative, to the Richfield Tourism Promotion Board for a three-year term ending December 31, 2017 or until his successor has been appointed, whichever is later. Adopted by the City Council of the City of Richfield, Minnesota this 14th day of April, 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.D. -wood STAFF REPORT NO. 52 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Chris Regis, Finance Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich, City Manager OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a resolution providing for the sale of$2,690,000 General Obligation Street Reconstruction Bonds, Series 2015 for the Portland Avenue Reconstruction Project. EXECUTIVE SUMMARY: At the September 23, 2014 City Council meeting the Council adopted the 5-Year Street Reconstruction Plan and authorized the issuance of street reconstruction bonds to finance the 2015 and 2016 reconstruction projects. A project included in the 5-Year Street Reconstruction Plan is the reconstruction of Portland Avenue from 67th Street south to 77th Street. The estimated cost of this project is $8,425,000. Funding for the project is to be provided by the combination of the issuance of street reconstruction bonds, Municipal State Aid, Federal and County grants, and utility rate payers. The bonds will be issued by the City and would be serviced by a debt service tax levy. The reconstruction of Portland Avenue will involve implementation of a three-lane section, improved sidewalk conditions, on-street bike lanes, multi-use trails, boulevards, and replacement of City utilities. In addition, undergrounding of parallel overhead utilities will also take place. RECOMMENDED ACTION: By Motion: Approve a resolution providing for the sale of$2,690,000 General Obligation Street Reconstruction Bonds, Series 2015 for the Portland Avenue Reconstruction Project. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: None. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): The Portland Avenue Street Reconstruction project is part of the 5-Year Street Reconstruction Plan approved by the City Council on September 23,2014. C. CRITICAL TIMING ISSUES: Bids for the project have been let. Construction is expected to begin in late spring or early summer of 2015.Therefore, it is important to have the necessary funding in place. D. FINANCIAL IMPACT: • The estimated total cost of the Portland Avenue Street Reconstruction Project is$8,425,000. • Funding for the project will be provided as follows: Street Reconstruction Bonds (Net of Par) $2,600,000 Municipal State Aid $400,000 Federal Funds $3,750,000 Hennepin County $475,000 Overhead Utility Rate Payers $400,000 City of Richfield $800,000 Total Funding $8,425,000 • The par amount of the bonds to be issued is$2,690,000. The City will be buying down the original estimate of bond funding by$800,000. This buy down will be provided by utilizing Local Government Aid revenues that the City has set aside for this purpose. The use of this money will reduce the overall debt service tax levy of the bonds. - The debt service on the bonds will be paid from an annual debt service tax levy over the life of the bonds. The term of the bonds will be twenty(20)years. • The estimated annual increase in taxes due to the issuance of these bonds for a residential property valued at$200,000 will be approximately$15.28. E. LEGAL CONSIDERATION: Legal counsel has reviewed the Pre-Sale report and the attached resolution. ALTERNATIVE RECOMMENDATION(S): None. PRINCIPAL PARTIES EXPECTED AT MEETING: Rebecca Kurtz, Ehlers&Associates, Inc. ATTACHMENTS: Description Type ❑ Portland Avenue Reconstruction Bonds Resolution Resolution Letter ❑ Portland Avenue Reconstruction Bond Pre Sale Report Exhibit Resolution Providing for the Sale of $2,690,000 General Obligation Street Reconstruction Bonds for the Portland Avenue Project A. WHEREAS,the City Council of the City of Richfield,Minnesota has heretofore determined that it is necessary and expedient to issue General Obligation Street Reconstruction Bonds in an amount not to exceed$2,690,000 to finance the Portland Avenue Street Reconstruction Plan Project in the City. This will be part of the City's $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A; and B. WHEREAS,the City has retained Ehlers &Associates, Inc., in Roseville, Minnesota("Ehlers"), as its independent financial advisor for the Bonds and is therefore authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Richfield,Minnesota, as follows: 1. Authorization; Findings. The City Council hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening. The City Council shall meet at 7:00 PM on May 12,2015, for the purpose of considering sealed proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by City Council Member and, after full discussion thereof and upon a vote being taken thereon,the following City Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. Dated this 14`"day of April, 2015. Beth VanHoose, City Clerk EHLERS LEADERS IN PUBLIC FINANCE April 14, 2015 Pre-Sale Report for City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A woo, Prepared by: Rebecca Kurtz Senior Financial Advisor And Brian Reilly Senior Financial Advisor t 1-300-552-1171 1 www,ehlei's-inc.com Executive Summary of Proposed Debt Proposed Issue: $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Purposes: The proposed issue includes financing for the following street reconstruction projects in the City of Richfield: • $1,660,000 for the 69th Street Reconstruction. Debt service will be paid from ad valorem property taxes. • $2,690,000 for the Portland Avenue Street Reconstruction. Debt service will be paid from ad valorem property taxes. The City is providing $800,000 in cash toward the total project cost of $3,490,000 • $5,085,000 for the Mill & Overlay Projects. Debt service will be paid from franchise fees and ad valorem taxes. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 475.58. The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. The Bonds count against the City's General Obligation Debt Capacity Limit of 3% of market value. Term/Call Feature: The Bonds are being issued for a 21 year term. Principal on the Bonds will be due on February 1 in the years 2016 through 2036. Interest is payable every six months beginning February 1, 2016. The Bonds maturing on and after February 1, 2025 will be subject to prepayment at the discretion of the City on February 1, 2024 or any date thereafter at the par(100%)plus accrued interest. Bank Qualification: Because the City is issuing less than $10,000,000 of tax exempt debt in the calendar year, the City will be able to designate the Bonds as "bank qualified" obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Rating: The City's most recent bond issues were rated "AA+" by Standard & Poor's. The City will request a new rating 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. Presale Report April 14, 2015 City of Richfield, Minnesota Page 1 Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us, our advisory relationship as well as characteristics of various municipal financing options, we are recommending the issuance of tax exempt General Obligation Street Reconstruction Plan Bonds as a suitable financing option. This option is in keeping with the City policy and past practices to finance these types of projects with this type of debt issue, and there are limited other options available to finance these types of projects. Method of Sale/Placement: In order to obtain the lowest interest cost to the City,we will competitively bid the purchase of the Bonds from local and national underwriters. We have included an allowance for discount bidding equal to 0.90% 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 their 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. Premium Bids: Under current market conditions, most investors in municipal bonds prefer "premium" pricing structures. A premium is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds the yield to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of face value is considered "reoffering premium." The amount of the premium varies,but it is not uncommon to see premiums for new issues in the range of 2.00%to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of$2,040,000 to $2,200,000. For this issue of Bonds we have been directed to use the premium to reduce the size of the issue. The adjustments may slightly change the true interest cost of the original bid, either up or down. You have the choice to limit the amount of premium in the bid specifications. This may result in fewer bids, but it may also eliminate large adjustments on the day of sale and other uncertainties. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are four potential advance refunding opportunities: • G.O. Water and Sewer Revenue Bonds, Series 2006A • G.O. Storm Sewer Bonds, Series 2006B • G.O. Capital Improvement Bonds, Series 2007A • G.O. Improvement Bonds, Series 2007B We are in discussions with City staff regarding the options for these four issues and the timing of a potential refunding. 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. Presale Report April 14, 2015 City of Richfield, Minnesota Page 2 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: Because the Bonds are tax-exempt securities/tax credit securities, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific responsibilities will be detailed in the Tax Certificate prepared by your Bond Attorney and provided at closing. We recommend that you regularly monitor compliance with these rules and/or retain the services of a qualified firm to assist you. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service,we have assumed that you will continue that relationship. For services you have not previously required,we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation,unless you notify us that you wish to pay them from other sources. Our pre-sale bond sizing includes a good faith estimate of these fees, so their final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like to use a different service provider for any of the listed services please contact us. Bond Attorney: Kennedy& Graven, Chartered Paying Agent: Wells Fargo Rating Agency: Standard&Poor's This presale report summarizes our understanding of the City's objectives for the structure and terms of this financing as of this date. As additional facts become known or capital markets conditions change,we may need to modify the structure and/or terms of this financing to achieve results consistent with the City's objectives. Presale Report April 14, 2015 City of Richfield, Minnesota Page 3 Proposed Debt Issuance Schedule Pre-Sale Review by City Council: April 14, 2015 Distribute Official Statement: Week of April 27,2015 Conference with Rating Agency: Week of April 27, 2015 City Council Meeting to Award Sale of the Bonds: May 12, 2015 Estimated Closing Date: June 4,2015 Attachments Sources and Uses of Funds Proposed Debt Service Schedule Resolution Authorizing Ehlers to Proceed With Bond Sale Ehlers Contacts Financial Advisors: Rebecca Kurtz (651) 697-8516 Brian Reilly (651) 697-8541 Disclosure Coordinator: Wendy Lundberg (651) 697-8540 Financial Analyst: Alicia Gage (651) 697-8551 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 April 14, 2015 City of Richfield, Minnesota Page 4 City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Total Issue Sources And Uses Dated 06/01/2015 1 Delivered 06/01/2015 Portland Mill&Overlay Issue 69th Street Avenue (Franchise Fees) Summary Sources Of Funds Par Amount of Bonds $1,660,000.00 $2,690,000.00 $5,085,000.00 $9,435,000.00 Planned Issuer Equity contribution 800,000.00 800,000.00 Total Sources $1,660,000.00 $3,490,000.00 $5,085,000.00 $10,235,000.00 Uses Of Funds Total Underwriter's Discount (0.900%) 14,940.00 24,210.00 45,765.00 84,915.00 Costs oflssuance 13,547.44 21,953.36 41,499.20 77,000.00 Deposit to Capitalized Interest(CIF)Fund 27,151.67 43,966.67 - 71,118.34 Deposit to Project Construction Fund 1,600,000.00 3,400,000.00 5,000,000.00 10,000,000.00 Rounding Amount 4,360.89 (130.03) (2,264.20) 1,966.66 Total Uses $1,660,000.00 $3,490,000.00 $5,085,000.00 $10,235,000.00 Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM EHLERS LEADERS IN PUBLIC FINANCE City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2015 - - - - - 02/01/2016 250,000.00 0.450% 148,615.01 398,615.01 398,615.01 08/01/2016 - - 110,898.75 110,898.75 - 02/01/2017 395,000.00 0.750% 110,898.75 505,898.75 616,797.50 08/01/2017 - - 109,417.50 109,417.50 - 02/01/2018 400,000.00 1.050% 109,417.50 509,417.50 618,835.00 08/01/2018 - - 107,317.50 107,317.50 - 02/01/2019 405,000.00 1.350% 107,317.50 512,317.50 619,635.00 08/01/2019 - - 104,583.75 104,583.75 - 02/01/2020 405,000.00 1.500% 104,583.75 509,583.75 614,167.50 08/01/2020 - - 101,546.25 101,546.25 - 02/01/2021 415,000.00 1.650% 101,546.25 516,546.25 618,092.50 08/01/2021 - - 98,122.50 98,122.50 - 02/01/2022 425,000.00 1.850% 98,122.50 523,122.50 621,245.00 08/01/2022 - - 94,191.25 94,191.25 - 02/01/2023 430,000.00 1.950% 94,191.25 524,191.25 618,382.50 08/01/2023 - - 89,998.75 89,998.75 - 02/01/2024 435,000.00 2.050% 89,998.75 524,998.75 614,997.50 08/01/2024 - - 85,540.00 85,540.00 - 02/01/2025 445,000.00 2.150% 85,540.00 530,540.00 616,080.00 08/01/2025 - - 80,756.25 80,756.25 - 02/01/2026 455,000.00 2.250% 80,756.25 535,756.25 616,512.50 08/01/2026 - - 75,637.50 75,637.50 - 02/01/2027 465,000.00 2.400% 75,637.50 540,637.50 616,275.00 08/01/2027 - - 70,057.50 70,057.50 - 02/01/2028 480,000.00 2.550% 70,057.50 550,057.50 620,115.00 08/01/2028 - - 63,937.50 63,937.50 - 02/01/2029 490,000.00 2.700% 63,937.50 553,937.50 617,875.00 08/01/2029 - - 57,322.50 57,322.50 - 02/01/2030 510,000.00 2.800% 57,322.50 567,322.50 624,645.00 08/01/2030 - - 50,182.50 50,182.50 - 02/01/2031 515,000.00 2.950% 50,182.50 565,182.50 615,365.00 08/01/2031 - - 42,586.25 42,586.25 - 02/01/2032 535,000.00 3.200% 42,586.25 577,586.25 620,172.50 08/01/2032 - - 34,026.25 34,026.25 - 02/01/2033 550,000.00 3.300% 34,026.25 584,026.25 618,052.50 08/01/2033 - - 24,951.25 24,951.25 - 02/01/2034 570,000.00 3.450% 24,951.25 594,951.25 619,902.50 08/01/2034 - - 15,118.75 15,118.75 - 02/01/2035 585,000.00 3.500% 15,118.75 600,118.75 615,237.50 08/01/2035 - - 4,881.25 4,881.25 - 02/01/2036 275,000.00 3.550% 4,881.25 279,881.25 284,762.50 Total $9,435,000.00 - $2,990,762.51 $12,425,762.51 Yield Statistics Bond Year Dollars $106,885.00 Average Life 11.329 Years Average Coupon 2.7981125% Net Interest Cost(NIC) 2.8775577 True interest Cost(TTC) 2.8530630% Bond Yield for Arbitrage Purposes 2.7573261% All Inclusive Cost(AIC) 2.9409490% IRS Form 8038 Net Interest Cost 2.7981125% Weighted Average Mautrity 11.329 Yews Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM FREERS IAD[Ns IN PUBLIC FINANCL City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Net Debt Service Schedule Fiscal Date Principal Coupon Interest Total P+I CIF Net New D/S Total 06/01/2015 - - - - - - 02/01/2016 250,000.00 0.450% 148,615.01 398,615.01 (71,118.34) 327,496.67 327,496.67 08/01/2016 - - 110,898.75 110,898.75 110,898.75 - 02/01/2017 395,000.00 0.750'% 110,898.75 505,898.75 505,898.75 616,797.50 08/01/2017 - - 109,417.50 109,417.50 109,417.50 - 02/01/2018 400,000.00 1.050% 109,417.50 509,417.50 509,417.50 618,835.00 08/01/2018 - - 107,317.50 107,317.50 107,317.50 - 02/01/2019 405,000.00 1.350% 107,317.50 512,317.50 512,317.50 619,635.00 08/01/2019 - - 104,583.75 104,583.75 104,583.75 - 02/01/2020 405,000.00 1.500% 104,583.75 509,583.75 509,583.75 614,167.50 08/01/2020 - - 101,546.25 101,546.25 101,546.25 - 02/01/2021 415,000.00 1.650% 101,546.25 516,546.25 516,546.25 618,092.50 08/01/2021 - - 98,122.50 98,122.50 98,122.50 - 02/01/2022 425,000.00 1.850% 98,122.50 523,122.50 523,122.50 621,245.00 08/01/2022 - - 94,191.25 94,191.25 94,191.25 - 02/01/2023 430,000.00 1.950% 94,191.25 524,191.25 524,191.25 618,382.50 08/01/2023 - - 89,998.75 89,998.75 89,998.75 - 02/01/2024 435,000.00 2.050% 89,998.75 524,998.75 524,998.75 614,997.50 08/01/2024 - - 85,540.00 85,540.00 85,540.00 - 02/01/2025 445,000.00 2.150% 85,540.00 530,540.00 530,540.00 616,080.00 08/01/2025 - - 80,756.25 80,756.25 80,756.25 - 02/01/2026 455,000.00 2.250'% 80,756.25 535,756.25 535,756.25 616,512.50 08/01/2026 - - 75,637.50 75,637.50 75,637.50 - 02/01/2027 465,000.00 2.400% 75,637.50 540,637.50 540,637.50 616,275.00 08/01/2027 - - 70,057.50 70,057.50 70,057.50 - 02/01/2028 480,000.00 2.550% 70,057.50 550,057.50 550,057.50 620,115.00 08/01/2028 - - 63,937.50 63,937.50 63,937.50 - 02/01/2029 490,000.00 2.700% 63,937.50 553,937.50 553,937.50 617,875.00 08/01/2029 - - 57,322.50 57,322.50 57,322.50 - 02/01/2030 510,000.00 2.800% 57,322.50 567,322.50 567,322.50 624,645.00 08/01/2030 - - 50,182.50 50,182.50 50,182.50 - 02/01/2031 515,000.00 2.950% 50,182.50 565,182.50 565,182.50 615,365.00 08/01/2031 - - 42,586.25 42,586.25 42,586.25 - 02/01/2032 535,000.00 3.200% 42,586.25 577,586.25 577,586.25 620,172.50 08/01/2032 - - 34,026.25 34,026.25 34,026.25 - 02/01/2033 550,000.00 3.300% 34,026.25 584,026.25 584,026.25 618,052.50 08/01/2033 - - 24,951.25 24,951.25 24,951.25 - 02/01/2034 570,000.00 3.450% 24,951.25 594,951.25 594,951.25 619,902.50 08/01/2034 - - 15,118.75 15,118.75 15,118.75 - 02/01/2035 585,000.00 3.500% 15,118.75 600,118.75 600,118.75 615,237.50 08/01/2035 - - 4,881.25 4,881.25 4,881.25 - 02/01/2036 275,000.00 3.550% 4,881.25 279,881.25 279,881.25 284,762.50 Total $9,435,000.00 - $2,990,762.51 $12,425,762.51 (71,118.34) $12,354,644.17 - Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM 4 all 1 EHLERS F AI]F Rti IN RII RI W FINANCE City of Richfield, Minnesota $2,690,000 General Obligation Street Reconstruction Bonds, Series 2015A Portland Avenue Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2015 - - - 02/01/2016 43,966.67 43,966.67 43,966.67 08/01/2016 - - 32,975.00 32,975.00 - 02/01/2017 110,000.00 0.750% 32,975.00 142,975.00 175,950.00 08/01/2017 - - 32,562.50 32,562.50 - 02/01/2018 115,000.00 1.050% 32,562.50 147,562.50 180,125.00 08/01/2018 - - 31,958.75 31,958.75 - 02/01/2019 115,000.00 1.350% 31,958.75 146,958.75 178,917.50 08/01/2019 - - 31,182.50 31,182.50 - 02/01/2020 115,000.00 1.500% 31,182.50 146,182.50 177,365.00 08/01/2020 - - 30,320.00 30,320.00 - 02/01/2021 120,000.00 1.650% 30,320.00 150,320.00 180,640.00 08/01/2021 - - 29,330.00 29,330.00 - 02/01/2022 120,000.00 1.850% 29,330.00 149,330.00 178,660.00 08/01/2022 - - 28,220.00 28,220.00 - 02/01/2023 120,000.00 1.950% 28,220.00 148,220.00 176,440.00 08/01/2023 - - 27,050.00 27,050.00 - 02/01/2024 125,000.00 2.050% 27,050.00 152,050.00 179,100.00 08/01/2024 - - 25,768.75 25,768.75 - 02/01/2025 125,000.00 2.150% 25,768.75 150,768.75 176,537.50 08/01/2025 - - 24,425.00 24,425.00 - 02/01/2026 130,000.00 2.250% 24,425.00 154,425.00 178,850.00 08/01/2026 - - 22,96250 22,96250 - 02/01/2027 130,000.00 2.400% 22,962.50 152,962.50 175,925.00 08/01/2027 - - 21,402.50 21,402.50 - 02/01/2028 135,000.00 2.550% 21,402.50 156,402.50 177,805.00 08/01/2028 - - 19,68125 19,68125 - 02/01/2029 140,000.00 2.700% 19,68125 159,68125 179,362.50 08/01/2029 - - 17,791.25 17,791.25 - 02/01/2030 145,000.00 2.800% 17,791.25 162,791.25 180,582.50 08/01/2030 - - 15,761.25 15,761.25 - 02/01/2031 145,000.00 2.950% 15,761.25 160,761.25 176,522.50 08/01/2031 - - 13,622.50 13,622.50 - 02/01/2032 150,000.00 3.200% 13,622.50 163,622.50 177,245.00 08/01/2032 - - 11,222.50 11,222.50 - 02/01/2033 155,000.00 3300% 11,22250 166,22250 177,445.00 08/01/2033 - - 8,665.00 8,665.00 - 02/01/2034 160,000.00 3.450% 8,665.00 168,665.00 177,330.00 08/01/2034 - - 5,905.00 5,905.00 - 02/01/2035 165,000.00 3.500% 5,905.00 170,905.00 176,810.00 08/01/2035 - - 3,017.50 3,017.50 - 02/01/2036 170,000.00 3.550% 3,017.50 173,017.50 176,035.00 Total $2,690,000.00 - $911,614.17 $3,601,614.17 - Yield Statistics Bond Year Dollaes $32,048.33 Average Life 11.914 Years Average Coupon 2.8444979 Net Interest Cost(NIC) 2.9200401% True Interest Cost(TIC) 2.8942267 Bond Yield for Arbitrage Purposes 2.7573261% All Inclusive Cost(AIC) 2.9784141'% IRS Form 8038 Net Interest Cost 2.8444979% Weighted Average Maturity 11.914 Years Series 2015A GO Street Re I Portland Avenue 1 4/3/2015 1 9:11 AM EHLERS LEADERS IN PUBLIC FINANCE AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.E. -wood STAFF REPORT NO. 53 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Chris Regis, Finance Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich, City Manager OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a resolution providing for the sale of$1,660,000 General Obligation Street Reconstruction Bonds, Series 2015 for the 69th Street Reconstruction Project. EXECUTIVE SUMMARY: At the September 23, 2014 City Council meeting the Council adopted the 5-Year Street Reconstruction Plan and authorized the issuance of street reconstruction bonds to finance the 2015 and 2016 reconstruction projects. A project included in the 5-Year Street Reconstruction Plan was the reconstruction of 69th Street. The estimated cost of this project is $1,600,000. Funding for the project is to be provided by the issuance of street reconstruction bonds. The bonds would be serviced by a debt service tax levy. The reconstruction of 69th Street would be between Humboldt Avenue to Knox Avenue and would include the replacement of City utilities. RECOMMENDED ACTION: By Motion: Approve a resolution providing for the sale of$1,660,000 General Obligation Street Reconstruction Bonds, Series 2015 for the 69th Street Reconstruction Project. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: None. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): The 69th Street Reconstruction project is part of the 5-Year Street Reconstruction Plan approved by the City Council on September 23,2014. C. CRITICAL TIMING ISSUES: Bids for the project have been awarded and construction commenced in early April of 2015.Therefore, it is important to have the necessary funding in place. D. FINANCIAL IMPACT: • The estimated total cost of the 69th Street Reconstruction Project is$1,600,000. • Funding for the project will be provided by G.O. Street Reconstruction Bonds. • The par amount of the bonds to be issued is$1,660,000. The term of the bonds will be twenty(20) years. • The debt service on the bonds will be paid from an annual debt service tax levy over the life of the bonds. • The estimated annual increase in taxes due to the issuance of these bonds for a residential property valued at$200,000 will be approximately$9.43. E. LEGAL CONSIDERATION: Legal counsel has reviewed the Pre-Sale report and the attached resolution. ALTERNATIVE RECOMMENDATION(S): None. PRINCIPAL PARTIES EXPECTED AT MEETING: Rebecca Kurtz, Ehlers&Associates, Inc. ATTACHMENTS: Description Type ❑ 69th Street Reconstruction Bonds Resolution Resolution Letter ❑ 69th Street Reconstruction Bond Pre Sale Report Exhibit Resolution Providing for the Sale of $1 ,660,000 General Obligation Street Reconstruction Bonds for the 69th Street Project A. WHEREAS, the City Council of the City of Richfield,Minnesota has heretofore determined that it is necessary and expedient to issue General Obligation Street Reconstruction Bonds in an amount not to exceed$1,660,000 to finance the 690'Street Reconstruction Plan Project in the City. This will be part of the City's $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A; and B. WHEREAS,the City has retained Ehlers &Associates, Inc., in Roseville, Minnesota("Ehlers"), as its independent financial advisor for the Bonds and is therefore authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Richfield,Minnesota, as follows: 1. Authorization; Findings. The City Council hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening. The City Council shall meet at 7:00 PM on May 12, 2015, for the purpose of considering sealed proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale,the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by City Council Member and, after full discussion thereof and upon a vote being taken thereon,the following City Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. Dated this 14`h day of April, 2015. Beth VanHoose, City Clerk EHLERS LEADERS IN PUBLIC FINANCE April 14, 2015 Pre-Sale Report for City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A woo, Prepared by: Rebecca Kurtz Senior Financial Advisor And Brian Reilly Senior Financial Advisor t 1-300-552-1171 1 www,ehlei's-inc.com Executive Summary of Proposed Debt Proposed Issue: $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Purposes: The proposed issue includes financing for the following street reconstruction projects in the City of Richfield: • $1,660,000 for the 69th Street Reconstruction. Debt service will be paid from ad valorem property taxes. • $2,690,000 for the Portland Avenue Street Reconstruction. Debt service will be paid from ad valorem property taxes. The City is providing $800,000 in cash toward the total project cost of $3,490,000 • $5,085,000 for the Mill & Overlay Projects. Debt service will be paid from franchise fees and ad valorem taxes. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 475.58. The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. The Bonds count against the City's General Obligation Debt Capacity Limit of 3% of market value. Term/Call Feature: The Bonds are being issued for a 21 year term. Principal on the Bonds will be due on February 1 in the years 2016 through 2036. Interest is payable every six months beginning February 1, 2016. The Bonds maturing on and after February 1, 2025 will be subject to prepayment at the discretion of the City on February 1, 2024 or any date thereafter at the par(100%)plus accrued interest. Bank Qualification: Because the City is issuing less than $10,000,000 of tax exempt debt in the calendar year, the City will be able to designate the Bonds as "bank qualified" obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Rating: The City's most recent bond issues were rated "AA+" by Standard & Poor's. The City will request a new rating 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. Presale Report April 14, 2015 City of Richfield, Minnesota Page 1 Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us, our advisory relationship as well as characteristics of various municipal financing options, we are recommending the issuance of tax exempt General Obligation Street Reconstruction Plan Bonds as a suitable financing option. This option is in keeping with the City policy and past practices to finance these types of projects with this type of debt issue, and there are limited other options available to finance these types of projects. Method of Sale/Placement: In order to obtain the lowest interest cost to the City,we will competitively bid the purchase of the Bonds from local and national underwriters. We have included an allowance for discount bidding equal to 0.90% 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 their 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. Premium Bids: Under current market conditions, most investors in municipal bonds prefer "premium" pricing structures. A premium is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds the yield to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of face value is considered "reoffering premium." The amount of the premium varies,but it is not uncommon to see premiums for new issues in the range of 2.00%to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of$2,040,000 to $2,200,000. For this issue of Bonds we have been directed to use the premium to reduce the size of the issue. The adjustments may slightly change the true interest cost of the original bid, either up or down. You have the choice to limit the amount of premium in the bid specifications. This may result in fewer bids, but it may also eliminate large adjustments on the day of sale and other uncertainties. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are four potential advance refunding opportunities: • G.O. Water and Sewer Revenue Bonds, Series 2006A • G.O. Storm Sewer Bonds, Series 2006B • G.O. Capital Improvement Bonds, Series 2007A • G.O. Improvement Bonds, Series 2007B We are in discussions with City staff regarding the options for these four issues and the timing of a potential refunding. 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. Presale Report April 14, 2015 City of Richfield, Minnesota Page 2 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: Because the Bonds are tax-exempt securities/tax credit securities, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific responsibilities will be detailed in the Tax Certificate prepared by your Bond Attorney and provided at closing. We recommend that you regularly monitor compliance with these rules and/or retain the services of a qualified firm to assist you. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service,we have assumed that you will continue that relationship. For services you have not previously required,we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation,unless you notify us that you wish to pay them from other sources. Our pre-sale bond sizing includes a good faith estimate of these fees, so their final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like to use a different service provider for any of the listed services please contact us. Bond Attorney: Kennedy& Graven, Chartered Paying Agent: Wells Fargo Rating Agency: Standard&Poor's This presale report summarizes our understanding of the City's objectives for the structure and terms of this financing as of this date. As additional facts become known or capital markets conditions change,we may need to modify the structure and/or terms of this financing to achieve results consistent with the City's objectives. Presale Report April 14, 2015 City of Richfield, Minnesota Page 3 Proposed Debt Issuance Schedule Pre-Sale Review by City Council: April 14, 2015 Distribute Official Statement: Week of April 27,2015 Conference with Rating Agency: Week of April 27, 2015 City Council Meeting to Award Sale of the Bonds: May 12, 2015 Estimated Closing Date: June 4,2015 Attachments Sources and Uses of Funds Proposed Debt Service Schedule Resolution Authorizing Ehlers to Proceed With Bond Sale Ehlers Contacts Financial Advisors: Rebecca Kurtz (651) 697-8516 Brian Reilly (651) 697-8541 Disclosure Coordinator: Wendy Lundberg (651) 697-8540 Financial Analyst: Alicia Gage (651) 697-8551 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 April 14, 2015 City of Richfield, Minnesota Page 4 City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Total Issue Sources And Uses Dated 06/01/2015 1 Delivered 06/01/2015 Portland Mill&Overlay Issue 69th Street Avenue (Franchise Fees) Summary Sources Of Funds Par Amount of Bonds $1,660,000.00 $2,690,000.00 $5,085,000.00 $9,435,000.00 Planned Issuer Equity contribution 800,000.00 800,000.00 Total Sources $1,660,000.00 $3,490,000.00 $5,085,000.00 $10,235,000.00 Uses Of Funds Total Underwriter's Discount (0.900%) 14,940.00 24,210.00 45,765.00 84,915.00 Costs oflssuance 13,547.44 21,953.36 41,499.20 77,000.00 Deposit to Capitalized Interest(CIF)Fund 27,151.67 43,966.67 - 71,118.34 Deposit to Project Construction Fund 1,600,000.00 3,400,000.00 5,000,000.00 10,000,000.00 Rounding Amount 4,360.89 (130.03) (2,264.20) 1,966.66 Total Uses $1,660,000.00 $3,490,000.00 $5,085,000.00 $10,235,000.00 Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM EHLERS LEADERS IN PUBLIC FINANCE City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2015 - - - - - 02/01/2016 250,000.00 0.450% 148,615.01 398,615.01 398,615.01 08/01/2016 - - 110,898.75 110,898.75 - 02/01/2017 395,000.00 0.750% 110,898.75 505,898.75 616,797.50 08/01/2017 - - 109,417.50 109,417.50 - 02/01/2018 400,000.00 1.050% 109,417.50 509,417.50 618,835.00 08/01/2018 - - 107,317.50 107,317.50 - 02/01/2019 405,000.00 1.350% 107,317.50 512,317.50 619,635.00 08/01/2019 - - 104,583.75 104,583.75 - 02/01/2020 405,000.00 1.500% 104,583.75 509,583.75 614,167.50 08/01/2020 - - 101,546.25 101,546.25 - 02/01/2021 415,000.00 1.650% 101,546.25 516,546.25 618,092.50 08/01/2021 - - 98,122.50 98,122.50 - 02/01/2022 425,000.00 1.850% 98,122.50 523,122.50 621,245.00 08/01/2022 - - 94,191.25 94,191.25 - 02/01/2023 430,000.00 1.950% 94,191.25 524,191.25 618,382.50 08/01/2023 - - 89,998.75 89,998.75 - 02/01/2024 435,000.00 2.050% 89,998.75 524,998.75 614,997.50 08/01/2024 - - 85,540.00 85,540.00 - 02/01/2025 445,000.00 2.150% 85,540.00 530,540.00 616,080.00 08/01/2025 - - 80,756.25 80,756.25 - 02/01/2026 455,000.00 2.250% 80,756.25 535,756.25 616,512.50 08/01/2026 - - 75,637.50 75,637.50 - 02/01/2027 465,000.00 2.400% 75,637.50 540,637.50 616,275.00 08/01/2027 - - 70,057.50 70,057.50 - 02/01/2028 480,000.00 2.550% 70,057.50 550,057.50 620,115.00 08/01/2028 - - 63,937.50 63,937.50 - 02/01/2029 490,000.00 2.700% 63,937.50 553,937.50 617,875.00 08/01/2029 - - 57,322.50 57,322.50 - 02/01/2030 510,000.00 2.800% 57,322.50 567,322.50 624,645.00 08/01/2030 - - 50,182.50 50,182.50 - 02/01/2031 515,000.00 2.950% 50,182.50 565,182.50 615,365.00 08/01/2031 - - 42,586.25 42,586.25 - 02/01/2032 535,000.00 3.200% 42,586.25 577,586.25 620,172.50 08/01/2032 - - 34,026.25 34,026.25 - 02/01/2033 550,000.00 3.300% 34,026.25 584,026.25 618,052.50 08/01/2033 - - 24,951.25 24,951.25 - 02/01/2034 570,000.00 3.450% 24,951.25 594,951.25 619,902.50 08/01/2034 - - 15,118.75 15,118.75 - 02/01/2035 585,000.00 3.500% 15,118.75 600,118.75 615,237.50 08/01/2035 - - 4,881.25 4,881.25 - 02/01/2036 275,000.00 3.550% 4,881.25 279,881.25 284,762.50 Total $9,435,000.00 - $2,990,762.51 $12,425,762.51 Yield Statistics Bond Year Dollars $106,885.00 Average Life 11.329 Years Average Coupon 2.7981125% Net Interest Cost(NIC) 2.8775577 True interest Cost(TTC) 2.8530630% Bond Yield for Arbitrage Purposes 2.7573261% All Inclusive Cost(AIC) 2.9409490% IRS Form 8038 Net Interest Cost 2.7981125% Weighted Average Mautrity 11.329 Yews Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM FREERS IAD[Ns IN PUBLIC FINANCL City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Net Debt Service Schedule Fiscal Date Principal Coupon Interest Total P+I CIF Net New D/S Total 06/01/2015 - - - - - - 02/01/2016 250,000.00 0.450% 148,615.01 398,615.01 (71,118.34) 327,496.67 327,496.67 08/01/2016 - - 110,898.75 110,898.75 110,898.75 - 02/01/2017 395,000.00 0.750'% 110,898.75 505,898.75 505,898.75 616,797.50 08/01/2017 - - 109,417.50 109,417.50 109,417.50 - 02/01/2018 400,000.00 1.050% 109,417.50 509,417.50 509,417.50 618,835.00 08/01/2018 - - 107,317.50 107,317.50 107,317.50 - 02/01/2019 405,000.00 1.350% 107,317.50 512,317.50 512,317.50 619,635.00 08/01/2019 - - 104,583.75 104,583.75 104,583.75 - 02/01/2020 405,000.00 1.500% 104,583.75 509,583.75 509,583.75 614,167.50 08/01/2020 - - 101,546.25 101,546.25 101,546.25 - 02/01/2021 415,000.00 1.650% 101,546.25 516,546.25 516,546.25 618,092.50 08/01/2021 - - 98,122.50 98,122.50 98,122.50 - 02/01/2022 425,000.00 1.850% 98,122.50 523,122.50 523,122.50 621,245.00 08/01/2022 - - 94,191.25 94,191.25 94,191.25 - 02/01/2023 430,000.00 1.950% 94,191.25 524,191.25 524,191.25 618,382.50 08/01/2023 - - 89,998.75 89,998.75 89,998.75 - 02/01/2024 435,000.00 2.050% 89,998.75 524,998.75 524,998.75 614,997.50 08/01/2024 - - 85,540.00 85,540.00 85,540.00 - 02/01/2025 445,000.00 2.150% 85,540.00 530,540.00 530,540.00 616,080.00 08/01/2025 - - 80,756.25 80,756.25 80,756.25 - 02/01/2026 455,000.00 2.250'% 80,756.25 535,756.25 535,756.25 616,512.50 08/01/2026 - - 75,637.50 75,637.50 75,637.50 - 02/01/2027 465,000.00 2.400% 75,637.50 540,637.50 540,637.50 616,275.00 08/01/2027 - - 70,057.50 70,057.50 70,057.50 - 02/01/2028 480,000.00 2.550% 70,057.50 550,057.50 550,057.50 620,115.00 08/01/2028 - - 63,937.50 63,937.50 63,937.50 - 02/01/2029 490,000.00 2.700% 63,937.50 553,937.50 553,937.50 617,875.00 08/01/2029 - - 57,322.50 57,322.50 57,322.50 - 02/01/2030 510,000.00 2.800% 57,322.50 567,322.50 567,322.50 624,645.00 08/01/2030 - - 50,182.50 50,182.50 50,182.50 - 02/01/2031 515,000.00 2.950% 50,182.50 565,182.50 565,182.50 615,365.00 08/01/2031 - - 42,586.25 42,586.25 42,586.25 - 02/01/2032 535,000.00 3.200% 42,586.25 577,586.25 577,586.25 620,172.50 08/01/2032 - - 34,026.25 34,026.25 34,026.25 - 02/01/2033 550,000.00 3.300% 34,026.25 584,026.25 584,026.25 618,052.50 08/01/2033 - - 24,951.25 24,951.25 24,951.25 - 02/01/2034 570,000.00 3.450% 24,951.25 594,951.25 594,951.25 619,902.50 08/01/2034 - - 15,118.75 15,118.75 15,118.75 - 02/01/2035 585,000.00 3.500% 15,118.75 600,118.75 600,118.75 615,237.50 08/01/2035 - - 4,881.25 4,881.25 4,881.25 - 02/01/2036 275,000.00 3.550% 4,881.25 279,881.25 279,881.25 284,762.50 Total $9,435,000.00 - $2,990,762.51 $12,425,762.51 (71,118.34) $12,354,644.17 - Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM 4 all 1 EHLERS F AI]F Rti IN RII RI W FINANCE City of Richfield, Minnesota $1,660,000 General Obligation Street Reconstruction Bonds, Series 2015A 69th Street Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2015 - - - 02/01/2016 27,151.67 27,151.67 27,151.67 08/01/2016 - - 20,363.75 20,363.75 - 02/01/2017 70,000.00 0.750% 20,363.75 90,363.75 110,727.50 08/01/2017 - - 20,101.25 20,101.25 - 02/01/2018 70,000.00 1.050% 20,101.25 90,101.25 110,202.50 08/01/2018 - - 19,733.75 19,733.75 - 02/01/2019 70,000.00 1.350% 19,733.75 89,733.75 109,467.50 08/01/2019 - - 19,261.25 19,261.25 - 02/01/2020 70,000.00 1.500% 19,26125 89,26125 108,522.50 08/01/2020 - - 18,73625 18,73625 - 02/01/2021 70,000.00 1.650% 18,736.25 88,736.25 107,472.50 08/01/2021 - - 18,158.75 18,158.75 - 02/01/2022 75,000.00 1.850% 18,158.75 93,158.75 111,317.50 08/01/2022 - - 17,465.00 17,465.00 - 02/01/2023 75,000.00 1.950% 17,465.00 92,465.00 109,930.00 08/01/2023 - - 16,733.75 16,733.75 - 02/01/2024 75,000.00 2.050% 16,733.75 91,733.75 108,467.50 08/01/2024 - - 15,965.00 15,965.00 - 02/01/2025 80,000.00 2.150% 15,965.00 95,965.00 111,930.00 08/01/2025 - - 15,105.00 15,105.00 - 02/01/2026 80,000.00 2.250% 15,105.00 95,105.00 110,210.00 08/01/2026 - - 14,205.00 14,205.00 - 02/01/2027 80,000.00 2.400% 14,205.00 94,205.00 108,410.00 08/01/2027 - - 13,245.00 13,245.00 - 02/01/2028 85,000.00 2.550% 13,245.00 98,245.00 111,490.00 08/01/2028 - - 12,16125 12,16125 - 02/01/2029 85,000.00 2.700% 12,16125 97,16125 109,322.50 08/01/2029 - - 11,013.75 11,013.75 - 02/01/2030 90,000.00 2.800% 11,013.75 101,013.75 112,027.50 08/01/2030 - - 9,753.75 9,753.75 - 02/01/2031 90,000.00 2.950% 9,753.75 99,753.75 109,507.50 08/01/2031 - - 8,426.25 8,426.25 - 02/01/2032 95,000.00 3.200% 8,426.25 103,426.25 111,852.50 08/01/2032 - - 6,906.25 6,906.25 - 02/01/2033 95,000.00 3300% 6,90625 101,90625 108,812.50 08/01/2033 - - 5,338.75 5,338.75 - 02/01/2034 100,000.00 3.450% 5,338.75 105,338.75 110,677.50 08/01/2034 - - 3,613.75 3,613.75 - 02/01/2035 100,000.00 3.500% 3,613.75 103,613.75 107,227.50 08/01/2035 - - 1,863.75 1,863.75 - 02/01/2036 105,000.00 3.550% 1,863.75 106,863.75 108,727.50 Total $1,660,000.00 - $563,454.17 $2,223,454.17 - Yield Statistics Bond Year Dollars $19,801.67 Average Lite 11.929 Years Average Coupon 2.8454886% Net Interest Cost(NIC) 2.9209368% True Interest Cost(TIC) 2.8953367 Bond Yield for Arbitrage Purposes 2.7573261% All Inclusive Cost(AIC) 2.9794400% IRS Form 8038 Net Interest Cost 2.8454886% Weighted Average Maturity 11.929 Years Series 2015A GO Street Re 169th Street 1 4/3/2015 1 9:11 AM AILV EHLERS LEADERS IN PUBLIC FINANCE AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.F. -wood STAFF REPORT NO. 54 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Chris Regis, Finance Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich, City Manager OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a resolution providing for the sale of$5,085,000 General Obligation Street Reconstruction Bonds, Series 2015 for mill and overlay projects. EXECUTIVE SUMMARY: At the September 23, 2014 City Council meeting the Council adopted the 5-Year Street Reconstruction Plan and authorized the issuance of street reconstruction bonds to finance the 2015 and 2016 reconstruction projects. A project included in the 5-Year Street Reconstruction Plan was the six year residential mill & overlay project. The overall project is estimated to cost$19,500,000 over the six year project period. Funding for the project is to be provided by a combination of street reconstruction bonds and gas and electric franchise fees. The bonds to be issued would be the first phase in the funding of the project and would cover project year 2015 and part of project year 2016. Gas and electric franchise fees will be also used to service the debt service on the bonds. RECOMMENDED ACTION: By Motion: Approve the attached resolution providing for the sale of$5,085,000 General Obligation Street Reconstruction Bonds, Series 2015 for mill and overlay projects. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: • The mill &overlay program is an initiative to perform major maintenance on the City's residential roads, which were originally constructed in the mid 1970's. • To date approximately 15 miles of the City's residential roads have previously received a mill & overlay. The remaining 85 miles of residential roads will be completed over the six year project period. • The project also includes utility and concrete curb and gutter repairs and maintenance. • Gas and electric franchise fees were increased in April of 2014 as a means to fund the project. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): The mill&overlay project is part of the 5-Year Street Reconstruction Plan approved by the City Council on September 23,2014. C. CRITICAL TIMING ISSUES: The first full year of the project begins in the spring of 2015. Bids for the 2015 project year were approved at the February 24,2015 City Council meeting.Therefore, it is important to have the necessary financing in place. D. FINANCIAL IMPACT: • The estimated total cost of the six year mill &overlay program is$19,500,000. • Funding for the program is to be provided by street reconstruction bonds and gas and electric franchise fees. Estimated funding and costs is as follows: 2015 Street Reconstruction Bonds(Net of Par) $5,000,000 2018 Street Reconstruction Bonds(Net of Par) 5,800,000 Gas and Electric Franchise Fees 8,700,000 Total Funding $19,500,000 Mill &Overlay $14,800,000 Utility 4,700,000 Total Project Cost $19,500,000 • The par amount of the 2015 bonds to be issued is$5,085,000. The term of the bonds will be twenty (20)years. • The debt service on the bonds will be paid from gas and electric franchise fee collections. E. LEGAL CONSIDERATION: Legal counsel has reviewed the Pre-Sale report and the attached resolution. ALTERNATIVE RECOMMENDATION(S): None. PRINCIPAL PARTIES EXPECTED AT MEETING: Rebecca Kurtz, Ehlers&Associates, Inc. ATTACHMENTS: Description Type ❑ Mill &Overlay Project Bond Resolution Resolution Letter ❑ Mill &Overlay Project Bond Pre Sale Report Exhibit Resolution Providing for the Sale of $5,085,000 General Obligation Street Reconstruction Bonds for the Mill and Overlay Projects A. WHEREAS, the City Council of the City of Richfield,Minnesota has heretofore determined that it is necessary and expedient issue General Obligation Street Reconstruction Bonds in an amount not to exceed$5,085,000 to finance the 2015 Mill and Overlay Projects in the City. This will be part of the City's $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A; and B. WHEREAS,the City has retained Ehlers &Associates, Inc., in Roseville, Minnesota("Ehlers"), as its independent financial advisor for the Bonds and is therefore authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Richfield,Minnesota, as follows: 1. Authorization; Findings. The City Council hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening. The City Council shall meet at 7:00 PM on May 12, 2015, for the purpose of considering sealed proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale,the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by City Council Member and, after full discussion thereof and upon a vote being taken thereon,the following City Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. Dated this 14`"day of April, 2015. Beth VanHoose, City Clerk EHLERS LEADERS IN PUBLIC FINANCE April 14, 2015 Pre-Sale Report for City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A woo, Prepared by: Rebecca Kurtz Senior Financial Advisor And Brian Reilly Senior Financial Advisor t 1-300-552-1171 1 www,ehlei's-inc.com Executive Summary of Proposed Debt Proposed Issue: $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Purposes: The proposed issue includes financing for the following street reconstruction projects in the City of Richfield: • $1,660,000 for the 69th Street Reconstruction. Debt service will be paid from ad valorem property taxes. • $2,690,000 for the Portland Avenue Street Reconstruction. Debt service will be paid from ad valorem property taxes. The City is providing $800,000 in cash toward the total project cost of $3,490,000 • $5,085,000 for the Mill & Overlay Projects. Debt service will be paid from franchise fees and ad valorem taxes. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 475.58. The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. The Bonds count against the City's General Obligation Debt Capacity Limit of 3% of market value. Term/Call Feature: The Bonds are being issued for a 21 year term. Principal on the Bonds will be due on February 1 in the years 2016 through 2036. Interest is payable every six months beginning February 1, 2016. The Bonds maturing on and after February 1, 2025 will be subject to prepayment at the discretion of the City on February 1, 2024 or any date thereafter at the par(100%)plus accrued interest. Bank Qualification: Because the City is issuing less than $10,000,000 of tax exempt debt in the calendar year, the City will be able to designate the Bonds as "bank qualified" obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Rating: The City's most recent bond issues were rated "AA+" by Standard & Poor's. The City will request a new rating 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. Presale Report April 14, 2015 City of Richfield, Minnesota Page 1 Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us, our advisory relationship as well as characteristics of various municipal financing options, we are recommending the issuance of tax exempt General Obligation Street Reconstruction Plan Bonds as a suitable financing option. This option is in keeping with the City policy and past practices to finance these types of projects with this type of debt issue, and there are limited other options available to finance these types of projects. Method of Sale/Placement: In order to obtain the lowest interest cost to the City,we will competitively bid the purchase of the Bonds from local and national underwriters. We have included an allowance for discount bidding equal to 0.90% 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 their 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. Premium Bids: Under current market conditions, most investors in municipal bonds prefer "premium" pricing structures. A premium is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds the yield to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of face value is considered "reoffering premium." The amount of the premium varies,but it is not uncommon to see premiums for new issues in the range of 2.00%to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of$2,040,000 to $2,200,000. For this issue of Bonds we have been directed to use the premium to reduce the size of the issue. The adjustments may slightly change the true interest cost of the original bid, either up or down. You have the choice to limit the amount of premium in the bid specifications. This may result in fewer bids, but it may also eliminate large adjustments on the day of sale and other uncertainties. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are four potential advance refunding opportunities: • G.O. Water and Sewer Revenue Bonds, Series 2006A • G.O. Storm Sewer Bonds, Series 2006B • G.O. Capital Improvement Bonds, Series 2007A • G.O. Improvement Bonds, Series 2007B We are in discussions with City staff regarding the options for these four issues and the timing of a potential refunding. 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. Presale Report April 14, 2015 City of Richfield, Minnesota Page 2 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: Because the Bonds are tax-exempt securities/tax credit securities, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific responsibilities will be detailed in the Tax Certificate prepared by your Bond Attorney and provided at closing. We recommend that you regularly monitor compliance with these rules and/or retain the services of a qualified firm to assist you. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service,we have assumed that you will continue that relationship. For services you have not previously required,we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation,unless you notify us that you wish to pay them from other sources. Our pre-sale bond sizing includes a good faith estimate of these fees, so their final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like to use a different service provider for any of the listed services please contact us. Bond Attorney: Kennedy& Graven, Chartered Paying Agent: Wells Fargo Rating Agency: Standard&Poor's This presale report summarizes our understanding of the City's objectives for the structure and terms of this financing as of this date. As additional facts become known or capital markets conditions change,we may need to modify the structure and/or terms of this financing to achieve results consistent with the City's objectives. Presale Report April 14, 2015 City of Richfield, Minnesota Page 3 Proposed Debt Issuance Schedule Pre-Sale Review by City Council: April 14, 2015 Distribute Official Statement: Week of April 27,2015 Conference with Rating Agency: Week of April 27, 2015 City Council Meeting to Award Sale of the Bonds: May 12, 2015 Estimated Closing Date: June 4,2015 Attachments Sources and Uses of Funds Proposed Debt Service Schedule Resolution Authorizing Ehlers to Proceed With Bond Sale Ehlers Contacts Financial Advisors: Rebecca Kurtz (651) 697-8516 Brian Reilly (651) 697-8541 Disclosure Coordinator: Wendy Lundberg (651) 697-8540 Financial Analyst: Alicia Gage (651) 697-8551 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 April 14, 2015 City of Richfield, Minnesota Page 4 City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Total Issue Sources And Uses Dated 06/01/2015 1 Delivered 06/01/2015 Portland Mill&Overlay Issue 69th Street Avenue (Franchise Fees) Summary Sources Of Funds Par Amount of Bonds $1,660,000.00 $2,690,000.00 $5,085,000.00 $9,435,000.00 Planned Issuer Equity contribution 800,000.00 800,000.00 Total Sources $1,660,000.00 $3,490,000.00 $5,085,000.00 $10,235,000.00 Uses Of Funds Total Underwriter's Discount (0.900%) 14,940.00 24,210.00 45,765.00 84,915.00 Costs oflssuance 13,547.44 21,953.36 41,499.20 77,000.00 Deposit to Capitalized Interest(CIF)Fund 27,151.67 43,966.67 - 71,118.34 Deposit to Project Construction Fund 1,600,000.00 3,400,000.00 5,000,000.00 10,000,000.00 Rounding Amount 4,360.89 (130.03) (2,264.20) 1,966.66 Total Uses $1,660,000.00 $3,490,000.00 $5,085,000.00 $10,235,000.00 Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM EHLERS LEADERS IN PUBLIC FINANCE City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2015 - - - - - 02/01/2016 250,000.00 0.450% 148,615.01 398,615.01 398,615.01 08/01/2016 - - 110,898.75 110,898.75 - 02/01/2017 395,000.00 0.750% 110,898.75 505,898.75 616,797.50 08/01/2017 - - 109,417.50 109,417.50 - 02/01/2018 400,000.00 1.050% 109,417.50 509,417.50 618,835.00 08/01/2018 - - 107,317.50 107,317.50 - 02/01/2019 405,000.00 1.350% 107,317.50 512,317.50 619,635.00 08/01/2019 - - 104,583.75 104,583.75 - 02/01/2020 405,000.00 1.500% 104,583.75 509,583.75 614,167.50 08/01/2020 - - 101,546.25 101,546.25 - 02/01/2021 415,000.00 1.650% 101,546.25 516,546.25 618,092.50 08/01/2021 - - 98,122.50 98,122.50 - 02/01/2022 425,000.00 1.850% 98,122.50 523,122.50 621,245.00 08/01/2022 - - 94,191.25 94,191.25 - 02/01/2023 430,000.00 1.950% 94,191.25 524,191.25 618,382.50 08/01/2023 - - 89,998.75 89,998.75 - 02/01/2024 435,000.00 2.050% 89,998.75 524,998.75 614,997.50 08/01/2024 - - 85,540.00 85,540.00 - 02/01/2025 445,000.00 2.150% 85,540.00 530,540.00 616,080.00 08/01/2025 - - 80,756.25 80,756.25 - 02/01/2026 455,000.00 2.250% 80,756.25 535,756.25 616,512.50 08/01/2026 - - 75,637.50 75,637.50 - 02/01/2027 465,000.00 2.400% 75,637.50 540,637.50 616,275.00 08/01/2027 - - 70,057.50 70,057.50 - 02/01/2028 480,000.00 2.550% 70,057.50 550,057.50 620,115.00 08/01/2028 - - 63,937.50 63,937.50 - 02/01/2029 490,000.00 2.700% 63,937.50 553,937.50 617,875.00 08/01/2029 - - 57,322.50 57,322.50 - 02/01/2030 510,000.00 2.800% 57,322.50 567,322.50 624,645.00 08/01/2030 - - 50,182.50 50,182.50 - 02/01/2031 515,000.00 2.950% 50,182.50 565,182.50 615,365.00 08/01/2031 - - 42,586.25 42,586.25 - 02/01/2032 535,000.00 3.200% 42,586.25 577,586.25 620,172.50 08/01/2032 - - 34,026.25 34,026.25 - 02/01/2033 550,000.00 3.300% 34,026.25 584,026.25 618,052.50 08/01/2033 - - 24,951.25 24,951.25 - 02/01/2034 570,000.00 3.450% 24,951.25 594,951.25 619,902.50 08/01/2034 - - 15,118.75 15,118.75 - 02/01/2035 585,000.00 3.500% 15,118.75 600,118.75 615,237.50 08/01/2035 - - 4,881.25 4,881.25 - 02/01/2036 275,000.00 3.550% 4,881.25 279,881.25 284,762.50 Total $9,435,000.00 - $2,990,762.51 $12,425,762.51 Yield Statistics Bond Year Dollars $106,885.00 Average Life 11.329 Years Average Coupon 2.7981125% Net Interest Cost(NIC) 2.8775577 True interest Cost(TTC) 2.8530630% Bond Yield for Arbitrage Purposes 2.7573261% All Inclusive Cost(AIC) 2.9409490% IRS Form 8038 Net Interest Cost 2.7981125% Weighted Average Mautrity 11.329 Yews Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM FREERS IAD[Ns IN PUBLIC FINANCL City of Richfield, Minnesota $9,435,000 General Obligation Street Reconstruction Bonds, Series 2015A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Net Debt Service Schedule Fiscal Date Principal Coupon Interest Total P+I CIF Net New D/S Total 06/01/2015 - - - - - - 02/01/2016 250,000.00 0.450% 148,615.01 398,615.01 (71,118.34) 327,496.67 327,496.67 08/01/2016 - - 110,898.75 110,898.75 110,898.75 - 02/01/2017 395,000.00 0.750'% 110,898.75 505,898.75 505,898.75 616,797.50 08/01/2017 - - 109,417.50 109,417.50 109,417.50 - 02/01/2018 400,000.00 1.050% 109,417.50 509,417.50 509,417.50 618,835.00 08/01/2018 - - 107,317.50 107,317.50 107,317.50 - 02/01/2019 405,000.00 1.350% 107,317.50 512,317.50 512,317.50 619,635.00 08/01/2019 - - 104,583.75 104,583.75 104,583.75 - 02/01/2020 405,000.00 1.500% 104,583.75 509,583.75 509,583.75 614,167.50 08/01/2020 - - 101,546.25 101,546.25 101,546.25 - 02/01/2021 415,000.00 1.650% 101,546.25 516,546.25 516,546.25 618,092.50 08/01/2021 - - 98,122.50 98,122.50 98,122.50 - 02/01/2022 425,000.00 1.850% 98,122.50 523,122.50 523,122.50 621,245.00 08/01/2022 - - 94,191.25 94,191.25 94,191.25 - 02/01/2023 430,000.00 1.950% 94,191.25 524,191.25 524,191.25 618,382.50 08/01/2023 - - 89,998.75 89,998.75 89,998.75 - 02/01/2024 435,000.00 2.050% 89,998.75 524,998.75 524,998.75 614,997.50 08/01/2024 - - 85,540.00 85,540.00 85,540.00 - 02/01/2025 445,000.00 2.150% 85,540.00 530,540.00 530,540.00 616,080.00 08/01/2025 - - 80,756.25 80,756.25 80,756.25 - 02/01/2026 455,000.00 2.250'% 80,756.25 535,756.25 535,756.25 616,512.50 08/01/2026 - - 75,637.50 75,637.50 75,637.50 - 02/01/2027 465,000.00 2.400% 75,637.50 540,637.50 540,637.50 616,275.00 08/01/2027 - - 70,057.50 70,057.50 70,057.50 - 02/01/2028 480,000.00 2.550% 70,057.50 550,057.50 550,057.50 620,115.00 08/01/2028 - - 63,937.50 63,937.50 63,937.50 - 02/01/2029 490,000.00 2.700% 63,937.50 553,937.50 553,937.50 617,875.00 08/01/2029 - - 57,322.50 57,322.50 57,322.50 - 02/01/2030 510,000.00 2.800% 57,322.50 567,322.50 567,322.50 624,645.00 08/01/2030 - - 50,182.50 50,182.50 50,182.50 - 02/01/2031 515,000.00 2.950% 50,182.50 565,182.50 565,182.50 615,365.00 08/01/2031 - - 42,586.25 42,586.25 42,586.25 - 02/01/2032 535,000.00 3.200% 42,586.25 577,586.25 577,586.25 620,172.50 08/01/2032 - - 34,026.25 34,026.25 34,026.25 - 02/01/2033 550,000.00 3.300% 34,026.25 584,026.25 584,026.25 618,052.50 08/01/2033 - - 24,951.25 24,951.25 24,951.25 - 02/01/2034 570,000.00 3.450% 24,951.25 594,951.25 594,951.25 619,902.50 08/01/2034 - - 15,118.75 15,118.75 15,118.75 - 02/01/2035 585,000.00 3.500% 15,118.75 600,118.75 600,118.75 615,237.50 08/01/2035 - - 4,881.25 4,881.25 4,881.25 - 02/01/2036 275,000.00 3.550% 4,881.25 279,881.25 279,881.25 284,762.50 Total $9,435,000.00 - $2,990,762.51 $12,425,762.51 (71,118.34) $12,354,644.17 - Series 2015A GO Street Re I Issue Summary 1 4/3/2015 1 9:11 AM 4 all 1 EHLERS F AI]F Rti IN RII RI W FINANCE City of Richfield, Minnesota $5,085,000 General Obligation Street Reconstruction Bonds, Series 2015A Mill & Overlay(Franchise Fees) Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2015 - - - - - 02/01/2016 250,000.00 0.450% 77,496.67 327,496.67 327,496.67 08/01/2016 - - 57,560.00 57,560.00 - 02/01/2017 215,000.00 0.750% 57,560.00 272,560.00 330,120.00 08/01/2017 - 56,753.75 56,753.75 - 02/01/2018 215,000.00 1.050% 56,753.75 271,753.75 328,507.50 08/01/2018 - 55,625.00 55,625.00 - 02/01/2019 220,000.00 1.350% 55,625.00 275,625.00 331,250.00 08/01/2019 - - 54,140.00 54,140.00 - 02/01/2020 220,000.00 1.500% 54,140.00 274,140.00 328,280.00 08/01/2020 - - 52,490.00 52,490.00 - 02/01/2021 225,000.00 1.650% 52,490.00 277,490.00 329,980.00 08/01/2021 - - 50,633.75 50,633.75 - 02/01/2022 230,000.00 1.850% 50,633.75 280,633.75 331,267.50 08/01/2022 - 48,506.25 48,506.25 02/01/2023 235,000.00 1.950% 48,506.25 283,506.25 332,012.50 08/01/2023 - - 46,215.00 46,215.00 - 02/01/2024 235,000.00 2.050% 46,215.00 281,215.00 327,430.00 08/01/2024 - - 43,806.25 43,806.25 - 02/01/2025 240,000.00 2.150% 43,806.25 283,906.25 327,612.50 08/01/2025 - - 41,22625 41,226.25 - 02/01/2026 245,000.00 2.250% 41,226.25 296,226.25 327,452.50 08/01/2026 - - 38,470.00 39,470.00 - 02/01/2027 255,000.00 2.400% 38,470.00 293,470.00 331,940.00 08/01/2027 - - 35,410.00 351410.00 02/01/2028 260,000.00 2.550% 35,410.00 295,410.00 330,820.00 08/01/2028 - - 32,095.00 32,095.00 - 02/01/2029 265,000.00 2.700% 32,095.00 297,095.00 329,190.00 08/01/2029 - - 28,517.50 29,517.50 - 02/01/2030 275,000.00 2.800% 28,517.50 303,517.50 332,035.00 08/01/2030 - - 24,667.50 24,667.50 - 02/01/2031 280,000.00 2.950% 24,667.50 304,667.50 329,335.00 08/01/2031 - - 20,537.50 20,537.50 - 02/01/2032 290,000.00 3.200% 20,537.50 310,537.50 331,075.00 08/01/2032 - - 15,897.50 15,897.50 02/01/2033 300,000.00 3.300% 15,897.50 315,897.50 331,795.00 08/01/2033 - - 10,947.50 10,947.50 - 02/01/2034 310,000.00 3.450% 10,947.50 320,947.50 331,995.00 08/01/2034 - - 5,600.00 5,600.00 - 02/01/2035 320,000.00 3.500% 5,600.00 325,600.00 331,200.00 Total $5,085,000.00 - $1,515,694.17 $6,600,694.17 - Yield Statistics Bond Year Dollars $55,035.00 Average Life 10.823 Years Average Coupon 2.7540550% Net Interest Cost(NTC) 2.9372112% True Interest Cost(TIC) 2.91423670/. Bond Yield for Arbitrage Purposes 2.7573261% All Inctusive Cost(AIC) 2.9056070% IRS Form 8038 Net Interest Cost 2.7540550% Weighted Average Maturity 10.823 Years Series 2015A GO Street Re I Mill&Overlay(Franchise 1 4/3/2015 1 9:11 AM ARL EHLERS LEADERS IN PUBLIC FINANCE AGENDA SECTION: CONSENT CALENDAR AGENDA ITEM# 5.G. -wood STAFF REPORT NO. 55 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Elizabeth Finnegan, Civil Engineer DEPARTMENT DIRECTOR REVIEW: Mike Eastling, Public Works Director OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of resolutions for reimbursement of certain expenditures from the proceeds of reconstruction bonds to be issued by the City for the following projects: • Reconstruction of 69th Street from Knox to Humboldt Avenue • Reconstruction of Portland Avenue from 67th to 77th Street • 6-Year Mill and Overlay project EXECUTIVE SUMMARY: On September 23, 2014, the City Council approved a 5-Year Street Reconstruction Plan and the use of street reconstruction bonds for 2015 construction of the following projects: • 69th Street Reconstruction • Portland Avenue Reconstruction • 6-Year Mill and Overlay project Adoption of the attached resolutions will enable City staff to begin incurring construction costs for these projects. The resolution allows costs incurred up to 60 days prior to Council approval of the resolution to be reimbursed using the proceeds of the street reconstruction bonds. RECOMMENDED ACTION: By Motion: • Approve a resolution for reimbursement of certain expenditures from proceeds of street reconstruction bonds to be issued by the City for the reconstruction of 69th Street from Knox to Humboldt Avenue. • Approve a resolution for reimbursement of certain expenditures from proceeds of street reconstruction bonds to be issued by the City for the reconstruction of Portland Avenue from 67th to 77th Street. • Approve a resolution for reimbursement of certain expenditures from proceeds of street reconstruction bonds to be issued by the City for the 6-Year Mill and Overlay project. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: • At the July 8, 2014, City Council Worksession the following projects were discussed as part of the 2015 5-Year Street Reconstruction Plan: 69th Street Reconstruction (2015) 6-Year Mill and Overlay(2015-2020) Portland Avenue (2015) 76th Street West(2016) 66th Street(2016-2017) 65th Street Central (2017) Nicollet Avenue (2019) • At the September 23, 2014, City Council Meeting, the Council approved the 5-Year Street Reconstruction Plan and adopted a resolution authorizing the issuance of street reconstruction bonds for the 2015-2016 construction projects. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): - In order to utilize the Street Reconstruction Bonds, the following must and has occurred: Creation of a 5-Year Street Reconstruction Plan (August 2014) Public Hearing regarding the 5-Year Street Reconstruction Plan and Issuance of Bonds (September 23, 2014) Adoption of a resolution approving the plan and giving preliminary approval of the issuance of bonds (September 23, 2014) City Council approval of plan and issuance of bond by a vote of all members present at the meeting (September 23, 2014-5-0 vote) 30 day period where voters may petition for a referendum, or vote, on the issuing of bonds (expired October 23, 2014- no petition received) • The discussion at the March 16, 2015 City Council Worksession regarding the 5-Year Street Reconstruction Plan and postponement of certain projects to accommodate funding the 66th Street Project does not impact the proposed bond sales for consideration in the attached resolutions. - The 5-Year Street Reconstruction Plan is revised annually with the Capital Improvement Plan. C. CRITICAL TIMING ISSUES: - 69th Street and Portland Avenue are in dire need of reconstruction and the Mill and Overlay project is needed to maintain the integrity of all of Richfield's residential streets. • The reimbursement resolutions are necessary to cover any project costs incurred prior to the sale of the bonds. D. FINANCIAL IMPACT: • Adoption of the proposed reimbursement resolutions provides approval for City staff to incur costs for the reconstrution of the 69th Street Reconstruction, Portland Avenue Reconstruction, and Mill and Overlay projects only. - The current bond amounts for the 2015 projects are: 69th Street $1,600,000 Portland Avenue $3,400,000 Mill and Overlay $5,000,000 Total $10,000,000 E. LEGAL CONSIDERATION: • The City Attorney will be available to answer questions. ALTERNATIVE RECOMMENDATION(S): - The City Council may choose to postpone the adoption of the proposed reimbursement resolutions and direct staff on how to proceed; however, the postponing adoption may affect the year of reconstruction and jeopardize federal funding on the Portland Avenue Reconstruction project. PRINCIPAL PARTIES EXPECTED AT MEETING: None ATTACHMENTS: Description Type ❑ 69th Street Reimbursement Resolution Resolution Letter ❑ Portland Avenue Reimbursement Resolution Resolution Letter ❑ Mill and Overlay Reimbursement Resolution Resolution Letter ❑ 5 Year Street Reconstruction Plan Backup Material RESOLUTION NO. DECLARING THE OFFICIAL INTENT OF THE CITY OF RICHFIELD TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE CITY WITH RESPECT TO 691h STREET RECONSTRUCTION PROJECT WHEREAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-2 (the "Reimbursement Regulations") providing that proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements are met; and WHEREAS, the City of Richfield, Minnesota (the "City") expects to incur certain expenditures that may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of tax-exempt bonds; and WHEREAS, the City has determined to make this declaration of official intent (the "Declaration") to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RICHFIELD, MINNESOTA AS FOLLOWS: 1. The City proposes to undertake the 69th Street Reconstruction Project within the City (the "Project"). 2. The City reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum principal amount of $1,600,000. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations. 3. This Declaration has been made not later than 60 days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of$100,000 or 5 percent of the proceeds of an issue; or (c) "preliminary expenditures" up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that finance or are reasonably expected by the City to finance the Project for which the preliminary expenditures were incurred. The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. 4. This Declaration is an expression of the reasonable expectations of the City based on the facts and circumstances known to the City as of the date hereof. The anticipated original expenditures for the Project and the principal amount of the bonds described in paragraph 2 are consistent with the City's budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the City's budget or financial policies to pay such Project expenditures. 5. This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. The foregoing resolution was moved by Councilmember and seconded by Councilmember The following voted in the affirmative: The following voted against: Councilmember was absent. Adopted by the City Council of the City of Richfield, Minnesota, this 14th day of April, 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose , City Clerk RESOLUTION NO. DECLARING THE OFFICIAL INTENT OF THE CITY OF RICHFIELD TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE CITY WITH RESPECT TO PORTLAND AVENUE STREET RECONSTRUCTION PROJECT WHEREAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-2 (the "Reimbursement Regulations") providing that proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements are met; and WHEREAS, the City of Richfield, Minnesota (the "City") expects to incur certain expenditures that may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of tax-exempt bonds; and WHEREAS, the City has determined to make this declaration of official intent (the "Declaration") to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RICHFIELD, MINNESOTA AS FOLLOWS: 1. The City proposes to undertake the Portland Avenue Street Reconstruction Project within the City (the "Project"). 2. The City reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum principal amount of $3,400,000. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations. 3. This Declaration has been made not later than 60 days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of$100,000 or 5 percent of the proceeds of an issue; or (c) "preliminary expenditures" up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that finance or are reasonably expected by the City to finance the Project for which the preliminary expenditures were incurred. The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. 4. This Declaration is an expression of the reasonable expectations of the City based on the facts and circumstances known to the City as of the date hereof. The anticipated original expenditures for the Project and the principal amount of the bonds described in paragraph 2 are consistent with the City's budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the City's budget or financial policies to pay such Project expenditures. 5. This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. The foregoing resolution was moved by Councilmember and seconded by Councilmember The following voted in the affirmative: The following voted against: Councilmember was absent. Adopted by the City Council of the City of Richfield, Minnesota, this 14th day of April, 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose , City Clerk RESOLUTION NO. DECLARING THE OFFICIAL INTENT OF THE CITY OF RICHFIELD TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE CITY WITH RESPECT TO 6 YEAR MILL AND OVERLAY PROJECT WHEREAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-2 (the "Reimbursement Regulations") providing that proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements are met; and WHEREAS, the City of Richfield, Minnesota (the "City") expects to incur certain expenditures that may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of tax-exempt bonds; and WHEREAS, the City has determined to make this declaration of official intent (the "Declaration") to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RICHFIELD, MINNESOTA AS FOLLOWS: 1. The City proposes to undertake a project designated as the 6 Year Mill and Overlay Project within the City (the "Project"). 2. The City reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum principal amount of $5,000,000. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations. 3. This Declaration has been made not later than 60 days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of$100,000 or 5 percent of the proceeds of an issue; or (c) "preliminary expenditures" up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that finance or are reasonably expected by the City to finance the Project for which the preliminary expenditures were incurred. The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. 4. This Declaration is an expression of the reasonable expectations of the City based on the facts and circumstances known to the City as of the date hereof. The anticipated original expenditures for the Project and the principal amount of the bonds described in paragraph 2 are consistent with the City's budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the City's budget or financial policies to pay such Project expenditures. 5. This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. The foregoing resolution was moved by Councilmember and seconded by Councilmember The following voted in the affirmative: The following voted against: Councilmember was absent. Adopted by the City Council of the City of Richfield, Minnesota, this 14th day of April, 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose , City Clerk OWL w Five Year Street Reconstruction Plan , s 2015 - 2019 Projects RINFIELD STREETS.OR', Residential Mill & Overlay (2015-2020) As part of a 6 year initiative to perform major maintenance to extend the life of the City's residential roads, originally constructed in the mid-70s, asphalt streets will receive a mill and overlay. To date approximately 15 miles of the City's residential roads have previously received a mill and overlay with the remaining 85 miles to be completed over the course of the project. The project also includes catch basin repairs and curb and gutter repairs, along with replacement of City utility manholes. The bonding required to complete the project will be financed through the increase in Franchise Fees that was effective April 2014. 691h Street Reconstruction (2015) Reconstruction of 691h Street from Humboldt to Knox Avenues which includes replacement of City utilities, including four 36" storm sewer lines. Portland Avenue (2015) Reconstruction of Portland Avenue (CR35) from 67th Street south to 77th Street. This project includes implementation of the three-lane section, improved sidewalk conditions, on-street bike lanes, multi-use trails, boulevards, and replacement of City utilities. Undergrounding of parallel overhead utilities will also take place. 76th Street West (2016) Reconstruction of 76th Street between Sheridan and Xerxes Avenues. This project includes replacement of CenterPoint Energy's transmission line, City utilities, undergrounding of overhead parallel utilities, and retaining walls. The future cross-section will be determined through a public involvement process per City Complete Streets Policy. 66th Street (2016-2017) Reconstruction of 66th Street (CR53)from Upton Avenue to Richfield Parkway. This project includes replacement of City utilities where identified, undergrounding of parallel overhead utility lines, and improved bicycle and pedestrian accommodations where feasible. 65th Street Central (2017) Reconstruction of 65th Street between Nicollet Avenue and 66th Street. This project will replace the concrete road surface with asphalt. A City Complete Streets Policy involvement process would be used to determine the future cross-section. Nicollet Avenue (2019) Reconstruction of Nicollet Avenue from TH 62 to 77th Street. This projects future cross-section was identified as a three-lane section in the 2009 Arterial Roads Study and includes the replacement of CenterPoint Energy's transmission line and City utilities. The final cross-section will be determined through a City Complete Streets Policy involvement process. UproudtY Serving Rirhfielce, June 19, 2014 ow PUBLIC WORKS OO O O O Z5 O O C O O N O C O O Q O If) O O Ln Q cD oc O N V M M O fl O z ta EA EA ER Efl EA EA EA ER U,3 Ef3 Ui, H3 EA fRO OC O O O O O O `y Q Oo O > N L1Y LO } � O tl3 H3 O O O O O O O O O Q) O O O CD CD CD ~ of O V �\ (n mm Q T Lr) C) N M Ln � M O d9 A A N O OO a Q, o o a o Ln 3: O 0 0 O CD asa O O O O O N ct7 O N O co U N N w ,ftEjuj � � � � � � ulU�l U�, U�, V�. ul, U�, C O O O O O O O O O O O O O — O O O O O O N L) 0 0 O O O O 7 (p O O V M O r-- CD �O oc LC) oc N O M N M .L.. 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Devich, City Manager OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Public hearing for the consideration of a resolution giving host approval for the City of Landfall Village to issue conduit bonds for the benefit of Progress Valley, Inc. in order to finance an expansion and renovation of their facility located at 308 78th Street East. EXECUTIVE SUMMARY: Progress Valley, Inc. is a Minnesota nonprofit that operates a men's chemical treatment facility located at 308 78th Street East. Progress Valley has asked the City of Landfall Village to issue tax-exempt, bank-qualified conduit bonds on its behalf to finance an expansion and renovation of its facility. The bonds to be issued will be in an amount not to exceed $3,500,000.00. Tax-exempt obligations are usually not eligible for purchase by banks and other financial institutions, but Section 265(b)(3) of the Tax Code permits each issuer of tax-exempt obligations to designate up to $10,000,000 of tax-exempt bonds as "bank-qualified bonds" that are eligible for purchase by banks and other financial institutions. In order to issue bank-qualified bonds, an issuer of bonds must not expect to issue more than $10,000,000 of bonds (other than private activity bonds that are not qualified 501(c)(3) bonds) in a calendar year. Generally, bank-qualified bonds provide a better interest rate than nonbank-qualified bonds. The City of Richfield is unable to issue the conduit bonds for Progress Valley because it plans to issue up to $10,000,000 of its own bank-qualified, tax-exempt general obligation bonds for City projects in 2015. Both Minnesota law and the Tax Code require the City to hold a public hearing and provide host approval anytime another city issues conduit bonds for a facility located within the City. Staff recommends approval of the resolution providing host approval for the issuance of a revenue note by the City of Landfall Village for the benefit of Progress Valley, Inc. RECOMMENDED ACTION: Conduct and close a public hearing and by motion: Approve a resolution giving host approval to the issuance of a revenue note by the City of Landfall Village for the benefit of Progress Valley, Inc. in order to finance an expansion and renovation of their facility located at 308 78th Street East. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: - Progress Valley, Inc. wishes to finance an expansion and renovation of its existing facility located in the City through tax-exempt, bank-qualified bonds. • The City was asked to issue the conduit bonds for the benefit of Progress Valley, Inc. but the City is unable to issue bank-qualified bonds for Progress Valley, Inc. because it plans to issue up to $10,000,000 of its own bank-qualified, tax-exempt general obligation bonds for City projects in 2015. • The City of Landfall Village has agreed to issue the bonds on behalf of Progress Valley. • Both Minnesota law and the Tax Code require that the City hold a public hearing and provide host approval before another city can issue conduit bonds to finance a facility located within the City. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): Providing host approval allows Progress Valley to finance the expansion and renovation of its facility while preserving the City's ability to issue its own tax-exempt, bank-qualified general obligation bonds for its 2015 infrastructure projects. C. CRITICAL TIMING ISSUES: The public hearing and host approval must be completed before the City of Landfall Village may issue the conduit bonds for Progress Valley. D. FINANCIAL IMPACT: There is no financial impact to the City providing host approval. E. LEGAL CONSIDERATION: City's bond counsel reviewed the attached resolution. ALTERNATIVE RECOMMENDATION(S): • Deny host approval. • Continue public hearing and consideration of resolution providing host approval. PRINCIPAL PARTIES EXPECTED AT MEETING: None. ATTACHMENTS: Description Type ❑ Host Approval Resolution Resolution Letter EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF RICHFIELD, MINNESOTA Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Richfield, Minnesota, was duly held at the Richfield Municipal Center, Council Chambers, in said City on Tuesday, April 14, 2015, at 7:00 P.M. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION GIVING HOST APPROVAL TO THE ISSUANCE OF HEALTHCARE FACILITIES REVENUE NOTE UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655 (PROGRESS VALLEY, INC. PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by member , and after full discussion thereof 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. 6986503v1 RESOLUTION GIVING HOST APPROVAL TO THE ISSUANCE OF HEALTHCARE FACILITIES REVENUE NOTE UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1655 (PROGRESS VALLEY, INC. PROJECT) BE IT RESOLVED, by the City Council (the "Council") of the City of Richfield, Minnesota (the "City") as follows: Section 1. General Recitals. The purpose of Minnesota Statutes, Sections 469.152 through 469.1655, as amended, (the "Act"), is, among other things, to promote the welfare of the State of Minnesota (the "State") by the active attraction and encouragement and development of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment. Section 2. Description of the Project. (a) Progress Valley, Inc., a Minnesota nonprofit corporation (the "Borrower"), has proposed the issuance of a revenue obligation, in one or more series (the "Note"), to finance the (i) improvements and renovation of a 9,000 square foot men's chemical treatment facility located at 308 781h Street East in the City, consisting of an approximately 6,700 square foot expansion, thereby increasing from a 24 bed capacity to a 28 bed capacity and renovations to include office and program space, computer lab, family visiting area, a fitness center and a cafeteria and (ii) improvements and renovation of an approximately 23,111 square foot one story office building located at 1100 80`h Street East, Bloomington, Minnesota, into a 32 bed women's chemical treatment facility to include office and program space, computer lab, family visiting area, a fitness center and a cafeteria (together, the "Project"). The Project is to be owned and operated by the Borrower. (b) The Borrower has proposed that the City of Landfall Village, Minnesota (the "Issuer"), issue the Note, under the Act, in order to finance the Project, in the approximate aggregate principal amount not to exceed $3,500,000; and (c) The City has been advised that the Note or other obligations, as and when issued, will not constitute a charge, lien or encumbrance upon any property of the City or the Issuer, except the Project and the revenues to be derived from the Project to be paid by the Borrower pursuant to a revenue agreement. Section 3. Recital of Representations Made by the Borrower. (a) The Borrower has agreed to pay any and all costs incurred by the City in connection with the issuance of the Note, whether or not such issuance is carried to completion, and has agreed to pay the administrative fee imposed by the City for its host approval. (b) The Borrower has represented to the City that no public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project. 2 6986503v1 Section 4. Public Hearing. (a) As required by the Act and Section 147(f) of the Code, a Notice of Public Hearing was published in the City's official newspaper and newspaper of general circulation, for a public hearing on the proposed issuance of the Note and the proposal to undertake and finance the Project. (b) As required by the Act and Section 147(f) of the Code, the City Council has on this same date held a public hearing on the issuance of the Note and the proposal of the Issuer to undertake and finance the portion of the Project located within the jurisdictional limits of the City, at which all those appearing who desired to speak were heard and written comments were accepted. Section 5. Host Approval. The City Council hereby gives the host approval required under Section 147(f) of the Code and, pursuant to Minnesota Statutes Sections 469.155, Subd. 12 and 471.656, Subd. 2(2), the City Council hereby consents to the issuance of the Note. Mayor ATTEST: City Clerk 3 6986503v1 STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD i, the undersigned, being the duly qualified and acting City Clerk of the City of Richfield, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of said City duly called and held on the date therein indicated, insofar as such minutes relate to granting host approval to the issuance of a revenue note for a project, a portion of which is located in the City. WITNESS my hand this day of April, 2015. City Clerk 4 6986503v1 AGENDA SECTION: PUBLIC HEARINGS AGENDA ITEM# 8. -wood STAFF REPORT NO. 57 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Melissa Poehlman, City Planner DEPARTMENT DIRECTOR REVIEW: John Stark, Community Development Director OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Public hearing to consider a request for resolutions authorizing a Comprehensive Plan amendment, conditional use permit and variances to allow an auto body repair shop (Maaco Collision Repair and Auto Painting) at 6244 Cedar Avenue. EXECUTIVE SUMMARY: For many years, the building at 6244 Cedar Avenue was owned and operated by Qwest (now CenturyLink). Use of the land by a public utility was consistent with the Comprehensive Plan designation of 'Public/Quasi-Public.' In 2011, the property was sold to cleaning service Zerorez. At the time of purchase, the proposed use of the site, primarily for parking service vehicles, was found to be substantially similar to Qwest's historical use. Hence, no land use approvals were required. Over the past four years, Zerorez's business has substantially expanded and the site has become overcrowded. Applicants Mark& Kari Kauffman have entered into a purchase agreement with the owners of 6244 Cedar Avenue. The Kauffman's are proposing to use the property for an auto body repair and painting facility (Maaco). The proposed change in use requires that the applicant apply for a Comprehensive Plan amendment to change the designation of the property from "Public/Quasi-Public" to "Community Commercial," and a conditional use permit for auto body repair in the General Business (C-2) District. The applicant is also requesting two variances related to screening. Amending the City's Comprehensive Plan is a question of community character. There has been renewed interest in development within the Cedar Corridor over the past six months and the Council has discussed possibly revisiting the 10 year old Cedar Corridor Master Plan. The Cedar Corridor Master Plan and the City's Park Master Plan both identify this site as a potential area of park expansion; however, funds are not available at this time. Whether or not this property should be part of a new study of the Cedar Corridor or whether this particular change is appropriate is the key decision in this request. Auto body repair businesses are conditionally permitted within the General Business (C-2) District. The proposal requests a variance for a six-foot fence on the south side of the building in order to screen damaged vehicles, and reduced setback and landscape requirements around the northern parking lot. The Planning Commission voted unanimously (6-0) to recommend approval of all requests. RECOMMENDED ACTION: Conduct and close a public hearing and by motion: 1) Approve or deny a resolution authorizing a Comprehensive Plan amendment to change the designation of 6244 Cedar Avenue from "Public/Quasi-Public" to "Community Commercial;" and 2) Approve or deny a resolution authorizing a conditional use permit and variances to allow an auto body repair business at 6244 Cedar Avenue. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: For many years,the property at 6244 Cedar Avenue was owned and operated by Qwest(now CenturyLink) Communications. The City's Comprehensive Plan guides the property for"Public/Quasi-Public" use,which is consistent with use by a public utility,and property is identified as a potential area of expansion for Taft Park. In 2011, Qwest sold the property to the owners of cleaning service Zerorez. At the time of purchase,the proposed use of the site, primarily for the parking of service vehicles which technicians would drive to client locations each day,was found to be substantially similar to Qwest's use of the property and no land use approvals were required. Since this time,Zerorez's business has substantially expanded and the site has become overcrowded. Upon recent inspection,the City found numerous Code violations which the owner is working to address. B. POLICIES(resolutions, ordinances, regulations,statutes,excl: Comprehensive Plan Amendment: The Comprehensive Plan is a vision and guide for future land use decisions in the City. The plan guides 6244 Cedar Avenue as"Public/Quasi-Public,"which includes civic,county and state facilities; religious facilities; schools and other similar non-profit uses. For the past four years,the site has been used for commercial purposes. The Recreation Department has identified this parcel and the CenterPoint Energy parcel to the north as potential areas for expansion of Taft Park; however, no funds are available to acquire the property. Amending the City's Comprehensive Plan is a question of community character,and the factors to be considered in that decision are generally qualitative, rather than quantitative. In addition to the fact that the Parks Master Plan identifies the site as a potential area of expansion,there has been renewed interest in development within the Cedar Corridor over the past six months and the Council has discussed possibly revisiting the 10 year old Cedar Corridor Master Plan. Whether or not this property should be part of that study,or if this particular change is appropriate and desired at this time,are decisions that should be made by the appointed and elected leaders of the community rather than by City staff. Conditional Use Permit: In the General Business(C-2)District, auto mechanical or body repair shops are a conditionally permitted use. A full discussion of all requirements can be found as an attachment to this report. The following is a discussion of items of specific importance and/or requests for deviations from requirements. • If an auto body repair site abuts a residentially-zoned lot, a buffer yard of not less than 25 feet in width and 75 percent all-season opacity from the ground to a height of 6 feet is required to separate all aspects of such use from abutting parcels. The Council may reduce this requirement to not less than 15 feet if significant additional landscaping and fencing,with 100 percent all-season opacity, is provided to screen the auto mechanical or body repair shop use. Taft Park(like all parks in the City)is a residentially-zoned property. Code regulations state that this requirement applies to all aspects of the use; however, staff believes that is may be intended to screen and separate all aspects that are unique to this type of business(e.g. damaged vehicles)as opposed to including the building and/or general parking lot. The applicant is proposing a heavily-landscaped 20-foot buffer with 100 percent opacity along the western edge of the south parking lot. A cedar fence has also been shown on the plans as an optional addition if the Planning Commission and/or Council feel it is necessary. A 6-foot cedar fence will be installed within the northwest corner of the south parking lot in order to screen damaged vehicles from the south and east. Staff recommends that the cedar fence be installed on all sides of the damaged vehicle area. Staff also recommends that the landscaping alone be allowed to suffice for the remainder of that buffer yard, rather than requiring the fence to extend to the southern property line. The applicants would be required to maintain the landscaping such that the 100 percent opacity requirement is met. Screening required for the ground equipment beneath the telecommunication tower has not been installed. A violation notice has been sent and staff will continue to work with the property owner to correct this. Staff recommends approval of a landscape plan that would include normal parking lot screening (3-4 ft) along the residential (park)edge of the northern parking lot since this will not be used for the storage or parking of vehicles awaiting service. • A 15-foot buffer is required to separate the use from all abutting parcels. The applicant is requesting a variance from this requirement. The north parking lot is separated from the abutting CenterPoint Energy parcel by a 10-foot side heavily-landscaped buffer. A block utility building, that houses no permanent staff, is located on this CenterPoint property. Staff believes that the requested variance is reasonable and that the existing buffer meets the intent of the regulation. If approved,the applicant shall be required to maintain this area. • Vehicles awaiting repair must be stored in appropriately designed and screened areas approved by the City. The applicant has proposed a cedar fence at the northwest corner of the south parking lot to surround the area in which damaged vehicles will be stored. Additional damaged vehicles shall be stored inside the building. • The front lot line of a property is defined by the Zoning Code as the shorter of the two lot lines. In this case,the front yard is along 63rd Street. Fencing and/or hedges in the front yard cannot exceed four feet in height. The proposed fence surrounding the damaged vehicles and portions of the proposed landscape buffer will exceed four feet in height. The additional height is necessary to provide adequate screening. The applicant is requesting a variance to allow this fence is what is considered the front yard of the property. Staff believes that the requested variance is reasonable due to the unique siting of the existing building on this lot. The Council must also find that the eight general requirements to grant a CUP are met. A full discussion of these requirements can be found in the attached document, but two key considerations are as follows: 1) The proposed use is consistent with the goals, policies, and objectives of the City's Comprehensive Plan;and 2) There is a public need for such use at the proposed location. C. CRITICAL TIMING ISSUES: 60-DAY RULE: The 60-day clock'started'when a complete application was received on March 9,2015. A decision is required by May 8, 2015 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. D. FINANCIAL IMPACT: None E. LEGAL CONSIDERATION: • A public hearing was also held before the Planning Commission on March 23, 2015. • Notice of both required public hearings was published in the Sun Current newspaper and mailed to properties within 350 feet of the site. - No members of the public spoke before the Planning Commission.The • Planning Commission recommended approval of the requests(6-0). ALTERNATIVE RECOMMENDATION(S): None PRINCIPAL PARTIES EXPECTED AT MEETING: Mark and Kari Kauffman, KFE Enterprises ATTACHMENTS: Description Type ❑ Draft Resolution-Comprehensive Plan Amendment Resolution Letter ❑ Resolution-Conditional Use Permit&Variances Resolution Letter ❑ Requirements document Backup Material ❑ Proposed plans Exhibit ❑ Zoning&Planning Maps Exhibit DRAFT RESOLUTION NO. RESOLUTION AMENDING THE CITY'S COMPREHENSIVE PLAN CHANGING THE DESIGNATION OF 6244 CEDAR AVENUE TO "COMMUNITY COMMERCIAL" WHEREAS, the City's Comprehensive Plan provides a Guide Plan establishing particular planning needs for specific segments of the City; and WHEREAS, the Comprehensive Plan designates 6244 Cedar Avenue as "Public/Quasi- Public"; and INSERT WHEREAS JUSTIFICATION BASED ON PLANNING COMMISSION AND COUNCIL DISCUSSION. WHEREAS, the City has reviewed the Guide Plan classification and determined that it would be appropriate to designate 6244 Cedar Avenue as "Community Commercial;" and WHEREAS, the Planning Commission conducted a public hearing on March 23, 2015 concerning modifying the Guide Plan and recommended approval of the modifications; and WHEREAS, the City Council considered the amendment on April 14, 2015; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota that the City's Comprehensive Plan is hereby amended to designate 6244 Cedar Avenue as "Community Commercial" and is contingent upon the following: 1. The revision is submitted to and approved by the Metropolitan Council. Adopted by the City Council of the City of Richfield, Minnesota this 14th day of April 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk RESOLUTION NO. RESOLUTION APPROVING A CONDITIONAL USE PERMIT AND VARIANCES FOR AN AUTO BODY REPAIR BUSINESS AT 6244 CEDAR AVENUE WHEREAS, an application has been filed with the City of Richfield which requests approval of a conditional use permit and variances to allow an auto body repair business at property commonly known as 6244 Cedar Avenue and legally described in the attached Exhibit A; and WHEREAS, the Planning Commission of the City of Richfield held a public hearing and recommended approval of the requested conditional use permit and variances at its March 23, 2015 meeting; and WHEREAS, notice of the public hearing was published in the Sun-Current and mailed to properties within 350 feet of the subject property on March 10, 2015; and WHEREAS, the requested conditional use permit meets the requirements necessary for issuing a conditional use permit as specified in Richfield's Zoning Code, Subsection 547.09 and as detailed in City Council Staff Report No. ; and WHEREAS, the Zoning Code states that a minimum 15-foot buffer is required to separate all aspects of an auto body repair shop from adjacent parcels, Subsection 534.07, Subd. 12(c); and WHEREAS, the Zoning Code states that the maximum height of a fence, wall or hedge in the front yard is four feet, Subsection 509.15, Subd. 3(a); and WHEREAS, Minnesota Statutes Section 462.357, Subdivision 6, provides for the granting of variances to the literal provisions of the zoning regulations in instances where their enforcement would cause "practical difficulty" to the owners of the property under consideration; and WHEREAS, based on the findings below, the Richfield City Council approves the requested variance from Richfield Zoning Code Subsections 534.07, Subd. 12(c); and 509.15, Subd. 3(a); 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. The City Council makes the following general findings: a. The Property is zoned General Business (C-2). b. The Zoning Code states that a minimum 15-foot buffer is required to separate all aspects of an auto body repair shop from adjacent parcels. The proposed buffer is 10 feet. A variance from Subsection 534.07, Subd. 12(c) is required. c. The Zoning Code states that the maximum height of a fence, wall or hedge in the front yard is four feet. The proposed fence is six feet and the proposed final height of screening hedges and or trees could be in excess of six feet once fully grown. A variance from Subsection 509.15, Subd. 3(a) is necessary. 2. With respect to the application for variances from the above-listed requirements, the City Council makes the following findings: a. Strict enforcement of Richfield Zoning Code Subsection 534.07, Subd. 12(c) would cause a practical difficulty. The existing 10-foot buffer is substantial and nearly 100 percent opaque year round. The adjacent parcel is home to a seldom-visited utility building. Requiring the property owner to remove a row of parking in order to add five additional feet at this boundary would serve no purpose and only hurt the property owner. Strict enforcement of Richfield Zoning Code Subsection 509.15, Subd. 3(a) would prohibit use of the site for an auto body repair shop and likely any new use that would want to utilize the interior vehicle space. Requiring the applicant to store vehicles on the north side of the building, away from the access doors, would be impractical and likely create an ongoing enforcement issue. b. Unique circumstances affect the Property that were not created by the applicant. The adjoining parcel is owned by a public utility company and the existing structure is not regularly accessed by either employees or the public. Additional buffering is unnecessary. In regard to the fence height, the existing building is situated such that the "front" faces Cedar Avenue and parking lots are located on either end of the building. This unusual layout is no fault of the applicant. c. Granting the requested variance will not alter the character of the neighborhood. The existing buffer is substantial and there are no employees or occupants of the adjacent parcel who would notice if an additional five-feet were to be added on the southern side of the existing landscaping. A six-foot fence and/or landscaping wall is required to meet screening requirements for the proposed use. The proposed screening is attractive and reasonable. No adverse impacts are anticipated. d. The variances requested are the minimum necessary to alleviate the practical difficulties. e. The proposed variances do not conflict with the purpose or intent of the Ordinance or Comprehensive Plan. 3. Based on the above findings, a variance is hereby approved to permit a 10-foot landscaped buffer on the north side of the Subject Property and a six-foot tall fence and/or hedges on the south side of the property in order to meet screening requirements. 4. A conditional use permit is issued to allow an auto body repair business, as described in City Council Letter No. , on the Subject Property legally described above. 5. 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: • A recorded copy of the approved resolution must be submitted to the City prior to the issuance of a building permit. • Damaged vehicles must be stored inside the building or inside the proposed fenced area only. No damaged vehicles are permitted in the north parking lot. • Fencing to screen damaged vehicles must completely screen the vehicles from all sides. • Landscaping plans must be approved by the Community Development and Public Works Departments prior to installation. Landscaping in the boulevard will require a Boulevard Feature Permit and trees will not be permitted within the 63rd Street right-of-way due to the location of a City water main. Trees must be minimum of 10-feet from existing watermain and sight triangles at driveway must be maintained. • Parking lot landscape screening is required. • Screening of monopole ground equipment in accordance with previously approved plans must be installed prior to occupancy. • The applicant shall be responsible for continued maintenance of landscaping in keeping with the approved plans; this includes the northern buffer area. • Separate sign permits are required. • A utility plan must be submitted and approved by the Public Works Director prior to the issuance of a building permit. • All new utility service must be underground. • All new utilities, including roof-top equipment, must be screened in accordance with City Code requirements. A screening plan is required prior to installation. • Parking lot striping on Cedar Avenue must be removed and work approved by the Public Works Director prior to building permit approval. • The applicant is responsible for obtaining all required permits, compliance with all requirements detailed in the City's Administrative Review Committee Report dated February 6, 2015, and compliance with all other City and State regulations; • Prior to the issuance of an occupancy permit the developer must submit a surety equal to 125% of the value of any improvements and/or requirements not yet complete. This surety shall be provided in the manner specific by the Zoning Code. 6. This conditional use permit and these variances shall expire one year after issuance 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. 7. 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 14th day of April 2015. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk EXHIBIT A LEGAL DESCRIPTION OF LAND Parcel 1: That part of Tract B lying East of a line parallel with and 118 feet East of the West line of said Tract B; Tract C; All in Registered Land Survey No. 930. (Torrens Property-Certificate of Title No. 1335982) Parcel 2: The north 24 feet of Lot 6, Block 3, Iverson's Third Addition. That part of the north 24 feet of Lot 7, Block 3, Iverson's Third Addition, lying east of a line parallel with and 118 feet east of the west line of Tract B, Registered Land Survey No. 930. That part of vacated 63rd St., dedicated in the plat of Iverson's Third Addition, lying east of a line parallel with and 118 feet east of the west line of Tract B, Registered Land Survey No. 930. That part of Government Lot 1, Section 26, Township 28, Range 24, Iying north of the north line of Iverson's Third Addition, west of the west line of Tract C, Registered Land Survey No. 934, south of the south line of Tract B, Registered Land Survey No. 930, and east of a'line parallel with and 118 feet east of the west line of Tract B, Registered Land Survey No. 930. (Torrens Property, Certificate of Title No. 13439281) A-1 Code Requirements / Required Findings Part 1 — Auto mechanical or body repair shops in General Business (C-2) District: The findings necessary to approve said business in the C-2 District are as follows (534.07, Subd. 12). 1. The use site shall not be located within 300 feet of the grounds of a school, church or hospital. This requirement is met. 2. If the use site abuts a residentially zoned lot, a buffer of not less than 25 feet in width and 75 percent all-season opacity from the ground to a height of 6 feet shall be provided to separate all aspects of such use from abutting residential parcels. The Council may reduce this requirement to not less than 15 feet if significant additional landscaping and fencing, with 100 percent all- season opacity, is provided to screen the auto mechanical or body repair shop use. The applicant has provided a plan that provides planting that are anticipated to fill in to 100 percent opacity within 1-2 years of growth. The applicant has included an option to install a cedar fence along this entire border as well. Staff recommends that the cedar fencing be required on all sides of the damaged vehicle storage area, but that the landscaping proposal be found sufficient for the remaining residential edge. Along the edge of the north parking lot where adjacent to the Park, staff recommends standard parking lot screening and a prohibition against the storing of damaged vehicles. 3. A buffer yard of not less than 15 feet in width shall be provided to separate all aspects of such use from any abutting parcel. The applicant has requested a variance to this requirement along the northern property line. A full discussion of this request can be found in Part 3 below. 4. Vehicles that are inoperable shall not be stored on the premises, except in appropriately designed and screened areas as approved by the City. In accordance with Section 1320 of the City Code, inoperable vehicles cannot be stored on any property for more than 96 hours. The applicant will be required to comply with all applicable storage regulations. 5. Vehicles that are waiting for repair shall be stored in appropriately designed and screened areas as approved by the City. The applicant is proposing to store damaged vehicles inside the building and in a screened area in the northwest corner of the south parking lot. Staff recommends that the cedar fencing be required on all sides of the damaged vehicle parking area. 6. If the use is not located on a county road or state highway, it shall not be operated between the hours of 11:00 pm and 6:00 am. Proposed hours of operation are Monday-Friday 7:00 am — 6:00 pm and Saturday 9:00 am — 12 pm. 7. All repair, assembly, disassembly and maintenance of vehicles shall occur within an enclosed building, except minor maintenance such as tire inflation or adding oil or windshield wiper fluid. The applicant will be required to comply with operational regulations. Part 2 — Conditional Use Permit: The findings necessary to issue a Conditional Use Permit (CUP) are as follows (547.09, Subd. 6): 1. The proposed use is consistent with the goals, policies, and objectives of the City's Comprehensive Plan. This property is "Public/Quasi-Public" use. The Council must find that a change to "Community Commercial" is appropriate in order to meet this requirement. 2. 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 purpose of the Zoning Code is to protect and promote the public health, safety, comfort, aesthetics, economic viability, and general welfare of the City. The purpose of the General Business (C-2) District is to allow a wide variety of commercial businesses that are attractive and compatible with nearby residential properties. The proposal is consistent with these purposes. 3. The proposed use is consistent with any officially adopted redevelopment plans or urban design guidelines. The 2004 Cedar Corridor Master Plan identifies this parcel and the current CenterPoint Energy to the north as part of Taft Park; however, the parcels are not directly discussed. The specific intent of the Plan is unclear. 4. The proposed use is or will be in compliance with the performance standards specified in Section 544 of this code. The proposed development will either maintain the status quo or improve compliance with performance standards requirements. 5. The proposed use will not have undue adverse impacts on governmental facilities, utilities, services, or existing or proposed improvements. The City's Public Works and Engineering Departments have reviewed the proposal and do not anticipate any issues that cannot be addressed through the stipulations of approval. 6. The use will not have undue adverse impacts on the public health, safety, or welfare. Adequate provisions have been made to protect the public health, safety and welfare. 7. There is a public need for such use at the proposed location. This is a question of policy and whether or not community leaders feel that a Comprehensive Plan change is appropriate. 8. 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 can be met, if the Comprehensive Plan amendment is approved. Part 3 -Variances: The findings necessary to approve a variance are as follows (Subd. 547.11): 1. There are "practical difficulties"that prevent the property owner from using the property in a reasonable manner. 2. There are usual or unique circumstances that apply to the property which were not created by the applicant and do not apply generally to other properties in the same zone or vicinity. 3. The variance would not alter the character of the neighborhood or the locality. 4. The variance is the minimum necessary to alleviate the practical difficulty. 5. The variance is in harmony with the general purpose and intent of the ordinance and consistent with the Comprehensive Plan. Reduced buffer yard The applicant has requested a variance to reduce the required buffer yard from 15 feet to 10 feet along the northern property line. Criteria 1: There is an existing heavily-landscaped 10-foot buffer along the northern edge of the property. The property to the north is the location of a CenterPoint Energy utility building at which no employees are present on a daily basis. The existing buffer meets the intent of the ordinance and removal of an entire row of parking to gain an additional five feet would be unreasonable. Criteria 2: The intent of the setback regulation is to protect neighbors from noise and unsightly views of cars awaiting repair. In this case, the adjacent parcel is the location of an infrequently visited utility building. Criteria 3: The proposed variance is not expected to have any impact on the character of the neighborhood. Criteria 4: The proposed variance is the minimum necessary. Criteria 5: The proposed reduction does not conflict with the purpose and/or intent of the Comprehensive Plan or the Ordinance. Height of fencing and/or landscaping in the front yard The applicant has requested a variance to allow a fence and landscaping that exceeds four feet in height in the front yard of a property. For a corner lot, the Zoning Code defines the front lot line as the shorter lot line abutting a street. In this case, the front lot line and therefore front yard are adjacent to 63rd Street. Proposed fencing will not exceed six feet. Criteria 1: The existing vehicle entrances to the building are from the south parking lot, which in this case happens to be the front yard. It would be impractical and inefficient to require the applicant to store damaged vehicles in a yard that is not adjacent to the vehicle entry doors. Criteria 2: The existing building is situated such that the "front" faces Cedar Avenue and parking lots are located on either end of the building. This somewhat unusual layout is no fault of the applicant. A layman looking at the building would assume that the front was the side facing Cedar Avenue. Criteria 3: The proposed variance is not expected to have a negative impact on the character of the neighborhood. Screening, both the proposed fencing and landscaping, will help to protect adjacent parcels and is expected to be an improvement. Criteria 4: The proposed variance is the minimum necessary to accommodate an auto body repair business at this location. Criteria 5: The proposed height variance does not conflict with the purpose and/or intent of the Comprehensive Plan or the Ordinance. 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I 17 I I ------ ------------------ �• i m // C7 ` y� i t L)XK ; i i a x E r Z d Q 66TH @ a� aai NU LL AtlMH91H LL oo � m v L-L-AS'MH°JIH � N U O ^ o a L.L o t V a� ° atla33 2 w 'c m■ c �U) m m a oo � m U U C K � n L o 0 �S£ o O o c Q � 3 V U a a 1 U ^+ a U W2 U7313H31N LE5a : a U Q ■ ■ ma L ■ ■■ ■ ■■■■ ■ ■ � ■■ E m L o m A♦ U d Y/' 1 U Hl9l c v �■ ■ � ' ■ ■ ■ ■ ,■im Eb m `m Y � U�� Baa N t0 a x r ZQ N Q 66TH m a� aai NU LL AtlMH91H LL oo � m v L-L-AS'MH°JIH � N U U � O o a` o t VN 21tlU33 � c_ w TTS c N■ � N m U U OO a a O U N a U N N a E if a E C: o � a� o m �S£ o o O o c C E o U_ /11 o O D W L U7313 H3RI @ 5 m � a ■ oma m o U` > Ua � V H191 m c LL m ix m c co ■ ■ ' ■ ■ ■ ■ ■ aci a Vi m ■ ■ ■ C7 c Ud d' N t0 AGENDA SECTION: PROPOSED ORDINANCES AGENDA ITEM# 9. -wood STAFF REPORT NO. 58 s � ' CITY COUNCIL MEETING M 4/14/2015 1W I REPORT PREPARED BY: Melissa Poehlman, City Planner DEPARTMENT DIRECTOR REVIEW: John Stark, Community Development Director OTHER DEPARTMENT REVIEW: None CITY MANAGER REVIEW: Steven L. Devich ITEM FOR COUNCIL CONSIDERATION: Consideration of the first reading of an ordinance rezoning 1400, 1420 and 1500 -78th Street East and 7711 - 14th Avenue from Mixed Use - Community (MU-C) to Planned Mixed Use (PMU). EXECUTIVE SUMMARY: International Autos Group ("Applicant") has entered into a Purchase Agreement for the properties located at 1400, 1420, and 1500 - 78th Street East and 7711 - 14th Avenue. The applicant proposes to combine the parcels, demolish the existing structures and construct a new$13 million three-story Audi car dealership and separate parking ramp. The applicant is requesting a change to the City's Comprehensive Plan and Zoning designations in order to make this possible. Regulations in the 1-494 Corridor were established in order to provide for, and take advantage of, opportunities that the visibility along the Interstate could provide -opportunities including an increased and diversified tax base and increased employment. The Corridor Plan established guiding principles that were intended to create an attractive, dense, walkable and green edge along the City's southern boundary. The proposed project includes buildings that provide attractive views from both 77th Street and the freeway. The siting and design of the buildings meet the requirements of the Mixed Use Districts by fronting on and providing direct access from 77th Street, avoiding large blank walls and utilizing high-quality building materials. The proposal also addresses the significant pedestrian and landscaping desires expressed by the Code and Comprehensive Plan through the inclusion of quasi-public amenities like sidewalks on all four sides of the property, and a more than 11,000 square-foot plaza and landscaped area. In addition to a second reading of this ordinance, the Council will be asked to consider a change to the Comprehensive Plan and site plans on April 28th. RECOMMENDED ACTION: By motion: Approve a first reading of an ordinance rezoning 1400, 1420, and 1500 78th Street East and 7711 - 14th Avenue from Mixed Use - Community (MU-C) to Planned Mixed Use (PMU). BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT: These parcels are currently zoned Mixed Use-Community and guided for High-Density Housing/Office use. Prior to the adoption of the 1-494 Corridor Plan in 2005,these properties were guided for Regional Commercial/Office use and zoned General Business(C-2). As part of the 2005 Corridor planning process, market consultants suggested that regional retail would be difficult to sustain in Richfield's 1-494 Corridor due to competition from the Mall of America, Southdale Mall and existing businesses on the south side of the Interstate. Sites designated as Regional Commercial/Office were reduced to those in areas near existing or anticipated major transportation access points(Penn Avenue, Lyndale Avenue, Portland Avenue and immediately adjacent to an anticipated 77th Street underpass). The properties in question are one block east of a regionally-guided area. B. POLICIES(resolutions, ordinances, regulations,statutes,exc): Comprehensive Plan and Zoning District Designations The Comprehensive Plan is an expression of the Community's vision for the future. The guide for the 1-494 Corridor reflects the Community's desire for an urban, dense,walkable area with a variety of uses. A lack of direct access and the perceived saturation of the retail market in this area, led to a guiding designation of High-Density Housing/Office for these parcels. The properties were zoned in accordance with this designation. Regional retail was not identified as an undesirable use, but rather was not seen as a viable option in this location. Staff believes that a regional commercial development is compatible with the City's vision for this area and would not be detrimental to future redevelopment. The rezoning of this property cannot take place without approval of a Comprehensive Plan amendment. This first reading is an administrative requirement and does not obligate the Council to approve the ordinance upon second reading. C. CRITICAL TIMING ISSUES: • 60-DAY RULE: The 60-day clock'started'when a complete application was received on March 9,2015. A decision is required by May 8, 2015 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. • A second reading of the proposed ordinance is scheduled for April 28, 2015 alongside consideration of other required land use approvals. D. FINANCIAL IMPACT: • City staff estimates that the proposed redevelopment would result in between$80,000 and$128,000 in additional tax revenue annually for the City. E. LEGAL CONSIDERATION: • A public hearing was held before the Planning Commission on March 23,2015 . • Notice of the public hearing was published in the Sun Current newspaper and mailed to properties(including individual apartments)within 350 feet of the site. • No members of the public spoke before the Planning Commission. - The Planning Commission recommended approval of the proposed rezoning (6-0). ALTERNATIVE RECOMMENDATION(S): • Reject the proposed ordinance. PRINCIPAL PARTIES EXPECTED AT MEETING: David Phillips, PHILLIPS Architects ATTACHMENTS: Description Type ❑ Ordinance Ordinance ❑ Site Plan&Renderings Exhibit ❑ Planning&Zoning Maps Exhibit ORDINANCE NO. AN ORDINANCE RELATING TO ZONING; AMENDING APPENDIX 1 TO THE RICHFIELD CITY CODE BY REZONING 1400, 1420, AND 1500 78TH STREET EAST AND 7711 — 14TH AVENUE FROM MIXED USE — COMMUNITY (MU-C) TO PLANNED MIXED USE (PMU) THE CITY OF RICHFIELD DOES ORDAIN: Section 1. Section 17, Paragraph (5) of Appendix 1 of the Richfield Zoning Code is amended to read as follows: (5) M-18 (9 of 14th to rBleerriRgte R). That hF�r�etw the nrininul Genter�res of 77th and 78thTQr Streets, and between G8Rt8M y Ii es E).--14 1. .—iia and Blr)r)minryyonl(77th Street and Bloomington Avenue). The East 198 feet of the Southeast Quarter of the Southwest Quarter of the Southeast Quarter, except roads and highway, of Section 35, Township 28, Range 24. Sec. 2. Section 8 of Appendix 1 of the Richfield Zoning Code is amended by adding new Paragraph (5) as follows: (5) M-18 (Audi). Lot 1, Block 1, Richfield Properties. LLC. Sec. 4. This ordinance is effective in accordance with Section 3.09 of the Richfield City Charter. 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