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02-16-82 aenda CITY OF RICHFIELD, MINNESOTA Office of City Manager Council Letter No. 60 Agenda February 16, 1982 The Honorable Mayor and Members of the City Council City of Richfield Council Members: Subject: Consideration of Resolution Giving Preliminary Approval for the Issuance of Industrial Development Revenue Bonds of $9,850,000 for the New Age Developers Project, L/H/N Godfather Block On January 25, 1982, the city council adopted a resolution setting a public hearing for February 16, 1982 on a request to authorize issuance of Industrial Development Revenue Bonds to finance a mixed-use development proposed by New Age Developers for the Godfather Block. The hearing notice was published during the week of January 25, 1982 in the Minneapolis Star and the Rich- field Sun. The appropriate documents have been on file with the City Clerk for review by the public. These included the documents which are attached: application to the state; a resolution giving preliminary approval to the financing; the -form of legal opinion; the memorandum of agreement; the project description; a statement concerning a proposed project under Minnesota Statutes, and a letter of intent from the sponsoring financial corporation. The project envisions a-mixed use development containing about 50,000 square feet of office space, 75,000 square feet of com- mercial space, 288 dwelling units and structured parking. The tax-exempt financing, not to exceed $9,850,000, would be utilized for the commercial and office portion of the project and related parking structure. A copy of the developer's pro- posal which provides additional details is attached to this letter. The project is in conformance with the L/H/N redevelopment plan adopted in 1975 and amended in March, 1979 by the HRA and the city council. It will help achieve a number of program objectives as follows: 1. Reduce underutilization of land by intensively developing the block in a unified and integrated manner; 2. Provide a compatible environment for living and shopping; 3. Provide shopping which will be an organized planned environment; • Council•Letter No. 60 -2- February 16, 1982 4. Provide a parking structure and related shops which will encourage "one stop" shopping; M 5. Include additional housing choices which will relate to to the amenities of Richfield Lake; 6. Reduce the number of curb cuts which will improve traffic flow; 7. Provide employment opportunities and tax revenue. The city has been asked to provide financing for this develop- ment under the Minnesota Municipal Industrial Development Act, in order to make this development financially feasible. Market rate financing, if even available, for temporary and permanent financ- ing of this development would result in rents beyond the ability of businesses to pay. The Industrial Development Act would provide a financing capability at less than market rate, because the financing would be tax exempt. The city has previously provided this type of financing for construction of the K-Mart Store, the Lyndale Garden Center, and the Lyndale Hardware projects. Preliminary approval by the city council of this type of financing will enable the project to proceed on schedule, whicr. calls for construction beginning in 1983. Following city council approval of the preliminary resolution, the application will be sent to the state for approval. Final negotiations will then be initiated between the private investor, the city and the developer to formulate terms for the mortgage, to determine the exact amount of the mortgage, amount of payments, and an amortization schedule. Upon completion of negotiations, the agreements will be presented to the city council for final approval. Until final approval by the city council, financing for the project cannot be consumated. Preliminary approval of the financing mechanism serves as an indication that the city supports the project, and will enable contacts with investors to be seriously pursued. With final approval of this financing, a mortgage note will be issued by the city wherein a private investor will purchase the mortgage from the city. The city will then lend the funds to the New Age Developers and assign its interest in the mortgage to the investors. It is recommended that the city council adopt the attached resolution indicating its support for this development proposal, and giving preliminary approval to this financing proposal. It is also recommended that the city council refer the proposal to the Planning Commission and direct the staff and the developer to meet with RING and CIC for their review of the proposal. Respectfully submitted, ~_j' Karl Nollenberger City Manager cc: HRA Commissioners Program Directors CM-00424-01 . This Application must be submitted to the Commissioner in duplicate. r STATE F MINNESOTA DEPARTMENT OF ENERGY, PLANNING AND DEVELOPMENT .BUSINESS. SERVICES .Application. •- For Approval of Municipal Industrial Revenue Bond Project Date To: Minnesota Department of Energy, Planning and Development Business Services 480 Cedar Street St. Paul, MN 55101 The governing body Of Richfield County of Hennepin Minnesota, hereby applies to the Commissioner of the State of Minnesota, Department of Energy, Planning and Development, for approval of this community's proposed- municipal Industrial Revenue Bond Issue, as required by Section 1, Subdivision 7, Chapter 474, Minnesota. Statutes: We have entered into preliminary discussions with: Firm NEW AGE DEVELOPERS Address 1650 Shelard Tower City Minneapolis State Minnesota 55426 ~' State of Incorporation Minnesota Partnership.to be formed. David C. Selle g LINDGREt~ TD. Attorney LARKIN HOFFMAN DALY ~ HdLdress 7900 Xerxes Ave. So. Name. of Project NEW AGE DEVELOPERS PROJECT Minneapolis, MN.55 31 • This firm is engaged primarily in (nature of business): Development of .the project. The funds received from the sale of the Industrial Revenue Bonds will be used to (general nature of project): pay a portion of the cost of acquiring land and con- structing thereon a 125,000 square-foot office/commercial building with related parking. It will be located in the City of Richfield . The total bond issue will be approximately $ 9,850,000.00 to be applied toward payment of costs now estimated as fol ows: Cost Item • Land Acquisition and Site Development Construction Contracts Equipment Acquisition and Installation Architectural and Engineering Fees Legal Fees Interest during Construction Initial Bond Reserve Contingencies Bond Discount Other (Fees ~ Miscellaneous Expenses) Amount $ 887,500 7,062,500 0 300,000 50,000 1,050,000 0 ,ioo,ooo 0 .300,000 It is presently estimated that construction wi-1l begin on or about October 19~, and will be completed on or .about October 19 83. lJhen completed, there will be approximately 40o new jobs created. by the project at an annual payroll of approximately $ 7,000,000 based upon currently prevailing wages. 19e $~ ntative term of the financing is TEN (10) years, commencing October The following exhibits are furnished with this application and are incorporated herein by reference: 1. An .opinion of bond counsel that the proposal constitutes a project under Minnesota Stat., Chapter 474.02. 2. A copy of the city. council resolution giving preliminary approval for the issuance of its revenue bonds. 3. A comprehensive statement by the municipality indicating how the project satisfies the public purpose of Pinnesota Stat., Chapter 474.OT. w 4. A letter of intent to purchase the bond issue or a letter confirming the feasibility of the project from a financial standpoint. 5. A statement, signed by the principal representative of the issuing authority, to the effect that upon entering into the revenue agreement, the information required by Minn. Stat., Ch. 474.01 Subd. 8 will be submitted to the Department of Energy, Planning and Development. 6. A statement, signed by the principal.representative of the issuing authority, that the project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 7. A statement, signed by the principal representative of the issuing .authority, that a public hearing was conducted pursuant to Minn. Stat. 474.01 Subd. 7b. The statement shall include the date, time and place of the meeting and that all .interested parties were afforded an opportunity to express their views. 8. A copy of the notice of publication of the public hearing., and appointed We, the undersigned, are duly elected /representatives of Richfield , Minnesota, and solicit your approval of this project at your earliest convenience so that we may carry it to a final conclusion. Signed by: (Principal Officers or Representatives of Issuing Authority) This approval shall not be deemed to be an approval by the Commissioner or the State of the feasibility of the project or the terms of the 14~s3s5~ to be executed or the bonds. t0 be issued therefor. revenue agreement Date of Approval • Commissioner Minnesota Department of Energy, Planning and Development LAW OFFICES LEFEVERE,LEFLER, KENNEDY, O'BRIEN & DRAWZ CLAYTON L. LeFEVERE HERBERT P. LEFLER J. DEN NIS O'B RIEN JOHN E. DRAWZ DAVID J. KENNEDY JOHN B. DEAN GLENN E. PURDUE CHARLES L. LeFEVERE HERBERT P. LEFLER, III JEFFREY J. STRAND JAMES P. O'M EARA - MARY J. BJORKLUND JOHN G. KRESSEL OAYLE NOLAN CINDY L.LAVO RATO MIC HAEL A.NASH LUKE R. KO MAREK JOAN N. ERICKSEN ELIZABETH D. MORAN A PROFESSIONAL ASSOCI,ATIO N 2000 FIRST BANK PLACE WEST MINNEAPOLIS, MINNESOTA 55402 TELEPHONE (612) 333-0543 RICHARD J. SCHIEFFER [FORM OF OPINION] BROOKLYN CENTER OFFICE 103 BROOKLYN LAW CENTER 5637 BROOKLYN BOULEVARD BROOKLYN CENTE R, MINNESOTA 55429 (612)536-8037 Exhibit l Mr. Michael Mulrooney, Director Minnesota Department of Energy, Planning and Development Business and Community Development Division 480 Cedar, Hanover Building St. Paul, Minnesota 55101 Re: $9,850,000 Commercial Development Revenue Bonds (New Age Developers Project). City of Richfield, Minnesota Dear Mr. Mulrooney: We have .reviewed resolutions adopted by the governing body of Richfield., Minnesota (the "city"), on January 25, 1982 and February 16, 1982 (the "Resolutions"), respectively, relating to a proposal that the City issue its revenue bonds under Minnesota Statutes, Chapter 474,. to finance, in whole or in part, a project in behalf of New Age Developers, a Minnesota general partnership (the "Company"). On the basis. of our review of the Resolutions and preliminary discussions with representatives of New Age Developers as to the nature of the project and the proposed financing, it is presently our opinion that the project constitutes a "project" within the meaning of Minnesota Statutes, Section 474.02, Subdivision la, and that the City is authorized, assuming further proceedings are taken in accordance with the provisions of Chapter 474 and any other applicable law, to issue its revenue bonds as proposed by the Resolutions. Very truly yours, LeFevere, Lefler, Kennedy, O'Brien & Drawz A Professional Association By David J. Kenne • i II Exhibit 2 l RESOLUTION N0. _ . RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT: REFERRING THE PROPOSAL TO THE DEPARTMENT OF ENERGY, PLANNING AND DEVELOPMENT FOR APPROVAL: AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS. BE IT RESOLVED By the City Council of the City of Richfield, Minnesota, as follows: 1. It is hereby found, determined and declared as follows: 1.1 The welfare of the State of Minnesota requires active promo- tion, attraction, encouragement and development of economically sound industry and commerce through governmental acts to prevent, so far as possible, emergency of blighted lands and areas of chronic unemploy- ment, and the state has encouraged local government units to act to prevent such economic deterioration. 1.2 New Age Developers, a Minnesota general partnership (here- inafter the "Company"), has advised. this Council of its desire to acquire and improve land and to construct and. equip thereon of approx- imately 125,000 square feet of commercial office and retail facilities and related parking facilities (the "Project"). 1.3 The existence of the Project within the City would signifi- cantly increase. the tax base of the City, County and school district in which the City is located, would provide opportunities for employ- ment for residents of the City and surrounding area, and would significantly assist the City and its Housing and Redevelopment. Authority in achieving the redevelopment. goals of the Lyndale-Hub- Nicollet Redevelopment .Project Area. 1.4 The City has been advised by the Company that conventional, commercial financing to pay the capital cost of the Project is avail- able only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be signif- icantly reduced, but that with the aid of municipal financing, and its resulting low borrowing cost, the Project is economically more feas- ible. 1.5 This Council has been advised by Steinberg Financial Corpo- ration, Minnesota investment bankers, that on the basis of information submitted to them and the discussions with representatives of the Company that the proposed Project is financially feasible and that bonds or notes to finance all or part of the cost of the Project can be successfully sold. 1.6 The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds or other obligations (the "Bonds") to finance capital projects consisting of properties used and useful in connection with a revenue producing enterprise, such as that proposed by the Company, and the issuance of such Bonds by the City would be a substantial inducement to the Company to construct the Project within the City. 2. On the basis of information given the. .City to date, it presently appears that it would be in the best interest of the City to issue its. industrial development revenue Bonds under the provisions of Chapter 474 to finance the Project of the Company in the principal amount presently estimated to be approximately. $9,850,000. 3. The-.Council declares that it is its present intent to issue the Bonds, and the Project above referred to is hereby given prelimin- ary approval by -the City and the issuance of Bonds for such purpose and in .such amount approved, subject to approval of the Project by the Department of Energy, Planning and Development ("Department") of the State of Minnesota and to the mutual agreement of this. body, the Company and the initial purchasers of the bonds as to the details of the bond issue and provisions for its: payment. In all events, it is understood, however,. that the Bonds shall not constitute a charge, lien or encumbrance legal or equitable upon any property of the City except the Project, and each Bond, when, as and if issued, shall recite. in substance that. the bond, including interest thereon, is w • • payable solely from the revenues received. from the Project and properly pledged to the payment thereof, and does not constitute a debt of the City within the meaning of any constitutional, charter or statutory limitation thereon. 4. The form of Memorandum of Agreement now on file with the City Clerk relating to the issuance of .the Bonds to finance the cost of the Project is hereby approved, and the Mayor and City Manager are hereby authorized and directed to execute the Memorandum of Agreement in behalf of the City. S. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7a, the Mayor and City Manager are authorized and directed to submit the proposal for the Project to the Department for approval. The Mayor, City Manager, and other officers,. employees, and agents. of the City and Messrs. LeFevere, Lefler, Kennedy, O'Brien & Drawz, a Professional Association, of Minneapolis, Minnesota, as bond counsel, are hereby authorized to provide the Department with any preliminary information needed for this purpose, and the City Attorney is author- ized to-initiate and assist. in the preparation of such documents as may be appropriate to the Project, if it is approved by the Depart- ment. Passed by the City Council of the City of Richfield, Minnesota, this 16th day of February, 1982. • John Hamilton, Mayor ATTEST: Sylvia K. Bergh, City Clerk • Exhibit 2A M [Draft] MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT, -dated as of February _, 1982, between the City of Richfield, Minnesota (the "City"}.and New Age Developers, a Minnesota general partnership (the "Company") provides as follows: 1. Preliminary Statement. Among the matters of mutual induce- ment which have resulted in this Agreement are the following: (a) the City is authorized and empowered by the provisions of Chapter 474, Minnesota Statutes, as amended (the "Act"), to issue revenue bonds to defray the costs-of a project as defined in the Act; (b) the Company has proposed that the City, pursuant to the Act, issue its revenue bonds to defray the costs to be incurred in connection with the acquisition of certain properties, con- sisting primarily of land and one or more buildings to be con- structed, and equipped thereon (the. "Project"), more fully . described in Exhibit A, and that the City and the Company enter into a lease, sale or loan agreement or similar agreement satisfying the requirements of the Act (the "Revenue Agreement"); (c) the Company wishes to obtain satisfactory assurance from the City that. the proceeds of the sale of the revenue bonds of the City will be made available to finance the costs of the Project; (d) subject to due compliance with all requirements of law, the City by virtue of such statutory authority as may now or hereafter be conferred by the Act, will issue and sell its reve- nue bonds or other obligations in an amount not exceeding $9,850,000 (the "Bonds") to pay the costs of the Project; (e) the Bonds shall be limited obligations of the City and the principal of and interest on the Bonds shall be payable solely out of the revenues derived from amounts payable to the City by the Company pursuant to the provisions of the Revenue Agreement.. 2. Undertakings on the Part of the City. Subject to the con- ditions stated in (d) of paragraph 1 hereof, the City agrees as follows: • (a) that it is its present :intent to authorize the issuance and sale of the Bonds, pursuant. to the teams of .the Act as then in force, and the terms and conditions of this Agreement... (b) that, if it issues and sells the_Bonds, it will as requested by,the Company enter into the Revenue Agreement with .the Company. The lease rentals, installment sale payments, loan payments or other amounts, payable under the.. Revenue Agreement will be sufficient to pay the principal and interest and redemp- tion premium, if any, on the Bonds as and when the same. shall. become due. and payable. 3. Undertakings,on the Part of the Company. .The Company agrees as follows: (a) that it will use all reasonable efforts to find one or more purchasers for the Bonds. (b) that. contemporaneously with the delivery of the Bonds the. Company will enter into .the Revenue Agreement with the City. under the terms. of which the Company will provide security to the City for payment of sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (c)' that it will pay all costs of the City in'connection with the financing of the Project whether or not the Project is carried to completion or approved by the Department of Energy, Planning and Development. 4. General Provisions. (a) All commitments of the City under paragraph 2 hereof .and of, the Company under paragraph 3 hereof are subject to .the condition`~that within. l2 months from the date hereof (or such. other date as shall be mutually satisfactory to the City and the Company, and as set forth in an amendment to this Agreement.), the 'City and the Company shall have agreed to mutually acceptable terms and ,conditions of the Revenue Agreement, the Bonds and of the other instruments and proceedings relating to the Bonds. (b) If the events set forth in (a) of this paragraph do not take place within the time set forth therein, or any modification thereof, and the Bonds are not sold and delivered within such time, the Company agrees that it will reimburse the City for all reasonable and necessary direct out-of-pocket expenses which. the City may incur arising from the execution of this Agreement and the performance by the City of its. obligations hereunder,:- and this Agreement shall thereupon terminate. (c) This Agreement may.: be terminated by mutual consent of the parties at any time, provided, however, that the City • reserves the right, at its sole discretion, to withdraw its approval of the Project if at any time the City Council deter- mines that the public interest and the purpose of the Act will not be served by the Project. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunto duly authorized as of the date first written above. CITY OF RICHFIELD, MINNESOTA $y Its Mayor $y , Its City Manager (SEAL) NEW AGE DEVELOPERS $Y Its General Partner • EXHIBIT A PROJECT DESCRIPTION In general, the Project consists of the acquisition and improve- ment of land in the. City. and the construction and equipping thereon of approximately 125,000 square feet of commercial office space and retail facilities and related parking facilities for use in the Com- pany's business of the development, leasing and management of commer- cial properties. The major components of the Project will include, but will not be limited to, the following: acquisition of land, site preparation building construction, equipping the building, and such other real and personal property as may be necessary, helpful or desirable in the business of the Company. Exhibits. 3, 5, b and 7 STATEMENT CONCERNING A PROPOSED PROJECT UNDER MINNESOTA STATUTES, CHAPTER 474 The undersigned, being the dulg qualified and acting Mayor. and City Manager, respectively, of the City of Richfield, Minnesota (the "City"), hereby certify that the City has been provided by New Age Developers, a Minnesota general partnership (the "Company"), with certain information concerning. a proposed project (the "Project") under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended (the "Act"). On the basis of such information, the City Council, by resolution adopted on Tuesday, February 16, 1982, has given preliminary approval to the proposed Project and the financing thereof by the issuance of revenue bonds or other obligations. of the City. .The following are factors considered by the City Council in determining to-give preliminary approval to the Project: 1. Representatives of the Company state that the Project consists generally of the acquisition of land in the City and the construction and equipping thereon of approximately 125,000 square feet of commercial office and retail facilities and . related parking facilities for use in the Company's business of the development, leasing and management of commercial properties. 2. Bond counsel is of the opinion that the Project consti- tutes a "project" within the meaning of Section 474.02, Subdi- vision la of the Act. 3. Representatives of the Company estimate that, upon com- pletion of the Project, the Company will employ approximately 400 additional persons in operation of the Project. 4. Representatives of the Company estimate that the acqui- sition and construction of the Project will result in an annual payroll of approximately $7,000,000 based on wage rates currently in effect. The City Council believes that a substantial percent- age of that payroll will be spent on housing, food and other goods and services in the City and surrounding area, thus bene- fiting the local economy. 5. The Project, when in place, will~add to the tax base of the City and .significantly aid the City and its Housing and Redevelopment Authority in achieving the redevelopment goals of the Lyndale-Hub-Nicollet Redevelopment Project Area. 6. The City Council has reviewed the preliminary plans and drawings for the Project and believes that the Project, when com- pleted, will be compatible with present and projected development in the area. The City will provide the Department of Energy, Planning and Development with the information required by Section 474.01, Sub- division 8 of the Act, upon entering, into a revenue agreement, as defined in the Act, with the. Company. The Project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing .facility to be rented or used as a permanent residence. A public hearing on the proposal to undertake and finance the. Project was conducted pursuant to Section 474.01, Subdivision 7b of the Act on Tuesday,. February 16, 1982, at 7:30 o'clock p.m. in the Richfield City Hall, at which public hearing all interested parties were afforded an opportunity to express their views. A copy of the notice of hearing is attached. Dated: February , 1982. Mayor City Manager • • tfie 4~~~~~ financial c®rp. 612-~44-0007 REAL ESTATE FINANCE SPECIALISTS January 27, 1982 Mayor Hamilton and Members of the City Council CITY OF RICHFIELD 6700 Portland Avenue South Richfield, MN 55423 RE: $9,850,000 CITY OF RICHFIELD COMMERCIAL DEVELOPMENT REVENUE BOND ISSUE - NEW AGE DEVELOPERS PROJECT Gentlemen: EXHIBIT 4 At the request of the New Age Developers, a Partnership to be formed under the laws of Minnesota (Applicant), we have evaluated the economic feasibility of the proposal that the City of Rich- field issue its Revenue Bonds under the. provisions of the Minnesota Municipal Industrial Development Act to provide funds • for a portion of the cost of the acquisition of land and the acquisition, construction and equipping of a 125,000 square foot commercial and off-ice complex with related parking facilities and related improvements thereon to be leased (the "Project"). Our evaluation has led us to conclude that, on the basis of current financial conditions, conventional commercial financing to pay the cost of the Project is available only on a limited basis and at such high cost borrowing that the economic feasi- bility of constructing and operating the Project would be signi- ficantly impaired, but that with the aid of municipal borrowing and its resulting lower borrowing cost, the Project is economi- cally more feasible. Our study has also led us to conclude that on the basis of current financial conditions, the Project is economically feasible and that the revenue obligations of the City can be successfully issued and sold. We propose to act as Agent in arranging for the placement of the Bonds with one or more financial institutions and/or individuals through a private placement or public offering of the bonds, subject to the approval of the Project by the State of Minnesota Department of Energy, Planning and Development and subject to final agreement among the City, Applicant and ultimate .purchasers of the-Bonds as to the terms and conditions of the issuance and sale of the Bonds. • 530 Parkdale Plaza 1660 South Highway 100 • Minneapolis, Minnesota 55416 ' Mayor Hamilton and Members of the City Council CITY OF RICHFIELD January 26, 1982 Page Two We understand a copy of this letter will be forwarded by the City to the:Department of Energy, Planning and Development of the State of Minnesota to serve as the letter as to financial ..feasibility required by the regulations pertaining to Industrial Development Revenue Bond Financing. Very truly yours, T~E ST,~ BE FINANCIAL CORPORATION n s~ , V ~,.J'ef r~`y .. `~~Rgbinson JAR Enclosure - • • ~CM-00424-01 ` This Application must be submitted to the Commissioner in duplicate. STATE F MINNESOTA DEPARTMENT OF ENERGY; PLANNING AND DEVELOPMENT BUSINESS SERVICES Application For Approval of municipal Industrial Revenue Bond Project To: Date Minnesota Department of Energy, Planning and Development Business Services 480 Cedar Street St. Paul, MN 55101 The governing body of Richfield County of Hennepin Minnesota, hereby applies to the Commissioner of the State of Minnesota, Department of Energy, Planning and Development, for approval of this community's proposed municipal Industrial Revenue Bond Issue, as required by Section 1, Subdivision 7, Chapter 474, Minnesota Statutes.- We have entered into preliminary discussions with: Firm NEW AGE DEVELOPERS Address 1650 Shelard Tower Clty Minneapolis State Minnesota 55426 State of Incorporation Minnesota Partnership to be formed. David C. Selle LINDGREt~ TD. AttorneyLARKIN HOFFMAN DALY ~ ~1dLdress 7900 Xerxes Ave. So. Name of Project NEW AGE DEVELOPERS PROJECT Minneapolis, MN.55 31 This firm is engaged primarily in (nature of business): Development bf the project. The funds received from the sale of the Industrial Revenue Bonds will be used to (general nature of project): .pay a portion of the cost of acquiring land and con- structing thereon a 125.000 square foot office/commercial building with related parking. It will. be located in the City of Richfield . The total. bond issue will be approximately $ 9,850,000.00 to be applied toward payment of costs now estimated as fol ows: Cost Item Land Acquisition and Site Development Construction Contracts Equipment Acquisition and Installation Architectural and Engineering Fees . Legal Fees Interest during Construction Initial-Bond Reserve Contingencies Bond Discount Other (Fees ~ Miscellaneous Expenses) $ 887,500 Amount 7,062,500 0 300,000 50,000 1,050,000 0 200,000 0 300,000 It is presently estimated that construction will begin on or about October :', 19~, and will be completed on or about October 19 8~. When completed, there will be approximately 400 new jobs created by the project at an annual payroll of approximately $ 7,00.0,000 based upon currently prevailing wages. 19e 82 ntative term of the financing is TEN (to) years, commencing October The following exhibits are furnished with this application and are incorporated herein by reference: 1. An opinion of bond counsel that the proposal constitutes a project under Minnesota Stat., Chapter 474.02. 2. A copy of the city council resolution giving preliminary approval for the. issuance of its revenue bonds. 3. A comprehensive statement by the municipality indicating how the project satisfies the public purpose of Pinnesota Stat., Chapter 474.01. , X~ 4. A letter of intent. to purchase the bond issue or a letter confirming the feasibility of the project from a financial-standpoint. 5. A statement, signed by the principal representative of the issuing authority, to the effect that upon entering into the revenue agreement, the information required by Minn. Stat., Ch. 474.01 Subd. 8 will be submitted to the Department of Energy, Planning and Development. 6. A statement, signed by the principal representative of the issuing authority, that the project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 7. A statement, signed by the principal representative of the issuing authority, that a public hearing was conducted pursuant to Minn. Stat. 474.01 Subd. 7b. The statement shall include the date, time and place of the meeting and that all interested parties were afforded an opportunity to express their views, 8. A copy of the notice of publication of the public hearing., and appointed We, the undersigned, are duly elected /representatives of Richfield , Minnesota, and solicit your approval of this project at your earliest convenience so that we may carry it to a final conclusion. Signed by: (Principal Officers or Representatives of Issuing Authority) This approval shall not be deemed to be an approval by the Commissioner or the State of the feasibility of the project or the terms of the l to be executed or the bonds to be issued therefor. revenue agreement Date of Approval Commissioner htinnesota Department of Energy, Planning and Development `. ti CITY OF RICHFIELD, MINNESOTA Office of City Manager Council Agenda The Honorable Mayor and Members of the City Council City of Richfield Council Members: Letter No. 61 February 16, 1982 Subject: Additional Information Regarding Budget Revisions At the February 4, 1982 special city council meeting, council members reviewed a recommendation for 1982 general fund budget modifications which the staff had developed. The staff recolmnenda- tion was based on the_need to reduce 1982 General Fund expenditures and/or increase 1982 General Fund revenues by approximately $375,000, to make up the shortfall which exists between the adopted revenues and expenditures for 1982. • At that time, council members requested the staff to investi- gate several other items as potential budget saving issues. The purpose of this letter is to provide information regarding those items, as well as to request specific city council authorization to enact the previously outlined staff recommendations for budget reductions. Following is a summary of the issues which the council request- ed the staff to investigate: 1. The per home cost of sealcoating, as a potential special assessment (based on the 1981 contract cost) would be approximately $1 per front foot; 2. Summer Park Programs: The 1982 recreation division bud- get includes an appropriation of $3,500 to support the summer programs in the park activity. This appropria- tion is estimated to support the cost of providing 8 concerts in Augsburg Park during the summer; 3. The Community Theatre Program: The 1982 General Fund includes an appropriation of $5,640 for the Community Theatre Program, which was instituted in 1981. Actual program costs are approximately $9,000; with estimated revenues of $3,360, resulting in the net cost of $5,640. It is anticipated that these costs will be reduced each year as the program matures so that city participa- tion will reduce similar to numerous recreational programs. =~ Council Letter No. 61 -2- February 16, 1982 4. Senior Transportation Program: Council members re- ~, quested information regarding the Senior Citizen Transportation Program, and asked for an estimate of budget savings which would result if this program were cut in half. The total transportation program operated through the Community Center is estimated to cost $30,539 in 1982; however, this cost alone is not an accurate picture of the program, since many of the participants and other Community Center programs rely on the transportation service to get to those other activities. It is likely that additional savings would be achieved if the transportation program were cut in half, because of the reduced participation other center activities would receive. 5. CETA Funding for Youth Employment Services: The staff has contacted Bill Brumfelt, Director of the Hennepin County CETA program, for information regarding potential funding to support the Youth Employment Service. We have been advised that there are no federal monies avail- able to the city. The CETA funds available for youth employment opportunities in the Richfield area are channeled through the school district only. Although the city has worked iri conjunction with the school district to place students in jobs (in fact, we now have a student worker in the finance division funded through the school CETA program), this is not a funding source to support the Youth Employment activity. 6. Travel Budget: The 1982 budget for professional confer- ences totals $13,860, of that amount, $5,720 (41%) is in the city council budget, $2,140 (15%) is in the city manager budget, and the remaining $6,000 is spread through- out the other budgets. I have imposed a severe restriction currently which will reduce expenditures in this category to offset our $50,000 budgeted deficit. An additional question raised by the city council during Thursday's budget discussion related to the actual 1982 property tax levy for Richfield homeowners. Attachments A and B show the impact of the 1982 property tax levy on three sample Richfield properties, the "average" home, a lower-valued property, and a higher-valued property. You will notice that the mill rate we assumed in projecting the 1982 budget was 99 mills, compared to the actual 1982 mill levy of 103.98 mills, which has increased the actual property tax bill to each of these three homeowners over what we had originally estimated. This increase in mill levy resulted after our budget review was completed due to state legislature changes in school and special district financing. The second chart por- trays the total property tax impact on the average Richfield prop- erty over the past several years. Council members received this data as part of the proposed budget, and these charts simply update the previous data to reflect the actual mill levy. 1 Council Letter No. 61 -3- February 16, 1982 Attached to this letter is a resolution which amends the 1982 General Fund budget. This resolution has been prepared in accordance with the package of revenue increases and expenditure cutbac]cs proposed by the staff in the original staff recommendation. ~9'~_} The specific positions which will be eliminated as a result of implementing these expenditure reductions are also detailed in ~',~ ' the resolution for confirmation of the city council. The resolution also provides for council approval of a contract with the City of ~~° Bloomington to provide inspection services, and execution of the c~'~''. contract with the City of Bloomington for the Community Health q4` Services at the rate of services which we previously detailed. ~ For some time our city staff and the staff of the City of Bloomington have been discussing a request by Bloomington to contract with the City of Richfield for certain building inspection activities. These discussions have resulted in development of a tentative contract (copy attached for council consideration) whereby Richfield would provide approximately the time equivalent to 3/4 of a full-time Building Inspector to assist with inspection responsibilities in the City of Bloomington. Implementation of this contract would provide for the present Plumbing and Heating Inspector, as well as the Electrical Inspector, to operate as a part of the Bloomington Inspection Department. These employees would continue to handle the inspection responsibilities now conducted for the City of Richfield, as well as handling the inspection responsibilities requested by the City of Bloomington. The City of Bloomington would pay Richfield $25,238 for these services, on an annual contractural basis. The contract would become effective on March 1, 1982, or as soon as the contract is ratified by the Bloomington City Council and the necessary operational arrangements can be concluded. In addition to paying the City of Richfield for the cost of 3/4 of an inspector's time, the City of Bloomington would provide some plan review assistance for Richfield and provide some of their inspection personnel to conduct technically complex building inspection activities, such as those which might be required in the Lake Shore Drive project which is currently under construction. We think that this arrangement will provide economic benefits to the City of Richfield, and provide a broader inspectional resource to meet unique building needs which might occur in our community. During the course of this contract we will evaluate this procedure. If it appears to be working effectively, we consider implementing this system on a permanent basis at the conclusion of the first year's contract period. A copy of the proposed contract is attached. - Council Letter No. 61 -4- February 16, 1982 ~, Since 1977, the City of Richfield has contracted with the City of Bloomington to provide a variety of personal health services to Richfield residents. A state community health services grant supports a portion of these costs, as well as supporting a portion of the city's in-house environmental health programs. The 1982 adopted budget includes an appropriation of $102,090. The package recommendations submitted to the city council recommended a $13,000 decrease in this expenditure. A contract has now been negotiated with the City of Bloomington to provide these services during 1982 for the sum of $89,187. The basic package of services provided will be the same, but many of the clinic services now provided in Richfield will be relocated to the Bloomington Public Health facility. The largest single decrease is a reduction of $5,600 in the cost of services to be provided to the parochial schools. This decreased level of services to the parochial schools will bring the level of services in those facilities comparable to the level of services provided in the public schools by the Rich- field School District. It is also recommended that the city council adopt .the attached transitory ordinance, appropriating monies for the Forestry and the Fire Vehicle reserve funds in the 1982 Capital Improvement Budget. A $45,000 appropriation for Forestry, included in the adopted 1982 Capital Improvement Budget, was previously deleted from the appropriations which the council has approved to finance 1982 capital projects. The attached transitory ordinance will provide that $22,500 will be appropriated for Forestry, and that the remaining $22,500 previously allocated for Forestry purposes be reallocated to the Fire Vehicle reserve fund. This ordinance will thereby transfer a fire vehicle reserve appropriation from the operating budget to the Capital Improvement budget in accordance with the staff recommendations. It is recommended that the city council adopt the attached resolution and transitory ordinance, thereby adjusting the 1982 General Fund budget as recommended. 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Statutes §§ 15.51-15.57 provides.the• mechanism by which governmental agencies such as the Cities of Richfield and Bloomington may accomplish the interchanges of personnels,: WHEREAS, the assignment of Richfield trade inspectors to.. the City of Bloomington for inspection duties in both Richfie?:~. and Bloomington will accomplish a more cost-effective and ef- ficient use of personnel in b©th cities;; NOW, THEREFORE, in consideration of the mutual covenants. and conditions expressed below, the parties hereto agzee as follows: (1) The intent of this Agreement is to effectuate the assignments of two Richfield trade inspectors (hereinafter "Inspectors") to Bloomington in accordance with the provisions of Minnesota Statutes §§ 15.51-15.57. (2) The Inspectors assigned are George Annas and David Fisher. (3) Unless the assignments are terminated at an earlier date pursuant to the provisions of Paragraph (10), below, the period of the assignments shall be from Dtarch 1, 1982 to ` ;,larch 1, 1983. The assignments may be cstcndcd for an additional . six months by written agreement of the parties. (4) The Inspectors, while on assignment to Bloomington, shat i for al } hiirnc~~c~ rcma in an cr.~ploycc of ~irhfield, c~i ~,~t that the control and st.~pcrvision of their duties shall lie t:ith Bloomington:. (S) During the poriod of the assignments, Bloomington shall. assume the duties involved in trade inspections and code enforcement in and for Richfield. Bloomington may direct the Inspectors to conduct multiple trade inspections., including, but= not limited to, plumbing, heating, ventilating and air conditioning, electrical and building inspections, in and for both Richfield and Bloomington.,. Bloomington may also utilize qualified . Bloomington inspectors to conduct plumbing, heating, ventilating 3 and~air conditioning, electrical and building. inspection5> in } and for the City of .Richfield when deemed .necessary and appro- priate by Bloomington.. i S C (6) Richfield shall continue to maintain liability insurance coverage for the inspectors during the term of their assignment. Richfield agrees to hold harmless and indemnify Bloomington-fog all actions, liability, and damages for property damage., .personal- injury, or death resulting from the acts or neglect of the. Inspectors while on their assignor-ertt. Likewise, Bloomington shall maintain liability insurance coverage for its own inspectors and agrees to hold harmless and ~ indemnify Richfield for all actions, liability, and damages for property damage, personal. injury, or death resulting from the acts of neglect of its own inspectors while working in Richfield. (7) Richfield shall continue to be responsible to the Inspectors for their salary and benefits. Should the Inspectors . ~i _ suffer death or disability as a result of personal injury arising out of and in the course of the assignment or during the perfor- mance of duties in connection therewith, they shall be treated, for the, purposes of worker's compensation benefits, as employees of Richfield. . Likewise, should ftloomin;ton inspectors suffer. such death or disability while ptrfonning duties in Richfield, they shall •- be treated, for the purpose; of ~~~orker's cempcn;ation benefit;, as employees of Bloomington. (S) Bloomington shall compensate Richfield in a total ,.i U N y t . amount of g25,23S for the first year of the Agreement. Payment by Bloomington shall be made in two installments due September 1, 19S2 and March 1, 1933. A quarterly roview of the Inspectors' duty time, together with the Richfield duty time (if any) of Bloomington inspectors, shall be done by the parties to determine the amount of time inspectors spent working. in each community, and,. based on this review, the compensation. to Riclfield may be adjusted semiannually upon agreement of both parties. (9) Bloomington shall. provide an insured vehicle and all other equipment and materials necessary for the performance of the Inspectors' duties. (10) This Agreement shall terminate. as follows:: 1 ¢ (a)upon the departure of an Inspector from hi;s j employment with Richfield;: • (b)upon the temporary or permanent total disabiaity of an Inspector.;, (c)upon the expiration of 45 days after service of written notice upon the other party,; '• (d)at any other time, upon the agreement of the parties; (e)with the completion of the term of the assign- . ments. i 1 (11) Upon termination of the Agreement, there shall be a pro rata reduction of the compensation owed by Bloomington to Richfield which reflects the portion of the assignment periods _ remaining at the time of termination. Upon proper execution, this CITY OF RICE}FIELD Agreement shall be a legal ~ and binding obligation upon the City of Bloomington. By : -- - City Attorney :..~ By: CI"PY OF BLOO~fIKGTOhT By: .Its Dfa~•or B~~ Its t:it~• ~I;in;~~,~,~: