08-24-2004 Agendav
CI TUESDAYHAUGUSIT 24N2004TA
REGULA UNCILCCHAMBERS ETING
CO
6700 PORTLAND AVENUE
6:30 P.M.
AGENDA
INTRODUCTORY PROCEEDINGS
Call to order
Roll call
Open forum (15 minutes maximum)
Each speaker is to keep their comment period t ddress tthe Council)on it ms- not otn the ~r
others. Comments are to be an opportun-ty to a
a enda. Individuals who wish to address the Council must have registered prior to the
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meeting.
Notes:
Pledge of Allegiance
Approval of minutes of Regular City Council Meeting of August 10, 2004
COUNCIL DISCUSSION
1. Council discussion
Hats Off To Hometown Hits
Notes:
CITY MANAGER'S REPORT
2. City Manager's report
Notes:
AGENDA APPROVAL
3. Council approval of agenda
CONSENT CALENDAR
4. Consent Calendar contains several separate items whas been app ovednthe individual
Council in one motion. Once the Consent Calenda roved. No further Council action
items and recommended actions have also been app
is necessary. However, any Council Member may request that an item be removed
from the Consent Calendar and placeodsent Calendarrare recommended for'approval.
and action. All items listed on the C
A. Consideration of approval of resolution calling for moratorium on City's floodplain
regulations and first reading evelo~ ment in~floodplain area and schedulensecond
moratorium established ford p
reading for September 16, 2004 S.R. No. 136
B. Consideration of approval of resolution authorizing City Manager to execute Letter
of Agreement establishing H unit employeesnLELS Local #123PStR I No. 137
Officer/Detective barga g
Notes:
5. Consideration of item(s), if any, removed from Consent Calendar
Notes:
RESOLUTION
6. Consideration of preliminary resolution calling forc nubfor Richfield Senioa Hous ng,
Senior Housing Revenue Refunding Bond Finan g
Inc.
Staff Report No. 138
Notes:
7. Claims and payrolls
Open forum (additional 15 minutes if more time needed after first Open Forum and by
majority vote. of the City Council)
Each speaker is to keep their comment period t to addres-s the Counlc- on ems not on
for others. Comments are to be an opportun-ty
the agenda. Individuals who wish to address the Council must have registered prior to
the meeting.
Notes:
Adjournment of Regular City Council Meeting
SPECIAL CITY COUNCIL WORKSESSION
COUNCIL CHAMBERS
6700 PORTLAND. AVENUE
IMMEDIATELY FOLLOWS REGULAR CITY COUNCIL MEETING
Call to order
Roll call
1. Discussion of proposed City Bella "Villa" changes
2. Discussion of 2004 Revised and 2005 Proposed Budget and 2005 preliminary tax
levy
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must
be made at least 96 hours in advance to the Administrative Services Director at 612-861-
9702.
AGENDA SECTION: Resolution
AGENDA ITEM # 6
REPORT# 13H
J
STAFF REPORT
CITY COUNCIL MEETING
AUGUST 24, 2004
Related to:
CITY COUNCIL GOAL(S) NO
REPORT PREPARED BY:
N/A AND/oR RICHFIELD 2020 GOAL(S) NO N/A
CHRIS REGIS, FINANCE MANAGER
NAME, TITLE
COUNCIL, PRESENTER:
DEPARTMENT DIRECTOR
REVIEW:
REVIEWED BY CITY
MANAGER:
SIGNATURE
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution calling for public hearing and preliminary approval for issuance of
Senior Housin Refundin Bonds.
I. RECOMMENDED ACTION:
By Motion:
Adopt the attached preliminary resolution calling for a public
hearing on the issuance of Senior Housing Revenue Refunding
Bond Financing for Richfield Senior Housing, Inc. and
Determine the waivers, if any, for administrative fee and minimum
denominations which will be documented in the final resolution
aparovinq sale of the bonds.
II BACKGROUND I
On October 18, 1999 the Richfield Housing and Redevelopment Authority (HRA)
entered into a Contract for Private Redevelopment with Richfield Senior Housing,
Inc. for the redevelopment of the Lyndale Gateway area. The development is the
08242004 R S H R efi n a n c i n g
Mainstreet Village Senior Apartments and offices on the east side of Lyndale
Avenue which includes a 161 unit senior apartment complex and 38,000 sq. ft. of
adjoining office space.
As part of the financing of the development, in December 1999, the Richfield City
Council approved the issuance of up to $20,000,000 of Senior Housing Revenue
Bonds, Series 2000A and 20006. The purpose of the bonds was for property
acquisition and construction costs.
In addition to the issuance of the Senior Housing Revenue Bonds, the HRA loaned
to Richfield Senior Housing, Inc. $338,251 to cover additional condemnation and
site assembly costs that exceeded projections.
Recently, Richfield Senior Housing, Inc. approached the City and the HRA and
indicated the need to refinance the Series 2000A and 20006 bonds due to the fact
that the project was not cash flowing sufficiently to cover the debt service on the
bonds. The cash flow deficit is serious enough that Richfield Senior Housing has
requested a waiver of the annual administrative fee that the City charges on private
activity revenue bonds. Their bond underwriter has indicated to the City that without
this waiver, the refinancing of the Series 2000A and 20006 bonds would not be
feasible for them and the future of the development would be in jeopardy.
In response to the request to waive the annual administrative fees, the City has
requested in exchange for waiving the fees, the inclusion of a "look back provision"
where if the project should begin to cash flow sufficiently, the City would then have
the right to begin to collect the annual administrative fees. If the City were to waive
the administrative fee, the City would be forfeiting in excess of $300,000 over the
life of the loan.
In addition, to the waiving of the administrative fee, the developer is also requesting
that the City waive the level of denominations of the bond issues. Currently, City of
Richfield procedures for private activity revenue bond issues, state that for issues
that carry low ratings or are non-rated may be sold only to institutional or other
private investors on a private placement basis and must be in denominations of at
least $100,000. Richfield Senior Housing is requesting the denominations to be sold
be at a level of $5,000.
Finally, the refinancing would provide sufficient proceeds to allow Richfield Senior
Housing to repay the $338,251 HRA loan.
I III. BASIS OF RECOMMENDATION I
A. POLICY
Under the Minnesota Statutes, Chapter 462C the City of Richfield has
authority to issue revenue bonds.
The Borrower has submitted an Application For Tax Exempt Bond
Financing to the City with respect to the proposed Refunding Bonds.
With regard to the procedure for the level of bond denominations to be
sold, the Council may depart from the guideline when in its judgement
the project is of a level of merit and public purpose to justify the
departure. However, in case of such a departure, the Council must
state its reasons in the resolution awarding the sale of the bonds.
There are no provisions made for the waiving of the annual
administrative fees. However, this is the refinancing of bonds that
were initially offered prior to the City's updating of procedures for the
issuance of private activity revenue bonds.
$. CRITICAL ISSUES
The question of waivers (administrative fee and minimum
denominations) need to be determined in a second motion. The
Council's final decision will be documented in the final resolution
approving the sale of the bonds.
The issuance of these bonds will not count against the City's annual
allotment of Bank Qualified Debt.
City Manager's Gomment
In the attached letter from Dougherty & Company, LLC, Mr.
Landreville mentions in paragraph 3 that cost overruns were a result
of requirements of the Fire Chief. It is necessary to state for the
record that the statement is inaccurate. The inspection staff, including
the Fire Department, communicated their positions clearly on a
number of occasions. Any misunderstanding of the requirements was
not a result of the inspection and fire staff.
C. FINANCIAL
The preliminary estimated amount of the refunding bonds is to be
$20,275,000.
As of August 31, 2004 the Richfield HRA had an outstanding. loan
receivable of $338,251 from Richfield Senior Housing.
The refinancing would include sufficient proceeds to allow Richfield
Senior Housing to immediately repay the $338,251 loan.
The bonds will be issued in the City's name, but will not be a charge
against the City's general credit or taxing powers. The City will act as a
conduit for the financing of the project. It does not create any financial
liability to the City.
The City is to be reimbursed and held harmless for and from any out-of-
pocket expenses related to the tax exempt financing, including, but not
limited to, legal fees, financial analyst fees, bond counsel fees, staff
costs, and any deposits or application fees required under state law in
order to secure allocation of bonding authority.
The City has received anon-refundable application fee in the amount of
$2,500.
The applicant is requesting waiver of the annual administrative fee in the
amount of 1/8th of 1 % (.125%) of the outstanding principal balance of the
bonds. By waiving the annual administrative fee, the City would be
forfeiting in excess of $300,000 over the life of the loan.
D. LEGAL
Kennedy & Graven will serve as bond counsel for the issue.
A public hearing is required as part of the issuance of private activity
revenue bond financing. 2004 in the Sun
Notice of public hearing will be published August 26,
Newspapers. Time and date of the public hearing is 6:30 p.m. on
September 16, 2004.
IV ALTERNATIVE RECOMMENDATION(S~
. Forgo approving the attached resolution and not go forward with the
issuance of the refunding bonds.
V ATTACHMENTS ~
Resolution calling for a Public Hearing on the refiinancing of the Series 2000A
and 20006 Senior Housing Revenue Bonds and the waiving of the annual
administrative fee charged on the issuance of private activity revenue bonds.
Application for Tax Exempt Financing.
Letter from Richfield Senior Housing's Bond Underwriter requesting waivers.
VI PRINCIPAL PARTIES EXPECTED AT MEETING
Representatives from Richfield Senior Housing
RESOLUTION NO.
RELATING TO A SENIOR HOUSING REVENUE REFUNDING BOND
FINANCING FOR RICHFIELD SENIOR HOUSING, INC.
BY THE CITY OF RICHFIELD, MINNESOTA (the "City")
WHEREAS, the City has previously issued its $19,905,000 Senior Housing Revenue
Bonds (Richfield Senior Housing, Inc. Project) Series 2000A and 2000B (the "Prior Bonds") and
loaned the proceeds thereof to Richfield Senior Housing, Inc. (the "Corporation'.), in order to
finance a 130-unit senior housing facility and attached 31-unit assisted living facility located on
the east side of the 7600 block of Lyndale Avenue South in the City (the "Project"); and
WHEREAS, in connection with the payment of condemnation costs ursutant tot e
Project, the City also loaned to the Corporation the amount of $338,251.76, p
Agreement dated August 5, 2002 (the "Prior City Debt"); and
WHEREAS, the Corporation has requested the City to refinance the Project through the
issuance of revenue refunding bonds, the proceeds of which will be loaned to the Corporation to
retire the Prior Bonds and the Prior City Debt; and
WHEREAS; the Corporation represents that the economic viability of the Project will be
greatly enhanced through the issuance of revenue refunding bonds for such purposes by the City
and therefore requests the City to declare its present intent to issue its revenue bonds to provide
refinancing for the Project; acid
WHEREAS, the City is authorized to issue its revenue bonds for such purposes by
Minnesota Statutes, Chapter 462C, as amended (the "Act").
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Richfield, Minnesota, as follows:
Section 1. It is hereby declared to be the intention of the City Council of the City of
Richfield, Minnesota, to issue revenue bonds of the City in an aggregate principal amount
expected to not exceed $21,000,000 to refinance the Project, as described above, subject to a
public hearing to be held as described in Section 3 hereof.
Section 2. The officers and employees of the City are hereby authorized to take such
further action as is necessary to carry out the intent and purposes of this resolution. All details of
such revenue bond issue and the provisions for payment thereof shall be subject to final approval
of this Council. The revenue bonds shall not constitute a charge, lien or encumbrance, legal or
equitable, upon any property of the City, and the bonds, when, as and if issued, shall recite in
substance that the bonds, including interest thereon, are payable solely from the revenues
received from a revenue agreement with the Corporation and shall not constitute a debt of the
City within the meaning of any constitutional or statutory limitation, or a charge against the
general credit or taxing powers of the City.
Section 3. The City Council shall hold a public hearing at 7:00 p.m. central time on
Thursday, September 16; 2004 at the Council Chambers in City Hall, 6700 Portland Avenue,
Richfield, Minnesota, to provide an opportunity for interested individuals to express their views
on the proposed issue of the bonds and the nature of the facilities to be refinanced. The City
Clerk shall cause a notice of public hearing in substantially the form attached as Exhibit A to be
published in the official newspaper of the City no fewer than fourteen (14) days before the
hearing.
Section 4. The Corporation has agreed to pay directly or through the City any and all
costs incurred by the City in connection with the bonds whether or not the bonds or operative
instruments are executed.
Section 5. The adoption of this resolution does not constitute a guarantee or a firm
commitment that the City will issue the bonds as requested by the Corporation. The City retains
the right in its sole discretion to withdraw from participation and accordingly not to issue the
bonds, or issue the bonds in an amount less than the amount referred to in Section 1 hereof,
should the City at any time prior to the issuance thereof determine that it is in the best interest of
the City not to issue the bonds, or issue the bonds in an amount less than referred to in Section 1
hereof, or should the parties to the transaction be unable to reach agreements as to the terms and
conditions of any of the documents required for the transaction.
Section 6. All commitments of the City expressed herein are subject to the condition
that the City and the Corporation shall have agreed to mutually acceptable terms and conditions
of the Loan Agreement, the bonds, and of the other instruments and proceedings relating to the
bonds and that the closing of the issuance and sale of the bonds shall have occurred by no later
than December 31, 2004. If the events set forth herein do not take place within the time set forth
above, or any extension thereof, and the bonds are not sold within such time, this resolution shall
expire and be of no further effect.
Adopted: August 24, 2004.
Approved:
Martin J. Kirsch, Mayor
Attest:
Nancy Gibbs, City Clerk
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EXHIBIT A
NOTICE OF A PUBLIC HEARING ON THE ISSUANCE OF
SENIO THE CITY OF RICHFIELDFMINNESO TA DS
BY
NOTICE IS HEREBY GIVEN m acent al t me on Thursday,tSept mbe~ 16~2004,1at
Minnesota (the "City"), will meet at 7:00 p
the Council Chambers In the City Hall at n700 o°osalthat theeCit~ycissued~its~Sen or Housing
Cha ter 462C
purpose of conducting a publlc heanng o p p
Revenue RefundingrBoo refinance a 30-unit`sBenior housingrfac lnty and attached~31-unit assisted
as amended, in ord
living facility located on the east side ofs ne 7600 blac ~ nne o al nonprofit S~orporation (the
and owned by Richfield Senlor Hou g,
"Corporation"). The aggregate principall b olimtitedtoblgapon of the CityB,oand the Bonds and
not exceed $21,000,000. The Bonds sha
the interest thereon shall be payable sole hall~e er ha e thoright to compel any elxergcise of the
payment thereof. No holder of the Bonds s
taxing power of the City to pay the Bondame const tutesa debt of the City w~thin hie meann g of
any property of the City, nor shall the
any constrtutlonal or statutory limitations.
All persons interested may appear and be heard at the time and place set forth above or
may file written comments with the Clty Clerk which shall be considered at the public hearing.
BY ORDER OF THE CITY COUNCIL
Nancy Gibbs, City Clerk
GP:1615352 vl
/ ~-
TWIN CITY
CHRISTIAN
. HOMES.
Honoring Gocl by caring for people
INDEMNIFICATION LETTER OF AGREEMENT
The Mayor of the City of Richfield
and Members of the City Council
City of Richfield
6700 Portland Avenue
Richfield, MN 55423
RE: Application of Richfield Senior Housing, Inc. for Tax Exempt Revenue Bond Financing
by the City of Richfield
Dear Mayor and Members of the City Council:
This letter of agreement is given by Chris Schmidt, a Director of Finance under the laws of
Minnesota ("Applicant") as required by the City of Richfield, Minnesota in connection with its
consideration of an application for tax exempt revenue bond financing for the project described
in the application.
Applicant agrees as follows:
Applicant agrees to pay or reimburse the City for any and all costs and expenses which the
City may incur in connection with its consideration of the project and the granting of tax
exempt revenue bond financing therefor, whether or not the project is preliminarily
approved by the City, whether or not the project is approved by the State of Minnesota,
whether or not revenue bond financing is finally approved by the City, whether or not the
bonds are issued and sold, and whether or not the project is carried to completion.
2. Applicant agrees to indemnify and hold the City, its officers, employees and agents
harmless against any and all losses, claims, damages, expenses or liabilities, including
attorneys fees incurred in their defense, to which the City, its officers, employees and
agents may become subject in connection with the City's consideration, issuance or sale of
the bonds for Applicant's project and the carrying out of the transactions contemplated by
this agreement and any resolutions adopted, or agreements executed by the City in
connection with the issuance of its bonds for this project.
3. Applicant hereby releases the City, its officers, agents and employees from any claims,
causes of action, losses, damages, or liabilities which it may have against the City, its
1.
7645 Lvndale Ave. S. ^ Richfield, wIN 55423 ^ (612) 861-2799 ^ FAX: (612) 861-2149
officers, agents, and employees or which it may incur in connection with: the City's
consideration of the application for industrial development revenue bond financing for
Applicant's project; the failure of the City, in its discretion, to issue tax-exempt revenue
bonds for Applicant's project; the issuance and sale of the bonds; the construction of the
project; or any other matter or thing of any type or nature whatsoever which may arise in
connection with the foregoing.
4. Applicant is aware of the City's application and administrative fee structure for tax exempt
financing and agrees and covenants that all such fees will be paid in the amount and at the
times required.
Dated: August 11, 2004 (Applicant)
B ~ ~~~•~-
Y
Chris Schmidt
Its Director of Finance
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PART V
APPLICATION FOR TAX-EXEMPT FINANCING
(Multi-Family Housing)
DATE OF APPLICATION: August 11, 2004
APPLICANT: Richfield Senior Housing, Inc.
CONTACT PERSON: Chris Schmidt
TITLE: Director of Finance
ADDRESS: 7645 Lyndale Avenue South
Richfield, MN 55423
TELEPHONE (612) 243-4586
PROJECT NAME: Mainstreet Village
PROJECT LOCATION: 7601 Lyndale Avenue South
PROJECT INFORMATION
Independent Living
The mix of apartments availablefor lease and the monthly rent per apartment is as
follows:
Unit T e Number of
Bedrooms Number of
Baths Square
Foota a Number of
Units Monthly
Rent
A 1 1 724 11 $1,026
A+ 1 1 734 15 $1,041
B l 1 724 10 $1,026
B+ . 1 1 734 16 $1,041
10
037
$1
C 1 1 732 2 ,
086
$1
D 1 1 766 3 ,
D+ 1 1 803 1 $1,138
E 1 1 847 1 $1,200
E+ 1 1 857 2 $1,215
F 2 1 868 2 $1,231
F+ 2 1 878 4 $1,244
G 2 1 916 6 $1,299
H 2 2 945 1 $1,340
1 2 1 917 1 $1,300
J 2 1 966 1 $1,369
J+ 2 1 976 2 $1,384
K 2 1 980 1 $1,389
~
K+ 2 1 ~ 990 2 $1,404
L 2 2 1,007 33 $1,427
L+ 2 2 1,041 7 $1,475
~q 2 2 985 2 $1,397
M+ 2 2 995 2 $1,410
N 2 2 1,050 2 $1,489
O 2 2 1,202 1 $1,704.
O+ 2 2 1,212 2 $1,718
Total Units/ 130 $1,241
Weighted
Average Rent
One of the one-bedroom apartment units is occupied by a resident caretaker on a rent-free
basis. Garage spaces (71 spaces underground) are leased for $40 per month. Heat and water are
included in the monthly rent.
Assisted Living
~ The 31 assisted-living apartments range in size from 263 to 720 square feet.
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~ Three levels of care are provided. Base level includes the unit rent, utilities except phone
~ and cable television, three meals per day plus snacks, weekly housekeeping, laundry (3
~ loads/week), medication monitoring/administration, scheduled activities/transportation, 24 hour
~ emergency response, and staffing 24/7 by personal,care attendants. Levels One and Two include
~ Base plus assistance with bathing, dressing, grooming, and hygiene.
~ Charges for Base level care range between $2,115 and. $2,732 per month, depending on
apartment size. Level One is Base plus an additional $429 per month, and Level Two is Base
plus an additional $806 per month.
~ _ The average monthly charge is $2,707, which means that the average level of care is
~ between Base and Level One.
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OPERATING EXPENSES
% of Gross (Annual)
TOTAL PROJECT COST: $20,228,077
DEBT SERVICE: See Attached
DEVELOPER EQUITY: $600,000
*HARD COSTS: $11,608,000
LAND VALUE: $3,575,000 SOFT COSTS: $5,044,0001
*(Hard Costs are all project costs the IItS has determined to be eligible items for depreciation.)
1 Includes $1,948,000 funded interest and $1,659,000 debt service reserve fund. ,
ANTICIPATED INTEREST RATES: AMORTIZATION SCHEDULE:
6.58% TIC
35-Year Amortization Schedule
If the project were conventionally financed, what interest rate would you expect to pay?
7.5%
SALES ASSUMPTION:
DEPRECIATION METHOD:
How many years do you plan to Years: 40 (building)
- hold the property before you
sell? No plan to sell. Type: Straight Line
At what percent do you
feel the value of the project Amount of Total Basis: $17,542,000 (as of 4/Ol)
will appreciate? Unknown
EQUIPMENT:
$275,000 of project cost is for equipment (e.g., washers/dryers)
ANTICIPATED INCREASES: ANTICIPATED VACANCY RATE*:
First Year: 91/94%
Revenue: 3.50/5.0% per year
After First Year: 93/94%
Expenses: 4.0% per year
* Independent Living/Assisted Living
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CONSTRUCTION SCHEDULE
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Anticipated construction commencement date: N/A
Anticipated construction completion date: N/A
ADDITIONAL INFORMATION:
The application is for a refunding of outstanding City of Richfield bonds issued in 2000.
Attached is a copy of a letter to the City outlining, the circumstances surroundin thequest.
I certify that the information provided above contains no misrepresentations, omissions or
concealments of material facts and that the information given is true and complete to the best of
my knowledge. I have been furnished a copy of the Procedure for Application to the City of
Richfield for Private Activity Revenue Bond Financing and is aware of its content and agree to
be bound by its terms and the terms of the indemnification letter.
Signature
Chris Schmidt
August 11, 2004
Date
Director of Finance
Title
13
PART VI
ADDENDUM TO APPLICATIONS
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The following items must be attached to each application:
APPENDIX A
A brief description of the organizational structure of Applicant, including parent subsidiary and
affiliate organizations (if applicant is other-than an individual).
APPENDIX B
Statement of Applicant's business history, including any multi-family rental projects.
APPENDIX C
The name, address, and telephone number of:
1. The Applicant's legal counsel
2. The Applicant's accountant
3. "The architect of the proposed Project
4, The engineer of the proposed Project
$. The general contractor of the proposed Project
APPENDIX D
1. Present ownership of the proposed Project site and Applicant's interest therein.
2. Present zoning of the Project site and a description of what city land use approvals are
needed for this project.
3. The projected number of new employees to be added to the Applicant's permanent work
force because of the Project (for Commercial, Industrial or Health Care only).
4. Other financing attempted or available to the Project including any interim financing.
5. Statement regarding whether or not this project has all required city approvals. If the
project does not have all of the required approvals, list the approvals still needed and a
tentative time schedule.
APPENDIX E
Indemnification Letter of Agreement.
APPENDIX P
Proforma Analysis of the Project
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APPENDIX A
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General
Richfield Senior Housing, Inc. (the "Company"), is a Minnesota nonprofit corporation,
organized in 1998 exclusively for the purpose of constructing, owning, and operating the Project.
Governance and Management
The management and direction of the business of the Company is vested in its Board of
Directors. The number, terms of office, powers, authorities and duties of the directors of the
Company, the time and place of their meetings, and such other regulations with respect to them
as are not inconsistent with the express provisions of the Articles of Incorporation of the
Company shall be as specified from time to time in the Bylaws of the Company. The Board of
Stewards of the Minnesota Baptist Conference ("MBC") will approve and appoint 2 members of
the Company's Board and the Board of Directors of Twin City Christian Homes, Inc., the
Company's parent organization, will approve and appoint 3 members of the Board.
Affiliated Organizations
The Company is a member of a family of organizations headed by Twin City Christian Homes,
Inc., a Minnesota nonprofit corporation formed in 1985. None of the Company's affiliates are
obligated with respect to the Series 2004 Bonds. The following is provided for background
information only.
Edendale Residence, Inc., operates a 61-unit Housing and Urban Development (HUD), Section
202, senior citizen apartment building in Eden Prairie, Minnesota.
Twin City Christian Homes Foundation was formed to solicit contributions from donors and to
expend them for the purposes restricted by the donors, or for the purposes of Twin City Christian
Homes, Inc., as appropriate. The current balance of foundation assets is $53,000.
Twin City Christian Homes Services Company was formed to provide business services and
other support to Twin City Christian Homes, Inc., and its affiliate organizations. This
organization is the property manager of the Project.
Twin City Christian Homes Management Company, Inc., afor-profit affiliate, was formed to
provide management and consulting services to unrelated organizations. Currently, this
organization provides management services for senior independent living facilities in Champlin,
Minnesota and Blaine, Minnesota. These facilities are owned by the respective municipalities.
This organization has also provided management services for numerous senior facilities that
were privately owned.
Shoreview Senior Residence (d/b/a Scandia Shores) operates a 108-unit independent senior
living facility in Shoreview, Minnesota.
WestRidge Senior Housing, Inc. operates a 106-unit independent senior living facility in
Minnetonka, Minnesota.
The purpose of Twin City Christian Homes, Inc., and its affiliate organizations is to provide
elderly persons suitable housing facilities, health care, and support services.
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APPENDIX B
Richfield Senior Housing, Inc. was organized in 1998 for the purpose of constructing, owning
and operating Mainstreet Village Senior Housing.
Phase One (Independent Living) opened in December 2000 for occupancy. Phase Two
(Independent Living and Assisted Living) opened in Apri12001.
The Project is attached to an office development that is constructed over part of the underground
parking garage. The office building contains three floors and approximately 40,700 gross square
feet. Approximately 4,400 square feet of the office building is a condominium unit owned by the
Company and leased to Twin City Christian Homes, Inc. for its administrative offices. This
portion of the office building was financed as part of the Project. The remainder of the office
building condominium units are owned and financed by Main Street Office, LLC, an entity
controlled by three individuals, two of whom are principals with Tushie Montgomery Associates,
Inc. and Weis Builders, Inc., the architect and general contractor, respectively, for the Project.
These condominium units are not part of the Project and are not subject to the Mortgage. Sixty
(60) parking spaces in-the underground parking garage are leased by the Company to Main Street
Office, LLC, for $22 per space per month.
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APPENDIX C
The Applicant's Legal Counsel
Charles Bans, Esq.
Maslon Edelman Borman & Brand, LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Phone: (612) 672-8318
The Applicant's Accountant
Daniel A. Vandenberghe
McGladrey & Pullen, LLP
801 Nicollet Avenue, Suite 1300
Minneapolis, MN 55402-2529
Phone: (612) 376-9267
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The Architect of the Project
Gary Tushie
President
Tushie Montgomery Architects, Inc.
7645 Lyndale Avenue South, #100
Richfield, MN 55423
Phone: (612) 861-9636
The Engineer of the Project
Jay Weis
Weis Builders Inc.
7645 Lyndale Avenue South
Richfield, MN 55423
Phone: (612) 243-5000
The General Contractor of the Project
Jay Weis
Weis Builders Inc.
7645 Lyndale Avenue South
Richfield, MN 55423
Phone: (612) 243-5000
APPENDIX D
1. Richfield Senior Housing, Inc. owns the Project and Project site.
2. Existing Project meets City requirements.
3. Existing Project - no new employees will be added.
4. Original Financings - $19,500,000
City of Richfield, Minnesota
Senior Housing Revenue Bonds
(Richfield Senior Housing, Inc. Project) ,
Series 2004A
$405,000
City of Richfield, Minnesota
Taxable Senior Housing Revenue Bonds
(Richfield Senior Housing, Inc. Project)
Series 2004B
5. Existing Project has all required City approvals.
DOUGHERTY & COMPANY LLC
August 10, 2004
Mr. Chris Regis
Finance Director
City of Richfield, Minnesota
6700 Portland Avenue
Richfield, Minnesota 55423
RE: City of Richfield, Minnesota
Senior Housing Refunding Revenue Bonds
(Richfield Senior Housing, Inc. Project)
Series 2004
Dear Mr. Regis:
In February 2000, the City of Richfield, Minnesota (the "City") issued conduit tax-exempt senior
housing revenue bonds on behalf of Richfield Senior Housing, Inc. ("RSH"), a qualified
501(c)(3) operating as Mainstreet Village. Mainstreet Village is comprised of 130 senior rental
apartments and 31 assisted living units.
As you may be aware, RSH became obligated to the City in connection with the use of so called
"quick take" condemnation proceedings for the Mainstreet Village redevelopment site. As the
result of valuation appeals by some original property. owners, subsequent to the quick take
proceedings, the ultimate condemnation awards exceeded appraisers' original estimates by more
than $500,000. Consequently, RSH currently owes the City $338,251.76 as evidenced by a
promissory note dated April 1, 2002.
Mainstreet Village opened on schedule, leased up in accordance with original projections, and
rents at projected levels, however certain cost overruns were sustairied. The cost overruns
include the additional condemnation awards discussed above and significant overtime to
complete work the City Fire Chief required prior to issuing a Certificate of Occupancy. It was
originally understood that certain work on the unfinished Phase II portion of the building would
not be necessary to permit "move ins" in the first phase of the project. The fire department
reserved their original position and the additional labor costs were necessary to meet tenant lease
obligations at Phase I.
Certain revenues have been lower than projected including tax increment revenues due to the
reclassification of two properties within the TIF district resulting from legislative changes in
commercial property tax rates.
K:\W PDATA\MBL\TCCMRichfield 2004\Regis City Lettet.doc
90 SOUTH SEVENTH STREET • SUITE ¢¢00 • MINNEAPOLIS, MINNESOTA $$¢02.¢II$
61x.376.4000 • 8oo.3a8.4oo0
MEn+ase SIPC a NASD
Mr. Chris Regis
August 10, 2004
Page 2
The cost overruns listed above are not exhaustive but are a summary of expenses having a
negative effect on RSH operating results over which RSH had very limited, if any control.
Through July of 2004, the sponsor of RSH, Twin City Christian Homes ("TCCH") has
contributed approximately $1,200,000 to RSH to support cash flow shortages. These
contributions were not required under any document related to the bond issue. As of August
2004, TCCH has largely exhausted its cash reserves and cannot support RSH cash flow shortfalls
going forward.
~, n analysis of the RSH financial situation by Dougherty & Company LLC has determined that
the project would cash flow at current interest rates, however, the bonds are not currently
callable. An analysis of the savings generated by an "advance refunding" indicate negative
savings due to the long period to the first call date and significant negative arbitrage in the
refunding escrow.
After discussions with U.S. Bank, the trustee for the issue, and American Express, the holder of
approximately 72% of the outstanding bonds, the following plan was agreed to.
On August 20, 2004, the RSH bonds will go into default resulting from a missed payment due
the trustee under the Loan Agreement. This is not a missed payment to bondholders, but does
trigger a default under the bond indenture. U.S. BBank has stated they will immediately declare
the bonds due and payable at par. The notice of default to bondholders will include a discussion
of the anticipated restructuring.
Contemporaneously, the City would authorize the issuance of new bonds that will pay off
existing bondholders at par and pay all amounts due the City as a result of the condemnation
appeal proceedings.
In reviewing the City's November 2002 Procedure for Application for Revenue Bond Financing,
we note that several requirements that did not exist when the original bonds were issued.
Specifically, the application refers to an issuers fee of .00125 per annum. Based on preliminary
estimates, this amounts to approximately $25,000 annually. In consideration of the hardship
currently experienced by RSH, the additional $1,200,000 equity contributed by TCCH and RSH
willingness to pay all amounts presently due the City, we respectfully request a waiver of this
fee. We believe the projected debt service coverage to be sufficient to sell the new bonds but the
margin is not significant. An additional $25,000 of annual expense would have a material effect
on coverage calculations and potentially interest rates on the new bonds.
_ Further, the new City policy places certain restrictions on the sale of non-rated bonds to retail
investors. Given the willingness of the retail marketplace to accept more aggressive pricing, we
K:\W PDATAUABL\TCCH~Richfield 2004\Regis City Letter.dac
Mr. Chris Regis
August 10, 2004
Page 3
hereby request a waiver of these investor restrictions. Be advised Dougherty & Company LLC
underwrites to a higher credit standard for issues sold on a retail basis.
On behalf of RSH, thank you for your consideration of our request. A formal application to the
City will be filed under separate cover. If you have immediate questions or concerns, please
contact either the undersigned at (612) 376-4014 or Mr. Chris Schmidt, Finance Director,
Richfield Senior Housing at (612) 243-4586.
Respectfully submitted,
2u~~-
Mark B. Landreville
Executive Vice President
MBL:cn
cc: Chris Schmidt, Richfield Senior Housing, Inc.
Steve Bubul, Kennedy & Graven, Chartered
John Green, Gray, Plant, Mooty, Mooty & Bennett, P.A.
Sid Inman, Ehlers & Associates, Inc.
Cindy Schroer, Dougherty & Company LLC
K\WPDATAUABL\TCCH~Richfield 2004\Regis City Letter.doc
AGENDA SECTION: Consent
AGENDA ITEM # 4$
REPORT # L 3 ~
~~' STAFF REPORT
CITY COUNCIL MEETING
AUGUST 24, 2004
Related to:
CITY COUNCIL, GOAL(S) NO. NA AND/oR RICHFIELD 2020 GOAL(S) NO NA
STEVEN L. DEVICH,
REPORT PREPARED BY: ADMINISTRATIVE SERVICES DIRECTOR
NAME, TITLE
COUNCIL PRESENTER:
NAME, TIT
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
i
REVIEWED BY CITY MANAGER:
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the attached resolution establishing authority for a Health Care Savings Plan
for Police Patrol Officer/Detective Bar ainin Unit Em to ees.
I. RECOMMENDED ACTION:
By Motion: Adopt the attached resolution authorizing the city
Manager to execute a Letter of Agreement establishing a Health Care
Savings Plan for Police Patrol Officer/Detective bargaining unit
employees LELS Local #123.
~IL BACKGROUND (BACKGROUND ~
In 2001 the Minnesota legislature granted authority to the Minnesota State
Retirement System (MSRS) to offer a post retirement health care savings plan to
eligible employees of the State of Minnesota and other governmental subdivisions.
MSRS was authorized to administer these plans after they were adopted by
governmental subdivisions throughout the state.
8/24 Police HCSP
A post retirement health care savings plan is an employer-sponsored program that
allows employees to save money to pay medical expenses and/or health insurance
premiums after termination of public service. 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.
Legal authority to establish such plans is provided through Minn. Stat. 352.98 and
Internal Revenue Service rulings. The establishment of each plan, including
contribution formula 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 the program.
Participation for each individual employee within a bargaining 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 may vary, however.
To date, General Services, Management and the Police Supervisory employee
groups have established aCity-approved Health Care Savings Plan. The Police
Patrol Officers/Detectives bargaining unit, which is comprised of approximately thirty
(30) members, has approved the attached plan based upon a majority vote of the
eligible employees voting on the matter.
III. BASIS OF RECOMMENDATION ~
A POLICY
The state statutes have been amended to provide the opportunity for a
very valuable benefit to city employees. The City of Richfield is
pursuing this benefit with 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 program for employees, who are
represented by a collective bargaining agreement through the Law
Enforcement Labor Services, Local #123.
B. CRITICAL ISSUES
There is no time-critical issue pertaining to the implementation of this
plan. However, the Police Officer/Detective bargaining unit has
expressed a desire to implement the program effective November 1,
2004.
After City approval, this plan must be submitted to MSRS for their
approval and filing.
C. FINANCIAL
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 retirement medical costs.
D. LEGAL
There is legal authority for this plan in Minnesota Statutes and IRS
Code.
A Letter of Agreement between the City of Richfield and LELS, Local
#123 will provide the full local authorization for this plan.
IV ALTERNATIVE RECOMMENDATION(S) ~
The City Council could decide not to approve this plan or to pursue a change
to the employee contribution limits proposed. However, if the City Council
chooses to do so, this program must be renegotiated with the employee
group, if there is still an interest to proceed.
V ATTACHMENTS
Resolution.
Letter of Agreement -Police Patrol/Detective .Health Care Savings Plan
VI. PRINCIPAL PARTIES EXPECTEB AT MEETING
None
RESOLUTION NO.
RESOLUTION APPROVING LETTER OF AGREEMENT BETWEEN THE CITY OF
RICHFIELD AND LAW ENFORCEMENT LABOR SERVICES. (EELS), LOCAL 123
ESTABLISHING A POST RETIREMENT HEALTH CARE SAVINGS PLAN
WHEREAS, Laws of Minnesota 2001, chapter 352.98, authorizes the Minnesota
State Retirement System (MSRS) to offer a Post Retirement 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 is interested in offering the 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, the provisions of a Plan have been agreed upon by police
officer/detective employees represented by EELS, Local 123.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Richfield hereby approves a Letter of Agreement establishing a Health Care Savings Plan
for police officer/detective employees represented by EELS, Local 123 in the City of
Richfield.
Adopted by the City Council of the City of Richfield, Minnesota this 24th day of
August 2004.
Martin J. Kirsch, Mayor
ATTEST:
Nancy Gibbs, City Clerk
Police Patrol/Detective
Post Retirement Health Care Savings Plan
Memorandum of Agreement
Between
The City of Richfield &LELS Local 123
Effective Date: October 1, 2004
Plan Purpose The Citv of Richfield and the Police PatroUDetective (LELS Local
#123 bargaining unit are 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
Retirement Health Care Savings Plan, administered by the Minnesota
State Retirement System (MSRS), is intended to provide an opportunity
to accomplish that goal.
Post Retirement A Post Retirement 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 Employees' bi-weekly 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 Police PatroVDetective HCSP is mandatory for all
Participate employees that meet the following requirements:
1. The Employee must be a member of the Richfield Police
PatroUDetective Bargaining Unit at the time of termination of
employment, 'and
2. The Employee must have been employed by the City of Richfield for
at least 5 consecutive years.
Contribution Mandatory participation in the Police PatroUDetective HCSP shall be in
Formula accordance with, and limited to the following formulas for contributions:
I. Bi-weekly Contribution
1. An eligible Employee with more than 5 but less than 10 years of service must
contribute $15 per pay period to the Employee's account in the Police
Patrol/Detective HCSP. Such contributions shall not exceed $15 per pay period.
2. An eligible Employee with more than 10 but less than 15 years of service must
contribute $20 per pay period to the Employee's account in the Police
PatroUDetective HCSP. Such contributions shall not exceed $20 per pay period.
3. An eligible Employee with more than 15 but less than 20 years of service must
Contribute $ZSper pay period to the Employee's account in the Police
Patrol/Detective HCSP. Such contributions shall not exceed $25 per pay period.
4. An eligible Employee with more than 20 years of service must contribute $30 per
pay period to the Employee's account in the Police Patrol/Detective HCSP. Such
contributions shall not exceed $30 per pay period.
II. Severance Contribution
1. Severance based on all accumulated but unused Personal Leave, Vacation
Leave, and Holiday Leave hours shall be paid as a credit to the Employee's
account in the Police PatroUDetective HCSP.
2. Severance based on all accumulated but unused Compensatory Time hours shall
be paid as a credit to the Employee's account in the Police PatroUDetective
HCSP.
3. All severance payments based upon Personal, Vacation and Holiday Leaves are
calculated as described above, by multiplying the number of hours by the
applicable rate of pay upon termination.
Contributions authorized under this Plan shall continue until such time as this
memorandum is amended or repealed by the City of Richfield and LELS-Local 123.
HCSP The HCSP is authorized under the Internal Revenue Code and is
Administration administered by the Minnesota State Retirement System.
FOR THE CITY OF RICHFIELD: For LELS #123)-F@I~ICE PATROL/DETECTIVES:
City Manager
Administrative Services Director
e~ ~~/
G
Union representative
.
Union repres tive
AGENDA SECTION: Consent
AGENDA ITEM # A
REPORT #
STAFF REPORT
CITY COUNCIL MEETING
AUGUST 24, 2004
Related to:
CITY COUNCIL GOAL(S) NO. N/A
REPORT PREPARED BY:
AND/OR RICHFIELD 2020 GOAL(S) NO ~ , 'I ~
CHRISTINE COSTELLO, ZONING
ADMINISTRATOR
NAME, TITLE
COUNCIL PRESENTER:
DEPARTMENT DIRECTOR
REVIEW:
REVIEWED BY CITY
MANAGER:
SIGNATURE
~--
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution calling for a study and a moratorium for floodplain regulations,
and first readin of transito ordinance establishin a moratorium for flood lain re ulations.
I. RECOMMENDED ACTION:
By motion: Adopt the attached resolution calling for a moratorium on
the city's floodplain regulations.
By Motion: Conduct a first reading of the attached ordinance
directing that a study be conducted and a moratorium be established
for development in the floodplain area and set a date of September
16, 2004, for a second reading of the ordinance establishing a
moratorium until permanent floodplain regulations are ado ted.
II. BACKGROUND
• The Federal Emergency Management Agency (FEMA) is currently in the
process of updating all flood insurance rate maps.
082404-FloodplainOrd-TransitoryOrd.doc
• The flood insurance rate maps are used for the National Flood Insurance
Program (NFIP).
• The NFIP is a federal program under which flood-prone areas are identified
`~--' and flood insurance is made available to communities.
• The City of Richfield has participated in NFIP since 1975.
• In 1981 the flood hazard boundary map for the City of Richfield was
rescinded by FEMA because it was determined that Richfield would not be
inundated by the base flood, which is the flood having a one percent chance
of being equaled or exceeded in any given year.
• Richfield has remained a part of NFIP however, and insurance coverage is
offered on a voluntary basis.
• There are currently seven flood insurance policies in force in Richfield on
improved residential property providing a total of $1,051,300 of flood
insurance coverage.
• Not participating in the program would drop and eliminate any current or
future policies for residents in Richfield.
• Richfield currently has Floodplain Management Regulation in Section 538 of
the Zoning Ordinance.
• The purpose of Section 538 is to promote floodplain management program
consistent with the surface water management plans of the Minnehaha
Watershed District and to maintain eligibility in NFIP.
• The current floodplain management regulations are not considered sufficient
by FEMA in order to maintain our eligibility in NFIP. Therefore, FEMA is
requiring the adoption of a new/revised ordinance.
• The purpose of the moratorium is to allow staff sufficient time to revise the
currenfi ordinance to meet with FEMA requirements to allow Richfield to
maintain it's eligibility in NFIP.
III. BASIS OF RECOMMENDATION
A. POLICY
• State Statute 462.355 allows the City to adopt an interim ordinance for
the purpose of protecting the planning process and the health, safety,
and welfare of its citizens.
B. CRITICAL ISSUES
• If Richfield does not adopt a new floodplain ordinance the City will lose
the ability to participate in NFIP, and the flood insurance policies that
are in force will not be renewed.
• According to FEMA there is no floodplain map because there is no
floodplain. Because there is no floodplain practically speaking the
moratorium has no impact and property owners will be able to engage
in "development" activities as defined in the resolution. (As strange as
this all may sound it is a process recommended by FEMA to maintain
Richfield's eligibility in NFIP and make it possible for residents to
_ ' purchase flood insurance should it be necessary for them to do so.)
C. FINANCIAL
• N/A
D. LEGAL
• State Statute 462.355 allows the City to adopt an interim ordinance for
the purpose of protecting the planning process and the health, safety,
and welfare of its citizens.
• The City Attorney has reviewed this matter and recommends that the
Planning Commission and Engineering Department develop
regulations for floodplain ordinance for the City Council's
consideration.
• The moratorium would be in effect until October 31, 2004, or until the
effective date of a permanent floodplain management ordinance
whichever is earlier.
IV. ALTERNATNE RECOMMENDATION(S~
• Deny the request for adopting a temporary moratorium by ordinance. This
would eliminate Richfield and its residents from the NFIP program. This may
have an adverse impact on properties or the City as a whole if any of the
policies are tied to an existing mortgage loan of a homeowner.
V. ATTACHMENTS
• Resolution
Transitory Ordinance
State Statute 462.355
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
RESOLUTION NO.
RESOLUTION AUTHORIZING A STUDY TO DETERMINE REQUIRED AMENDMENTS
TO THE CITY'S FLOODPLAIN REGULATIONS AND ESTABLISHING A MORATORIUM
ON
DEVELOPMENT IN THE FLOODPLAIN AREA
WHEREAS, the City has participated in the National Flood Insurance Program
since 1975; and
WHEREAS, current National Flood Insurance Program regulations require that the
a d update and adopt a new floodplain management ordinance by September 2, 2004;
WHEREAS, the City wishes to maintain its eligibility in the National Flood Insurance
Program and failure to adopt the required ordinance within the time period allowed could
subject the City to suspension from the program; and
WHEREAS, the time period in which to update the flood plain ordinance will expire
without the City Council agreeing on the necessary language for the ordinance; and
WHEREAS, the City deems it desirable and necessary to place a temporary
moratorium on new development within the floodplain area in order to allow the City time to
revise its official controls as required by the state and federal government.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield,
Minnesota as follows:
1. The City staff is directed to conduct a study and determine the necessary
revisions to the City's floodplain regulations.
2. Upon completion of the study, the matter is to be considered by the Planning
Commission for its review and recommendation to the City Council.
3. A moratorium on new development within the floodplain area of the City is
hereby adopted pending completion of the study and the adoption of any amendments to
the City's floodplain regulations.
4. For the purpose of this moratorium, "development" shall mean new building
construction, placement of manufactured or modular structures and recreation vehicles,
substantial improvements or substantial repairs to existing structures, filling, paving,
mining, excavating, dredging, and similar activities, utilities, levee, dike, or dam
construction, and any other activity that may change the course of surface waters. For the
purposes of this moratorium, "floodplain" shall be that area referred ~ to in the City's
Comprehensive Surface Water Management Plan.
5. This Resolution shall expire on October 31, 2004, or at such earlier date as
may be further determined by the City Council.
Adopted by the City Council of the City of Richfield, Minnesota this day of
August, 2004.
Martin J. Kirsch, Mayor
ATTEST:
Nancy Gibbs, City Clerk
082404-Flood pla i nOrd-Tran sitoryOrd. doc
BILL NO. 2004-
TRANSITORY ORDINANCE NO.
AN INTERIM ORDINANCE ESTABLISHING A SHORT MORATORIUM
ON DEVELOPMENT IN THE FLOODPLAIN AREA IN ORDER TO
ENACT REQUIRED OFFICIAL CONTROLS
THE CITY OF RICHFIELD DOES ORDAIN:
Section 1. Background.
1.01. The City wishes to temporarily prevent development in the City's floodplain
area until it has an opportunity to revise its official controls required by the state and
federal government.
1.02. The City wishes to maintain its eligibility in the National Flood insurance
Program, which requires participating communities to adopt and enforce floodplain
management regulations meeting minimum federal and state requirements in return
for federally backed flood insurance being made available throughout the
community.
1.03. The City of Richfield has voluntarily participated in the National Flood
insurance Program since 1975.
1.04. Minnesota Statutes, Section 462.355, subd. 4, allows the City to adopt an
interim ordinance for the purpose of protecting the planning process and-the health,
safety and welfare of its citizens.
Section 2. Findings.
2.01. The City Council finds it necessary to review and amend its official controls
relating to floodplain management.
2.02. The City Council finds that the adoption of an interim ordinance for the
floodplain area is essential to enable it to preserve the planning process and to
protect the health, safety and welfare of the citizens of the City.
2.03. The time allowed by the federal government for the City to update its
floodplain management regulations will expire on September 2, 2004, without the
City Council agreeing on necessary language in such regulations.
2.04. The National Flood Insurance Program regulations require that an updated
floodplain management ordinance be adopted by September 2, 2004, or the City
will be suspended from the program for failure to adopt the necessary regulations
and such suspension would mean an immediate loss of flood insurance benefits to
the community and perhaps an increased exposure to flood risk.
Section 3. Planning and Zoning Study~ Moratorium.
3.01. The City Council deems it in the best interest of the residents of Richfield to
adopt a temporary moratorium on all new development within the floodplain area of
the City, which shall include those areas designated or otherwise defined by the
City as being within the 100-year floodplain. The boundaries of the floodplain shall
be that area that could be inundated by a flood that has a one percent chance of
being equaled or exceeded in any given year. All decisions will be based on
elevations of the 100-year floodplain and other available technical data. For the
purposes of this moratorium, "floodplain" shall be that area referred to in the City's
Comprehensive Surface Water Management Plan.
3.02. For the purpose of this moratorium, "development" shall mean new building
construction, placement of manufactured or modular structures and recreation
vehicles, substantial improvements or substantial repairs to existing structures,
filling, paving, mining, .excavating, dredging, and similar activities, utilities, levee,
dike, or dam construction, and any other activity that may change the course of
surface waters.
Section 4. Enforcement.
4.01. The City may enforce any provisions of this ordinance by mandamus,
injunction or other appropriate civil remedy in any court of competent jurisdiction.
Section 5. Term.
5.01. The temporary moratorium will be in effect until October 31, 2004, or until the
effective date of a permanent floodplain management ordinance, whichever is
earlier. The moratorium may be further extended as allowed under Minnesota
Statutes Section 462.355, subd. 4.
Section 6. Resolution Repealed.
6.01. Resolution No.
Ordinance.
is repealed upon the effective date of this
Passed by the City Council this 24th day of August, 2004.
ATTEST:
Martin J. Kirsch, Mayor
Nancy Gibbs, City Clerk
MN Statute 462.355 Prepare, adopt, and amend comprehensive municipal plan
Subdivision 1. Preparation and review. The planning agency shall prepare the
comprehensive municipal plan. In discharging this duty the planning agency shall consult
with and coordinate the planning activities of other departments and agencies of the
municipality to insure conformity with and to assist in the development of the
comprehensive municipal plan. In its planning activities the planning agency shall take due
cognizance of the planning activities of adjacent units of government and other affected
public agencies. The planning agency shall periodically review the plan and recommend
amendments whenever necessary.
Subd. 1a. Plan update by metropolitan municipalities. Each municipality in the
metropolitan area, as defined in section 473.121, subdivision 2, shall review and update its
comprehensive plan and fiscal devices and official controls as provided in section 473.864,
subdivision 2.
Subd. 2. Procedure for plan adoption and amendment. The planning agency may,
unless otherwise provided by charter or ordinance consistent with the municipal charter,
recommend to the governing body the adoption and amendment from time to time of a
comprehensive municipal plan. The plan may be prepared and adopted in sections, each
of which relates to a major subject of the plan or to a major geographical section of the
municipality. The governing body may propose the comprehensive municipal plan and
amendments to it by resolution submitted to the planning agency. Before adopting the
comprehensive municipal plan or any section or amendment of the plan, the planning
agency shall hold at least one public hearing thereon. A notice of the time, place and
purpose of the hearing shall be published once in the official newspaper of the municipality
at least ten days before the day of the hearing.
Subd. 3. Adoption by governing body. A proposed comprehensive plan or an
amendment to it may not be acted upon by the governing body until it has received the
recommendation of the planning agency or until 60 days have elapsed from the-date an
amendment proposed by the governing body has been submitted to the planning agency
for its recommendation. Unless otherwise provided by charter, the governing body may by
resolution by atwo-thirds vote of all of its members adopt and amend the comprehensive
plan or portion thereof as the official municipal plan upon such notice and hearing as may
be prescribed by ordinance.
Subd. 4. Interim ordinance. If a municipality is conducting studies or has authorized a
study to be conducted or has held or has scheduled a hearing for the purpose of
considering adoption or amendment of a comprehensive plan or official controls as defined
in section 462.352, subdivision 15, or if new territory for which plans or controls have not
been adopted is annexed to a municipality, the governing body of the municipality may
adopt an interim ordinance applicable to all or part of its jurisdiction for the purpose of
protecting the planning process and the health, safety and welfare of its citizens. The
interim ordinance may regulate, restrict or prohibit any use, development, or subdivision
within the jurisdiction or a portion thereof for a period not to exceed one year from the date
it is effective, and may be extended for such additional periods as the municipality may
deem appropriate, not exceeding a total additional period of 18 months. No interim
ordinance may halt, delay, or impede a subdivision, which has been given preliminary
approval prior to the effective date of the interim ordinance.