07-27-99 agenda._.
CITY OF .RICHFIELD, MINNESOTA
TUESDAY, JULY 27, 1999
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
COUNCIL CHAMBERS
7:00 P.M.
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF REGULAR HRA MEETING OF JUNE 21, 1.999
CONSIDERATION OF REPORT FROM CSM PROPERTIES, INC. REGARDING
THEIR PROPOSAL FOR CONTINUATION OF INTERCHANGE WEST
REDEVELOPMENT PROJECT
HRA LETTER NO. 38
2. CONSIDERATION OF APPOINTMENT OF HRA ADVISORY COMMITTEE TO
RECOMMEND POLICY REGARDING REPLACEMENT OF AFFORDABLE HOUSING
HRA LETTER NO. 39
3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE
OF 506 EAST 67TH STREET TO RICKY A. AND ANN L. GARLAND, OWNERS OF
500 EAST 67TH STREET
_- ~ HRA LETTER NO. 40
4. CONSIDERATION OF RICHFIELD REDISCOVERED AND TRANSFORMATION
HOMES PROGRAM FUNDING PLAN AND REQUEST OF CITY COUNCIL TO
AUTHORIZE SALE OF GENERAL OBLIGATION TAX INCREMENT REVENUE BONDS
HRA LETTER NO. 41
5. CONSIDERATION OF RICHFIELD ENTERPRISE FACILITATION PROGRAM
STATUS REPORT
HRA LETTER NO. 42
6. CONSIDERATION OF COMMUNITY APARTMENT PROGRAM STATUS REPORT
HRA LETTER NO. 43
7. CONSIDERATION OF RESOLUTION AUTHORIZING EXECUTION OF CERTIFICATE
OF COMPLETION FOR GALYAN'S TRADING COMPANY RETAIL STORE
REDEVELOPMENT PROJECT
HRA LETTER NO. 44
8. CONSIDERATION OF RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY
LIMITS ESTABLISHED BY MINNESOTA STATUTES 466.04
• HRA LETTER NO. 45
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 861.-9702.
8
CITY OF RICHFIELD, MINNESOTA
HRA Letter No. 45
Agenda July 27, 1999
Issue Statement:
Resolution affirming municipal tort liability limits established by Minnesota Statutes
466.04
Background:
The State Statute that governs tort liability limits for a municipality was amended in
1998. One major change contained in that amendment was to raise the monetary limits
of exposure for any municipality involved in a liability claim against it. The limits of
$200,000 for a single claimant and $600,000 for any single occurrence, were raised to
$300,000 per single claimant and $750,000 per occurrence. Thus, in 1999 the City was
subject to the new limits.
With the previous limits, the League of Minnesota Cities Insurance Trust through which
the City purchases insurance, automatically waived single claimant liability limit in
providing the insurance. Thus, any single claimant could recover up to $600,000
against the City for a liability claim. With the change of liability limits, this option was no
longer automatically invoked by the League of Minnesota Cities Insurance Trust.
Instead, the waiver of liability limits must be acted upon by each individual city and/or
HRA by City Council or HRA action.
The Richfield HRA must annually decide whether the HRA would voluntarily waive the
statutory limits for both the single claimant and each occurrence. If the single limit is
waived it would allow an individual claimant to recover up to the $750,000 single
occurrence limit. If the HRA waived its per occurrence liability limits and purchased
excess liability insurance, a single claimant could potentially recover up to the amount
of the limit of the additional coverage purchased. The total which all claimants would.
be able to recover for a single occurrence to which the statutory limits apply would also
be limited to the amount of coverage purchased regardless of the number of claimants.
Since the new law was implemented, the majority of cities in Minnesota, including
Richfield for the period July 1, 1998 to June 30, 1999, have elected not to waive the
monetary limits on municipal tort liability that was established by Minnesota Statutes
466.04. In other words, most cities are standing by the statute which would allow an
individual claimant to recover no more than $300,000. on any individual claim and that
all claimants recover no more than $750,000 per single occurrence.
The election to waive limits of liability is an action that may be reviewed by the HRA on
an annual basis. City staff, in examining the actions of other municipal entities across
the state and its own risk management practices, is recommending that the HRA not
waive the monetary limits on municipal tort liability for its insurance renewal of July 1,
1999.
Recommended Motion:
Adopt a resolution authorizing the HRA not to waive the monetary limits on municipal
tort liability established by Minnesota Statutes 466.04.
Basis of Recommendation:
1. The new limits have been increased to provide greater coverage for claimants
against municipal entities. The increase taking effect in 1998 is the first step in a
series of increases that will eventually bring the limits up to $1,000,000 per
occurrence in 2000.
2. The City has typically not purchased excess liability coverage because of the cost
of such coverage.
3. The majority of municipalities in Minnesota are not waiving the monetary limits on
municipality tort liability as was established by Statutes 466.04.
4. The tort liability limits established by Minnesota Statutes have protected cities
historically and no court has awarded an amount to a claimant in excess of the
statutory limits for municipalities in Minnesota.
5. There is a slight premium saving for entities that affirm the monetary limits on tort
municipal liability in their package coverage with League of Minnesota Cities
Insurance Trust. The savings for the City would be less than $1000 per year.
6. The HRA could waive its statutory limits in future years if the HRA should decide to
do so.
Alternative Recommendation:
1. If the HRA believes that any single claimant should receive more than the $300,000
limit, the HRA could elect to waive the monetary limits on tort liabilities established
by Minnesota Statutes.
2. If the HRA believes that the $750,000 limit is not adequate, the HRA could
purchase excess liability coverage in the amount of $1,000,000 in excess of the
limit at a cost of approximately $2,200 and .subsequently waive the limits of liability
so individuals suing the HRA could collect up to the amount of coverage purchased
by the HRA.
Discussion/Decision Mode:
The HRA's insurance policy with the League of Minnesota Cities Insurance Trust
renewed on July 1, 1999. Thus, it is important that the Council take action as soon as
possible to,either affirm or waive the monetary limits on tort liabilities established by
Minnesota Statutes 466.04.
Ily subm~ d,
evic
Executive Director
SLD:cak
RESOLUTION NO.
• RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LIMITS ESTABLISHED BY
MINNESOTA STATUTES 466.04
WHEREAS, Minnesota Statute 466.04 provides for Municipal tort liability limits
for Minnesota cities, and
WHEREAS, the League of Minnesota Cities Insurance Trust has asked that
each city review the tort liability limits and determine if the respective city would choose
to waive it's limits, and
WHEREAS, such decision to affirm or waive the tort liability limits must be filed
with the League of Minnesota Cities Insurance Trust at the insurance renewal date.
NOW, THEREFORE, BE IT RESOLVED that the City Manager is directed to
report to the League of Minnesota Cities Insurance Trust that the Richfield HRA does
not waive the monetary limits on the municipal tort liability established by Minnesota
statutes 466.04.
Adopted by the Housing and Redevelopment Authority of the City of Richfield,
Minnesota this 27th day of July 1999.
•
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl. Secretary
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 44
. Agenda July 27, 1999
Issue Statement:
Request for issuance of a Certificate of Completion for the Galyan's Trading Company retail
store redevelopment project, Interchange Tax Increment District.
Background:
The HRA entered into a Contract for Private Redevelopment (the "Contract") with The
Limited, Inc. (the "Developer") for construction of the Galyan's Trading Company :retail store
redevelopment project (the "Project") on December 31, 1996. Section 4.7 of the Contract
discusses the Certificate of Completion (the "Certificate"). It indicates that the Certificate is
to be issued upon the completion of the minimum improvements indicated within the
Contract. The process for the issuance of the Certificate is to be initiated by the Developer.
The Developer has requested the issuance of the Certificate for the Project. Construction,
in accordance with the concept plans, is complete. There are no outstanding issues, which
would impede the release of the Certificate for the Project.
Recommended Motion:
Adopt a motion to approve the attached resolution which authorizes the execution of the
Certificate of Completion for the Galyan's Trading Company retail store redevelopment
• project by the Executive Director and HRA Chair.
Basis of Recommendation:
1. Construction of the improvements is complete and in accordance with the approved
concept plans.
2. The Limited, Inc. has requested issuance of the Certificate of Completion for the
Galyan's Trading Company retail store redevelopment project.
Alternative Recommendation:
There is no alternative recommendation for this action.
Discussion/Decision Mode:
The Limited, Inc. requested issuance of the Certification of Completion for the Galyan's
Trading Company retail store redevelopment project in order to release its obligations for
construction of the minimum improvements under the Contract.
Res ctf ly submitt ,
M~
ven L. Devich
• Acting Executive Director
SLD:ds
HRA RESOLUTION NO.
• RESOLUTION AUTHORIZING EXECUTION OF A
CERTIFICATE OF COMPLETION FOR
THE GALYAN'S TRADING COMPANY RETAIL STORE
REDEVELOPMENT PROJECT
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (HRA) entered into a Contract for Private Redevelopment
(Contract) with-The Limited, Inc. (the "Developer"), dated December 31, 1996, pursuant
to and in furtherance of the Richfield Redevelopment Project heretofore adopted by the
City and the Richfield Housing and Redevelopment Authority; and
WHEREAS, the Contract obligated the Developer to construct certain
improvements to the property identified in that Contract; and
WHEREAS, Section 4.7 of the Contract required the HRA to furnish the
Developer with a Certificate of Completion when requested by the Developer upon
completion. of the construction in accordance with Concept Plans; and
WHEREAS, the Contract establishes the form for the Certificate of Completion in
Exhibit B; and
WHEREAS, staff has found the improvements to be in accordance with the
terms of the Contract.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield that the Acting Executive Director and HRA
Chair are directed to execute the Certificate of Completion and deliver same to the
Developer.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 27th day of July, 1999.
Thomas E. Harms, Chair
ATTEST:
• Michael Sandahl, Secretary
• CERTIFICATE OF COMPLETION
The undersigned hereby certifies that The Limited, Inc. has fully and completely
complied with its obligations under Article IV of that document entitled "Contract for
~~
Private Development, dated December 31, 1996, between THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD and THE
LIMITED, INC., a Delaware corporation with respect to construction of the
Improvements located on the tract of land described in the attached Exhibit A in.
accordance with the requirements of such document and is released and forever
discharged from its obligations to constructing the Improvements under such above-
referenced Article on the above-referenced tract.
DATED:
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
By
Its Chairperson
By
Its Acting Executive Director
•
EXHIBIT A
• Legal Description
Tract A, Registered Land Survey No. 1037, Hennepin County, Minnesota
•
i HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 43
Agenda July 27, 1999
Issue Statement:
Community Apartment Program status report.
Background:
In January, the Housing and Redevelopment Authority (HRA) authorized a contract
with Julianne Manship for the ensuing year. Ms. Manship will be present at the July
HRA meeting to give a brief overview of significant current program elements.
Richfield Apartment Managers' Association (RAMA)
RAMA continues to meet to provide support to owners and managers in a variety of
areas.
FOYER Program
This program was brought to Richfield by the Minneapolis Neighborhood Employment
Training (NET). Foyer is a four-week job training program which will be offered at
Hampton Place apartments. Funding is available for those in the Welfare to Work
program. Additional funds are being pursued for others who are unemployed or under
employed. Residents of Richfield who do not live at Hampton Place are also welcome.
Other Community Apartment Programs (CAP) projects include:
Unique program offering "on site" training.
CAP partnerships with NET, the Richfield Chamber of Commerce, Minnesota School
of Business, SAGE (the owners of Hampton Place), Resident Council, Minnesota
Work Force, and Famillink.
Pilot program, offering opportunity for other training in Richfield apartment homes.
Livable Communi~ Team (LCT)
Membership is comprised of City staff members in the enforcement departments who
work with rental housing: Police, Fire, Building Inspections, and Health division staff.
LCT meets every month in order to discover reoccurring issues or problems in rental
buildings and units. Their accomplishments to date include:
• 100 percent compliance with ordinance codes.
• Over one dozen addresses are no longer considered "worst properties" to deal with.
• After a turnaround, property owners/managers are more willing to continue a
working relationship with Public Safety, Building Inspections, and Health.
• Extremely positive relationship building opportunity.
n
~J
Collaborations
Several linkages are being created in order to work cooperatively or in collaboration with
apartment managers and residents. The idea is to communicate the services available
in order to connect rental residents more to the community of Richfield at large.
Recreation Services, FamiLink Library
Community Education, Hennepin County Health
Children and Family MN Work Force Center
Services, YouthNet Resident Councils
Richfield Apartment Managers' Association (RAMA)
RAMA continues to meet to provide support to owners and managers in a variety of
areas.
Recommended Motion:
Receive and discuss the report from Ms. Manship.
Basis of Recommendation:
Appropriate to hear interim/mid-year report.
Alternative Recommendation:
1. Indicate no report is desired.
2. Postpone the report to a future date.
Discussion/Decision Mode:
The report will be presented at the July 27 HRA meeting.
9
SLD:ds
•
5
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No.42
Agenda July 27, 1999
Issue Statement:
Richfield Enterprise Facilitation Program status report.
Background:
In 1997 the HRA approved partial funding support for the establishment of an Enterprise
Facilitation program in Richfield. A facilitator, Rob Smolund, was hired in June 1998
and the program was initiated. The program is aimed at promoting Richfield's economic
and community vitality by helping budding and existing entrepreneurs discover as well
as translate their passion, skill and imagination into rewarding work for themselves. The
focus is on Richfield residents who wish to start-up a business regardless of the
business location or businesses already located in Richfield. With partial funding
support from the HRA additional dollars have been leveraged from Norwest Bank
Foundation and Hennepin County. Office space and related office support services are
provided without charge by Norwest Bank Richfield.
Recently, the Wal-Mart Foundation approved a grant for $2,000 to help fund this
program as did TCF, Nicollet branch, making a donation of $1,000. To date, Enterprise
Facilitation has served over 50 clients which has resulted in a Richfield resident buying
a successful fast food Asian restaurant; an existing Richfield business expanding and
increasing volume up to 50 percent; and a Richfield business owner/resident purchasing
a convenience store. The concept has been well received, and the board of directors
has been very helpful in providing expertise in all areas of business as well as their time
in helping clients. The Board of Directors consists of:
Officers
Marcy Lindstrom, Chair
Jim Young, Vice Chair
Dick Franzmeier, Board Secretary
Members
Bill Kilian
Bruce Palmborg
Brian Ringham
Nancy Ross-Cullen
Sue Sandahl
Patti Sterbuck
Steve Lindgren
Jim Desmond
Larry Matthews
Lindstrom Embroidery; Resident
Kinney & Lange Law Firm; Resident
Richfield/Bloomington Credit Union; Resident
Consults as a Business Operations Analyst; Resident
Richfield Community Development Director
Property evaluator; Resident
Norwest Bank Richfield Manager; Resident
Attorney; Resident
Broadway Pizza
Richfield Chamber of Commerce; Resident
Investment Officer Norwest Bank
Business Development Specialist; Resident
Rob Smolund, the Enterprise Facilitator, will give a brief report on Enterprise Facilitation
to date and the program goals.
Recommended Motion:
• Receive and discuss the report from Mr. Smolund.
Basis of Recommendation:
A report from Mr. Smolund is appropriate at this time.
Alternative Recommendation:
1. Indicate that no report is desired.
2. Postpone the report to a future date.
Discussion/Decision Mode:
The report will be presented at the July 27 HRA meeting.
Re ectf Ily submitted,
/"
. De ' h
Acting Executive Director
SLD:ds
Attachments
•
•
Richfield Enterprise Facilitation Activity Report Exhibit A
•
•
Outcomes 1/1/99-6/30/99 1999 Planned
Clients Served 33 SO
New businesses started S 10
# businesses ex ended 4 10
# o 'obs coated 9 IS
s of new economic activity (new
~ ex ended adi ' ,$800, 000 l.Smillion
Ric6iiield Enterprise Facilitation Adlvity Report
6/22/98 to '7/10/99
1ST CLIENT CONTACTS: 82
CLIENTS SERVED 62
CONTINUED CLIENT CONTACTS Z3
LOVERS/TOURISTS 37/45
REFERRAL SOURCES:
Norwest Bank, Richfield Community Development, Rob's direct contacts, Board Members, Chamber of.Commerce, other
Facilitators, existing businesses, Richfield Community Council, Edina Famlink, clients, City of Richfield Web site, Simlli
Institute; Your Business Publication; Richfield Sun Article, Richfield Remodeling Fair
START-UPS 47
EXISTING BUSINESSES 35
BUSINESS TYPES
coffee house, P~& Pipe organ builder, hair salon, hand pared floor coverings, video store, small engine rppair shop, golf shop, auto detailing,
consulting business, Property managemerrt and related services, safety light manufacnuing, wallpaper hanging, insruance agenry, full service day spa,
art galley, gift baskets, dental ceramics, balloons, Thai restwrarrt, Chiropractor, early childhood development bead, F.mbet's Ratauranf franchise,
wheel cover store, home furnishings, phone and vending mad»ne, real estate development, home organization csmsultant, marketing and advertiong
Srm, products celebrating African Amerian's a~liahments, Native Amman Restaurant, Skiing Inatrrmtarb, magazwe Publishes, FLp Hop
musician; Respite child day are; Compute Software Telemarketing firm,1'kywright, Smoking Cessation Connrlta~ Staffing Agency, Web Based
Nutritional Planning, Custom Frame Matting, Import/Export clothing business, estate Planner, Dance Hall, Computer Consulting„ Exporting Printirrg
Equipmrnt, Importing Kenyan Crafts, IaundroraaUCar wash, Dance Studio, Repair and Sales of Electric razors, Personalized Narrative Story Tapes,
convenience store, Travel guide service, Ceramic =laze manotaetnrer, Ednatioad Pre+dacta, Panda= Lot SfrippLrt, Delivery service, child
care center, Mexican Home Fnrnishhr=s, Ttee Coffin=, Kenyan Tea Laports, Plastlc Maaa[actmia=, Interior Daitrb vend6a= nuchinn,
sshing guide, Marine business, Iflustrator, Handyman service, lrrdldia= arahrtenance, Publisher
ASSISTANCE NEEDED
• low cost financing for business expansion • gaols or low cost financing for working spiral
• site location for existing business expansion (hair salon)• low cost conmrerciai location for small engine repair shop operating art of home
• implemrnting better signage for strip mall tenants • feasibility analysis for video store
• marketing residential maintenance services business plan developrmrrt •rrrsrketing of insurance agency
• therapeutic massage ordinance variance or change •Conditional Use Pemut s~~s~
• Locating restaurants going out of business for low cost used restaurant equipment
• Research on exchanging medical services for payment on studeru loam• sporuotship of catty drildhood development bard
• .new sign application process•public subsidy for real estate development •debt consolidation help
• Conditional Use Pemtit adjustment •restaurant purchase auistance• Markel research for new magazine idea
• Grants for music recording •SOl C-3 incorporation lrelp•Registaing out of state corporation in Minnesota
• Negotiating purchase of restaurazrt business•Publicizingoew Piay of original works •Muketing of Smoking Cessation cxmsuftant
• Cna:rt application •Short term funding for Staffing Agency Financial records organizations Copyright and patent infamatiat
• Lease renegotiations sLocating convenirnce store or gas stations for sale • Franchise a=reement ne=otiattoas Credit cormsdin=
• IDactrator mentor
Richfield Enterprise. Facilitation Activity Report
•
TEAM MEMBERS NEEDED
5nancial analyst aad marketing for coffee house and gift basket venture, muketing for Pipe organ builder, management consultant for infocrnational
interview, financial and marketing for manufacturing company, city atdwance expect, restaurant corouliant, construction expert, business manager
SUCCESSES
1.Coffee house operator contacted me for outside capital sources, after reviewing heroperation she was able to
increase margins on baked goods anti sandwiches by making them herself and consulted with arestaurant/bakery
expert. This diminished the need for outside funding. Improving the bottom line has made her look at all aspects
of the business critically to see if costs can be reduced. She reduced her sandwich roll cost by 50% by changing.
suppliers and continues search out other vendors. Coffee house sales have increased over 50% from previous year
2. Golf shop owner needed assistance in SBA loan application. Spent 2.5 hours with client filling out application,
client was relieved because it was holding up his loan process. His expansion will increase his space by 50% and
add 2-3 pt employees and one full time employee. Moved to new location Oct.1. Installed 2 golf simulators on
Nov. 5. ,joined Chamber of Commerce and had ribbon cutting ceremony 11/16 and featured on Channel s Joe's
Night out sportscast on 11/18. Business featured on front page of Finance and Commerce after short article
appeared in Your Business.
3. Helped client who wants to open up Thai Restaurant obtain Planning Commission. approval of Conditional Use
Permit.
4. Helped client with getting the process going for an ordinance amendement to allow therapeutic massage
which would allow his full service hair salon to expand up to SO%.
5. Assisted client in purchase of fast food restaurant grossing over 300K and directed him to look at benefits
of maintaining the e~sting business for a period of time before changing it into a full service sit down
restaurant.
6. Helped client focus on expansion and redevelopment options that could result in a $2 million ezpansion.
7. Helped client in obtaining $SOKSBA loan to purchase business
8. Helped client get approved for 535K SBA loan to purchase commercial real estate and restaurant ~ . .
9. Helped client obtain new office space and found free office furniture for her
10. Assisted client in obtaining 135K SBA loan to purchase convenience store
il. Helped client renegotiate lease to better refleM standard occupancy costs in the industry. Client was able
to reduce rent costs by 28% for a full year.
12. Helped client obtain a 40K SBA loan to purchase a mat cutter and start a new picture framing business.
13. Assisted client in getting approval for $35K conventional loan to purchase hair salon.
•
Exhibit B
•
EF Monthy Summary Report
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4}.:?:: v?: +\\..
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...
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:
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.
X• 7 4 9 4
33
Feb 22 8 0 0 2
March 34 12 1 0 10
Aril 24 10 0 4 8
Ma 35 7 0 2 1
June 29 23 1 3 10
Jul 10 6 0 0 11
Au
S tember
October
November
December
1999 Totals 187 73 6 18 46
1999 Total
284
Contacts
Program to
Date 663 Start Ups Expansions Stabilization
Contacts
Type of Client 47 30 5
Contacts
Client
Activi
Pro ram
1998 1999 2000 Total
Number of
Client 42 40 82 New Businesses 7
Contacts
Number of Business
Clients 27 35 62 Expansions or 6
Served Stabilizations
Number of 9 9 ~ lg
Jobs
Projected
annual gross
revenue of $1,693,000 $2,330,000 $4,023,000
client's
businessess
MONTH99.WK4 07/14/99
•
Exhibit C
RICHFIELD ENTERPRISE FACILITATION PROGRAM PROCESS CHART
Enterprise Facilitation Board
Enterprise Facilitation
Network Building
Financial Resources
1
Accounting
1
Marketing
1
Legal
Product Development
•
Share Dream
1
Passion Test
1
Obstacle Definition
1
Connect Enterpreneur to
Resources
Enterprise Facilitator
Business Building
.r.
Enterpreneur Referral
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 41
Agenda July 27, 1999
Issue Statement:
Authorization of a Richfield Rediscovered and Transformation Homes Program funding
plan and a request of the City Council to authorize the sale of general obligation tax
increment revenue bonds.
Background:
The new construction and transformation of single family homes through Richfield
Rediscovered has been highly recognized and very successful. The vision of the
Housing and Redevelopment Authority (HRA) and City Council in 1990 resulted in
introducing a program, which has provided more than 100 new homes. In addition,
approximately 50 homes have been transformed. Their action authorized the start up
interfund loans from the water/sewer fund and Lyndale/Hub/Nicollet (LHN)
redevelopment district to acquire substandard homes. The momentum from the initial
authorization and the HRA's use of the Development Account in the following years has
sustained the new construction program and. allowed the implementation of the
Transformation Homes Program.
To continue the programs, a new funding strategy is required:
• Rapidly increasing property values in the marketplace, even for substandard and
obsolete homes valued at 50 to 60 percent of the community average, result in fewer
properties redeveloped with available funds.
• Administrative changes made in 1997 due to pending tax increment legislation
resulted in the Development Account no longer funding new construction and
transformation.
• There are no funds to continue the program.
Staff has worked with Ehlers/Publicorp, Inc. (Ehlers) to evaluate all the options that are
available. Based upon that analysis, it is recommended that the City issue general
obligation tax increment revenue bonds. This action would fund the new construction
and transformation elements for two years. The HRA, through a pledge agreement,
would cover debt service with future Richfield Rediscovered district tax increment funds,
and from the housing trust funds provided by the Gramercy and Urban Village tax
increment districts.
The plan prepared by Ehlers is summarized in an attached memorandum (Exhibit A).
The bond is a general obligation of the City that is 100 percent supported with tax
increment. The risk in issuing general obligation debt by the City is that it might have to
be, in part, supported by general tax levy. The proposed structure of multiple sources of
tax increment that have been identified represents two times the amount required for
debt service. This structure demonstrates that the risk has been minimized. Because it
is to be a taxable bond, it would not impact the City's ability to issue other debt. The
issuance of $1,030,000 in bonds, and the resulting $420,000 in land sale proceeds from
the sale of vacant lots, provides 14 new homes and approximately 30 to 40
transformations in the next two years.
The plan to issue additional debt has also included a review of how the existing debt is
being managed. A memorandum from Ehlers (Exhibit B): which is dated July 7, 1999,
discusses loan payback. Tax increment generated by existing Richfield Rediscovered
districts is structured to retire the debt based on the schedule presented. The structure
retires all obligations. Sid Inman of Ehlers will attend the HRA meeting to present more
detailed information and answer more detailed questions about the bond issue, the
HRA's pledge of tax increment to the City bonds, and the management of previous
loans made to the program.
Long term, program cash flow will be evaluated in two years to devise the next course
of action. One solution that will be evaluated is to commit increased property tax
resources from the LHN to HRA activities as the district expires in 2001.. The HRA may
also consider whether to request that the City commit City General Fund resources to
the multiple programs and services provided by the HRA.
Recommended Motion:
Authorize the two-year funding plan, requesting the City Council to authorize the sale of
general obligation tax increment revenue bonds and authorize the HRA Chair and
Acting Executive Director to execute agreements related to the funding plan for the
Richfield Rediscovered and Transformation Homes Programs.
Basis of Recommendation:
1. Richfield Rediscovered is important because it removes small, substandard and
obsolete homes and provides new homes for people at all income levels.
2. The Transformation Homes program is important because a small amount of
incentive deferred loan financing from the HRA helps provide more family-style.
housing and encourages homeowners to improve rather than move.
3. There are no funds to continue the programs from this point forward and the
demand for both programs is high.
4. A two-year funding plan has been developed by Ehlers, reviewed by legal counsel,
and found to be the recommended course of action.
5. The HRA, through a pledge agreement with the City, covers the debt service from
established tax increment districts.
6. The water/sewer fund debt is being repaid on schedule.
Alternative Recommendation:
1. Discontinue the program.
2. Defer action, continuing to evaluate alternative funding sources. However,
increased general property tax revenues to the City from the LHN are not expected
until 2002. The revised 1999 and proposed 2000 budget do not request City
General Fund resources to support the HRA's multiple programs and services.
Discussion/Decision Mode:
Following HRA action, the City Council would consider the bond issue in August, a
negotiated bond sale would occur 60 days hereafter, and funds would then be available
to tfZe program in the fall of 1999.
Re a ull ub fitted,
e n .D is
Acting Executive Direc or
SLD:cak
Attachments
Exhibit A
~ MEMORANDUM
TO: Bruce Palmborg -City of Richfield
Bruce Nordquist -City of Richfield
Pam Bookhout -City of Richfield
Steve Bubul -Kennedy and Graven
FROM: Sid Inman -Ehlers/Publicorp Inc.
DATE: July 19, 1999
RE: Richfield Rediscovered Finance Plan
As per your request, we have been reviewing the long term funding options for the Richfield
Rediscovered Program. In the past the program has had a variety of funding sources and each
year it was uncertain that the project would be funded . Your objective was to find a secure funding
source for at least five years.
At the current time the city's funds are committed to other capital projects and therefore not
available to the HRA for this project. The HRA has to look to its own funds in order to continue the
project.
Due to the lack of city funds we determined that the HRA would have to borrow the funds needed
from another source. We first determined that we needed to establish base line data as to the
annual. need of the project. We established the goal of 7 homes a year and $200,000 for the
Transformation Program. Following are the sources and uses for the project:
SOURCES
Land Sale Income 210,000
Other 000.000
TOTAL SOURCES 210,000
USES
Acquisition Cost 455,000
Admin and Demo 42,000
Other Costs 28,000
Transformation Program 200.000
TOTAL USES 725,000
TOTAL GAP 515,000
Funding the project presented two problems. First, we needed to borrow funds upfront for the full
$725,000 needed to complete one year of the project. But, we would receive $210,000 within a
year and a half. Therefore we only needed to borrow long term for the balance or $515,000. The
second problem was finding a source of revenue to support the borrowing.
•
In order to solve the problem of the short term need for $210,000, it was determined to sell short
term General Obligation variable rate bonds: These bonds are resold every month and allow the
city to pay back any or all of the debt every 30 days. These bonds are sold at short term rates and
will cost the city far less then a fixed rate 20 year term bond. For example, at the time of writing
this memo the short term rate is around 5.3%. The 20 year fixed rate debt would cost the city
around 6.3%.
r
We have identified 5 revenue sources that we can use for the debt.
1. Tax Increment from Urban Village 15% housing trust fund. $118,000 .Pay 2001
2. Tax Increment from Gramercy 15% housing trust fund. $40,000 Pay 2001
3. Existing Tax Increment from Richfield Rediscovered Projects. $12,500 Pay 1999
(Available for only 10 years if we shut the existing districts down).
4. New Tax Increment from new Richfield Rediscovered Projects. $10,800 Pay 2003
5. Interest on cash in the housing trust fund.
Attached are cash flows that assume that the City sells one bond issue. This is enough bonds to
fund two years of the project, or enough for 14 houses. You will note that we have sized the bond
as a fixed rate -- not a variable rate bond. This is due to the fact that. we want to use the most
conservative assumptions when forecasting the cash flows. After two years we would re-evaluate
our cash flows and determine if we can issue bonds for 14 more houses.
Please review this-information and if you have additional questions, please do not hesitate to call
me. _
from the desk of:
Sid Inman
Development Consultant/Financial Advisor
Ehlers and Associates, Inc.
3060 Center Pointe Drive
Roseville, MN 55113
N:Vvtinnsota~Richfield~RREDIS~RRMEMO-2.wpd
(65f) 697-8507
FAX: (651) 697-8555
E-MNL s/d~eh/ers Inccom
City of Richfileld
Richfield Rediscoved Project
24-May-99
Debt Service Cash Flow
~ - - - ----- -- ----- - -- ------ -- Payment From Payment Payment From Payment From
• ' Total Cap Interest Interest Tax Increment Tax Incmmsnt Total
YEAR Period Annual Annum Principal 8, Sold VYth On Unused Revenue Revenue Payments
Principal Interest Interest interest Bond Proceeds New Trust Fund
Payment Rate Payrrrerrt Payment .issue 0.00% District Disdices ___
- 1999 _
0.50
0.00
0.00
0.00.
0.00
0.00
0.00 _
0.00
2000 1.00 72,410.00 72,410.00 72,410.00 15,000.00 0.00 0.00 87,410.001
2000 1.50 54.307.50 54,307.50 54,307.50 15.000.00 0.00 0.00 69,307.50 i
2001 2.00 54,307.50 54.307.50 54,307.50 0.00 0.00 0.00 54.307.50
j 2001 2
50 54,307.50 54.307.50' .54,307.50 0.00 0.00 0.00 54.307.50
2002 .
3.00 55,000.00 5.80% 41,320.00 96.320.00 0.00 0.00 0.00 96,320.00 96,320.00 ~
2002 3.50 39,725.00 39,725.00 0.00 0.00 5,400.00 34,325.00 39,725.001
2003 4.00 60,000.00 5.80°,6 39,725.00 99.725.00: 0.00 0.00 5,400.00 94,325.00 99,725.00 ~
2003 4.50 37,985.00 37,965.00 0.00. 0.00 10,800.00 27,185.00 37,985.00
! 2004 5.00 60,000.00 5.90% 37,985.00 97,985.00 ~ 0.00 0.00 10,800.00 87,185.00 97,985.00
2004 5.50 36.215.00 36,215.00 0.00 0.00 10,800.00 25,415.00 36,215.00 j
2005 6.00 65,000.00 5.90°,6 36,215.00 101,215.00 0.00. 0.00 10,800.00 90,415.00 101,215:00 i
2005 6.50 34,297.50 34.297.50 0.00 0.00 10,800.00 23,497.50 34,297.50
2006 7.00 70,000.00 6.00% 34,297.50 104,297.50 0.00 0.00 10,800.00 93,497.50 104,297.50 ~
2006 7.50 32,197.50 32,197.50. 0.00 0.00 10,800.00 21,397.50 32,197.SOI
1 2007 8.00 75,000.00 6.00% 32,197.50 107,197.50 0,00 0.00 10,800.00 96,397.50 107,197.501
2007 8.50 29,947.50 29,947.50. 0.00 0.00 10,800.00 19,147.50 29,947,SOI
2008 9.00 80
000.00 6.10% 29,947.50 109,947.50 0.00 0.00 10,800.00 99,147.50. 109,947.50!
2008 9
50 , 507.50
27 27,507.50 0.00 0.00 10,800.00 16,707.50 27,507.50
2009 .
10.00 85,000.00 6.10°.6 ,
27,507.50 112,507.50 0.00 0.00 10,800.00 101,707.50 112,507.50
0
j 2009 .10.50 24,915.00 24,915.00 0.00 0.00 10,800.00 14,115.00 24,915.0
j 2010 11.00 90,000.00 6.20°,6 24,915.00. 114,915.00 0.00 0.00 10,800.00 104,115.00 114,915.00
~ 2010 11.50 22,125.00 22,125.00: 0.00 0.00 10,800.00 11,325.00 22,125.00
2011 12.00 95,000.00 6.20% 22,125.00 117,125.00: 0.00 0.00 10,800.00 106,325.00 117,125.00
2011 12.50 19,180.00. '19,180.00! 0.00 0.00 10,800.00 8,380.00 19,180.00;
j 2012 13.00 100,000.00 6.30% -19,180.00 119,180.00 ! 0.00 0.00 10,800.00 108,380.00 119,180.00
2012 13.50 16,030.00 16,030.00. 0.00 0.00 10,800.00 5,230.00 16,030.001
2013 14.00 105,000.00 6.30% 16,030.00 121,030.00: 0.00 0.00 10,800.00 110,230.00 121,030.00
2013 14.50 12,722.50 12,722.50: 0.00 0.00 10,800.00 1,922.50 12,722.SOj
2014 15.00 110,000.00 6.40°~ 12,722.50 122,722.50 0.00 0.00 10,800.00 111,922.50 122,722.50
2014 15.50. 9,202.50 9,202.50; 0.00 0.00 9,20250 0.00 9,202.501
• 2015 16.00 120
000.00 6.40% 9,202.50 129,202.50;. 0.00 0.00 10,800.00 118,402.50 129,202.50;
1 2015 16.50 , 5,362.50 5,362.50; 0.00 0.00 5,x62.50 0.00 5,362.50
2016 17.00 125,000.00 6.50% 5,362.50. 130,362.50; 0.00 0.00 10,800.00 119,562.50 130,362.50
I 2016 17.50 1,300.00 1,300.00 0.00 -0.00 1,300.00 0.00 1,300.00
2017 16.00 40,000.00 6.50% 1,300.00 41,300.00: 0.00 0.00 10,800.00 30,500.00 41,300.00.
2017 18.50 0.00 0.00 i 0.00 0.00 0.00 0.00 0.00
j 2018 19.00 0.00 6.60°,6 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ~
2018 19.50 0.00 0.00 i 0.00 0.00 0.00 0.00 0.00
2019 20.00 0.00 6.60°,6 0.00 0.00 ; 0.00 0.00 0.00 0.00. 0.00
n'-bond-4.wk4
Prepared by EhlerslPublicorp, Inc.
PAGE 1
City of Richfileld
Richfield Rediscoved Project
24-May-99
•• Availatie Tax Increment Cash Flow
__ Tax Tax Tax Tax Tax Payment Payment
Period incroment Increment Increment Merement Merement Made For Made For period
YEAR Period Beginning Revenue Revenue Revenue Revenue Interest Bond Bond Ending
Balance Urban Gramercy Existing New Debt Debt Balance
Village Yllage Richfetd Red. Richfield Red. 4.00'X. Service A Service B
1999 0.50 0.00 0.00 _
0.00 6,250.00 0.00 0.00 0.00 0.00 6.250.00
2000 1.00 6,250.00 0.00 0.00 6,250.00 0.00 125.00 0.00 0.00 12,625.00
2000 1.50 12,625.00 0.00 0.00 6,250.00 0.00. 252.50 0.00 0.00 19.127.50
2001 2.00 19,127.50 0.00 0.00 6,250.00 0.00 382.55 0.00 0.00 25,760:05
2001 2.50 25,760.05 58,967.00 19,849.00 6,250.00 0.00 515.20 0.00 0.00 111.341.25
2002 3.00 111,341.25 58,967.00 19,849.00. 6,250.00 0.00 2,226.83 (96,320.00) 0.00 102,314.08
2002 3.50 102,314.08 58,967.00 19,849.00 6,250.00 0.00 2,046.28 (34,325.00) 0.00 155,101.36
2003 4.00 155,101.36 58,967.00 19,849.00 6,250.00 0.00 .3,102.03 (94,325.00) 0.00 148,944.38
2003 4.50 148,944.38 58,967.00 19,849.00 6,250.00 0.00 2,978.89 (27,185.00) 0.00 209,804.27
2004 5.00 209,804.27 58,967.00 19,849.00 6,250.00 0.00 4,196.09 (87,185.00) 0.00 211.881.36
2004 5.50 211,881.36 58,967.00 19,849.00 6,250.00 0.00 4,237.63 (25,415.00) 0.00 275,769.98
2005 6.00 275,769.98 58,967.00 19,849.00 6,250.00 0.00 5,515.40 (90,415.00) 0.00 275,936.38
2005 6.50 275,936.38 58,967.00 19,849.00 6,250.00 0.00 .5,518.73 (23,497.50) 0.00 343,023.61
2006 7.00 343,023.61 58,967.00 19,849.00 6,250.00 0.00 6,860.47 (93,497.50) 0.00 341,452.58'
2006 7.50 341,452.58 58,967.00 19,849.00 6,250.00 0.00 6,829.05 (21,397.50) 0.00 411,950.14.
2007 8.00 411,950.14 58,967.00 19,849.00 6,250.00 0.00 !1,239.00 (96,397.50) 0.00 406,857.64
2007 8.50 408;857.64 58,967.00 .19,849.00 6,250.00 0.00 8,177.15 (19,147.50) 0.00 482,953.29:
2008 .9.00 482,953.29 58,967.00 19,649.00 6,250.00 0.00 9,659.07 (99,147.50) 0.00 478,530.86.
2008 9.50 478,530.86 58,967.00 19,849.00 6,250.00 0.00 9,570.62 (16,707.50) 0.00 556,459.97'
2009 10.00 556,459.97 58,967.00 19,849.00 6,250.00 000 11,129.20 (101,707.50) 0.00 550,947.67
2009 10.50 550,947.67 58,967.00 19,849.00 0.00 0.00 11,018.95 (14,115.00) 0.00 626,667.63:
2010 11.00 626,667.63 58,967.00 19,849.00 0.00 0.00. 12,533.35 (104,115.00) 0.00 613,901.98
2010 11.50 613,901.98 58,967.OG 19,849.00 0.00 0.00 12,278.04. (11,325.00) 0.00 693,671.02
2011 12.00 693,671.02 58,967.00 19,849.00 0.00 0.00 13,873.42 (106,325.00} 0.00 680,035.44
2011 12.50 680,035.44 58,967.00 19,849.00 0.00 0.00 13,600.71 (8,380.00) 0.00 764,072.15
` 2012 13.00 764,072.15 58,967.00 19,849.00 0.00 0.00 15,281.44 (108,380.00) 0.00 .749,789.59
2012 13.50 749,789.59 58,967.00 19,849.00 0.00 0.00 14,995.79 (5,230.00) 0.00 838,371.38;
2013 14.00 838,371.38 58,967.00 19,849.00 0.00 0.00 16,767.43 (110,230.00) 0.00 823,724.81
2013 14.50 823,724.81 58,967.00 19,849.00 0.00 0.00 16,474.50 (1,922.50) 0.00 917,092.81 ;
2014 15.00 917,092.81 58,967.00 19,849.00 0.00 0.00 18,341.86 (111,922.50) 0.00 902,328.16
2014 15.50 902,328.16 58,967.00 19,849.00 0.00 1,597.50 18,046.56. 0.00 0.00 1,000,788.23;
I 2015 16.00 1,000,788.23 58,967.00 19,849.00 0.00 0.00 20,015.76 (118,402.50) 0.00 981,217.49
2015 .16.50 981,217.49 58,967.00 19,849.00 0.00 5,437.50 19,624.35 0.00 0.00 1,085,095.34
j 2016 17.00 1,085,095.34 58,967.00 19,849.00 0.00 0.00 21,701.91 (119,562.50) 0.00 1,066,050.75
j 2016 17.50 1,066,050.75 58,967.00 19,849.00 0.00 9,500.00 21,321.01 0.00 0.00 1,175,687.76:
i 2017 18:00 1,175,687.76 58,967.00 19,849.00 0.00 0.00 23,513.76 (30,500.00) 0.00 1,247,517.52 ~
~ 2017 18.50 1,247,517.52 58,967.00 19,649.00 0.00 10,800.00 24,950.35 0.00 0.00 1,362,083.87
I 2018 19.00 1,362,083.87 58,967.00 19,849.00 0.00 10,800.00 27,241.68 0.00
0
00 0.00
0
00 1,478,941.55!
136
38
1
598
~ 2018 19.50 1,478,941.55 58,967.00 19,849.00 0.00 10,800.00 29,578.83 .
. . .
,
,
2019 20.00 1,598,136.38 58,967.00 19,849.00 0.00 10,800.00 31,962.73 0.00 0.00 1,719,715.11
2019 20.50 1,719,715.11 58,967.00 19,849.00 0.00 (285,865.00) 34,394.30 0.00 0.00 1,547,060.41
j 2020 21.00 547,060.41
1 58,967.00 19,849.00 0.00 10,800.00 30,941.21 0.00 0.00 1,667,617.62':
~~ 2020 21.50 ,
1,667,617.62 58,967.00 t9,849.00 0.00 10,800.00 33,352.35 0.00 0.00 1,790,585.97
2021 22.00 1,790,565.97 58,967.00 19,849.00 0.00 10,800.00 35,811.72 0.00 0.00 1,916,013.69;
2021 22.50 1,916,013.69 58,967.00 19,849.00 0.00 10,800.00 38,320.27 0.00 0.00 2,043,949.96;
2022 23.00 2,043,949.96 58,967.00 19,849.00 0.00 10,800.00 40,879.00 0.00 0.00 2,174,444.96
2022 23.50. 2,174,444.96 58,967.00 19,849.00 0.00 10,800.00 43,488.90 0.00 0.00 2,307,549.86
2023 24.00 2,307,549.86 58,967.00 19,849.00 0.00 10,800.00 46,151.00 0.00 0.00 2,443,316.86;
~ 2023 24.50 2,443,316.86 58,967.00 19,849.00 0.00 10,800.00 48,866.34 0.00 0.00 2,581,799.191
2024 25.00 2,581,799.19 58,967.00 19,849.00 0.00 10,800.00 51,635.98 0.00 0.00 2,723,051.18;
2024 25.50 2,723,051.18 58,967.00 19,849.00 0.00 10,800.00 54,461.02 0.00 0.00 2,867,128.20]
2025 26.00 2,867,128.20 58,967.00 19,849.00 0.00 10,800.00 57,342.56 0.00 0.00 3,014,086.76;
2025 26.50 3,014,086.76 58,967.00 19,849.00 0.00 10,800.00 60,281.74 0.00 0.00 3,163,984.50;
2026 27.00 3,163,984.50 58,967.00 19,849.00 0.00 10,800.00 63,279.69 0.00 0.00 3,316,880.19
2026 27.50 3,316,660.19 0.00 0.00 0.00 10,800.00 66,337.60 0.00 0.00 3,394,017.79;
2,948,350.00 992,450.00 __
125,000.00 (74,930.00) 1,180,227.79 (1,777,080.00) 0.00
n'-bond-4.wk4
Prepared by Ehlers/Publicorp, Inc.
PAGE 2
•
City of Richfield, Minnesota
Taxable 17ariable Rate G.O. Bonds
(Richfield Rediscover Project)
Series 1999
SOURCES ~ USES
Dated 06/01/1999 Delivered 06/01/1999
SOURCES OF FUNDS
Par Amount of Bonds ........................................................................ $1,730,000.00
TOTAL.SOURCES ............................................................................ $1,730,000.00
USES OF FUNDS
Total Underwriter's Discount (1.500%) .............................................. 25,950.00
Costs of Issuance .............................................................................. 30,000.00
Deposit to Capitalized Interest (CIF) Fund ......................................... 221,594.30
Deposit to Project Construction Fund ................................................ 1,450,000.00
Rounding Amount .............................................................................. 2,455.70
TOTAL USES .................................................................................... $1,730,000.00
. Ehlers & Associates File =RICH-RED/SCOVER.SF-Redis-2b- SINGLE PURPOSE
Leaders in Public Finance 524/1999 11:01 AM
•
•
City of Richfield, Minnesota
Taxable Variable Rate G.O. Bonds
(Richfield Rediscover Project)
Series 1999
DEBT SERVICE SCHEDULE
Date Prindpal Coupon Interest Total Ptl FISCAL TOTAL
6/01/1999 - - -
2/01/2000 - - 72,410:00 72,410.00 72,410.00
8/01/2000 - - 54.307.50 54,307.50 -
2/01/2001 - - 54,307.50 54,307.50 108,615.00
8/01/2001 - - 54.307.50 54,307.50
2/01/2002 55,000.00 5.800°h .54,307.50 109,307.50 163,615.00
8/01/2002 - - 52.712.50 52,712.50 -
2/01/2003 60,000.00 5.800°h 52,712.50 112,712.50 165,425.00
8/01/2003 - - 50,972.50 50,972.50 -
2/01/2004 60,000.00 5.900% 50,972.50 110,972.50 161,945.00
8/01/2004 - - 49,202.50 49,202.50 -
2/01/2005 65.000.00 5.900% 49,202.50. 114,202.50 163,405.00
8/01/2005 - - 47.285.00 47,285.00 -
2/01/2006 70,000.00 6.000% 47,285.00 117,285.00 164,570.00
8/01/2006 - 45,185.00 45,185.00 -
2/01/2007 75,000.00 6.000% 45,185.00 120,185.00 .165,370.00
8/01/2007 - - 42,935.00 42,935.00 -
2/01/2008 80,000.00 6.100°k 42.935.00 122,935.00 165,870.00
8/01/2008 - - 40,495.00 40,495.00 -
2/01/2009 85,000.00 6.100% 40,495.00 125,495.00 165,990.00
8/01/2009 _- - - 37,902.50 37,902.50 -
2/01/2010 90,000.00 6.200% 37,902.50 127,902.50 165,805.00
.8/01/2010 - - 35,112.50 35,112.50 -
2/01/2011 95,000.00 6.200°k __ 35,112.50 130,112.50 165,225.00
8/01/2011 - - 32,167.50 32,167.50 -
2/01/2012 100,000.00 6.300% 32.167.50 132,167.50 164,335.00
8/01/2012 - - 29,017.50 29,017.50 -
2/01l2013 105,000.00 6.300°k 29,017.50 134,017.50 163,035.00
8!01/2013 - - 25,710.00 25,710.00
2/01/2014 110,000.00 6.400°h 25,710.00 135,710.00 161,420.00
8/01/2014 - - 22,190.00 22,190.00 -
2/01/2015 120,000.00 6.400% 22,190.00 142,190.00 164,380.00
.8/01/2015 - - 18,350.00 18,350.00 -
2/01/2016 125,000.00 6.500% 18,350.00 143,350.00 161,700.00
6/01/2016 - - 14,287.50 14,287.50 +
2/01/2017 135,000.00 6.500% 14;287.50 149,287.50 163,575.00
8/01/2017 - - 9,900.00 9,900.00 -
2/01/2018 145,000.00 6.600% 9,900.00 154,900.00 164,800.00
8/01/2018 - - 5,115.00 5,115.00 -
2/01/2019 155,000.00 6.600% 5,115.00 160,115.00 165,230.00
Total 1,730,000.00 - 1,406,720.00 3,136,720.00 -
YIELD STATISTICS
Bond Year Dollars ........................................ 522,058.33
Average Lffe ................................................. 12.750 Years
Average Coupon .......................................... 6.3772724%
Net Interest Cost (NIC) ................................. 6.4949150%
True Interest Cost (TIC) ............................... 6.5322321 %
Bond Yield for Arbitrage Purposes ............... 6.3497563%
All Indusive Cost (AIC) ................................. 6.7463083%
IRS FORM 8038
Net Interest Cost .......................................... 6.3772724%
Weighted Average Maturity .......................... 12.750 Years
Ehlers & Assoaates Fik =RICH-REOISCOVER.SFRedis-26- SINGLE PURPOSE
Leaders in Public Finance 524/1999 11:01 AM
Exhibit B
~ EHLERS
& ASSOCIATES INC
MEMORANDUM
TO: Bruce Palmborg -City of Richfield
CC: Bruce Nordquist -City of Richfield
Pam Bookhout -City of Richfield
Chris Regis -City of Richfield
Mert Link -City of Richfield
Katia Medvetski -City of Richfield
FROlv1: Sid Inman -Ehlers
DATE: July 7, 1999
RE: Richfield Rediscovered Loan Payback
As we proceed with the analysis of the funding sources for future Richfield. Rediscovered
Projects, I want to insure that we are all operating under the same assumptions. regarding the
amount of tax increment generated, the amount of the outstanding loans and the term. and method
of loan payback.
Enclosed for your review is an analysis of all of the Richfield Rediscovered tax increment
districts. At the current time you have 8 districts with 20 separate projects that are generating tax
increment. You will. note_that we are projecting that after a deduction for l 0% administration,
I S% for the housing trust fund (currently car marked for future Richfield Rediscovered projects)
and .25% for the state auditor, you have art annual balance of $55.792 available to pay off vour
loans. You should,be.awaze that due to_the restrictions in poolingxhis amount can only be spent
for costs incurred within the district. Since all costs have been incurred the only expenses to be
paid back aze the city loans.
Also enclosed fbr your review is a break down of the balance due on the loans as of I2-31-98 and
a payback schedule. Asper the City Councils direction we have attempted to pay back all of the
loans. Since there is insufficience funds to pay all principal back we have not applied an interest
rate.. The chart shows that by applying the available tax increment to the loans and using a 0%
interest rate, you will repay all of the money loaned from the water and sewer funds and
$977,893. l 8 of the loans from the Development Account.
Please review this information and confirm if this is your understanding of the agreed solution.
if so let me know and 1 will prepare individual payment schedules for each loan.
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•
HOUSING AND REDEVELOPMENT AUTHORITY 3
HRA Letter No. 40
Agenda July 27,1999
Issue Statement:
Public hearing and authorization to sell 506 East 67th Street to Ricky A. Garland and
Ann L. Garland, owners of 500 East 67th Street.
Background:
The Housing and Redevelopment Authority. (HRA) approved the purchase of the
property at 506 East 67th Street under the voluntary acquisition program in 1995 with
the intent to convey to the adjacent neighbors. Community Development Block Grant
(CDBG) funds were used for the acquisition and the substandard single family home
was removed. The lot is 4,200 sq. ft., which is too small to be redeveloped with a new
home. The lot was appraised as a splinter parcel by BCL Appraisals and found to have
a market value of $2,100. The adjoining property owners are now ready to purchase
this property.
Recommended Motion:
Following a public hearing, adopt the resolution authorizing the sale of 506 East 67th
Street to Ricky A. Garland and Ann L. Garland.
Basis of Recommendation:
1. The lot at 506 East 67th Street is of substandard size and can not be redeveloped.
• 2. The HRA acquired 506 East 67th Street for the purpose of removing a substandard
house and conveying the land to the owners of adjacent 500 East 67th Street.
3. The Garlands have indicated an interest in purchasing the property.
4. Notice of public hearing on sale of the property was published on July 14, 1999 in
the Sun-Current.
Alternative Recommendation:
Do not proceed with the purchase agreement.
DiscussionlDecision Mode:
Closing would occur in July.
submitted,
~~
Acting Executive Director
• SLD:ds
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 506
EAST 67TH STREET TO RICKY A. GARLAND AND ANN L. GARLAND
•
WHEREAS, the Richfield Housing and Redevelopment Authority in and for the
City of Richfield, Minnesota (HRA) desires to convey certain real property pursuant to
and in furtherance of the Richfield Rediscovered Program adopted by the HRA, said
real property being described as follows:
Address Legal Description
506 East 67th Street That part of Lots 13 and 14 lying East of
West 83 feet thereof, Block 1
McCutchan's Portland Avenue Park Addition
WHEREAS, the HRA is authorized to sell real property within its area of
operation after a public hearing; and
WHEREAS, the purchaser of the described property has been identified and a
purchase agreement negotiated as follows:
Address Sale Price Purchaser
506 East 67th Street $2,100 Ricky A. Garland and
Ann L. Garland
~J
WHEREAS, a public hearing has been held after proper public notice.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and. for the City of Richfield:
A public hearing has been held and 506 East 67th Street is authorized to
be sold for $2,100 to Ricky A. Garland and Ann L. Garland
2. The Chairperson and Acting Executive Director are authorized to execute
a purchase agreement
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 27th day of July, 1999.
Thomas E. Harms, Chair
•
ATTEST:
Michael Sandahl, Secretary
a-
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 39
Agenda July 27, 1999
Issue Statement:
Consideration to appoint an HRA advisory committee to recommend policy regarding
replacement of affordable housing.
Background:
A significant number of multi-family and single family homes are within close proximity
of the location of the north south runway, which is currently under construction. It is
possible that those homes will be purchased and replaced with airport compatible uses.
The City's adopted mitigation program envisions replacement of those homes. In
addition, in 1998 the City initiated an effort to construct 500 new homes (single and
multi-family) within five years and 1,000 in ten years. To date the City has under
construction 376 units, 160 at Gramercy and 216 at Urban Village. One remaining.
issue is the impact of the loss of affordable housing on the City.
In order to address this issue, staff recommends that an advisory committee be
implemented. The committee will be specifically requested to provide recommendations
regarding what policies and initiatives should be considered to address replacement of
affordable housing in a manner consistent with the City's adopted Livable Communities
housing goals, the Comprehensive-Plan and the Mitigation Proposal. Consideration.
should be given to identifying practical suggestions, including financing resources, to
implement suggestions.
Recommended Motion:
Appoint an advisory committee to recommend policy regarding replacement of
affordable housing with the following conditions:
1. The Richfield Community Council will facilitate the process for securing members
from the following organizations:
• League of Women Voters
• Familink
• Richfield Public Schools
• Community Churches
• City Council
• HRA
• Richfield Apartment Management Association
• Community Development Department
• Pubic Safety Department
2. Meetings shall be facilitated by Jeanne Massey from the South Hennepin Human
Service Agency (SHERPA).
3. The policy recommendations shall be completed by December 31, 1999 for
presentation to the HRA at their January 17, 2000 meeting.
4. The cost of formulating the recommendations shall not. exceed $5,000. (Ryan
Companies, U.S. will reimburse the HRA for the cost.)
5. The Chair and Acting Executive Director are authorized and directed to sign an
agreement effectuating this relationship with SHERPA.
Basis of .Recommendation:
1. The issue of replacement of affordable housing is complex and requires special
attention. Existing policies such as Livable Community goals, Comprehensive Plan
and the Mitigation Plan should be considered.
2. The City has been requested to address this issue by interested residents.
3. There is a potential for loss of homes in the airport .impacted area.
Alternative Recommendation:
1. Consider alternative appointments.
2. Direct staff to provide recommendations.
3. Defer action until later date.
4. Take no action.
Discussion/Decision Mode:
This matter will be considered at the HRA meeting on July 27, 1999. It would be
appropriate for the HRA to designate a commissioner to participate as a member of the
advisory committee. The designation could be made at either the July or August HRA
meetings.
SLD:cak
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 38
Agenda July 27, 1999
Issue Statement:
Consideration of a report from CSM Properties, Inc. regarding their proposal for
continuation of the Interchange West redevelopment project.
Background:
At the June 21 meeting, the Housing and Redevelopment Authority (HRA) responded to
CSM Properties, Inc.'s (CSM) request to delay the purchase of residential properties in
the Interchange West area. Instead of formally amending the Contract for Private
Development (Contract) to allow CSM additional time to complete the site assembly
activities, the HRA directed CSM to create a detailed schedule for progressing with the
project and to meet with homeowners to determine the effects of a delay. Specifically,
the HRA's decision was to:
Defer action until the July meeting at which time CSM would provide the following:
• Evidence that CSM has met with impacted Interchange West residents and is
prepared to present a plan to address their concerns caused by the delay in closing.
• A schedule setting the completion date for each of the specified steps necessary for
progressing with the redevelopment.
• A letter acknowledging that failure to meet the completion date for any of the steps in
the schedule may result in a termination of the Contract for Private Development
with CSM for the redevelopment of Interchange West.
Since the June 21 meeting, CSM has held five neighborhood meetings at which they
outlined a schedule to homeowners for how they propose to progress with the
development.
Mr. Kornberg will be present to report the results of CSM's efforts since the June 21
meeting and their success in responding to the HRA's directives.
Recommended Motion:
The HRA may take action to either grant CSM an extension based on the schedule
which they are proposing; or terminate the Contract with CSM due to non-compliance,
based upon information presented by CSM at the meeting.
Basis of Recommendation:
1. CSM has exceeded the deadline for site assembly activities and is currently in non-
compliance of the Contract.
2. The HRA directed CSM to complete three specific tasks prior to the July 27 meeting
before considering whether to grant an extension for the completion of site
assembly activities.
3. A representative of CSM will report their success on achieving the tasks which the
HRA requested.
Alternative Recommendation:
Determine that CSM has only partially achieved the steps they were directed to
complete and defer further action until the August 16 meeting to allow for completion.
Acting Executive Director
Discussion/Decision Mode:
The attached memo (Exhibit A) served as the basis for the June 21 motion to delay the
decision on granting CSM an extension until the July 27 meeting. Murray Kornberg will
be present to discuss the schedule which CSM is proposing as well as the outcome of
their meetings with homeowners.
Res ctf Ily submitt ,
ev . Devic
SLD:ds
Attachments
•
Exhibit A
HOUSING AND REDEVELOPMENT AUTHORITY
OfFice of Executive Director
June 21, 1999
HRA Memorandum No. 36
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Interchange West
Dear Commissioners:
HRA Letter No. 30 provides several options for addressing CSM's inability to close on
the purchase of residential property on September 1. One of the options for your
consideration is, °Defer action until the July meeting to give CSM an opportunity to
satisfy the concerns of-the residential property. owners." Upon further discussion, staff
would like to offer a modification to the above referenced option. This modified option
would read as follows:
Defer action until the July meeting at which time CSM would provide the following:
• Evidence that CSM has met with impacted Interchange West residents and is
prepared to present a plan to address their concerns caused by the delay in closing.
• A schedule setting the completion date for each of the necessary steps for
progressing with the redevelopment. These steps would include:
1. Application and approval dates for: environmental assessment worksheet;
rezoning to PUD/PMR; conditional use permit, and; final development plan.
2. HRA consideration of the °But For" analysis.
3. Issuance of written purchase offers to all residential and commercial property
owners.
4. Acceptance of all commercial and residential purchase offers.
5. Dropping of contingencies and closing on all property purchases.
6. Notice of eligibility for relocation benefits to all residential and commercial
tenants.
7. Request for HRA acquisition through eminent domain.
8. Sale/leasing of the residential portion of the development.
9. Sale/leasing of the commercial portion of the development.
• A-letter acknowledging that failure to meet the completion date for any of the steps in
the .schedule may result in a termination of the Contract for Private Development for
Interchange West.
Staff would also recommend that, if this were the preferred option, a special HRA
meeting be held on July 27 for the purpose of considering CSM's conformance. This
woru,'Id ;so provide CSM with at least 30 days to accomplish the required tasks
ng Executive Di
SLD:cak