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03-10-2020 Regular AgendaR EG U LAR C IT Y C O U N C IL MEET IN G R IC H F IE L D MU N IC IPAL C E N TE R, C O U N C IL C H AMB E R S MAR C H 10, 2020 7:00 P M IN TR O D U C TO RY P R O C E E D IN G S C all to order P ledge of A llegiance Open forum E ach speaker is to keep their comment period to three minutes to allow sufficient time for others. C omments are to be an opportunity to address the C ouncil on items not on the agenda. I ndividuals who wish to address the C ouncil must have registered prior to the meeting. A pproval of the Minutes of: (1) C ity C ouncil Work S ession of F ebruary 24, 2020; and (2) C ity C ouncil Meeting of F ebruary 24, 2020. P R E S E N TATIO N S 1.P roclamation declaring March 10, 2020 Tibet D ay AG E N D A APPR O VAL 2.A pproval of the A genda 3.Consent Calendar contains several separate items, which are acted upon by the City Council in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further Council action on these items is necessary. However, any Council Member may request that an item be removed from the Consent Calendar and placed on the regular agenda for Council discussion and action. All items listed on the Consent Calendar are recommended for approval. A .C onsider a resolution approving an agreement related to a previously approved planned unit development at 1401 77th S treet E ast (A udi Richfield). S taff Report No. 38 B .C onsider the approval of the Minnesota D epartment of Natural Resources Outdoor Recreation Grant Resolution to submit a grant for the Universally Inclusive P layground at A ugsburg P ark and authorize staff to execute the grant agreement if awarded. S taff Report No. 39 4.C onsideration of items, if any, removed from C onsent C alendar P U B LIC H E AR IN G S 5.P ublic hearing and second reading of transitory ordinance providing funding for certain capital improvements from the S pecial Revenue F und. S taff Report No. 41 PR O P O S E D O R D IN AN C E S 6.C onsider the second reading of an ordinance amending S ubsections 705.17, 715.05, and 720.07 of the Richfield C ity C ode relating to sanitary sewer, water, and storm water utility billing and establishment of an new section 727 relating to the street light system. S taff Report No. 42 R E S O L U T IO N S 7.C onsider a resolution providing for the sale of $5,375,000 General Obligation B onds, S eries 2020A . S taff Report No. 43 C IT Y MAN AG E R’S R E P O R T 8.C ity Manager's Report C LAIMS AN D PAYR O L LS 9.C laims and P ayroll C O U N C IL D ISC U SSIO N 10.Hats Off to Hometown Hits 11.A djournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. CITY COUNCIL MEETING MINUTES Richfield, Minnesota City Council Work Session February 24, 2020 CALL TO ORDER The work session was called to order by Mayor Maria Regan Gonzalez at 5:15 p.m. in the Bartholomew Room. Council Members Maria Regan Gonzalez, Mayor; Mary Supple; and Ben Whalen Present: Council Members Edwina Garcia; and Simon Trautmann Absent: Staff Present: Katie Rodriguez, City Manager; Amy Markle, Recreation Services Director; Rachel Lindholm, Sustainability Specialist; Neil Ruhland, Communications and Engagement Manager; and Kelly Wynn, Senior Office Assistant Others Present: Brian Grogan, Moss & Barnett Attorney Item #1 PRESENTATION FROM SOUTHWEST SUBURBAN CABLE COMMISSION City Manager Rodriguez presented the item and Brian Grogan from Moss & Barnett. Attorney Grogan introduced himself and began by describing what the commission does and why it exists. He went on to describe the FCC 621 Order. The Order effective date was Thursday, September 26, 2019 and it is reinterpreting a 35 year old Cable Act. In the Order it addressed Mixed Use which states the city cannot impose any fees on non-cable services and PEG Capital which refers to costs incurred in improving PEG facilities. Attorney Grogan also discussed Cable Franchises and PEG Channel Capacity. He continued with the Franchise Modification Process and how the FCC encourages parties to negotiate franchise modifications. He spoke of the FCC 621 Appeal and how all cases have been consolidated into City of Eugene, Oregon v. FCC as of January 15, 2020. As of today, it is unlikely to see a decision before 2021. Mayor Regan Gonzalez thanked Attorney Grogan for coming and sharing the information. Council Member Whalen appreciated Attorney Grogan for mentioning that this is separate from politics but wonders if a new President could come in and change the FCC members later this year. Attorney Grogan confirmed this is a possibility. Council Member Whalen questioned this limbo period for negotiations. Attorney Grogan stated it is slightly unknown at this point. The City should budget for worst case scenario. Council Work Session -2- February 24, 2020 Mayor Regan Gonzalez asked if there were recommended actions of any kind. Attorney Grogan stated there is no action at this time, only an information update. City Manager Rodriguez proposed a resolution to show support. Council Member Supple believes the resolution was well written and will provide support. Council Member Whalen also would support the resolution. Mayor Regan Gonzalez thanked Attorney Grogan again for attending. She realizes this is a very concerning issue and looks forward to future updates. Item #2 PRESENTATION UPDATE ON ORGANIZED RECYCLING AND ORGANICS City Manager Rodriguez introduced the item and staff. Director Markle gave an overview of the collection process including a county recycling rate goal of 75% by the year 2030. Currently, the rate is approximately 46%. Sustainability Specialist Lindholm updated Council on the most recent letter from Garbage Haulers for Citizen Choice, a meeting with Minnesota Pollution Control Agency, and letters written to Hennepin County and Commissioner Goettel. She then listed the options for next steps (1) Follow state statute procedure for organizing solid waste collection and organize everything; (2) Do not organize and license haulers for organics collection to fulfill county mandate; or (3) Follow state statute procedure for organizing solid waste collection which would be organizing recycling and organics collection. She then listed pros and cons for each option. Council Member Supple wondered if there would be a separate cart for organics. Sustainability Specialist Lindholm stated they will have to negotiate collection options but a cart could be one choice. She then proceeded to give a detailed timeline for organization by state statute. Mayor Regan Gonzalez wondered about meetings and negotiations regarding current contracts with haulers. Sustainability Specialist Lindholm explained there would be meetings with the haulers first to attempt to come to an agreement but if communications break down or there is no consensus among the haulers, then the City can put out an RFP. Mayor Regan Gonzalez then questioned how the process works in getting the best price for the residents. Sustainability Specialist Lindholm stated the City would have a strong hand in negotiations since it will be negotiating on behalf of approximately 16,000 households. Council Member Supple wondered if it would be one company or multiple companies partaking in the collection. Sustainability Specialist Lindholm explained it would be determined by market share between the haulers. If the haulers are unable to come to an agreement, an RFP could be put out and potentially one company could do the collecting. Council Member Whalen asked if it was beneficial for the City to have already put out an RFP for data purposes. Sustainability Specialist Lindholm confirmed and they also have costs from neighboring cities as well. Council Member Whalen addressed that in St. Paul a decision was made regarding collection and a city wide vote was needed. Director Markle stated they will have to rely on City Charter but residents would have the right to petition, such as they did in St. Paul and Bloomington. Council Work Session -3- February 24, 2020 City Manager Rodriguez clarified in Bloomington, the residents petitioned to change the city charter. Sustainability Specialist Lindholm provided some legal wording provided by City Attorney Tietjen regarding petitions. City Manager Rodriguez stated they need to be prepared for residents to request the decision to go to a referendum. Sustainability Specialist Lindholm went back to the timeline for collection and stated it could take nine months and starting a new contract wouldn’t be ideal in the winter months. She then concluded with the two big reasons of why this important (1) equity and resident protection and (2) environmental benefits. She also explained the importance of the entire Council being on board with moving forward in this process and to not waiver. Council Member Whalen expressed support to organize everything and would like to know more about defining winter months so as to determine when the process could start. Director Markle explained they have been advised to have the process take place in spring or fall as residents may be out of town in the winter and summer months. Sustainability Specialist Lindholm added that a start date can be negotiated in the contract. City Manager Rodriguez recommends a long lead time in case there are issues. Council Member Supple voiced support for option one and would like to see movement start sooner rather than later to accommodate the timeline. Mayor Regan Gonzalez also supported option one. She voiced some concern on staffing resources, financial impact and would like to see big picture view of the process to understand any implications. Council Member Supple followed up asking who would handle this task. Director Markle confirmed this falls under the charge of the Sustainability Commission. Council Member Whalen questioned if this would require establishment of another committee. Sustainability Specialist Lindholm believes a separate committee would need to be established but they will be utilizing the Sustainability Commission. Director Markle also spoke of using the Sustainability Commission resources to assist with public education. Council Member Whalen suggested shooting for spring of 2021 instead of fall of 2021 so if issues do arise, people are not scrambling to get things done. City Manager Rodriguez spoke of flushing out a proper timeline and presenting it to Council soon. Council Member Whalen commented on the insightful comment of Council and staff all being on board with moving forward with the process. Sustainability Specialist Lindholm spoke of all the haulers involved have been a part of at least one consortium prior to this one so they are familiar with the process. She also clarified this presentation was for updates and recommendations on next steps but no voting necessary. Mayor Regan Gonzalez thanked staff for the presentation. ADJOURNMENT The work session was adjourned by unanimous consent at 6:35 p.m. Date Approved: March 10, 2020 Council Work Session -4- February 24, 2020 Maria Regan Gonzalez Mayor Kelly Wynn Katie Rodriguez Senior Office Assistant City Manager CALL TO ORDER The meeting was called to order by Mayor Maria Regan Gonzalez at 7:00 p.m. in the Council Chambers. Council Members Maria Regan Gonzalez, Mayor; Mary Supple; Ben Whalen; and Present: Simon Trautmann Council Members Edwina Garcia Absent: Staff Present: Katie Rodriguez, City Manager; Dave Anderson, Acting City Attorney; Neil Ruhland, Communications Manager; Jay Henthorne, Police Chief; Julie Urban, Housing Manager; John Stark, Community Development Director; Melissa Poehlman, Assistant Community Development Director; and Blanca Martinez Gavina, Executive Analyst; PLEDGE OF ALLEGIANCE Mayor Regan Gonzalez led the Pledge of Allegiance OPEN FORUM No speakers APPROVAL OF MINUTES M/Supple, S/Trautmann to approve the minutes of the: (1) City Council Work Session February 11, 2020; (2) City Council Meeting of February 11, 2020; and (3) Special City Council Meeting of February 14, 2020 Motion carried 4-0. CITY COUNCIL MEETING MINUTES Richfield, Minnesota Regular Council Meeting February 24, 2020 Council Meeting Minutes -2- February 24, 2020 Item #1 APPROVAL OF THE AGENDA M/Trautmann, S/Whalen to approve the agenda Motion carried 4-0. Item #2 CONSENT CALENDAR City Manager Rodriguez presented the consent calendar. A. Consider the approval of a contract, not to exceed $226,439, with Kimley Horn and Associates, Inc. for preliminary design engineering of the 65th Street Reconstruction Project between 66th Street/Rae Drive and Nicollet Avenue, including the Lyndale Avenue Pedestrian improvements between 64th Street and 66th Street (Staff Report No. 32) B. Consider the first reading of an ordinance amending Subsections 705.17, 715.05 and 720.07 of the Richfield City Code relating to sanitary sewer, water, and storm water utility billing and establishment of a new Subsection 727 relating to the street light system (Staff Report No. 33) C. Consider the adoption of a resolution accepting grants and donations received by the Richfield Recreation Services Department in 2019 and authorizing the Recreation Services Department to administer the funds in accordance with any applicable grant agreements and terms prescribed by donors (Staff Report No. 34) RESOLUTION NO. 11720 RESOLUTION AUTHORIZING ACCEPTANCE OF GRANTS RECEIVED BY THE CITY OF RICHFIELD-RECREATION SERVICES DEPARTMENT AND TO AUTHORIZE THE CITY TO ADMINISTER THE FUNDS IN ACCORDANCE WITH GRANT AGREEMENTS AND TERMS PRESCRIBED BY DONORS D. Consider the approval of the location of the Richfield Dog Park at Roosevelt Park (Staff Report No. 35) M/Supple, S/Trautmann to approve the consent calendar Motion carried 4-0. Item #3 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM CONSENT CALENDAR None Council Meeting Minutes -3- February 24, 2020 Item #4 PUBLIC HEARING AND CONSIDERATION OF THE ADOPTION OF A RESOLUTION SPECIFYING THE USE OF FUNDS FROM THE URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT ALLOCATION FOR 2020 AND CONSIDERATION OF A RESOLUTION REPROGRAMMING 2019 COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS (STAFF REPORT NO. 36) Supple presented staff report 36 and opened the public hearing. M/Supple, S/Whalen to close public hearing. Motion carried 4-0. M/Supple, S/Whalen to approve the resolution (1) authorizing the use of funds for the 2020 Urban Hennepin CountyCommunity Development Block Grant Program and authorizing execution of a Subrecipient Agreement with Hennepin County and any required third party agreements; (2) Adopt a resolution authorizing the reprogramming of 2019 Community Development Block Grant Program funds from Single Family Acquisition and Rehabilitation to the First Time Homebuyer Program and authorizing execution of any required agreements with Hennepin County. RESOLUTION NO. 11721 RESOLUTION APPROVING REPROGRAMMING 2019 URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FUNDS AND AUTHORIZING EXECUTION OF ANY REQUIRED AGREEMENTS WITH HENNEPIN COUNTY RESOLUTION NO. 11722 RESOLUTION APPROVING PROPOSED USE OF 2020 URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FUNDS AND AUTHORIZING EXECUTION OF SUBRECIPIENT AGREEMENT WITH HENNEPIN COUNTY AND ANY REQUIRED THIRD PARTY AGREEMENTS Council Member Whalen recognized the importance of the first time buyer program. He spoke to the personal experience in buying a home and the difficulties that come with it. He also stated that he is excited to create more funds and support more community members. Council Member Supple echoed Council Member Whalen’s comments as she stated that many residents are paying in rent what they could be paying in mortgage. She continued to speak about how buying a home is a great way for families to build generational wealth. Mayor Regan Gonzalez communicated that she heard great interest and encouraged people to listen to the HRA 2019 work in review session to learn about the robust and diverse programs that support homeowners, small businesses, store fronts and landlords. She continued to say that there are many programs that can support residents. Mayor Regan Gonzalez thanked staff leading in Minnesota and the Twin Cities with programs like Kids at Home and many other cities are using the same model to support children in their school. Council Member Trautmann thanked staff for making this program a reality and wanted to highlight the deferred loan rehabilitation program for seniors in the community who have fixed income and feel like the only solution is to sell their homes. This program is a great solution to create accessibility. He also stated that it is giving people access to create wealth as he estimated that there Council Meeting Minutes -4- February 24, 2020 was a billion dollars of wealth created by homeowners and renters. He then referred to staff to ask how the program is going. Housing Manager Urban stated there have been a couple of adjustments but the max income of 80% is set there. She stated there are limitations as the program is restricted by the amount of homes for sale. The amount was increased as the numbers were not working well. Underserved populations, out of the 8 households 6 were for households of color and 2 for people with disabilities. They also partnering with NeDA and helping people get ready for home ownership and making sure things are going well. Council Member Trautmann mentioned that there has been a 20 to 30 percent increase in home values, and asked whether the 10k to 15k, at this point is enough. Housing Manager Julie Urban believed it is workable but it is about finding the correct inventory. Motion carried 4-0 Item #5 (1) CONSIDER THE APPROVAL OF A RESOLUTION GRANTING AN AMENDMENT TO THE MARKET PLAZA/VILLAGE SHORES PLANNED UNIT DEVELOPMENT TO ALLOW A NEW BUILDING FOR A BANK BRANCH WITH A DRIVE-UP ATM. (2) CONSIDER APPROVAL OF A RESOLUTION GRANTING A SUBDIVISION WAIVER TO ALLOW THE CREATION OF A SEPARATE LOT FOR THE PROPOSED BUILDING (STAFF REPORT NO. 37) Council Member Whalen presented staff report 37. Assistant Community Development Director Poehlman summarized the issues that were brought up in the previous council meeting related to (1) Grading; (2) ATM requirements; and (3) Parking agreements that would preclude any other agreements. She stated that the submitted revised plan has added a vestibule, replacing exterior stairs with interior stairs. Chase Bank has communicated an ATM is vital for people with disabilities and the Richfield Disability Advocacy Partnership (RDAP) supports an ATM for equity and accessibility. She continued to speak that there are no existing parking agreements that would preclude larger parking lots. However, Chase Bank cannot build a larger parking lot. Assistant Community Development Director Poehlman said staff feels this proposal has made an improvement and staff is in support of this project. M/Whalen, S/Supple to (1) Approve a resolution amending the Planned Unit Development, Conditional Use Permit, and Final Development Plan for Market Plaza / Village Shores; and (2) Approve a resolution granting a subdivision waiver to allow the creation of a separate lot for the proposed building. RESOLUTION NO. 11723 RESOLUTION APPROVING AN AMENDED FINAL DEVELOPMENT PLAN AND CONDITIONAL USE PERMIT FOR A PLANNED UNIT DEVELOPMENT AT 6501 WOODLAKE DRIVE Council Meeting Minutes -5- February 24, 2020 RESOLUTION NO. 11724 RESOLUTION AUTHORIZING A SUBDIVISION WAIVER FOR MARKET PLAZA AND VILLAGE SHORES AT 6501 WOODLAKE DRIVE Council Member Supple thanked staff because she believes the improvements make the building more appealing. Council Member Trautmann asked about long term use of the space if Chase Bank were to ever leave the land. Assistant Community Development Director Poehlman confirmed if for example a restaurant were to move in, they would need to apply for a new permit altering the use of the space. Council Member Trautmann then thanked RDAP for being involved and helping him to understand some of the necessities of residents with disabilities. Council Member Whalen echoed Council Member Supple’s comments. He then spoke of his conversations with members of RDAP and the different meanings of convenient. He continued to speak about a few members of the Planning Commission that are interested in a discussion about drive throughs. He wondered if it would be worth having a larger conversation about drive throughs or if it will be a project-by-project basis. Assistant Community Development Director Poehlman said there are stringent regulations in the mixed used district, it is the staff’s perspective that we address the negative aspects of drive throughs as opposed to banning them, senior populations benefit from drive through. Mayor Regan Gonzalez appreciated hearing staff’s response and there may be additional conversations. She also expressed appreciation to all staff has done and the improvements. Motion carried 4-0 Item #6 CITY MANAGER’S REPORT City Manager Rodriguez had nothing to report. Item #7 CLAIMS AND PAYROLL M/Whalen, S/Supple that the following claims and payrolls be approved: U.S. Bank 02/24/2020 A/P Checks 284829 - 285292 $ 1,398,980.51 Payroll: 152453 - 152791 693,731.19 TOTAL $ 2,092,711.70 Motion carried 4-0. Council Meeting Minutes -6- February 24, 2020 Item #8 HATS OFF TO HOMETOWN HITS Council Member Supple spoke about the Beacons program which is a partnership with the YMCA, Boys and Girls Club, Centennial middle school and high school. She said it was fun to see the kids enjoying the programming. She then encouraged everyone to go to their precinct caucus tomorrow for the political party of their choosing. Council Member Whalen reminded residents of the Presidential Primary next week. He then talked about the new Safe Routes to School Coordinator, Will Wlizlo. Will is working with the Richfield Police Department and Public Works to make walking and biking a safer and more viable option. Council Member Whalen also spoke of the Sustainability Commission and the first meeting will be Thursday. He continued with kind words of Paul Smithson, Wood Lake Nature Center Manager, enjoying our community and spoke about conversations with constituents being proud of Richfield. Council Member Trautmann encouraged everyone to attend the caucus, engage and meet your neighbors. He then mentioned a tip of his hat to Council Member Whalen for sporting the spring color palette in his ensemble. Mayor Regan Gonzalez reminded residents of the event Friday, February 28 from 6-7:30 pm put on by CLUES and MIRA. She also referenced Red Latina Understanding Behavior on Saturday, February 29 from 9:30am-12:30pm. Lastly, she mentioned the necessity of building community and the importance of the Census. Item #9 ADJOURNMENT The meeting was adjourned by unanimous consent at 7:39 p.m. Date Approved: March 10, 2020 Maria Regan Gonzalez Mayor Kelly Wynn Katie Rodriguez Senior Administrative Assistant City Manager Proclamation of the City of Richfield WHEREAS, on March 10, 2020, Tibetans will gather in their host countries to commemorate the 61st anniversary of the Tibetan National Uprising against the occupation of Tibet and to honor more than one million Tibetans who have died in this struggle; and WHEREAS, the occupation and ongoing suppression of human rights and freedom in Tibet and the continuous degradation of culture, religion, economic, and the annihilation of the Tibetan people’s identity should be a concern for all; and WHEREAS, Tibetan Buddhism and its spiritual leader in exile, His Holiness the 14th Dalai Lama are recognized for their teaching on compassion, forgiveness and tolerance; and WHEREAS, The Tibetan American Foundation of Minnesota was founded in 1992, and has over 5000 Tibetan community members - many of whom live in the city of Richfield, is committed to promoting and preserving the Tibetan culture, heritage and religion; and WHEREAS it is only fitting that we affirm the determination of the Tibetan people in Tibet and in-exile to retain their heritage and protect it from destruction against overwhelming odds through non-violent and peaceful means. NOW, THEREFORE, I, MARIA REGAN GONZALEZ, Mayor of the City of Richfield, on behalf of the Richfield City Council, do hereby proclaim March 10, 2020 as: Tibet Day in the City of Richfield IN THE CITY OF RICHFIELD And call on the people of Richfield to observe this day with appropriate programs, activities, and ceremonies, and continue to support our Tibetan community throughout the year. PROCLAIMED this 10th day of March, 2020. Maria Regan Gonzalez, Mayor AGENDA SECTION:CONSENT CALENDAR AGENDA ITEM #3.A. STAFF RE P ORT NO. 38 CIT Y COUNCIL ME E T ING 3/10/2020 RE P O RT P RE PA RE D B Y: Matt B rillhart, A ssociate P lanner D E PA RTME NT D IRE C TO R RE V IE W: John S tark, C ommunity D evelopment D irector 3/4/2020 O THE R D E PA RTM E NT RE V IE W: C ITY MA NA G E R RE V IE W: K atie Rodriguez 3/5/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Consider a resolution approving an agreement related to a previously approved planned unit development at 1401 77th Street East (Audi Richfield). E X E C UT IV E S UM M ARY: I n 2015, the City Council approved development plans for a new Audi dealership at 1401 77th Street East ("Property"). Those approvals stated that Audi Richfield ("Audi") was to construct a multi-story parking ramp on the Property within five years of the City's approval, to be completed no later than April of 2020. At the time of approval, Audi requested this delay because the anticipated volume of business for a newly opened dealership did not justify the construction of a parking ramp. As that deadline approaches this spring, Audi has not submitted plans and now wishes to further delay construction of the ramp, as they state their current volume of sales still does not necessitate a parking ramp. I n order to guarantee completion of the parking ramp, as agreed to by Audi in the 2015 land use approvals, the City Attorney and Community Development staff have crafted a Construction Agreement ("Agreement") with Audi. The Agreement requires that Audi submit plans within three years, and complete construction of the ramp within four years. The Agreement authorizes the Community Development Director to extend these deadlines by one additional year, with the ramp to be completed no later than April 2025. Audi representatives have signed the attached Agreement. Staff recommends approval of a resolution authorizing the Mayor and City Manager to sign the Agreement, bringing it into effect. RE C O M M E ND E D AC T I O N: By motion: Adopt a resolution approving an agreement related to a previously approved planned unit development at 1401 77th Street East (Audi Richfield). B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T None. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): Required Minimum Lot Coverage in the Mixed Use Zoning District (Zoning Code Section 537): I n the Mixed Use Regional zoning district, buildings are required to cover at least 50% of a lot. Higher building coverage encourages more intense utilization of land and increased tax base on some of the community's most valuable properties along the I -494 Corridor. Audi's current dealership building covers only 29% of the site. During the application process, Audi presented plans to build a multi-story parking ramp on the Property, but indicated it would prefer to wait and assess its business for the future rather than construct the parking ramp immediately, because the anticipated volume of business for a newly opened automobile dealership did not justify the construction of a parking ramp. Those plans showed that addition of the parking ramp would increase the building coverage on the site to approximately 44%, bringing it closer to compliance with the zoning code requirement of 50%. C.C R IT IC AL T IMIN G IS S U E S: None. D.F IN AN C IAL IMPAC T: The Agreement stipulates that Audi will provide the City $50,000 to be held a non-interest-bearing account to ensure compliance with the terms of the Agreement. E.L E GAL C ON S ID E R AT ION: The City Attorney prepared the attached agreement. ALTE R N AT IV E R E C O MME N D ATIO N(S): None. P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: J oe Bosco, Audi Richfield AT TAC H ME N T S: D escription Type Resolution Resolution L etter A greement B ackup Material 2015 P UD P lans B ackup Material RESOLUTION NO. RESOLUTION APPROVING A CONSTRUCTION AGREEMENT FOR A PLANNED PARKING STRUCTURE FOR AUDI RICHFIELD AT 1401 77TH STREET EAST WHEREAS, on April 28, 2015, the City Council approved a comprehensive plan amendment, rezoning, and a resolution authorizing a planned unit development, conditional use permit, and final development plans to allow Audi Richfield (“Developer”) to build a new car dealership at 1401 77th Street East (“Property”); and WHEREAS, the minimum required building coverage in the Mixed Use–Regional Zoning District is 50 percent. The Developer’s proposal included building coverage of only 29 percent of the site; and WHEREAS, during the application process with the City, Developer represented it had plans to build a multi-story parking ramp on the Property, but indicated it would prefer to wait and assess its business for the future rather than construct the parking ramp immediately, because the anticipated volume of business for a newly opened automobile dealership did not justify the construction of a parking ramp. Developer represented that addition of the parking ramp would increase the building coverage on the site to approximately 44 percent; and WHEREAS, Developer agreed that it would construct a parking ramp on the Property within five years of the City’s land use approvals and was willing to stipulate to this as a condition in the Conditional Use Permit (City Council Resolution No. 11075); and WHEREAS, Developer has not submitted plans for construction of the parking ramp and now wishes to extend the deadline for completion by up to five additional years. NOW, THEREFORE, BE IT RESOLVED, by the City Council that the City of Richfield enter into a Construction Agreement (“Agreement”) with ARB L.L.C. d/b/a AUDI RICHFIELD for the purposes of completing construction of a parking ramp on the Property no later than April 28, 2025, subject to all terms stated in the Agreement. BE IT FURTHER RESOLVED that the Mayor and the City Manager are authorized to execute the Agreement and any amendments to the Agreement. Adopted by the City Council of the City of Richfield, Minnesota this 10th day of March, 2020. Maria Regan Gonzalez, Mayor ATTEST: Elizabeth VanHoose, City Clerk CONSTRUCTION AGREEMENT BY AND BETWEEN THE CITY OF RICHFIELD AND ARB L.L.C. d/b/a AUDI (AUDI) This document drafted by: Kennedy & Graven, Chartered (MDT) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 (AMB) i TABLE OF CONTENTS PAGE 1. Right to Proceed ................................................................................................................2 2. Plans/PUD Amendment ....................................................................................................2 3. Erosion Control .................................................................................................................2 4. Construction of Ramp .......................................................................................................3 5. Cash Escrow......................................................................................................................3 6. Revocation of Conditional Use Permit .............................................................................4 7. Insurance ...........................................................................................................................4 8. Responsibility for Costs ....................................................................................................4 9. Clean up and Dust Control ................................................................................................4 10. Compliance with Laws .....................................................................................................5 11. Agreement Runs With the Land .......................................................................................5 12. Indemnification .................................................................................................................5 13. Assignment .......................................................................................................................5 14. Notices ..............................................................................................................................5 15. Severability .......................................................................................................................6 16. Non-waiver .......................................................................................................................6 17. Counterparts ......................................................................................................................6 18. Force Majeure ...................................................................................................................6 SIGNATURES .......................................................................................................................... 7-8 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT B RESOLUTION APPROVING A FINAL DEVELOPMENT PLAN AND CUP EXHIBIT C CASH ESCROW AGREEMENT 1 This Construction Agreement (the “Agreement”) is made and entered into this ____ day of ________________, 2020, by and between the city of Richfield, a municipal corporation under the laws of Minnesota (the “City”), and ARB L.L.C. d/b/a Audi Richfield, a limited liability company formed under the laws of the state of Minnesota (the “Developer”). RECITALS 1. On April 28, 2015, the Richfield City Council approved a Comprehensive Plan Amendment, rezoning ordinance and a resolution authorizing a planned unit development, conditional use permit, and final development plans to allow Developer to build a new Audi car dealership on the Property legally described in Exhibit A (“Property”). 2. The minimum required building coverage in the Mixed Use – Regional District is 50 percent. The Developer’s proposal included building coverage of only 29 percent of the site. 3. During the application process with the City, Developer represented it had plans to build a multi-story parking ramp on the Property, but indicated it would prefer to wait and assess its business for the future rather than construct the parking ramp at the time that the City issued its approvals, because the anticipated volume of business for a newly opened point for an automobile dealership did not justify the construction of a parking ramp. Developer represented that construction of the parking ramp would increase the building coverage on the site to approximately 44 percent. 4. Under the then existing projections, Developer agreed that it would construct a parking ramp on the Property within five years of the City’s land use approvals and was willing to stipulate to this as a condition in the Conditional Use Permit approved for the Property. 5. The Resolution approving Developer’s Final Development Plan and Conditional Use Permit for a Planned Unit Development (Exhibit B) included the following condition: “The property owner must return to the City for approval of a minimum two-story parking ramp within four years of this approval. Construction of said ramp must be completed within five years of this approval. The property owner must negotiate and execute a separate agreement detailing the specific terms and penalties associated with this requirement. This agreement must be executed prior to the issuance of a certificate of occupancy.” 6. The parties now wish to memorialize the agreement related to the above-described condition. NOW, THEREFORE, based on the mutual covenants and obligations contained herein, the parties agree as follows: 2 AGREEMENT 1. Right to Proceed. This Agreement governs the construction of a parking ramp on the Property, pursuant to the stipulated condition in the Conditional Use Permit. The Developer may not proceed with construction until all of the following conditions precedent have been satisfied: a) this Agreement has been executed by the Developer and the City; b) the required Cash Escrow has been received by the City from or on behalf of the Developer; c) land use plans including site design and architectural details have been submitted by the Developer and approved by the City; d) final engineering and construction plans and erosion control plan have been submitted by the Developer and approved by the city engineer; e) the Developer has paid the City for legal expenses incurred by the City regarding this Agreement, including fees related to the drafting and negotiation of this Agreement; f) the Developer has received all required permits and approvals from the Minnehaha Creek Watershed District, Three Rivers Park District, Minnesota Pollution Control Agency, Hennepin County, the Minnesota Department of Transportation, and any other permitting entity having jurisdiction; and g) the City has issued a building permit. 2. Plans/PUD Amendment. a) The Developer agrees to construct the parking ramp in accordance with all required city approvals and in compliance with all applicable city codes and other laws. The Developer also agrees that the ramp constructed shall be materially in accordance with the approved engineering and construction plans (collectively, “Plans”) that will be submitted to the City. Once submitted, the Plans may not be materially modified by the Developer without the prior written approval of the City. b) Developer must submit its engineering and construction Plans and an application for an amendment to Developer’s Planned Unit Development to the City for approval no later than April 28, 2023. The Director of Community Development may authorize one (1) 12-month extension of this deadline, extending no later than April 28, 2024. c) Construction must be substantially completed no later than April 28, 2024. The Director of Community Development may authorize one (1) 12- month extension of this deadline, extending no later than April 28, 2025. 3 d) No vehicles related to the inventory or service operations of the Audi car dealership shall be parked on public right of way surrounding the property. e) All construction work performed by or on behalf of the Developer must comply with City and State noise regulations. 3. Erosion Control. a) All construction shall be conducted in a manner designed to control erosion and in compliance with all City ordinances and other requirements, including the City’s permit with the Minnesota Pollution Control Agency regarding municipal separate storm sewer system program. Before construction begins, the City must approve an erosion control plan submitted by the Developer, and the Developer shall implement such plan. The City may impose additional erosion control requirements after the City’s initial approval if the City deems such measures reasonably necessary due to a change in conditions. All areas disturbed by the grading shall be reseeded promptly after the completion of the work in that area unless the construction is anticipated immediately thereafter. Except as otherwise provided in the erosion control plan, seed shall provide a temporary ground cover as rapidly as possible. All seeded areas shall be fertilized, mulched, and disc anchored as necessary for seed retention. The parties recognize that time is of the essence in controlling erosion. b) If the Developer does not comply with the erosion control plan and schedule or supplementary instructions received from the City, the City may take such action as it deems reasonably appropriate to control erosion based on the urgency of the situation. The City will make a good faith effort to notify the Developer in advance of any proposed action, including by telephone or email in the case of emergencies, but failure of the City to do so will not affect the Developer’s obligations or the City’s rights hereunder. c) The Developer agrees to reimburse all expenses incurred by the City in connection with erosion control actions. The erosion control measures specified in the Plans or otherwise required on the Property shall be binding on the Developer and its successors and assigns. 4. Construction of Ramp. a) Construction must be in accordance with the Plans, any required city approvals, and applicable City engineering standards. The Developer shall submit plans and specifications for construction prepared by a registered professional engineer. The Developer shall obtain any necessary permits from the Minnesota Pollution Control Agency, Minnehaha Creek Watershed District, Three Rivers Park District, Hennepin County, MnDOT, and any other agency having jurisdiction over the Property before proceeding with construction. The City shall inspect all work at Developer’s cost. The Developer, its contractors, and subcontractors, shall follow all instructions received from the City’s inspectors regarding compliance with the Plans, with City Code requirements or with City engineering standards. b) As-builts or escrow required prior to final C.O. issue. Submit .pdf file of complete civil and site plan set including all updates with as-built information of all utilities installed and removed. Utility plan also to be delivered as an AutoCAD file, ANSI D size Mylar, and ArcMap point and line shapefile with attribute table populated with structure, pipe and invert elevation 4 information; provide benchmark information to all new and adjusted hydrants TNH elevation, vertical datum: NAVD 88. 5. Cash Escrow. To guarantee compliance with the terms of this Agreement and construction of the parking ramp, Developer shall furnish the City with a cash deposit in the amount of $50,000. The cash escrow agreement is attached as Exhibit C. 6. Revocation of Conditional Use Permit. If Developer fails to complete the construction of the ramp by the date identified in paragraph 2(c) of this Agreement, the City will take all lawful steps to revoke the Conditional Use Permit approved for the Property. 7. Insurance. The Developer or its contractor shall maintain, during construction and until at least six months after construction is completed, commercial general liability insurance covering claims for damages for bodily injury, including death, and claims for property damage which may arise out of Developer’s work or the work of its contractors or subcontractors. Minimum insurance limits shall be: $1,000,000 – per occurrence; $2,000,000 – annual aggregate; $2,000,000 – annual aggregate – Products/Completed Operations. The following coverages must be included: Premises and Operations Bodily Injury and Property Damage; Personal and Advertising Injury; Blanket Contractual Liability; Products and Completed Operations Liability. The City shall be named as an additional insured on the policy. The certificate of insurance shall provide that the City must be given the same advance written notice of the cancellation of the insurance as is afforded to the Developer or its contractor. Developer must also provide Worker’s Compensation Insurance for all of its employee in accordance with the statutory requirements for the State of Minnesota. 8. Responsibility for Costs. The Developer agrees to reimburse the City for its reasonable legal costs and expenses incurred in drafting and negotiating this Agreement within 30 days after notice in writing by the City. The Developer agrees t o reimburse the City for the reasonable cost incurred in the enforcement of any provision of this Agreement, including reasonable attorneys’ fees. 9. Clean up and Dust Control. The Developer shall daily clean dirt and debris resulting from construction work by the Developer, its contractors, agents, or assigns. The Developer shall provide dust control to the satisfaction of the City’s engineer throughout construction on the Property. 10. Compliance With Laws. The Developer agrees to comply with all laws, ordinances, regulations and directives of the state of Minnesota, Hennepin County, and the City applicable to the Property. This Agreement shall be construed according to the laws of Minnesota. Breach of the terms of this Agreement by the Developer shall be grounds for denial of building permits for the Property, as well as revocation of the Conditional Use Permit approved for the Property. 5 11. Agreement Runs With the Land. This Agreement shall run with the Property and shall be recorded against the title thereto and shall bind the parties hereto and their successors and assigns. 12. Indemnification. The Developer hereby agrees to indemnify and hold the City and its officers, employees, and agents harmless from claims made by third parties for damages sustained or costs incurred resulting from any action taken pursuant to this Agreement. The Developer hereby agrees to indemnify and hold the City and its officers, employees, and agents harmless for all costs, damages, or expenses which the City may pay or incur in consequence of such claims, including attorneys’ fees, except matters involving procedural errors in violation of law or acts of gross negligence by the City. 13. Assignment. The Developer may not assign this Agreement without the prior written permission of the City. 14. Notices. Any notice or correspondence to be given under this Agreement shall be deemed to be given if delivered personally or sent by U.S. Mail, postage prepaid, certified mail, return receipt requested: a) as to Developer: ARB L.L.C. d/b/a Audi Richfield 1401 77th St. East Richfield, MN 55423 Attn: Ralph Gesualdo With a copy to: International Autos 2400 S. 108th Street West Allis, WI 53227 Attn: Ralph Gesualdo b) as to City: City of Richfield 6700 Portland Avenue Richfield, MN 55423 Attn: City Manager with a copy to: Richfield City Attorney Kennedy & Graven 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 or at such other address as either party may from time to time notify the other in writing in accordance with this Section. The Developer shall notify the City if it changes its name or address. 6 15. Severability. In the event that any provision of this Agreement shall be held invalid, illegal or unenforceable by any court of competent jurisdiction, such holding shall pertain only to such section and shall not invalidate or render unenforceable any other provision of this Agreement. 16. Non-waiver. Each right, power or remedy conferred upon the City by this Agreement is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter arising, or available to the City at law or in equity, or under any other agreement. Each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by the City and shall not be a waiver of the right to exercise at any time thereafter any other right, power or remedy. If either party waives in writing any default or nonperformance by the other party, such waiver shall be deemed to apply only to such event and shall not waive any other prior or subsequent default. 17. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be an original and shall constitute one and the same Agreement. 18. Force Majeure. Whenever a period of time is herein prescribed, for action to be taken by City or Developer, City or Developer shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any unavoidable delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations, or restrictions or any other causes of any kind whatsoever which are beyond the reasonable control of the parties, including without limitation, inclement conditions and delays in the issuance of permits and approvals. However, this provision shall not apply to any delay caused, in whole or in part, by the Developer’s failure to apply for or diligently pursue all necessary government approvals required under this Agreement. ********************** 7 IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written. CITY OF RICHFIELD By: ______________________________ Maria Regan Gonzalez, Mayor By: ______________________________ Katie Rodriguez, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ___________, 2020, by Maria Regan Gonzalez and Katie Rodriguez, the Mayor and City Manager, respectively, of the city of Richfield, a Minnesota municipal corporation, on behalf of the municipal corporation. ____________________________________ Notary Public ARB L.L.C. d/b/a AUDI RICHFIELD \tA\SC6NS Icy STATE OF ) ) ss. COUNTY OF The foregoing instrument was acknowledged before me this /0 day of C&A 4Y, -291�by P !A 54WAUDO, the V,.%W ,tuk &-tqhM of ARS L.L.C., a Minnesota limited liability company, on behalf of the limited liability company. Notary Public K. A-1 EXHIBIT A The land to which this Construction Agreement applies is legally described as follows: LOT 1, BLOCK 1, RICHFIELD PROPERTIES, HENNEPIN COUNTY, MINNESOTA RESOLUTION NO 11075 RESOLUTION APPROVING A FINAL DEVELOPMENT PLAN AND CONDITIONAL USE PERMIT FOR A PLANNED UNIT DEVELOPMENT AT 1400 78TH STREET EAST 1420 78TH STREET EAST 1500 78TH STREET EAST AND 7711 14TH AVENUE WHEREAS an application has been filed with the City of Richfield which requests approval of a final development plan and conditional use permit for a planned unit development to allow construction of a three story automobile dealership and parking ramp at 1400 78th Street East 1420 78th Street East 1500 78th Street East and 7711 14th Avenue property legally described in the attached Exhibit A and WHEREAS the Planning Commission of the City of Richfield held a public hearing and recommended approval of the requested final development plan and conditional use permit at its March 23 2015 meeting and WHEREAS notice of the public hearing was mailed to properties within 350 feet of the subject property on March 10 2015 and published in the Sun Current on March 12 2015 and and WHEREAS the requested final development plan and conditional use permit meets those requirements necessary for approving a planned unit development as specified in Richfield s Zoning Code Section 542 09 Subd 3 and as detailed in City Council Staff Report No 63 and WHEREAS the request meets those requirements necessary for approving a conditional use permit as specified in Richfield s Zoning Code Section 547 09 Subd 6 and as detailed in City Council Staff Report No 63 and WHEREAS the City has fully considered the request for approval of a planned unit development final development plan and conditional use permit and NOW THEREFORE BE IT RESOLVED by the City Council of the City of Richfield Minnesota as follows 1 The City Council adopts as its Findings of Fact the WHEREAS clauses set forth above 2 A planned unit development final development plan and conditional use permit are approved for an automobile dealership as described in City Council Report No 63 on the Subject Property legally described in Exhibit A 3 The approved planned unit development final development plan and conditional use permit are subject to the following conditions B-1 EXHIBIT B A recorded copy of the approved resolution must be submitted to the City prior to the issuance of a building permit The property must be platted and the plat recorded prior the issuance of a certificate of occupancy The property owner must return to the City for approval of a minimum two story parking ramp within four years of this approval Construction of said ramp must be complete within five years of this approval The property owner must negotiate and execute a separate agreement detailing the specific terms and penalties associated this requirement This agreement must be executed prior to the issuance of a certificate of occupancy Separate sign permits are required This resolution constitutes approval of a height 33 ft variation only This variation is for one freestanding sign along 1 494 Light levels may not exceed those proposed in approved plans Lights must be dimmed to meet City standards between the hours of 10 p m and 7 a m daily All new utility service must be underground All utilities must be screened from public view Final 77th Street pedestrian lighting plan must be approved by the Public Works Director A Maintenance Agreement related to lighting must be recorded prior to the issuance of a Certificate of Occupancy Entire sidewalk along 78th Street must be replaced with new 6 foot walk Final landscaping plans must be approved by the Directors of Public Works Community Development and Mn DOT where applicable Full site irrigation including boulevards is required The property owner is responsible for the ongoing maintenance and tending of all landscaping in accordance with approved plans A Construction and Maintenance Agreement must be recorded prior to the issuance of a final Certificate of Occupancy The applicant is responsible for obtaining all required permits compliance with all requirements detailed in the City s Administrative Review Committee Report dated February 26 2015 and compliance with all other City and State regulations Minnesota Department of Transportation review required Applicant must obtain all required permits for work in State right of way Final stormwater management plan must be approved by Public Works Director Infiltration not allowed in high vulnerability wellhead protection area Prior to the issuance of an occupancy permit the developer must submit a surety equal to 125 of the value of any improvements not yet complete As builts or 7 500 cash escrow must be submitted to the Public Works Department prior to issuance of a final certificate of occupancy 4 The approved planned unit development final development plan and conditional use permit shall expire one year from issuance unless the use for which the permit was granted has commenced substantial work has been completed or B-2 upon written request by the developer the Council extends the expiration date for an additional period of up to one year as required by the Zoning Ordinance Section 547 09 Subd 9 5 The approved planned unit development final development plan and conditional use permit shall remain in effect for so long as conditions regulating it are observed and the conditional use permit shall expire if normal operation of the use has been discontinued for 12 or more months as required by the Zoning Ordinance Section 547 09 Subd 10 Adopted by the City Council of the City of Richfield Minnesota this 28th day of April 2015 Debbie Goettel Mayor ATTEST Eliza e anHoose City Clerk B-3 EXHIBIT C C-1 PARKING RAMP (FUTURE) AUDI DEALERSHIP (2017) PARKING RAMP PLANS SUBMITTED FOR 2015 PUD APPROVAL PARKING RAMP VIEW FROM TRAIL ALONG EAST SIDE OF PROPERTY AGENDA SECTION:CONSENT CALENDAR AGENDA ITEM #3.B. S TAFF REPORT NO. 39 CIT Y COUNCIL ME E T ING 3/10/2020 RE P O RT P RE PA RE D B Y: A my Markle, Recreation S ervices D irector D E PA RTME NT D IRE C TO R RE V IE W: A my Markle 3/3/2020 O THE R D E PA RTM E NT RE V IE W: None C ITY MA NA G E R RE V IE W: K atie Rodriguez 3/5/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Consider the approval of the Minnesota Department of Natural Resources Outdoor Recreation Grant Resolution to submit a grant for the Universally Inclusive Playground at Augsburg Park and authorize staff to execute the grant agreement if awarded. E X E C UT IV E S UM M ARY: All Minnesota Department of Natural Resources Outdoor Recreation Grant applicants are required to execute a resolution, which authorizes the filing of the application and pledges to execute final agreements with the Minnesota Department of Natural Resources if a grant is awarded. The Recreation Department is applying for $190,000 for the Universally I nclusive Playground at Augsburg Park. I f awarded, the grant would help us reach our financial goal so we can construct the playground this year. The Minnesota Department of Natural Resources has stated not to alter the resolution as written, but know that some language does not pertain to this playground project but to other types of grant projects that fall under the scope of the program. RE C O M M E ND E D AC T I O N: By Motion: Approve the resolution to submit a Minnesota Department of Natural Resources Outdoor Recreation Grant and authorize the Recreation Services Director to execute the grant if awarded. B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T The Recreation Services Director and the Community Services Commission have approved a playground vendor and design for the Universally I nclusive Playground. W e are raising approximately $700,000 to construct the playground. Currently, we have $510,000 for the project and are seeking an additional $190,000. Funding sources include budgeted C I P funds, grants, community support through the Richfield Liquor Stores Round-Up Program, and regional business sponsorship. The playground sub-committee has identified funding strategies and the Minnesota Department of Natural Resources Outdoor Recreation Grant is key to achieving our goal to construct the playground this year. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The attached resolution authorizes the City of Richfield to enter into necessary and required agreements with Minnesota Department of Natural Resources for the specific purpose of developing the Universally I nclusive Playground at Augsburg Park and managing its long-term operation (please note that the resolution language can't be changed, some language may not pertain specifically to this project). C.C R IT IC AL T IMIN G IS S U E S: The Minnesota Department of Natural Resources Outdoor Recreation Grant is due March 27. D.F IN AN C IAL IMPAC T: The Minnesota Department of Natural Resources Outdoor Recreation Grant can fund both new recreation facilities up to $250,000. I f awarded full or partial funding, the grant would provide tremendous financial support for the Universally I nclusive Playground which will cost approximately $700,000. Here is the overall project budget: D E S C R IP TIO N P R IC E Little Tikes Kids Builder All-I nclusive Universal Park I ncudes all play equipment $282,882 12,600 sq.ft. No Fault Rubber Resilient Surfacing $211,680 Site Work (grading, limestone blocks, curb, etc.)$80,675 I nstallation of new equipment removal of old $107,000 Fencing $15,000 Seeding of old playground site $3,000 TO TAL (freight included)$700,237 E.L E GAL C ON S ID E R AT ION: There are no legal considerations for this item. ALTE R N AT IV E R E C O MME N D ATIO N(S): Reject the resolution and potentially miss an opportunity for funds to support the Universally I nclusive Playground at Augsburg Park. P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: AT TAC H ME N T S: D escription Type M N D NR Outdoor Recreation Grant Resolution C over Memo MN Department of Natural Resources Outdoor Recreation Grant Resolution BE IT RESOLVED that the City of Richfield act as legal sponsor for the project contained in the Outdoor Recreation grant application to be submitted on 27/3/2020 and that Amy Markle, Recreation Services Director is hereby authorized to apply to the Department of Natural Resources for funding of this project on behalf of the City of Richfield. BE IT FURTHER RESOLVED that the applicant has read the Conflict of Interest Policy contained in the Outdoor Recreation Grant Program Manual and certifies it will report any actual, potential, perceived or organizational conflicts of interest upon discovery to the related to the application or a grant award to the State. BE IT FURTHER RESOLVED that the City of Richfield has the legal authority to apply for financial assistance, and financial capability to meet the match requirement (if any) and ensure adequate construction, operation, maintenance and replacement of the proposed project for its design life. BE IT FURTHER RESOLVED that the City of Richfield has not incurred any development costs and has not entered into a written purchase agreement to acquire the property described in the Cost Breakdown section on this application. BE IT FURTHER RESOLVED that the City of Richfield has or will acquire fee title or permanent easement over the land described in the site plan included in the application. BE IT FURTHER RESOLVED that, upon approval of its application by the State, the City of Richfield may enter into an agreement with the State for the above-referenced project, and that the City of Richfield certifies that it will comply with all applicable laws and regulations as stated in the grant agreement including dedicating the park property for uses consistent with the funding grant program into perpetuity. NOW, THEREFORE BE IT RESOLVED that Recreation Services Director, Amy Markle, hereby authorized to execute such agreements as are necessary to implement the project on behalf of the applicant. I CERTIFY THAT the above resolution was adopted by the City Council of the City of Richfield on 10/3/2020. SIGNED: WITNESSED: ________________________________ _____________________________________ (Signature) (Signature) _______________________________ _____________________________________ (Title) (Date) (Title) (Date) AGENDA SECTION:PUBLIC HEARINGS AGENDA ITEM #5. STAFF RE P ORT NO. 41 CIT Y COUNCIL ME E T ING 3/10/2020 RE P O RT P RE PA RE D B Y: C hris Regis, F inance D irector D E PA RTME NT D IRE C TO R RE V IE W: C hris Regis, F inance D irector O THE R D E PA RTM E NT RE V IE W: N/A C ITY MA NA G E R RE V IE W: K atie Rodriguez 3/3/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Public hearing and second reading of transitory ordinance providing funding for certain capital improvements from the Special Revenue Fund. E X E C UT IV E S UM M ARY: As part of the Capital I mprovement Budget (C I B) and annual City Budget process, certain special revenue funds are allocated each year to fund capital projects identified through the budget process. At the February 11, 2020 City Council meeting the Council approved the first reading providing for the expenditure of funds from the Special Revenue Fund for certain capital improvements. The planned expenditures are as follows: $50,000 for Major Park Maintenance Projects/Fence Repair $50,000 Community Center/W ood Lake Building Repair $180,000 Augsburg Park Play Equipment $85,000 Madison Park Play Equipment $85,000 Washington Park Play Equipment The source of the special revenue funds are profits derived from the City’s Liquor Store operation. These profits are transferred to the Liquor Contribution Special Revenue Fund. Before the funds within the Special Revenue Fund can be used for the identified capital projects, the City Charter requires that a transitory ordinance be used to authorize the expenditure of the funds. I n addition, the ordinance process allows for public input through a public hearing. RE C O M M E ND E D AC T I O N: Conduct and close the public hearing and by motion: Approve second reading of the transitory ordinance providing for the expenditure of funds from the Special Revenue Fund for certain capital improvements. B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T The 2020 Capital I mprovement Budget also provides for expenditures for all types of funds contained in the budget including municipal state aid, user fees, federal grants and state grants. Authorization by ordinance is not required for expenditures other than Special Revenues. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): City Charter Section 7.12, Subd. 2 requires that Special Revenue Funds used for capital improvements must be authorized by ordinance. T his process provides for public input through a public hearing. C.C R IT IC AL T IMIN G IS S U E S: Under S ec tion 3.09 of the C ity Charter, a transitory ordinance bec omes effective 30 day s after publication of the second hearing notice. T he ordinance requirements must be completed early enough in 2020 so that the capital projects can be initiated on a timely basis, completed and the funds expended. D.F IN AN C IAL IMPAC T: W hile the total 2020 Capital I mprovements Budget (C I B) includes total budgeted expenditures of $18,285,980, the portion of the C I B concerning proposed funding from the Spec ial Revenue funds is $450,000. Major Park Maintenance Projects/Fence Repair $50,000 Community Center/W ood Lake Building Repair $50,000 Augsburg Play Equipment $180,000 Madison Park Play Equipment $85,000 Washington Park Play Equipment $85,000 A transitory ordinance is necessary to finalize the appropriations utilizing spec ial revenue funds pursuant to City Charter. The source of Special Revenue funds is municipal liquor profits. E.L E GAL C ON S ID E R AT ION: The City Charter requires that a transitory ordinance be used to authorize the expenditure of Special Revenue funds. First reading of the ordinance was approved at the February 11, 2020 City Council meeting and a notice of public hearing was published on February 27, 2020. ALTE R N AT IV E R E C O MME N D ATIO N(S): The City Council could decide to authorize none or only a portion of the expenditures identified from special revenue in the C I B. P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: None. AT TAC H ME N T S: D escription Type Transitory Ordinance Ordinance BILL NO. TRANSITORY ORDINANCE NO. AN ORDINANCE PROVIDING FOR THE EXPENDITURE OF MONEY FROM THE SPECIAL REVENUE FUND FOR CERTAIN CAPITAL IMPROVEMENTS CITY OF RICHFIELD DOES ORDAIN: Section 1: It is found and determined to be necessary and expedient for the City to expend money from the Special Revenue Fund for the making of capital improvements listed in Section 2 hereof, for which the City would be authorized to issue general obligation bonds. Section 2: The capital improvements and amounts of expenditures for such improvements which are authorized to be paid from the Special Revenue Fund under Section 7.12, Subdivision 2 of the City Charter, are as follows: Major Park Maintenance/Fence Repair $ 50,000 Community Center/Wood Lake Building Repair $ 50,000 Augsburg Park Play Equipment $ 180,000 Madison Park Play Equipment $ 85,000 Washington Park Play Equipment $ 85,000 Section 3: The expenditures herein authorized shall be made pursuant to such contracts as are authorized from time to time by Council action. Passed by the City Council of the City of Richfield this 10th day of March, 2020. Maria Regan Gonzalez, Mayor ATTEST: Elizabeth VanHoose, City Clerk AGENDA SECTION:PROPOSED ORDINANCES AGENDA ITEM #6. STAFF RE P ORT NO. 42 CIT Y COUNCIL ME E T ING 3/10/2020 RE P O RT P RE PA RE D B Y: C hris Regis, F inance D irector D E PA RTME NT D IRE C TO R RE V IE W: C hris Regis, F inance D irector 2/27/2020 O THE R D E PA RTM E NT RE V IE W: N/A C ITY MA NA G E R RE V IE W: K atie Rodriguez 3/3/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Consider the second reading of an ordinance amending Subsections 705.17, 715.05, and 720.07 of the Richfield City Code relating to sanitary sewer, water, and storm water utility billing and establishment of an new section 727 relating to the street light system. E X E C UT IV E S UM M ARY: At the J anuary 28, 2020 City Council work session, staff presented for City Council consideration the implementation of owner only utility billing. At the present time the City’s utility billing system has been set up to generate utility bills by customer/account number, not by property owner and Property I dentification Number (P I D#). The implementation of owner only utility billing would require a change in the City ordinance sections that relate to utility billing. I f approved staff would communicate the change to owner only utility billing through the most current utility cycle billing and then implement the change in the next utility cycle billing. The City Council approved the first reading at the February 25, 2020 City Council meeting. RE C O M M E ND E D AC T I O N: By Motion: Approve the second reading of an ordinance amending Subsections 705.17, 715.05, and 720.07 of the Richfield City Code relating to sanitary sewer, water and storm water utility billing and establishment of a new section 727 relating to the street light system. B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T Owner only utility billing is already in effect for multi-family buildings. The proposed change would extend to single family and duplex rentals and would provide the following: Fewer move in/outs processed by Utility Billing (UB) Staff at the City: Reduces UB staff time for processing move in/outs and final bills Reduces Public Works staff time to obtain final readings Reduces printing and mailing expenses for final bills Ensures owner receives the quarterly utility bill and has an opportunity to pay it prior to certification: Reduces UB staff time to generate multiple certification letters for unpaid balances Reduces printing and mailing expenses for certification letters Allows for clean-up of utility accounts: W e do not always receive updated tenant information, leads to incorrect billings to old tenant and creates inefficiencies. Eliminates the billing confusion of tenants moving in and moving out. W ould Eliminate: Calls from property owners checking on payments. Owners disputing late fees because the tenant did not pay. Eliminates the issue of a renter moving out of a property without paying the final bill unbeknownst to the owner. The unpaid bill now becomes the responsibility of the owner. Eliminate utility accounts with the duplicate P I D#’s. I mpact on renters: Renters would no longer automatically receive a bill for their utility charges but they do have the option to request a bill to see actual charges. This may be helpful if the owner chooses to pass the charges on to the renter as opposed to incorporating the costs into the rent. The change aligns the billing notification, ultimate responsibility for payment (enforced through year-end certification process) and responsibility for maintaining plumbing. For example it would eliminate situations where the renter is billed for excessive usage due to a leak but is not responsible for fixing the leak. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The change to owner only utility billing must be accomplished through a change in the current City ordinances. C.C R IT IC AL T IMIN G IS S U E S: At the conclusion of publication of the proposed ordinance change, staff will begin to notify customers through communication with the regular cycle billing. D.F IN AN C IAL IMPAC T: I t is expected that the City will realize savings in postage, printing/paper and mailing service costs. E.L E GAL C ON S ID E R AT ION: City ordinances will need to be change in order to implement owner only billing. ALTE R N AT IV E R E C O MME N D ATIO N(S): None. P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: None. AT TAC H ME N T S: D escription Type Owner Only Utility B illing Ordinance Ordinance 1 BILL NO. __________ AN ORDINANCE AMENDING SUBSECTIONS 705.17, 715.05, AND 720.07 OF THE RICHFIELD CODE OF ORDINANCES RELATING TO SANITARY SEWER, WATER AND STORM WATER UTILITY BILLING AND ESTABLISHMENT OF A NEW SECTION 727 RELATING TO THE STREET LIGHT SYSTEM THE CITY OF RICHFIELD DOES ORDAIN: Section 1. Subsection 705.17 of the Richfield Code of Ordinances is amended as follows: 705.17. – Billings. Bills for charges for the use and service of the sewage system shall be made out prepared by the Finance Department in accordance with the usual and customary practice. The City will place all accounts in the name of the fee title owner of the property and will send all bills and notices to such owner or the owner’s duly authorized property manager at the designated billing address. Any error in address must be promptly reported to the City. Tenants may request duplicate copies by submitting a written request to the City. Bills shall be payable at the office of the City Finance Coordinator. Bills are rendered quarterly. Section 2. Subsection 715.05 of the Richfield Code of Ordinances is amended as follows: 715.05. – Accounts, how maintained. All accounts shall be kept on the books of the City by the house and street number and under the account number assigned thereto and the name of the owner or of the person signing the application for services. The City will place all accounts in the name of the fee title owner of the property and will send Aall bills and notices sent out by the City shall be sent to the house or street number of the property such owner or the owner’s duly authorized property manager at the designated billing address. Any error in address must be promptly reported to the City. If non-resident owners or agents desire personal notice sent to a different address, they shall file an application therefor with the City. Tenants may request duplicate copies by submitting a written request to the City. Section 3. Subsection 720.07 of the Richfield Code of Ordinances is amended as follows: 720.07. – Establishing basic rate and billing. In determining charges, the Council shall, from time to time, by resolution establish a basic system rate to be charged against one (1) acre of land having an 2 REF of one. The charge to be made against each parcel of land shall then be determined by multiplying the REF for the parcel's land use classification times the parcel's acreage times the basic system rate. The City will place all accounts in the name of the fee title owner of the property and will send all bills and notices to such owner or the owner’s duly authorized property manager at the designated billing address. Any error in address must be promptly reported to the City. Tenants may request duplicate copies by submitting a written request to the City. Section 4. A new section 727 is added to the Richfield Code of Ordinances as follows: SECTION 727. – STREET LIGHTING SYSTEM 727.01. – Basic rates. The rates due and payable to the City for use of the street lighting system shall be established, from time to time, by resolution of the City Council. 727.03. – Billings. The City will place all accounts in the name of the fee title owner of the property and will send all bills and notices to such owner or the owner’s duly authorized property manager at the designated billing address. Any error in address must be promptly reported to the City. Tenants may request duplicate copies by submitting a written request to the City. Section 5. This Ordinance will be effective in accordance with Section 3.09 of the City Charter. Adopted this ____ of ________________, 2020. By: ___________________________ Maria Regan Gonzalez, Mayor ATTEST: __________________________ Elizabeth VanHoose, City Clerk AGENDA SECTION:RESOLUTIONS AGENDA ITEM #7. STAFF RE P ORT NO. 43 CIT Y COUNCIL ME E T ING 3/10/2020 RE P O RT P RE PA RE D B Y: C hris Regis, F inance D irector D E PA RTME NT D IRE C TO R RE V IE W: C hris Regis, F inance D irector 3/2/2020 O THE R D E PA RTM E NT RE V IE W: K ristin A sher, P ublic Works D irector C ITY MA NA G E R RE V IE W: K atie Rodriguez 3/3/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Consider a resolution providing for the sale of $5,375,000 General Obligation Bonds, Series 2020A. E X E C UT IV E S UM M ARY: The Series 2020A bonds will accomplish the following: Provide the second phase of funding for the Lyndale Avenue reconstruction project with a $3,120,000 par bond. Debt service for this portion of the bond issue will be provided by an estimated annual debt service tax levy of $201,511. The estimated increase in taxes for a residential property valued at $225,000 is $12.42. Provide funding for the 65th Street Water Main lining in preparation for future reconstruction of 65th Street with a $1,235,000 par bond. Debt service for this portion of the bond issue will be provided by water revenues. Refund the $1,480,000 Water Revenue Bonds, Series 2011A, with $1,025,000 par bond. The refunding of the Series 2011A bonds with the Series 2020A refunding will provide estimated interest savings of $132,260 over the remaining life of the bonds. Debt service on the new bond will continue to be water revenue bonds. RE C O M M E ND E D AC T I O N: By Motion: Approve the attached resolution providing for the sale of $5,375,000 General Obligation Bonds, Series 2020A. B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T Lyndale Avenue Project This project was I ncluded within the City’s 5-Year Street Reconstruction Plan, adopted by the City Council on November 12, 2019. The City previously issued the $8,325,000 G.O. Bonds, Series 2019A for the Lyndale reconstruction project. The 5-Year Street Reconstruction Plan called for a second bond issue to complete the funding of the project in 2020. This Series 2020A bond issue along with planned Municipal Street Aid dollars, utility fund transfers and additional LGA set aside funds should complete the funding of the project. T he Lyndale Avenue project began in 2019 and should be completed in 2020. 65th Street W ater Main Lining T his water main is one of the main feed lines to Penn water tower and the west side of Richfield. A condition assessment was performed on this pipeline and it was found to be in need of replacement or rehabilitation. Lining the water main was the chosen course of action. Lining of this main will restore the pipe back to a “like new” condition and will result in a new life for the pipe. T his technology is very cost effective and is the preferred choice for this application. T his project is intended to be completed prior to the reconstruction of 65th Street and will result in lower construction costs for the roadway. Series 2011A Refunding For the refunding of the Series 2011A bonds, the City’s fiscal consultant, Ehlers & Associates, I nc. periodically reviews the City’s outstanding bond issues to determine which issues, if any are feasible for refunding. Upon the latest review of the outstanding City bond issues, Ehlers & Associates, I nc. recommends undertaking a bond refunding of the Series 2011A bonds to take advantage of the low interest rates and realize interest savings. For this refunding the interest savings is estimated to be $132,260 over the remaining life of the bond. The type of refunding being presented is a current refunding. I n a current refunding transaction, the bonds being refunded will either all mature or be redeemed within 90 days or less from the date of issuance of the refunding issue. The City would then begin to make payments on the newly issued “refunding bonds.” Accordingly, the Series 2020A bonds are being issued to provide funds sufficient for a current refunding on J une 1, 2020. The par amount of the Series 2011A to be called on the call date is $990,000. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The Lyndale Avenue project is part of the 5-Year Street Reconstruction Plan approved by the City Council on November 12, 2019. The 65th Street Reconstruction project, of which the lining of the 65th water main is part of, is part of the 5-Year Street Reconstruction Plan approved by the City Council on November 12, 2019. C.C R IT IC AL T IMIN G IS S U E S: Final construction items for the Lyndale Avenue project will be completed as soon as weather permits. Therefore, it is important to have the final financing in place. Planned construction for the 65th Street W ater Main lining is planned for the spring of 2020. The sale of the refunding bonds at this time will allow the City to take advantage of the low interest rates and realize interest savings. D.F IN AN C IAL IMPAC T: Lyndale Avenue Project The estimated total cost of the Lyndale Avenue project is $13,020,050. Funding for the project is to be provided by general obligation bonds, Municipal State Aid funds and internal funding. Estimated funding and costs is as follows: 2019 General Obligation Bonds (Net of Par) $8,423 798 2020 General Obligation Bonds (Net of Par) 3,000,000 Utility Funds Transfers 300,000 Municipal State Aid 212,066 Equity Contribution (L GA) 1,084,186 Total Funding $13,020,050 Street Reconstruction $10,128,128 Utility 2,891,922 Total Project Cost $13,020,050 The debt service on the bonds will be provided from an average annual debt service tax levy which is estimated to be $201,511. T he estimated annual increase in taxes due to the issuance of these bonds for a residential property valued at $225,000 will be approximately $12.42. 65th Street Water Main Lining Funding for the 65th Street Water Main lining is as follows: 2020 General Obligation Bonds (Net of Par) $1,200,000 Total Funding $1,200,000 Water Main Lining $1,200,000 Total Project Cost $1,200,000 Series 2011A Refunding I t is estimated that the refunding of the Series 2011A bonds with the Series 2020A bonds will yield interest savings of $132,260 over the remaining life of the bonds. T he savings expressed in net present value benefit of the refunding is estimated to be $117,888, equal to 11.91% of the refunded principal. T he bonds are being issued for a 12-year period; this does not extend the term of the original issue. T he maturity date of the new refunding issue will be the same as the current outstanding issue. E.L E GAL C ON S ID E R AT ION: Legal Counsel has reviewed the Pre-Sale report and the attached resolution. ALTE R N AT IV E R E C O MME N D ATIO N(S): None P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: Rebecca Kurtz, Ehlers, I nc. AT TAC H ME N T S: D escription Type Resolution P roviding for the S ale of the $5,375,000 G.O. B onds S eries 2020A Resolution L etter 2020A P resale Report E xhibit Resolution No. _______ Resolution Providing for the Sale of $5,375,000 General Obligation Bonds, Series 2020A A. WHEREAS, the City Council of the City of Richfield, Minnesota has heretofore determined that it is necessary and expedient to issue the City's $5,375,000 General Obligation Bonds, Series 2020A (the "Bonds"), to finance the City’s 2020 Street Reconstruction project, the 65th Street Water Main Lining Project, and the current refunding of the Series 2011A General Obligation Water Revenue Bonds in the City; and B. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as its independent municipal advisor for the Bonds in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota, as follows: 1. Authorization; Findings. The City Council hereby authorizes Ehlers to assist the City with the sale of the Bonds. 2. Meeting; Proposal Opening. The City Council shall meet at 7:00 PM on April 28, 2020, for the purpose of considering proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. Adopted by the City Council of the City of Richfield, Minnesota this 10th day of March, 2020. ___________________________ Maria Regan Gonzalez, Mayor ATTEST: _________________________ Elizabeth VanHoose, City Clerk March 10, 2020 Pre-Sale Report for City of Richfield, Minnesota $5,375,000 General Obligation Bonds, Series 2020A Prepared by: Rebecca Kurtz, CIPMA Senior Municipal Advisor Brian Reilly, CIPMA Senior Municipal Advisor Presale Report City of Richfield, Minnesota March 10, 2020 Page 1 Executive Summary of Proposed Debt Proposed Issue: $5,375,000 General Obligation Bonds, Series 2020A (the “Bonds”) Purposes: The proposed issue includes financing for the following purposes: ▪ $3,120,000 for the 2020 Street Reconstruction Project. Debt service will be paid from ad valorem property taxes. ▪ $1,230,000 for the 65th Street Water Main Lining Project. Debt service will be paid from water utility revenues. ▪ $1,025,000 for current refunding of the Series 2011A General Obligation Water Revenue Bonds. Debt service will be paid from water utility revenues. Interest rates on the obligations proposed to be refunded are 3.10% to 4.15%. The refunding is expected to reduce debt service expense by approximately $132,260 over the next 12 years. The Net Present Value Benefit of the refunding is estimated to be $117,888, equal to 11.91% of the refunded principal. This refunding is a current refunding as the obligations being refunded are callable (pre-payable) now with 30-days’ notice. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters: ▪ 475.58 – Allows cities to issue debt for street reconstruction after completing a Street Reconstruction Plan and holding a public hearing. ▪ 444 – Allows cities to issue debt without limitation as long as debt service is expected to be paid from water and/or sewer revenues. ▪ 475 – General bonding authority Chapter 444 allows cities to issue debt without limitation as long as debt service is expected to be paid from water and sewer revenues. The $3,120,000 Street Reconstruction portion of the Bonds count against the City’s Net Debt Limit of 3% of the estimated market value of taxable property in the City. The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. Term/Call Feature: The Bonds are being issued for a term of 20 years. Principal on the Bonds will be due on February 1 in the years 2021 through 2041. Interest is payable every six months beginning February 1, 2021. The Bonds will be subject to prepayment at the discretion of the City on February 1, 2030 or any date thereafter. Presale Report City of Richfield, Minnesota March 10, 2020 Page 2 Bank Qualification: Because the City is expecting to issue no more than $10,000,000 in tax exempt debt during the calendar year, the City will be able to designate the Bonds as “bank qualified” obligations. Bank qualified status broadens the market for the Bonds, which can result in lower interest rates. Rating: The City’s most recent bond issues were rated by Standard & Poor’s. The current rating on those bonds is “AA+”. The City will request an update to the rating for these Bonds. If the winning bidder elects to purchase bond insurance, the rating for the issue may be higher than the City’s rating in the event that the bond rating of the insurer is higher than that of the City. Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us, our advisory relationship as well as characteristics of various municipal financing options, we are recommending the issuance of tax-exempt general obligation bonds as a suitable financing option. ▪ This option is consistent with City policies and past practices to finance these types of projects with this type of debt issue. ▪ The issuance of general obligation bonds provides the most overall cost-effective option that still maintains future flexibility for the repayment of the debt. Method of Sale/Placement: The City will solicit competitive bids for the purchase of the Bonds from underwriters and banks. An allowance for discount bidding will be included in the terms of the issue. The discount is treated as an interest item and provides the underwriter with all or a portion of their compensation in the transaction. If the Bonds are purchased at a price greater than the minimum bid amount (maximum discount), the unused allowance may be used to reduce your borrowing amount. Premium Pricing: In some cases, investors in municipal bonds prefer “premium” pricing structures. A premium is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds the yield to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of each maturities’ face value is considered “reoffering premium.” The underwriter will retain a portion of this reoffering premium as their compensation (or “discount”) but will pay the remainder of the premium to the City. The amount of the premium varies, but it is not uncommon to see premiums for new issues in the range of 2.00% to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of $2,040,000 to $2,200,000. Presale Report City of Richfield, Minnesota March 10, 2020 Page 3 For this issue of Bonds, we have been directed to use the net premium to reduce the size of the issue/increase the net proceeds for the project. The resulting adjustments may slightly change the true interest cost of the issue, either up or down. The amount of premium can be restricted in the bid specifications. Restrictions on premium may result in fewer bids but may also eliminate large adjustments on the day of sale and unintended impacts with respect to debt service payment. Ehlers will recommend appropriate premium restrictions for the Bonds intended to achieve the City’s objectives for this financing. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that, other than the obligations proposed to be refunded by the Bonds, there are no other refunding opportunities at this time. We will continue to monitor the market and the call dates for the City’s outstanding debt and will alert you to any future refunding opportunities. Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this issue) and this issue is over $1,000,000, the City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually, as well as providing notices of the occurrence of certain reportable events to the Municipal Securities Rulemaking Board (the “MSRB”), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide such reports for its existing bonds and has contracted with Ehlers to prepare and file the reports. Arbitrage Monitoring: Because the Bonds are tax-exempt obligations, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific responsibilities will be detailed in the Tax Certificate prepared by your Bond Attorney and provided at closing. You have retained Ehlers to assist you with compliance with these rules. Investment of and Accounting for Proceeds: In order to more efficiently segregate funds for this project and maximize interest earnings, we recommend using an investment advisor, to assist with the investment of bond proceeds until they are needed to pay project costs. Presale Report City of Richfield, Minnesota March 10, 2020 Page 4 Risk Factors: Current Refunding: The Bonds are being issued to finance a current refunding of prior City debt obligations. Those prior debt obligations are “callable” on or after February 1, 2020. The new Bonds will not be pre-payable until February 1, 2030. This refunding is being undertaken based in part on an assumption that the City does not expect to pre-pay this debt prior to the new call date and that market conditions warrant the refunding at this time. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service, we have assumed that you will continue that relationship. For services you have not previously required, we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation, unless you notify us that you wish to pay them from other sources. Our pre-sale bond sizing includes a good faith estimate of these fees, but the final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like to use a different service provider for any of the listed services please contact us. Bond Counsel: Kennedy & Graven, Chartered Paying Agent: Bond Trust Services Corporation Rating Agency: Standard & Poor's Global Ratings (S&P) Summary: The decisions to be made by the City Council are as follows: • Accept or modify the finance assumptions described in this report • Adopt the resolution attached to this report. This presale report summarizes our understanding of the City’s objectives for the structure and terms of this financing as of this date. As additional facts become known or capital markets conditions change, we may need to modify the structure and/or terms of this financing to achieve results consistent with the City’s objectives. Presale Report City of Richfield, Minnesota March 10, 2020 Page 5 Proposed Debt Issuance Schedule Pre-Sale Review by City Council: March 10, 2020 Due Diligence Call to review Official Statement: Week of April 13, 2020 Distribute Official Statement: Week of April 13, 2020 Conference with Rating Agency: Week of April 13, 2020 City Council Meeting to Award Sale of the Bonds: April 28, 2020 Estimated Closing Date: May 14, 2020 Redemption Date for Bonds Being Refunded: May 13, 2020 Attachments Estimated Sources and Uses of Funds Estimated Proposed Debt Service Schedule Estimated Debt Service Comparison Resolution Authorizing Ehlers to Proceed with Bond Sale Ehlers Contacts Municipal Advisors: Rebecca Kurtz (651) 697-8516 Brian Reilly (651) 697-8541 Disclosure Coordinator: Jen Chapman (651) 697-8566 Financial Analyst: Alicia Gage (651) 697-8551 The Preliminary Official Statement for this financing will be sent to the City Council at their home or email address for review prior to the sale date. City of Richfield, Minnesota $5,375,000 General Obligation Bonds, Series 2020A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Total Issue Sources And Uses Dated 05/13/2020 | Delivered 05/13/2020 Street Reconstruction Water Revenue Proposed CR 2011A GO Wtr Rev Bonds Issue Summary Sources Of Funds Par Amount of Bonds $3,120,000.00 $1,230,000.00 $1,025,000.00 $5,375,000.00 Total Sources $3,120,000.00 $1,230,000.00 $1,025,000.00 $5,375,000.00 Uses Of Funds Total Underwriter's Discount (1.200%)37,440.00 14,760.00 12,300.00 64,500.00 Costs of Issuance 39,471.63 15,560.93 12,967.44 68,000.00 Deposit to Capitalized Interest (CIF) Fund 41,194.00 --41,194.00 Deposit to Project Construction Fund 3,000,000.00 1,200,000.00 -4,200,000.00 Deposit to Current Refunding Fund --1,000,542.13 1,000,542.13 Rounding Amount 1,894.37 (320.93)(809.57)763.87 Total Uses $3,120,000.00 $1,230,000.00 $1,025,000.00 $5,375,000.00 2020A GO Bonds New $ & CR | Issue Summary | 3/ 2/2020 | 10:36 AM City of Richfield, Minnesota $5,375,000 General Obligation Bonds, Series 2020A Issue Summary Assumes Current Market BQ AA+ Rates plus 20bps Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 05/13/2020 ----- 02/01/2021 85,000.00 1.150%67,839.66 152,839.66 152,839.66 08/01/2021 --46,841.25 46,841.25 - 02/01/2022 270,000.00 1.150%46,841.25 316,841.25 363,682.50 08/01/2022 --45,288.75 45,288.75 - 02/01/2023 270,000.00 1.150%45,288.75 315,288.75 360,577.50 08/01/2023 --43,736.25 43,736.25 - 02/01/2024 280,000.00 1.200%43,736.25 323,736.25 367,472.50 08/01/2024 --42,056.25 42,056.25 - 02/01/2025 275,000.00 1.200%42,056.25 317,056.25 359,112.50 08/01/2025 --40,406.25 40,406.25 - 02/01/2026 280,000.00 1.250%40,406.25 320,406.25 360,812.50 08/01/2026 --38,656.25 38,656.25 - 02/01/2027 285,000.00 1.350%38,656.25 323,656.25 362,312.50 08/01/2027 --36,732.50 36,732.50 - 02/01/2028 285,000.00 1.450%36,732.50 321,732.50 358,465.00 08/01/2028 --34,666.25 34,666.25 - 02/01/2029 295,000.00 1.600%34,666.25 329,666.25 364,332.50 08/01/2029 --32,306.25 32,306.25 - 02/01/2030 300,000.00 1.700%32,306.25 332,306.25 364,612.50 08/01/2030 --29,756.25 29,756.25 - 02/01/2031 300,000.00 1.800%29,756.25 329,756.25 359,512.50 08/01/2031 --27,056.25 27,056.25 - 02/01/2032 305,000.00 1.900%27,056.25 332,056.25 359,112.50 08/01/2032 --24,158.75 24,158.75 - 02/01/2033 215,000.00 2.000%24,158.75 239,158.75 263,317.50 08/01/2033 --22,008.75 22,008.75 - 02/01/2034 225,000.00 2.100%22,008.75 247,008.75 269,017.50 08/01/2034 --19,646.25 19,646.25 - 02/01/2035 230,000.00 2.150%19,646.25 249,646.25 269,292.50 08/01/2035 --17,173.75 17,173.75 - 02/01/2036 230,000.00 2.200%17,173.75 247,173.75 264,347.50 08/01/2036 --14,643.75 14,643.75 - 02/01/2037 235,000.00 2.250%14,643.75 249,643.75 264,287.50 08/01/2037 --12,000.00 12,000.00 - 02/01/2038 245,000.00 2.300%12,000.00 257,000.00 269,000.00 08/01/2038 --9,182.50 9,182.50 - 02/01/2039 250,000.00 2.350%9,182.50 259,182.50 268,365.00 08/01/2039 --6,245.00 6,245.00 - 02/01/2040 255,000.00 2.400%6,245.00 261,245.00 267,490.00 08/01/2040 --3,185.00 3,185.00 - 02/01/2041 260,000.00 2.450%3,185.00 263,185.00 266,370.00 Total $5,375,000.00 -$1,159,332.16 $6,534,332.16 - Yield Statistics Bond Year Dollars $57,767.08 Average Life 10.747 Years Average Coupon 2.0069079% Net Interest Cost (NIC)2.1185632% True Interest Cost (TIC)2.1156923% Bond Yield for Arbitrage Purposes 1.9876484% All Inclusive Cost (AIC)2.2530912% IRS Form 8038 Net Interest Cost 2.0069079% Weighted Average Maturity 10.747 Years 2020A GO Bonds New $ & CR | Issue Summary | 3/ 2/2020 | 10:36 AM City of Richfield, Minnesota $3,120,000 General Obligation Bonds, Series 2020A Street Reconstruction Debt Service Schedule Date Principal Coupon Interest Total P+I CIF Net New D/S 105% of Total 02/01/2021 --41,194.00 41,194.00 (41,194.00)-- 02/01/2022 135,000.00 1.150%57,480.00 192,480.00 -192,480.00 202,104.00 02/01/2023 135,000.00 1.150%55,927.50 190,927.50 -190,927.50 200,473.88 02/01/2024 140,000.00 1.200%54,375.00 194,375.00 -194,375.00 204,093.75 02/01/2025 140,000.00 1.200%52,695.00 192,695.00 -192,695.00 202,329.75 02/01/2026 140,000.00 1.250%51,015.00 191,015.00 -191,015.00 200,565.75 02/01/2027 145,000.00 1.350%49,265.00 194,265.00 -194,265.00 203,978.25 02/01/2028 145,000.00 1.450%47,307.50 192,307.50 -192,307.50 201,922.88 02/01/2029 145,000.00 1.600%45,205.00 190,205.00 -190,205.00 199,715.25 02/01/2030 150,000.00 1.700%42,885.00 192,885.00 -192,885.00 202,529.25 02/01/2031 150,000.00 1.800%40,335.00 190,335.00 -190,335.00 199,851.75 02/01/2032 155,000.00 1.900%37,635.00 192,635.00 -192,635.00 202,266.75 02/01/2033 155,000.00 2.000%34,690.00 189,690.00 -189,690.00 199,174.50 02/01/2034 160,000.00 2.100%31,590.00 191,590.00 -191,590.00 201,169.50 02/01/2035 165,000.00 2.150%28,230.00 193,230.00 -193,230.00 202,891.50 02/01/2036 165,000.00 2.200%24,682.50 189,682.50 -189,682.50 199,166.63 02/01/2037 170,000.00 2.250%21,052.50 191,052.50 -191,052.50 200,605.13 02/01/2038 175,000.00 2.300%17,227.50 192,227.50 -192,227.50 201,838.88 02/01/2039 180,000.00 2.350%13,202.50 193,202.50 -193,202.50 202,862.63 02/01/2040 185,000.00 2.400%8,972.50 193,972.50 -193,972.50 203,671.13 02/01/2041 185,000.00 2.450%4,532.50 189,532.50 -189,532.50 199,009.13 Total $3,120,000.00 -$759,499.00 $3,879,499.00 (41,194.00)$3,838,305.00 $4,030,220.25 Significant Dates Dated 5/13/2020 First Coupon Date 2/01/2021 Yield Statistics Bond Year Dollars $36,796.00 Average Life 11.794 Years Average Coupon 2.0640803% Net Interest Cost (NIC)2.1658305% True Interest Cost (TIC)2.1642986% Bond Yield for Arbitrage Purposes 1.9876484% All Inclusive Cost (AIC)2.2909021% 2020A GO Bonds New $ & CR | Street Reconstruction | 3/ 2/2020 | 10:36 AM City of Richfield, Minnesota $1,230,000 General Obligation Bonds, Series 2020A Water Revenue Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 05/13/2020 ----- 02/01/2021 --16,225.33 16,225.33 16,225.33 08/01/2021 --11,320.00 11,320.00 - 02/01/2022 55,000.00 1.150%11,320.00 66,320.00 77,640.00 08/01/2022 --11,003.75 11,003.75 - 02/01/2023 55,000.00 1.150%11,003.75 66,003.75 77,007.50 08/01/2023 --10,687.50 10,687.50 - 02/01/2024 55,000.00 1.200%10,687.50 65,687.50 76,375.00 08/01/2024 --10,357.50 10,357.50 - 02/01/2025 55,000.00 1.200%10,357.50 65,357.50 75,715.00 08/01/2025 --10,027.50 10,027.50 - 02/01/2026 55,000.00 1.250%10,027.50 65,027.50 75,055.00 08/01/2026 --9,683.75 9,683.75 - 02/01/2027 55,000.00 1.350%9,683.75 64,683.75 74,367.50 08/01/2027 --9,312.50 9,312.50 - 02/01/2028 55,000.00 1.450%9,312.50 64,312.50 73,625.00 08/01/2028 --8,913.75 8,913.75 - 02/01/2029 60,000.00 1.600%8,913.75 68,913.75 77,827.50 08/01/2029 --8,433.75 8,433.75 - 02/01/2030 60,000.00 1.700%8,433.75 68,433.75 76,867.50 08/01/2030 --7,923.75 7,923.75 - 02/01/2031 60,000.00 1.800%7,923.75 67,923.75 75,847.50 08/01/2031 --7,383.75 7,383.75 - 02/01/2032 60,000.00 1.900%7,383.75 67,383.75 74,767.50 08/01/2032 --6,813.75 6,813.75 - 02/01/2033 60,000.00 2.000%6,813.75 66,813.75 73,627.50 08/01/2033 --6,213.75 6,213.75 - 02/01/2034 65,000.00 2.100%6,213.75 71,213.75 77,427.50 08/01/2034 --5,531.25 5,531.25 - 02/01/2035 65,000.00 2.150%5,531.25 70,531.25 76,062.50 08/01/2035 --4,832.50 4,832.50 - 02/01/2036 65,000.00 2.200%4,832.50 69,832.50 74,665.00 08/01/2036 --4,117.50 4,117.50 - 02/01/2037 65,000.00 2.250%4,117.50 69,117.50 73,235.00 08/01/2037 --3,386.25 3,386.25 - 02/01/2038 70,000.00 2.300%3,386.25 73,386.25 76,772.50 08/01/2038 --2,581.25 2,581.25 - 02/01/2039 70,000.00 2.350%2,581.25 72,581.25 75,162.50 08/01/2039 --1,758.75 1,758.75 - 02/01/2040 70,000.00 2.400%1,758.75 71,758.75 73,517.50 08/01/2040 --918.75 918.75 - 02/01/2041 75,000.00 2.450%918.75 75,918.75 76,837.50 Total $1,230,000.00 -$298,627.83 $1,528,627.83 - Yield Statistics Bond Year Dollars $14,471.50 Average Life 11.765 Years Average Coupon 2.0635582% Net Interest Cost (NIC)2.1655518% True Interest Cost (TIC)2.1640214% Bond Yield for Arbitrage Purposes 1.9876484% All Inclusive Cost (AIC)2.2909136% IRS Form 8038 Net Interest Cost 2.0635582% Weighted Average Maturity 11.765 Years 2020A GO Bonds New $ & CR | Water Revenue | 3/ 2/2020 | 10:36 AM City of Richfield, Minnesota $1,025,000 General Obligation Bonds, Series 2020A Proposed CR 2011A GO Wtr Rev Bonds Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 05/13/2020 ----- 02/01/2021 85,000.00 1.150%10,420.33 95,420.33 95,420.33 08/01/2021 --6,781.25 6,781.25 - 02/01/2022 80,000.00 1.150%6,781.25 86,781.25 93,562.50 08/01/2022 --6,321.25 6,321.25 - 02/01/2023 80,000.00 1.150%6,321.25 86,321.25 92,642.50 08/01/2023 --5,861.25 5,861.25 - 02/01/2024 85,000.00 1.200%5,861.25 90,861.25 96,722.50 08/01/2024 --5,351.25 5,351.25 - 02/01/2025 80,000.00 1.200%5,351.25 85,351.25 90,702.50 08/01/2025 --4,871.25 4,871.25 - 02/01/2026 85,000.00 1.250%4,871.25 89,871.25 94,742.50 08/01/2026 --4,340.00 4,340.00 - 02/01/2027 85,000.00 1.350%4,340.00 89,340.00 93,680.00 08/01/2027 --3,766.25 3,766.25 - 02/01/2028 85,000.00 1.450%3,766.25 88,766.25 92,532.50 08/01/2028 --3,150.00 3,150.00 - 02/01/2029 90,000.00 1.600%3,150.00 93,150.00 96,300.00 08/01/2029 --2,430.00 2,430.00 - 02/01/2030 90,000.00 1.700%2,430.00 92,430.00 94,860.00 08/01/2030 --1,665.00 1,665.00 - 02/01/2031 90,000.00 1.800%1,665.00 91,665.00 93,330.00 08/01/2031 --855.00 855.00 - 02/01/2032 90,000.00 1.900%855.00 90,855.00 91,710.00 Total $1,025,000.00 -$101,205.33 $1,126,205.33 - Yield Statistics Bond Year Dollars $6,499.58 Average Life 6.341 Years Average Coupon 1.5571049% Net Interest Cost (NIC)1.7463478% True Interest Cost (TIC)1.7546215% Bond Yield for Arbitrage Purposes 1.9876484% All Inclusive Cost (AIC)1.9727275% IRS Form 8038 Net Interest Cost 1.5571049% Weighted Average Maturity 6.341 Years 2020A GO Bonds New $ & CR | Proposed CR 2011A GO Wtr | 3/ 2/2020 | 10:36 AM City of Richfield, Minnesota $1,025,000 General Obligation Bonds, Series 2020A Proposed CR 2011A GO Wtr Rev Bonds Debt Service Comparison Date Total P+I Net New D/S Old Net D/S Savings 02/01/2021 95,420.33 96,229.90 107,207.50 10,977.60 02/01/2022 93,562.50 93,562.50 105,037.50 11,475.00 02/01/2023 92,642.50 92,642.50 102,867.50 10,225.00 02/01/2024 96,722.50 96,722.50 105,452.50 8,730.00 02/01/2025 90,702.50 90,702.50 102,865.00 12,162.50 02/01/2026 94,742.50 94,742.50 105,090.00 10,347.50 02/01/2027 93,680.00 93,680.00 107,130.00 13,450.00 02/01/2028 92,532.50 92,532.50 103,857.50 11,325.00 02/01/2029 96,300.00 96,300.00 105,585.00 9,285.00 02/01/2030 94,860.00 94,860.00 106,940.00 12,080.00 02/01/2031 93,330.00 93,330.00 103,092.50 9,762.50 02/01/2032 91,710.00 91,710.00 104,150.00 12,440.00 Total $1,126,205.33 $1,127,014.90 $1,259,275.00 $132,260.10 PV Analysis Summary (Net to Net) Gross PV Debt Service Savings.....................118,697.52 Net PV Cashflow Savings @ 1.988%(Bond Yield).....118,697.52 Contingency or Rounding Amount....................(809.57) Net Present Value Benefit $117,887.95 Net PV Benefit / $1,117,551.59 PV Refunded Debt Service 10.549% Net PV Benefit / $990,000 Refunded Principal...11.908% Net PV Benefit / $1,025,000 Refunding Principal..11.501% Refunding Bond Information Refunding Dated Date 5/13/2020 Refunding Delivery Date 5/13/2020 2020A GO Bonds New $ & CR | Proposed CR 2011A GO Wtr | 3/ 2/2020 | 10:36 AM