06-18-01 agendaCITY OF RICHFIELD, MINNESOTA
HOUSING AND REDEVELOPMENT AUTHORITY
MONDAY, JUNE 18; 2001
• RICHFIELD CITY HALL
6700 PORTLAND AVENUE
COUNCIL CHAMBERS
7:00 P.M.
AGENDA
Call to order
-Approval of minutes of-Regular HRA Meeting-wf May 21, 2001
1. Opportunity for citizens to address the HRA on items not on the agenda
Notes:
2. HRA approval of agenda
3. Consent Calendar contains several separate items which are acted. upon by the
HRA in one motion. Once the Consent Calendar has been approved, the individual
items and recommended actions have also been approved. No further HRA action
• is necessary. However, any HRA Commissioner may request that an item be
removed from the Consent Calendar and placed on the regular agenda for HRA
discussion and action. All items listed on the Consent Calendar are recommended
for approval
A. Consideration of approval of resolution ratifying staff approval of just compensation for
remnant parcels within the Interchange West Redevelopment Area S.R. No. 46
Notes:
4. Consideration of resolution .approving and ratifying financial transactions related to
certain tax increment financing districts; and resolution ratifying and approving a
repayment schedule for interfund loans related to the Richfield Rediscovered. Program
Staff Report No. 47
Notes:
5. Council request to HRA regarding Lyndale Gateway redevelopment
6. Claims and payroll
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.
•
STAFF REPORT
AGENDA ITEM # 4
REPORT # /~.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JUNE 18, 2001
•
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
KATIA MEDVETSKI,
REDEVELOPMENT SPECIALIST
NAME, TITLE
CHRIS REGIS, FINANCE MANAGER
ITEM FOR HRA CONSIDERATION:
Review the Financial Reporting Analysis Tax Increment Districts, Richfield Rediscovered,
dated May 16, 2001, by HLB Tautges Redpath, Ltd. and consider (1.) a resolution approving
and ratifying financial transactions related to certain tax- increment financing districts; and (2.) a
resolution ratifying and approving a repayment schedule for interfund loans related to the
Richfield Rediscovered Program.
I. RECOMMENDED ACTION:
By Motion: Adopt (1.) the attached resolution approving and ratifying
financial transactions related to certain tax increment financing
districts; and (2.) the attached resolution ratifying and approving a
repayment schedule for interfund loans related to the Richfield
Rediscovered Program.
II. BACKGROUND
On November 20, 2000, the Housing and Redevelopment Authority (HRA) was
presented with the Financial Reporting Analysis Tax Increment Districts, Lyndale-
Hub-Nicollet (LHN), Interstate-Lyndale-Nicollet (ILN), and Cedar Avenue Business
Area (CABA), dated November 10, 2000, as prepared by the City's/HRA's certified
public accountant (CPA)/auditor, HLB Tautges Redpath, Ltd. in conjunction with
Ehlers & Associates and staff. Upon review of this report, the HRA adopted a
0618_RRkm.doc
NAME, TITLE
resolution approving and ratifying financial transactions relating to these tax
• increment financing (TIF) districts. The report currently being presented is similar to
the aforementioned report but represents the analysis for the Richfield
Rediscovered New Construction Housing Program (RR Program) and its relevant
TIF districts. It is titled "Financial Reporting Analysis Tax Increment Districts,
Richfield Rediscovered, dated May 16, 2001" (RR Report). This is the final report in
the series of analyses undertaken to date.
The need for the detailed financial analyses stemmed from changes in TIF reporting
requirements and impacts of those changes on transactions from the time of
inception of each TIF districf. Furthermore, the interpretations of the TIF law being
made by the Office of the State Auditor (OSA) and attorneys who specialize in TIF
matters also necessitated a review.
The detailed objectives of the RR Report are stated on page 3 of the RR report
(attached) and summarized as follows:
• Identify the remaining TIF account balances through review of audited financial
statements;
• Define the funds in which the balances reside;
• Segregate residual balances into unspent tax increment revenue and non-tax
increment revenue; and
• Amend balances, where appropriate, in tax increment reports to the OSA.
• Page 4 of the report summarizes the process that was undertaken for the analysis
while page 5 provides the recommendations that require implementation. Item
number 1 of the recommendations relates to the need for the HRA and City to ratify,
by resolution, the financial transactions that were undertaken over the course of
time since the various Richfield Rediscovered TIF districts were. established.
Exhibit A to the RR Report, titled "Interfund Transfers to Richfield Rediscovered
Program" provides the detailed yearly activity from 1990 - 1999.
As you may recall, from 1990 - 1992, the Water Utility Fund, Sewer Utility Fund, and
LHN TIF Fund were revenue sources used to establish the RR program. The HRA
and City forgave repayment to the LHN TIF fund in November 1999. The last
repayment to the Water and Sewer Funds were made in 1998. One of the
recommendations in the RR Report (item number 6) indicates the need to document
a repayment schedule for the remaining balance of the Water and Sewer Fund
Loan. Exhibit B to the RR Report, titled "Richfield Rediscovered Interfund Loan
Amortization Schedule" shows the remaining balances of each utility fund and
amount of annual repayment required to payoff the loans by the year 2020. The
HRA and City need to approve this repayment schedule by resolution before
repayment begins again.
Additional recommendations within the RR Report are directives to staff and
consultants for other work to be undertaken as it related to the RR program,
• including revising the OSA reporting forms to be in conformance with the RR
Report.
• III. BASIS OF RECOMMENDATION
A. POLICY
• Managing the program must be sensitive to and recognize the fact
that laws and regulations change.
B. CRITICAL ISSUES
• Recommendations stated in the RR Report need to be implemented
as soon.as possible.
• On November 20, 2000, the HRA was presented with and reviewed
the Financial Reporting Analysis Tax Increment Districts for LHN, ILN,
and CABA and adopted a resolution approving and ratifying financial
transactions relating to the LHN, ILN, and CABA TIF Districts.
• On November 27, 2000, the City Council was presented with and
reviewed the Financial Reporting Analysis Tax Increment Districts for
LHN, ILN, and CABA and adopted a resolution approving and ratifying
financial transactions relating to the LHN, ILN, and CABA TIF districts.
• The City Council will be presented with the RR Report at their meeting
of June 25, 2001 and also consider adopting resolutions (a.) ratifying
and approving financial transactions related to Richfield Rediscovered
and (b.) ratifying and approving -the repayment schedule for interfund
• loans related to the Richfield Rediscovered Program.
C. FINANCIAL
• The interfund loan transfers to the RR Program and repayments to the
loans through 1999 are delineated in Exhibit A of the RR Report.
• The amortization schedule (Exhibit B to the RR Report) provides a
means for the City to receive repayment of the funds advanced to
initiate the program.
• Please refer to the attached RR Report for other detailed information.
D. LEGAL
• The HRA's financial consultants, CPA/auditor, legal counsel, and staff
have prepared the financial report and analysis in accordance. with
applicable state laws and regulations, federal law pertaining to bonds,
and generally accepted accounting principles and practices for
government.
IV. ALTERNATIVE RECOMMENDATION(S~
• The HRA could delay or not adopt either of the proposed resolutions at this
time. However, time is of the essence as the TIF reports required by the
OSA are due by August 1, 2001. ,Also, the financial analysis and other
• pertinent information tied to the audited financial statements for the year
ending 2000 have recently been completed by the City.
• V. ATTACHMENTS
• Resolution approving and ratifying financial transactions related to certain tax
increment financing districts.
• Resolution ratifying and approving repayment schedule for interfund loans
related to the Richfield Rediscovered Program.
• Financial Reporting Analysis Tax Increment Districts, Richfield Rediscovered,
by HLB Tautges Redpath, Ltd., dated May 16, 2001 (Exhibits A and B).
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Rob Tautges, HLB Tautges Redpath, Ltd.
• Sid Inman, Ehlers & Associates, Inc.
•
HRA RESOLUTION NO.
RESOLUTION APPROVING AND RATIFYING
FINANCIAL TRANSACTIONS RELATED TO
• CERTAIN TAX INCREMENT FINANCING DISTRICTS
WHEREAS, the City of Richfield (the "City") and its Housing and Redevelopment
Authority (the "HRA") have previously created certain redevelopment project areas known as
Redevelopment Project Area A, Redevelopment Project Area B, and the Richfield
Redevelopment Project Area (collectively, the "Project"), all pursuant to Minnesota Statutes,
Sections 469.001 to 469.047 (the "HRA Act"); and
WHEREAS, within the Project, the City and HRA have established certain tax
increment financing districts including the Richfield Rediscovered -(forrnerly known as the
Expanded New Home Program) A-1 TIF District, B-1 TIF District, A-2 TIF District, B-2 TIF
District, A-3 TIF District, B-3 TIF District, A-4 TIF District, B-4 TIF District, A-5 TIF District, B-5
TIF District, and the Richfield Rediscovered 1999 TIF District (collectively, the "TIF Districts");
and
WHEREAS, the HRA has reviewed a financial analysis of the TIF Districts prepared by
HLB Tautges Redpath, Ltd.. titled "Financial Reporting Analysis Tax Increment Districts
Richfield Rediscovered, dated May 16, 2001" (the "TIF Report"), which describes the
financing transactions related to the TIF Districts since their inception; and.
WHEREAS, the TIF Report analyzes fund balances, recommends certain fund
transfers, and other- recommendations regarding the accounting of transactions funded in
whole or in part with tax increments from the TIF Districts; and
• WHEREAS, the HRA has determined that it is in the interests of the sound financial
management of the City and the HRA to accept the TIF Report and take actions needed to
implement its recommendations.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota, as follows:
1. The HRA accepts the TIF .Report and ratifies and approves all expenditures described
in the report and all transfers to and from the funds described and recommended in
the TIF Report, specifically including prior tax increment expenditures approved by the
City Council
2. The HRA authorizes and directs staff to take all actions necessary to carry out the fund
transfers and other recommendations made in the TIF Report.
3. The HRA authorizes and directs staff to take all actions necessary to revise reports
regarding the TIF Districts filed with the Office of the State Auditor in order to conform
those reports with the TIF Report and this resolution.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of June, 2001.
Thomas E. Harms, Chair
• ATTEST:
Michael Sandahl, Secretary
HRA RESOLUTION NO.
• RESOLUTION RATIFYING AND APPROVING REPAYMENT SCHEDULE
FOR INTERFUND LOANS RELATED TO THE
RICHFIELD REDISCOVERED PROGRAM
WHEREAS, the City of Richfield (the "City") and its Housing and Redevelopment
Authority (the "HRA") have previously created certain redevelopment project areas known as
Redevelopment Project Area A, Redevelopment Project Area B, and Richfield
Redevelopment Project Area (collectively; the "Project") pursuant to Minnesota Statutes,
Sections 469.001 to 469.047 (the "HRA Act"); and
WHEREAS, in connection with the Project, the City and the HRA established the
Richfield Rediscovered New Construction Program, formerly known as the Expanded New
Home Program (the "RR Program"); and
WHEREAS, to finance the RR Program the City and HRA established certain tax
increment financing districts ("TIF Districts") including the A-1 TIF District, B-1 TIF District,
A-2 TIF District, B-2 TIF District, A-3 TIF District, B-3 TIF District, A-4 TIF District, B-4 TIF
District, A-5 TIF District and B-5 TIF District (collectively, the "RR TIF Districts"); and
WHEREAS, in order to provide funds to initiate the RR Program, the City made
certain interfund loans in the amount of $254;183.33 from its Water Utility Fund (the "Water
• Fund Loan"), $254,183.33 from its Sewer Utility Fund (the "Sewer Fund Loan"), and
$254,183.34 from the LHN TIF District account (the "LHN Loan"); and
WHEREAS, as of the date of this resolution, the HRA has repaid a portion of the
Water Fund Loan, Sewer Fund Loan, and LHN .Loan with a combination of land sale
proceeds and tax increments from one or more of the RR TIF Districts, all as shown in the
schedule attached as Exhibit A; and
WHEREAS, the HRA and City have previously forgiven the remaining balance of
the LHN Loan, as noted in Exhibit A; and
WHEREAS, the HRA has determined a need to document the repayment schedule
for the remaining balance of the Water Fund Loan and Sewer Fund Loan, without interest
thereon, and to that end has directed preparation of the Richfield Rediscovered Interfund
Loan Amortization Schedule (the "Loan Schedule") attached as Exhibit B to .this resolution.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota, as follows:
1. The HRA ratifies all actions of its staff and consultants in making the Water Fund
Loan, Sewer Fund Loan, and the LHN Loan and in making all the prior repayments
as shown in Exhibit A.
• 2. The HRA approves the Loan Schedule for the Water Fund and Sewer Fund Loan in
substantially the form of Exhibit B.
•
3. The HRA authorizes and dire
Water Fund Loan and Sewer
RR TIF Districts at the times
Staff may select the specific
based on the availability of tax
Program.
is staff to take all actions necessary to repay the
=und Loan with tax increments generated from the
~d in the amounts described in the Loan Schedule.
~R TIF Districts from which payments are made,
increment revenues and long-term needs of the RR
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 18th day of June, 2001.
Thomas E. Harms, Chair
•
ATTEST:
Michael Sandahl, Secretary
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Richfield Rediscovered
Interfund Loan Amortization Schedule
Water Fund
Sewer Fund
Exhibit B
YEAR Balance Balance
Jan-01 Pa ment Dec-31 Balance Sewer Balance
Jan-01 Pa ment Dec 31
2001 $124,765 ($6,238) $118,527 $124,765 ($6,238) $118,527
2002 $118,527 ($6,238) $112,289 $118,527 ($6,238) $112,289
2003 $112,289 ($6,238) $106,051 $112,289 ($6,238) $106,051
2004 $106,051 .($6,238) $99,812 $106,051 ....($6,238) $99,812
2005 $99,812 ($6,238) $93,574 $99,812 ($6,238) $93,574
2006 $93,574 ($6,238) $87,336 $93,574 ($6,238) $87,336
2007 $87,336 ($6,238) $81,098 $87,336 ($6,238) $81,098
2008 $81,098 ($6,238) $74,859 $81,098 ($6,238) $74,859
2009 $74,859 ($6,238) $68,621 $74,859 ($6,238) $68,621
2010 $68,621 ($6,238) $62,383 $68,621 ($6,238) $62,383
2011 $62,383 ($6,238) $56,144 $62,383 ($6,238) $56,144
2012 $56,144 ($6,238) $49,906 $56,144 ($6,238) $49,906
2013 $49,906 ($6,238) $43,668 $49,906 ($6,238) $43,668
2014 $43,668 ($6,238) $37,430 $43,668 ($6,238) $37,430
2015 $37,430 ($6,238) $31,191 $37,430 ($6,238) $31,191
2016 $31,191 ($6,238). $24,953 $31,191 ($6,238) $24,953
2017 $24,953 ($6,238). $18,715 $24,953 ($6,238) $18,715
2018 ~ $18,715 ($6,238) $12,477 $18,715 ($6,238) $12,477
2019 $12,477 ($6,238) $6,238 $12,477 ($6,238) $6,238
2020 $6,238 ($6,238) ($0 $6,238 ($6,238) ($0)
TOTAL ($124,765 ($124,765)
•
• Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
Richfield Rediscovered
May 16, 2001
•
sioso.i
Housing and Redevelopment Authority
City of Richfield
• Financial Reporting Analysis
Tax Increment Districts
Table of Contents
Page
Introduction ............................................................................................................. 3
Description of the Process ....................................................................................... 4
Recommendations ................................................................................................... 5
Discussion and Analysis:
Richfield Rediscovered .................................................................................... 6
District Financial Transaction Summaries:
• Richfield Rediscovered - In Total ....................................................Schedule 1
Richfield Rediscovered - By District ...............................................Schedule 2
Transfers to Richfield Rediscovered Program ...........................................Exhibit A
Richfield Rediscovered Interfund Loan Amortization Schedule ...............Exhibit B
•
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Housing and Redevelopment Authority
City of Richfield
• Financial Reporting Analysis
Tax Increment Districts
Introduction
A joint effort to analyze the tax increment transactions of the Housing and Redevelopment
Authority of the City of Richfield was started in November, 1999. Participants in the process
included:
HRA Staff Bruce Palmborg
Katia Medvetski
Myrt Link
City Staff Chris Regis
Ehlers and Associates Sid Inman
Rebecca Kurtz
HLB Tautges Redpath, Ltd. Rob Tautges
Tom Hodnefield
•
The districts analyzed were:
^ Lyndale Hub and Nicollet (LHN)
^ Interstate Lyndale and Nicollet (ILN)
^ Cedar Avenue Business Area (CABA)
^ Richfield Rediscovered
The analysis of the Richfield Rediscovered District is included in this report. The LHN, ILN
and CABA Districts are analyzed in a separate report dated November 10, 2000.
The objectives of the work were to:
1. Identify the remaining tax increment district balances by tracing district transactions
from the inception of the District through the audited financial statements of the City
and the HRA.
2. Define the specific funds in which the remaining district balances reside.
3. Segregate the residual balances of the specific funds between the portion that is
unspent tax increment revenue and the portion that was generated from non-tax
increment revenue sources.
4. Amend, if appropriate, the balances as reported in the Tax Increment Forms of the
• Office of the State Auditor (OSA).
3
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Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
Description of the Process
The process included the following:
^ Preparation by HRA staff of detail account expenditure and revenue transactions from
the inception of each district.
^ Preparation by City and HRA staff of a number of schedules, such as combining fund
worksheets that supported the amounts contained in-the audited Comprehensive
Annual Financial Statements of the City and HRA.
^ Research by all participants of budgets, transfers, specific transactions, and other
areas.
^ Consultation with Steve Bubul of Kennedy and Graven regarding interpretation of
statutes.
^ A series of meetings to review the progress of the project.
The work generally did not include testing of expenditures to invoices or other supporting
documents. The work also did not resolve areas of potential challenge by the OSA review
• process. The OSA has taken certain positions regarding interpretation of tax increment
statutes. Several of these positions, if deemed appropriate by the court system or the state
legislature, would have broad sweeping effects.on many, if not all, tax increment authorities
in Minnesota. Areas often interpreted differently by tax increment authorities and the OSA
include:
^ Adequate documentation. of expenditures:
1. Administrative
2. Other
^ Commingling of TIF revenue with non-TIF revenue.
^ Transfers including authorization and reporting issues.
^ Potential overpayment of increment.
^ Budget and line item reporting specificity.
^ Various other compliance areas related to District formation and subsequent
administration.
The schedules and analysis contained in this report reflect common reporting and
management practices of tax increment authorities in Minnesota. These practices have
evolved since the 1970s as tax increment laws have changed and as practitioners have
interpreted the statutes.
•
4
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Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
Recommendations
Based on the financial transaction summaries and analysis, the project team recommends the
following actions:
1. HRA Board and City Council ratification of the tax increment transactions from the
inception of the Districts analyzed.
2. City and HRA staff to review District budgets and amendments thereto in light of the
fmancial transaction summaries contained herein and evaluate the need for further
amendments.
3. Non-district activity should be recorded in separate fund(s) from district activity.
4. Transfer $50,000 from the Development Fund to cover the remaining non-district deficit.
5. HRA staff to amend OSA TIF reports in accordance with the results of the financial
summaries and analysis contained herein.
6. HRA Board and City Council ratification and approval of the repayment schedule for
interfund loans related to the Richfield Rediscovered program.
•
•
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Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
Richfield Rediscovered
The Richfield Rediscovered activities involve parcels included in scattered site tax increment
redevelopment districts (district activity) and parcels that are not included in tax increment
districts and did not use tax increments (non-district activity).
In 1997, the City/HRA reported all district activity on one OSA reporting form. The OSA
took the position that Richfield Rediscovered consists of several districts, all requiring
separate reporting forms. The City/HRA now reports Richfield Rediscovered as 12 separate
districts, each on separate forms. The non-district activity has been excluded from the OSA
reporting forms.
This structure presents some unique accounting challenges for Richfield Rediscovered,
including the following:
^ District activity and non-district activity must be separately identified
^ District activity must be identified by specific district. In addition, certain items, such
as general administrative costs, must be allocated to each district.
Financial activity identified by specific district and non-district is presented in Schedule 2.
The City and HRA have used the following funds to account for Richfield Rediscovered
transactions:
947 Richfield Rediscovered
485 Tax Increment 1254
486 * Tax Increment 1255
487 * Tax Increment 1258
488 * Tax Increment 1259
489 * Tax Increment 1262
490 * Tax Increment 1263
* Funds 486-490 were used for Richfield Rediscovered districts
through 1997. In 1998 these fund numbers were re-assigned to
non-Richfield Rediscovered activity.
The detailed analysis of the Richfield Rediscovered districts includes the transactions of the
above funds since 1990. The transaction summary is presented in Schedule 1.
•
6
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Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
947 Richfield Rediscovered
485 ENHP Tax Increment 1254
Reporting of transfers on OSA TIF forms exclude infra-district transfers; for example, the
transfer of tax increment revenue from a Capital Project Fund to a Debt Service Fund that
pays debt of the tax increment district. Transfers out which were used to reimburse other
funds for budgeted tax increment qualifying expenditures are reported on the OSA TIF forms
as an expenditure of TIF revenue. Reporting of transfers contained in this report is consistent
with the recommended procedures as published `by the OSA.
The calculated Richfield Rediscovered districts balance at December 31, 1999 was as follows
compared to the 1999 submitted OSA TIF form:
December 31, 1999
Balance
All Richfield
Rediscovered Districts
($512,928)
122,894
Reclass interfund loan payable to cash basis 249,529
•
Total
(140,505)
Balance per 1999 OSA TIF form.
- All Richfield Rediscovered Districts
Difference
C7
($1,344,273)
$1,203,768
The main portion of this difference is because non-district activity has been reported in these
funds. The remaining difference relates to changes in methods of accumulating accounting
information since 1990. City and HRA systems, personnel and record retention policies have
changed over the periods included in the tax increment cumulative reported balances.
Additionally, the OSA reporting form has changed significantly from the initial reporting
requirements.
7
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•
Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
Activity of the Richfield Rediscovered funds from inception of the first district through
December 31, 1999 is as follows:
Sources
Tax Increment (TIF)
Interest on Investments
Sale of Property
Intergovernmental Revenue
Other
District Non-District
Total Activity Activity
$288,348 $288,348 $ -
53,393 - 53,393
2,076,474 1,610,473 466,001
135,713 135,713 -
18,586 7,028 11,558
2,572,514
2,041,562
530,952
Total Sources of Funds
Expenditures and Other Uses
Transfers In
• Transfers Out
Balance December 31, 1999
(5,627,469)
4,171,610
(4,187,381)
2,295,796
(1,440,088)
1,875,814
(1,257,160) (149,977) (1,107,183)
($140,505) $ - ($140,505)
As shown above, the net district activity is $0. This is the result of allocating transfers from
the Development Fund to all districts to eliminate deficit balances. The remaining balance of
transfers in from the Development Fund was allocated to non-district activity.
To simplify reporting and compliance management, we recommend that all non-district
activity be recorded in separate fund(s) from the district activity. In addition, the non-district
deficit, which was $140,505 as of December 31, 1999, needs to be addressed. Preliminary
results for 2000 show that non-district activity had a surplus in excess of $90,000. We
recommend that $50,000 be transferred from the Development Fund to eliminate the
remaining deficit.
8
sioso.i
Housing and Redevelopment Authority
City of Richfield
Financial Reporting Analysis
Tax Increment Districts
Presented below is a summary of just the district activity separated between TIF and
non-TIF.
Richfield Rediscovered -All Districts
Total TIF Non-TIF
Sources
Tax Increment (TIF) $288,348 $288,348 $ -
Interest on Investments - - -
Sale of Property 1,610,473 212,914 1,397,559
Intergovernmental Revenue 135,713 - 135,713
Other 7,028 - 7,028
Total Sources of Funds 2,041,562 501,262 1,540,300
Expenditures and Other Uses (4,187,381) (3,924,747) (262,634)
Transfers In 2,295,796 - 2,295,796
• Transfers Out (149,977) (149,977) -
Balance December 31, 1999 $ - ($3,573,462) $3,573,462
We recommend that the OSA Reporting Forms be amended to reflect the amounts
summarized above and in Schedule 2.
In order to provide funds to initiate the Richfield Rediscovered program, the City made
certain interfund loans in the amount of $254,183 from its Water Utility Fund; $254,183
from its Sewer Utility Fund; and $254,183 from the LHN TIF Fund. The HRA has repaid a
portion of these loans with tax increment and land sale proceeds from several of the Richfield
Rediscovered districts. In 1999, the HRA and City forgave repayment to the LHN TIF Fund.
We recommend the HRA Board and City Council ratify and approve the repayment schedule
for interfund loans related to the Richfield Rediscovered program.
Exhibit A shows the interfund transfers to the Richfield Rediscovered Program. Exhibit B
shows the Richfield Rediscovered interfund loan amortization schedule.
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9
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Exhibit B
•
r,
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Richfield Rediscovered
Interfund Loan Amortization Schedule
Water Fund
Sewer Fund
YEAR Balance Balance
Jan-01 Payment Dec-31 Balance Sewer Balance
Jan-01 Payment Dec 31
2001 $124,765 ($6,238) $118,527 $124,765 ($6,238) $118,527
2002 $118,527 ($6,238) $112,289 $118,527 ($6,238) $112,289
2003 $112,289 ($6,238) $106,051 $112,289 ($6,238) $106,051
2004 $106,051 ($6,238) $99,812 $106,051 ($6,238) $99,812
2005 $99,812 ($6,238) $93;574 $99;812 ($6,238) $93;574
2006 $93,574 ($6,238) $87,336 $93,574 ($6,238) $87,336
2007 $87,336 ($6,238) $81,098 $87,336 ($6,238) $81,098
2008 $81,098 ($6,238) $74,859 $81,098 ($6,238) $74,859
2009 $74,859 ($6,238) $68,621 $74,859 ($6,238) $68,621
2010 $68,621 ($6,238) $62,383 $68,621 ($6,238) $62,383
2011 $62,383 ($6,238) $56,144 $62,383 ($6,238) $56,144
2012 $56,144 ($6,238) $49,906 $56,144 ($6,238) $49,906
2013 $49,906 ($6,238) $43,668 $49,906 ($6,238) $43,668
2014 $43,668 ($6,238) $37,430 $43,668 ($6,238) $37,430
2015 $37,430 ($6,238) $31,191 $37,430 ($6,238) $31,191
2016 $31,191 ($6,238) $24,953 $31,191 ($6,238) $24,953
2017 $24,953 ($6,238) $18,715 $24,953 ($6,238) $18,715
2018 $18,715 ($6,238) $12,477 $18,715 ($6,238) $12,477
2019 $12,477 ($6,238) $6,238 $12,477 ($6,238) $6,238
2020 .$6,238 ($6,238) ($0) $6,238 ($6,238) ($0)
TOTAL ($124, 765) ($124,765)
r ~
Consent
•
•
•
AGENDA ITEM # 3A
REPORT # 4 6
STAFF REPORT
~ HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JUNE 18, 2001
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
KATIA MEDVETSKI,
REDEVELOPMENT SPECIALIST
NAn~; TITLE
BRUCE NORDQUIST
HOUSING AND REDEVELOPMENT
ITEM FOR HRA CONSIDERATION:
Ratification of staff approval of just compensation for remnant parcels within the Interchange
West Redevelopment Area.
I. RECOMMENDED ACTION:
By Motion: Adopt the attached resolution ratifying staff approval of
just compensation for remnant parcels within the Interchange West
Redevelopment Area.
III. BACKGROUND ~
On November 20, 2000 and March 19, 2001, the Richfield Housing and
Redevelopment Authority (HRA) approved eminent domain/condemnation activities
for six remnant parcels of land within the Interchange West Redevelopment Area for
the Best Buy project. Condemnation of these parcels was necessary to clear title
for these unassembled portions of land. Since the HRA's approvals, appraisal
reports have been received that establish a fair market value for the six remnant
parcels. Exhibit A to the attached resolution provides the legal descriptions of the
remnant parcels; Exhibits B provides the fair market values that establish just
compensation. Staff has provided legal counsel with this information and now
requires the HRA to ratify the fair market values as the just compensation so that
condemnation can proceed.
0618JCremnt.doc
MANAGER
N,gn~, TITLE
• III. BASIS OF RECOMMENDATION
A. POLICY
• On March 20, 2000 the HRA entered into a Contract for Private
Development with Best Buy Co., Inc. for the redevelopment of the
Interchange West area.
• In accordance with the terms of the Contract, the HRA acted to
proceed with the acquisition of certain properties through
condemnation.
• Just compensation is set by obtaining fair market va1ues`through the
appraisal of real properties.
B. CRITICAL ISSUES
• The HRA must set just compensation for the remnant parcels prior to
making any deposit with the district court.
• Making a deposit with the district court for the remnant parcels will
allow condemnation matters to proceed and allow parties to title to
apply to receive a portion or all of the deposit.
C. FINANCIAL
• Best Buy, in accordance with the Contract, will provide the HRA with
S funding for the aforementioned court deposits based on the set just
compensation.
D. LEGAL
Legal counsel is working with staff on condemnation matters for the
remnant parcels.
IV. ALTERNATIVE RECOMMENDATION(S~
• The HRA could delay ratification of the just compensation for the remnant
parcels. However, this would stall condemnation matters from proceeding.
V. ATTACHMENTS
• Resolution ratifying staff approval of just compensation for remnant parcels
within the Interchange West Redevelopment Area and Exhibit A (Legal
Description) and Exhibit B (Just Compensation of Remnant Parcels)
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
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HRA RESOLUTION NO.
• RESOLUTION RATIFYING STAFF APPROVAL OF
JUST COMPENSATION FOR REMNANT PARCELS
WITHIN THE INTERCHANGE WEST REDEVELOPMENT AREA
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield (the "HRA") has initiated steps to acquire property identified as remnant parcel 1,
remnant parcel 2, remnant parcel 3, remnant parcel 4, remnant parcel 5 and remnant
parcel 6, legally described in Exhibit A (the "Parcels") through eminent domain in
accordance with Minnesota Statutes, Chapter 1.17; and
WHEREAS., the HRA has identified .the Best B.uy.Co., Jnc..:as a.buyer..of..the_.Parcels
(the "Buyer"); and
WHEREAS, the Buyer has agreed to purchase the property from the HRA in
accordance with the terms of the Contract for Private Redevelopment by and between the
HRA and Best Buy Co., Inc., dated .March 20, 2000; the. First Amendment to Contract for
Private Redevelopment dated November 27, 2000; and the Second Amendment to
Contract for Private Redevelopment, dated February 20, 2001 (collectively, the "Contract");
and
WHEREAS, qualified appraisers have prepared appraisal reports (the "Reports") for
the Parcels and certified the Reports as being in conformity with appraisal standards; and
WHEREAS, HRA staff (the "Staff') has reviewed all Reports prepared for the
Parcels and has approved the appraised values as set forth in the Reports; and
• WHEREAS, Staff recommends that the HRA approve the appraised values as just
compensation for the .Parcels stated in Exhibit B; and
WHEREAS, the just compensation stated in Exhibit B are consistent with said
Reports.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. That the amounts set forth in Exhibit B is hereby approved as just compensation for the
Parcels described in Exhibit A .
2. That actions by Staff in approving the Reports and proceeding with the condemnation
action to acquire the Parcels are hereby ratified.
3. That the Chair, Executive Director, staff, legal counsel, and other consultants to the
HRA on this matter are authorized to take all other actions necessary to complete the
acquisition of said Parcels for the amount of just compensation set forth in this
resolution.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 18th day of June, 2001.
Thomas E. Harms, Chair
ATTEST:
•
Michael Sandahl, Secretary
•
EXHIBIT A
Legal Description of Remnant Parcels
C]
Remnant Parcel 1:
Street address: None assigned; part of 77t" Street West
Tax parcel-PID: None
Legal Description:The North 60 feet of Tract M as measured along the East and
West lines of said Tract M, Registered Land Survey No. 800, Files of Registrar of
Titles, County of Hennepin (Torrens property; Certificate of Title No. 474766)
Remnant Parcel 2:
Street address: None assigned, part of 77t" Street West
Tax parcel PID: None
Legal Description:Tracts Band C, Registered Land Survey No. 618, Files of
Registrar of Titles, County of Hennepin: (Torrens property; Certificate of Title No.
376258)
Remnant Parcel 3:
Street address: None assigned; part of 77t" Street West
Tax parcel PID: None
Legal Description:The North Thirty (30) feet of that part of the tract lying in the
South half (S'/2) of the Southwest Quarter (SW'/4) of the Southwest Quarter (SW
'/4) of Section Thirty Three (33), Township Twenty Eight (28), Range Twenty Four
(24) West, 4t" Principal Meridian, and described as follows: commencing at a
point on the East line of the Southwest Quarter (SW'/4) of the Southwest Quarter
(SW'/) of said section, distant 897.62 feet South from the Northeast corner
thereof; thence North 711.32 feet; thence West parallel with the North line of the
Southwest Quarter (SW '/) of the Southwest Quarter (SW'/4) of said section to
the West line of the East one-eighth (E 1/8) thereof; thence South 711.31 feet;
thence East parallel with said North line to the point of beginning.
Remnant Parcel 4:
That part of Tract A described below:
Tract A:
The south one-half of that part of the Southwest Quarter of the Southwest Quarter
of Section 33, Township 28, Range 24 West, Hennepin County, Minnesota
described as follows: Commencing on the southwest corner of said Section 33;
thence running north 1313.7 feet; thence east 327.6 feet; thence south 1313.33
feet; thence west 328 feet to the point of beginning;
• Which lies easterly of the easterly line of Penn Avenue, northerly of Line 1
described below, easterly and northerly of Line 2 described below and southerly
and westerly of Line 3 described below:
Line 1: Beginning at a point on a line run parallel with and distant 656 feet east of
the west line of said Section 33, distant 120 feet north of the south line of said
Section 33; thence run northwesterly to a point on the west line of said Section
33, distant 355 feet north of the southwest corner thereof and there terminating;
Line2: Beginning at a point on the west line of -said Section 33; distant 501.24
feet north of the southwest corner thereof; thence run easterly at an angle of 91
degrees 30 minutes 00 seconds from said west section line (measured from south
to east) for 125.65 feet; thence .deflect to the right on a curve having a radius of
53 feet (delta angle 91 degrees 30 minutes 00 seconds) for 84.64 feet; thence on
tangent to said curve to an intersection with Line 1 described above and there
terminating;
Line 3: Beginning at a point on the west line of said Section 33, distant 535.26
feet north of the southwest corner thereof; thence run easterly at an angle of 88
degrees 30 minutes 00 seconds from said west section line (measured from north
to east) for 150.44 feet; thence deflect to the right on a curve having a radius of
62 feet (delta angle 91 degrees 30 minutes 00 seconds) for 99.01 feet; thence on
tangent to said curve for 210 feet and there terminating;
also together with a triangular piece, being that part of Tract A herein before
described, which lies southerly of Line 2 described above, easterly of the easterly
line of Penn Avenue and northwesterly of the following described line: Beginning
at a point on the easterly line of Penn Avenue, distant 30 feet southerly of its
intersection with said Line 2; thence run northeasterly to a point on said Line 2,
distant 30 feet easterly of said intersection and there terminating;
also together with a triangular piece, being that part of Tract A herein before
described, which lies easterly of a line run parallel with and distant 33 feet
easterly of the west line of said Section 33, northerly of line 3 described above
and southwesterly of the following described line: Beginning at a point on said 33
foot parallel line, distant 31.37 feet northerly of its intersection with said Line 3;
thence run southeasterly to a point on said Line 3, distant 31.37 feet easterly of
said intersection and there terminating.
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Remnant Parcel 5:
• Street address: None assigned; part of 78t" Street West
Tax parcel PID: None
Legal Description:That part of the Southwest Quarter (SW'/4) of the Southwest
Quarter (SW'/) of Section Thirty Three (33), Township Twenty Eight (28), Range
Twenty Four (24) West, 4t" Principal Meridian, lying southwesterly of the following
described Line 1:
Beginning at a point on a line run parallel with and distant 656 feet east of the
west line of said. Section 33, distant 120 feet north of the south line of said Section
33; #hence..run northwesterly o-a-point-on thewest:~ineof.sa~d-Section=33:::distant
355 feet north of the southwest corner thereof and terminating..
And lying northerly of a line run parallel with and distant 180 feet northerly the
following described Line 2:
From a point on the southwest corner of said Section 33, run easterly at an angle
of 89 degrees 46 minutes 00 seconds from the west line of said Section 33
(measured from north to east) for 1359.14 feet to the point of beginning of Line 2
to be described; thence run westerly on the last described course for 89.23 feet;
thence deflect to the right on a 00 degree 30 minutes 00 second curve (delta
angle 04 degrees 39 minutes 00 seconds) for 930 feet; thence on tangent to said
curve for 77.19 feet; thence deflect to the left on a 01 degree 00 minute 00
• second curve (delta angle 07 degrees 31 minutes 48 seconds) for 753 feet and
there terminating.
And lying easterly of the following described Line 3:
Beginning at a point on the west line of said Section 33, distant 501.24 feet north
of the southwest corner thereof; thence run easterly at an angle of 91 degrees 30
minutes 00 seconds from said west section line (measured from south to east) for
125.65 feet; thence deflect to the right. on a curve having a radius of 53 feet (delta.
angle 91 degrees 30 minutes 00 seconds) for 84.64 feet; thence on a tangent to
said curve to an intersection with Line 1 described above; then run southerly to a
point distant 165 feet northerly (measured at right angles) to a point on Line 2
described above distant 656.32 feet easterly of its point of termination and there
terminating.
said lines forming a triangle with dimensions of 226.47 feet along Line 1 and
216.21 feet along Line 2 and 59.91 feet along Line 3.
All according to the United States Government Survey thereof, and situate in
Hennepin County, Minnesota.
Remnant Parcel 6:
• The North thirty (30) feet of the following described tract of land:
The South '/z of the following described tract of land:
That part of the Southwest '/4 of the Southwest '/4 of Section 33,
Township 28, Range 24, described as follows: Commencing at the
• Southwest corner of said Section 33;
thence running North 1313.33 feet; thence East 327.60 feet; thence
South 1313.33 feet; thence West 328 feet to the point of beginning,
according to the United States Government Survey thereof and
situated in Hennepin County, Minnesota.
That part of the above described tract of land described as follows:
Commencing at the. Southwest corner of Section 33, Township 28,
-Range 24; thence North along the lNest line of the ~outhwes# %4 of the
Southwest '/ of said Section 33, a distance of 355.0 feet; (said West
line of Southwest '/ of the Southwest '/4, having an assumed bearing
of North) thence South 70 degrees 35 minutes 06 seconds East, a
distance of 34.99 feet, to the actual .point of beginning of the land to
be described; (said point being the point of intersection of the East
right of way line of Penn Avenue and the North right of way line of
Interstate Highway No. 494) thence North along the East right of way
line of Penn Avenue, a distance of 313.48 feet, to the North line of the
above described tract of land; thence North 89 degrees 40 minutes
05 seconds East, along the North line of .the above described tract, a
distance of 294.80 feet, to the Northeast corner of the above
described tract; thence South 0 degrees 01 minutes East, along the
East line of the above described. tract, a distance of 419.14 feet, to the
North right of way line of Interstate Highway No. 494; thence North
70 degrees 35 minutes 06 seconds West, along the North right of way
line of Interstate Highway No. 494, a distance of 312.70 feet, to the
point of beginning, and situate in Hennepin County, Minnesota.
•
Exhibit B
•
•
Just Compensation of Remnant Parcels
Parcel Number Fair Market Value
Remnant Parcel 1 $3,000
Remnant Parcel 2 $2,000
Remnant Parcel 3 $1,500
Remnant Parcel 4 $1;-000
Remnant Parcels $ 500
Remnant Parcel 6 $ 600
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