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042710 agenda packetCITY OF RICHFIELD, MINNESOTA TUESDAY, APRIL 27, 2010 SPECIAL CITY COUNCIL WORKSESSION CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 6:00 P.M. AGENDA Call to order Roll call 1. Presentation by Mn/DOT regarding results of I-494/1-35W Interchange Study (Council Memo No. 53) Notes: 2. Discussion regarding therapeutic massage in residential settings (Council Memo No. 54) Notes: Adjournment REGULAR CITY COUNCIL MEETING COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA INTRODUCTORY PROCEEDINGS Call to order Roll call Open forum (15 minutes maximum) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: Pledge of Allegiance Approval of minutes of (1) Special City Council Worksession of April 13, 2010 and (2) Regular City Council Meeting of April 13, 2010 PRESENTATIONS 1. Presentation of proclamation designating April 30, 2010 as "We Care Day" in Richfield 2. Presentation regarding Face2Face event 3. Presentation from Fireman's Fund Insurance Company to Richfield Fire Department of Bullard T-3 Max Thermal Camera valued at $8,800 and consideration of resolution accepting donation Staff Report No. 68 Notes: COUNCIL DISCUSSION 4. Council discussion • Hats Off to Hometown Hits Notes: AGENDA APPROVAL 5. Council approval of agenda CONSENT CALENDAR 6. 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 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. Consideration of approval of first reading of ordinance amendment to Richfield City Code Subsection 549.25 Subd. 2(a) related to dynamic sign regulations clarifying requirement that dynamic displays be structurally connected to static (non-changing) portion of sign S.R. No. 69 B. Consideration of approval of resolution terminating Joint and Cooperative Agreement with Regional Mutual Aid Association for use of personnel and equipment during emergencies S.R. No. 70 C. Consideration of approval of purchase from Total Control,Systems, Inc. for new slaker control panel at Richfield Water Treatment Plant in amount of $33,893 S.R. No. 71 D. Consideration of approval of award of contract to North Star Tree Care for diseased boulevard tree removal in amount not to exceed $99,000 S.R. No. 72 Notes: 7. Consideration of items, if any, removed from Consent Calendar Notes: PUBLIC HEARINGS 8. Public hearing and second reading of transitory ordinance vacating Market Drive street rig ht-of-way Staff Report No. 73 Notes: 9. Public hearing regarding resolution adopting modification to Redevelopment Plan for Richfield Redevelopment Project Area and establishment of 2010-1 Housing Tax Increment Financing District (aka Woodlake Housing Tax Increment Finance District) Staff Report No. 74 Notes: RESOLUTIONS 10. Consideration of disciplinary hearing regarding resolution imposing civil enforcement on establishment in Richfield that underwent alcohol check conducted by Richfield Public Safety staff and failed by selling alcohol to underage youth Staff Report No. 75 Notes: 11.Consideration of resolution awarding sale of General Obligation Bonds, Series 2010A in aggregate principal amount of $1,535,000 Staff Report No. 76 Notes: PROPOSED ORDINANCES 12.Consideration of first reading of proposed ordinances modifying electric and gas franchise fees and scheduling public hearing and second reading for May 25, 2010 Staff Report No. 77 Notes: OTHER BUSINESS 13. Consideration of directing Wold Architects to initiate proposal requests for humidification and/or sound masking systems for new Richfield Municipal Center Staff Report No. 78 Notes: CITY MANAGER'S REPORT 14. City Manager's report Notes: 15. Claims and payrolls Open forum (additional 15 minutes if more time needed after first Open Forum and by majority vote of the City Council) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda. Individuals who wish to address the Council must have registered prior to the meeting. Notes: 16.Adjournment 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 OF RICHFIELD, MINNESOTA Office of City Manager April 22, 2010 Council Memorandum No. 53 The Honorable Mayor and Members of the City Council Subject: 135W / 1-494 Interchange Study (Worksession Agenda Item No. 1 ) Council Members: A Mn/DOT representative will be presenting the results of the I-494/1-35W Interchange Study at the April 27 Council Worksession. They will be providing copies of the Executive Summary and the. Figures of the concepts for the interchange and the Bus Rapid Transit facility at American Boulevard. Staff will also bring the City copy of the full report. spe fully subm' ted, S n L. City Manager SLD:cak Email: Department Directors Assistant to the City Manager CITY OF RICHFIELD, MINNESOTA Office of City Manager April 22, 2010 Council Memorandum No. 54 The Honorable Mayor and Members of the City Council Subject: Therapeutic Massage in Residential Settings (Worksession Agenda Item No. 2 ) Council Members: In the 1970's and early 1980's, Richfield had as many as seven "massage parlors" located throughout the City. One news report at the time indicated that Richfield led the Nation in the number of these parlors per capita. These establishments were fronts for prostitution and drew unsavory clients into the City. Efforts to shut the establishments down by arresting the "massage therapists" were not successful until 1984 when a concerted effort by Public Safety personnel, the Minnesota Department of Revenue and the IRS finally succeeded in closing all of the establishments. Having rid the City of these establishments, City staff drafted various ordinances regulating "Adult Entertainment" establishments. These ordinances were based on those from other cities that had success in regulating the businesses. In April 1999, staff was contacted by a Richfield Salon owner who was interested in providing the service of therapeutic massage for his clients. At that time, staff worked closely with him and several independent massage therapists on drafting initial ordinance language that was presented to the City Council at a study session on August 2, 1999 for their discussion and consideration. All of the individuals consulted in drafting the ordinance agreed that massage therapy locations should only be business based or allowed only in general commercial districts. The reasoning behind this was not only to refrain from introducing business activities in a residential setting but also so that a peace officer or any properly designated employee of the City could enter, inspect and search the business premises of any therapeutic massage establishment during business hours without a warrant. The City Attorney's office concurred. At the August 2, 1999 study session, staff was directed by Council at that time to proceed with scheduling a first reading of the ordinance on August 23, 1999 with a second reading scheduled for September 13, 1999. The ordinance was approved and became law in October 1999. When the ordinance was passed in 1999, the intent of it always was that massage therapists could only be located in general commercial districts. In 2008, Community Development staff were consolidating any zoning code references within the general code and referencing them to the zoning code instead. When that occurred, that intent was changed in the consolidation without Community Development staff realizing that referring individuals to the zoning code would impact the meaning that was originally intended. ~. It should also be noted that in 2002 an attorney working with the Disability Law Center contacted the City of Richfield about a Richfield resident who had a confirmed legal disability who wanted to practice massage therapy in her home. Her disability was well documented by medical doctors and confirmed by staff and the City Attorney at which point the City had no legal option to not allow her to practice massage therapy from her home. She is the only person who has the legal authority to do this. In checking with neighboring cities in preparation for this current work session this is what we found as to how other cities handle this area: • The City of Bloomington allows for both commercial and residential massage therapy business licensing. They currently have approximately 22 licenses with 8 of them being residential. Zoning does not dictate where they can and can't be located. • The City of Edina licenses therapeutic massage businesses in their City but only in commercial or regional medical districts of the City. If less than 25% of the business conducts massage, a license is not required. The city feels that allowing massage therapy businesses in a residential district could have a negative impact on the city. • The City of St. Louis Park licenses therapeutic massage businesses but are only allowed in commercially zoned areas. The City feels that allowing massage therapy businesses in a residential area could result in excess customer traffic; could negatively affect the perception of the neighborhood; and could possibly result in inappropriate activity. Edina and St. Louis Park staff told us that they would be adamantly opposed to massage therapists being allowed in residential districts in their cities and their concerns over the issues that can present themselves when allowed in a residential setting. Bloomington did not voice that same concern. SLD:cak Attachments Email: Department Directors Assistant to the City Manager /C CITY OF RICHFIELD, MINNESOTA Council Letter No. 50 Agenda February 13, 1995 ~~~ I ~ +j /~~ Issue Statement: First readings of: ari ordinance amendment to the Zoning Ordinance on adu us ; an amendment to Section 2020.01 prohibiting nudity in licensed establishmen ; an adult establishment ordinance; and an ordinance relating to premises conducive to high-risk sexual conduct. Background: The City of Richfield ,has regulated. adult use establishments through liquor licensing and a "massage parlor" type ordinance. The Zoning Ordinance does not specifically relate to adult uses. In recent years, other types of adult uses have appeared in other cities or inquiries received about uses which may not be covered by either the licensing provisions or the Zoning Ordinance. In response, the City Council has approved and extended a moratorium to provide adequate time to research the issue and address the land use, zoning and licensing issues. Recommended Motion: Approve first reading of the following ordinances: Amendment to the Zoning Ordinance to regulate the location of adult establishments; 2. Section 1196 -Adult Establishments; 3. Amendment to Subd.6 of Subsection 2020.01 prohibiting nudity in licensed establishments; and 4. Section 625 -Premises Conducive to High-Risk Sexual Conduct. Basis of Recommendation: 1. Since the moratorium on adult uses was approved by the City Council, the Planning Commission has been reviewing materials and studies relating to adult use establishments and received the counsel of the City Attorney's office. 2. New ordinances have been developed as well as an amendment to the Zoning Ordinance. 3. The community lias been solicited for its views throughout the process. There have been several articles in the Sun Current and Your City. Planning Commission members have appeared on a local cable program, spoken to service clubs and written letters to the editor. An informational meeting was held where residents were invited through the newspaper, letters to all the churches, service clubs and civic groups, and cable. This meeting was also noted on WCCO radio and television. A public meeting was also held, pursuant to published notice, with about a dozen ~c-.~ Discussion/Decision Mode: A public hearing and second reading will be scheduled for 7:00 p.m. on March 27, 1995: The moratorium on the establishment of adult use businesses is still in effect. Respectfull bmitted, James _ rosser City M ger JDP:cak Attachment 3 Subd. 1. A therapeutic massage enterprise may not be licensed if the enterprise is located on property on which taxes, assessments or other financial claims to ~, / the state, county, school district or city are due and delinquent. In the event a (~' suit has been commenced under Minnesota Statutes, sections 278.01 - 278.13, questioning the amount of validity of taxes, the city council may o.n application may, \~, waive strict compliance with this provision; no waiver may be granted, however, for taxes or any portion thereof, which remain unpaid for a period exceeding ne ~ ~ ~`~ year after becomin du t ~' ~~~~- Subd. 2. Zoning compliance. A therapeutic massage enterprise may not be ~u~d'° ~ licensed if the location of such enter rise is not located in one of the eneral commercial districts of the city and does not mee a zoning requirements. 88.21 General license restrictions. Subd. 1. Po_ sting. A therapeutic massage enterprise license must be posted in a conspicuous place on the premises for which it is used. A person licensed as a therapeutic massage therapist must have in their possession a copy of the license when therapeutic massage services are being rendered. Subd. 2. Area. A therapeutic massage enterprise license is effective only for the compact and contiguous space specified in the approved license application. If the licensed premises are enlarged, altered or extended, the licensee must inform the public safety director. A licensed therapeutic massage therapist may perform on-site massage at a business, public gathering, and private home or other site not on the therapeutic massage enterprise premises. Subd. 3. Affiliation with enterprise required. A massage therapist must be employed by, affiliated with or hold a therapeutic massage enterprise business license issued by the City unless a person or place is specifically exempted from obtaining a therapeutic massage enterprise license in section 1188.07 of this code. Subd. 4. Transfer. The license issued is for the person or the premises named on the approved license application. Transfer of a license from place to place or from person to person is not permitted. Subd. 5. Employment of unlicensed massage therapists prohibited. No therapeutic massage enterprise shall employ or use any person to pertorm therapeutic massage who is not licensed as a therapeutic massage therapist under this code, unless the .person is specifically exempted from obtaining a therapist license in Section 1188.07 of this Code. Subd. 6. Coverings. The massage therapist must require that the person who is receiving the massage will at all times have that persons breasts, buttocks, anus Richfield City Code Section 1188: Therapeutic Massage (Added, Bill No. 1999-12) 1188.01. Findings. It is found and determined that: 1188.01 (Rev. 1999) (a) persons who have recognized and standardized training in therapeutic massage, health and hygiene provide a legitimate and necessary service to the general public; (b) health and sanitation regulations governing therapeutic massage enterprises and massage therapists will minimize the risk of the spread of communicable diseases and promote health and sanitation; (c) license qualifications for therapeutic massage enterprises and massage therapists will minimize the risk that such businesses and persons may facilitate prostitution and other criminal activity in the city; and (d) massage services provided by persons without recognized and standardized training in massage can endanger citizens by facilitating the spread of communicable diseases, by exposing citizens to unhealthy and unsanitary conditions, and by increasing the risk of personal injury. 1188.03. Definitions. The terms defined in this section have the meanings given to them. Subdivision 1. "Clean" means the absence of dirt, grease, rubbish, garbage and other offensive, unsightly or extraneous matter. Subd. 2. "In good repair" means free of corrosion, breaks, cracks, chips, pitting, excessive wear and tear, leaks, obstructions and similar defects. Subd. 3. "Massage" means the rubbing, stroking, kneading, tapping or rolling of the body of another person with the hands for the purpose of physical fitness, health-care referral, relaxation and for no other purpose. Subd. 4. "Operate" means to own, manage or conduct, or to have control, charge or custody over. Subd. 5. "Therapeutic massage enterprises" means a place of business providing massage services to the public for consideration: the term does not include a hospital, sanitarium, rest home, nursing home, boarding home or other institution for the hospitalization or care of other human beings duly licensed under the provisions of Minnesota Statutes, sections 144.50 through 144.69. Subd. 6. "Therapeutic massage therapist" means a person who practices or administers massage to the public for consideration. Subd. 7. "In the city" means physical presence, as well as telephone referrals such as phone- a-massage operations in which the business premises, although not physically located within the city, serves as a point of assignment of employees who respond to requests for services from within the city. Richfield City Code 1188.05 (Rev. 1999) 1188.05. License required. Subdivision 1. Therapeutic massage enterprises. It is unlawful to operate, offer, engage in or carry on massage services in the city without a therapeutic massage enterprise license. Subd. 2. Therapeutic massage therapist license. It is unlawful to practice, administer or provide massage services in the city without a therapeutic massage therapist license. 1188.07. Exemptions. A therapeutic massage enterprises license or therapeutic massage therapist license is not required for the following persons and places: (a) persons licensed by the state to practice medicine, surgery, osteopathy, chiropractic, physical therapy or podiatry, provided that the massage is administered in the regular course of the medical treatment and not provided as part of a separate and distinct massage business; (b) persons licensed by the state as beauty culturists or barbers, provided the persons do not hold themselves out as giving massage treatments and provided that massage by beauty culturists is limited to the head, hand, neck and feet and the massage by barbers is limited to the head and neck; (c) persons employed by and working solely under the direction and control of a person duly licensed by the state to practice medicine, surgery, osteopathy, chiropractic, physical therapy or podiatry; this does not include therapeutic massage therapists employed as an independent contractor; (d) places licensed or operating as a hospital, nursing home, hospice, sanitarium or group home established for hospitalization or medical care; and (e) athletic coaches, directors and trainers employed by public or private schools. 1188.09. General rule. The owner or operator of a licensed therapeutic massage enterprise may employ only licensed therapeutic massage therapists to provide massage services. The owner or operator of a licensed therapeutic massage enterprise need not be licensed as a therapeutic massage therapist unless that owner or operator personally provides massage services. 1188.11. License application. Subdivision 1. Therapeutic massage enterprise. The application for a therapeutic massage enterprise license must contain the following information. (a) For all applicants: (1) whether the applicant is an individual, corporation, partnership or other form of organization; (2) the legal description of the premises to be licensed together with a plan of the area showing dimensions, location of buildings, street access and parking facilities; (3) the floor number, street number and rooms where the massage services are to be conducted; (4) whether all real estate and personal property taxes that are due and payable for the premises to be licensed have been paid, and if not, the years and amounts that are unpaid; (~ Richfield City Code 1188.11 Subd. 1 (Rev. 1999) (5) if the application is for premises either planned or under construction or undergoing substantial alteration, the application must be accompanied by preliminary plans showing the design of the proposed premises; if the plans for design are on file with the building inspector, no plans need be submitted; (6) the name and street address of the business if it is to be conducted under a designation, name or style other than the name of the applicant, and a certified copy of the certificate required by Minnesota Statutes, section 333.02; (7) other information that the city council may require. (b) For applicants who are individuals: (1) the name and date of birth of the applicant and the applicant's residence address; (2) if the applicant has ever used or been known by a name other than the applicant's name, and if so, the name or names and information concerning the dates and places where used; (3) whether the applicant is a citizen of the United States or a resident alien or has the legal authority to work in the United States; (4) residence addresses of the applicant during five years preceding the date of application; (5) the type, name and location of every business or occupation the applicant has been engaged in during the preceding five years; (6) names and addresses of the applicant's employers for the preceding five years; (7) if the applicant has ever been convicted of a felony, crime or violation of an ordinance other than a minor traffic offense; if so, the applicant must furnish information as to the time, place and offense involved in the convictions; (8) if the applicant has ever been engaged in the operation of massage services; if so the applicant must furnish information as to the name, place and length of time of the involvement in such activity. (c) For applicants that are partnerships: (1) the names and addresses of general and limited partners and the information concerning each general partner described in subdivision 1(b) of this section; (2) the managing partners must be designated, and the interest of each general and limited partner in the business must be disclosed; (3) a true copy of the partnership agreement must be submitted with the application, and if the partnership is required to file a certificate as to a trade name under Minnesota Statutes, section 333.02, a certified copy of that certificate must be submitted. The license, if issued, will be in the name of the partnership. 7 Richfield City Code (d) For applicants that are corporations: 1188.11 Subd. 2 (Rev. 1999) (1) the name of the organization, and if incorporated, the state of incorporation; (2) a true copy of the certificate of incorporation, and, if a foreign corporation, a certificate of authority as described in Minnesota Statutes, section 303.02 and information of the nature described in subdivision 1(b) regarding such persons; (3) the name of the general manager, corporate officers, proprietor, and other person in charge of the premises to be licensed, and the information about those persons described in subdivision 1(b); (4) a list of the persons who own or have a controlling interest in the corporation or organization or who are officers of the corporation or organization, together with their addresses and the information regarding such persons described in subdivision 1(b) of this section. Subd. 2. Therapeutic massa e~pist. An application for a therapeutic massage therapist license must contain the following information: (a) the applicant's name and address; (b) the applicant's current employer; (c) the applicant's employers for the previous five years, including employer's name, address and dates of employment; (d) the applicant's residence address for the previous five years; (e) the applicant's date of birth, home telephone number, weight, height, color of eyes and color of hair; (f) if the applicant has ever been convicted of a felony, crime or violation of an ordinance other than a minor traffic offense, and if so, the time, place and offense involved in the convictions; (g) whether the applicant is a citizen of the United States or a resident alien or has the legal authority to work in the United States; `(h) if the applicant has ever used or been known by a name other than the applicant's name, and if so, the name or names and information concerning dates and places where used; (i) evidence that the applicant: (1) is a member in good standing of the American Massage Therapy Association, the Associated Bodywork and Massage Professionals or other organizations of therapeutic massage professionals which has a similar written and enforceable code of ethics, and has been currently approved by the public safety director; (2) has current insurance coverage over $1,000,000 for professional liability in the practice of massage; (3) is affiliated with, employed by or owns a therapeutic massage enterprise licensed by the city; (4) has completed 400 hours of certified therapeutic massage training from a recognized school accredited by one of the national organizations described in paragraph (1); (5) has at least two years of experience practicing massage therapy. (j) Other information that the city council may require. Richfield City Code 1188.13 (Rev. 1999) 1188.13. Application and investigation fees. The fees for a massage enterprise and massage therapist licenses are as provided in Appendix D. A background investigation fee will be charged for all new therapeutic massage enterprise licenses and therapeutic massage therapist licenses and are as provided in Appendix D. An application for either license must be accompanied by payment in full of the required license and investigation fee. 1188.15. Application verification and consideration. Subdivision 1. Therapeutic massage enterprise license. The public safety director must verify the information supplied on the license application and investigate the background, including the criminal background, of the applicant to assure compliance with this section. Within 21 days of receipt of a completed application and fee for a therapeutic massage enterprise license, the public safety director must make a written recommendation to the city council as to issuance or non-issuance of the license. The city council may order additional investigation if it deems it necessary. Subd. 2 Therapeutic massage therapist license. The public safety director must verify the information supplied on the license application and investigate the background, including the criminal background, of the applicant to assure compliance with this section. Within 21 days of receipt of a complete application and fee for a therapeutic massage therapist license, the public safety director must grant or deny the application. Notice will be sent to the applicant upon a denial informing the applicant of the right to appeal to the city council within 14 days. If an appeal is properly made, the matter will be placed on the next available council agenda. 1188.17. Persons ineligible for license. Subdivision 1 Therapeutic massa eg enterprise license. A therapeutic massage enterprise license may not be issued to an individual who: (a) is a minor at the time the application is filed; (b) has been convicted of any crime directly related to the occupation licensed as prescribed by Minnesota Statutes, section 364.03, subdivision 2, and who has not shown competent evidence of sufficient rehabilitation and present fitness to perform the duties and responsibilities of a licensee as prescribed by Minnesota Statutes, section 364.03, subdivision 3; (c) is not a citizen of the United States or a resident alien or has the legal authority to work in the United States; (d) is not of good moral character or repute; (e) is not the real party in interest of the enterprises; (f) has misrepresented or falsified information on the license application; (g) owes taxes or assessments to the state, county, school district or city that are due and delinquent. Subd. 2. Therapeutic massage therapist license. A therapeutic massage therapist license may not be issued to a person who cannot meet the requirements in section 1188.17 subdivision 1, paragraphs (a) - (g) or who is not (i) affiliated with, (ii) employed by or (iii) does not hold, a therapeutic massage enterprise license by the city or cannot meet the definition of a therapeutic massage therapist in section 1188.03 or in 1188.11 subdivision. 2. (paragraph i). Richfield City Code 1188.19 (Rev. 2008) 1188.19. Locations ineligible for therapeutic massage enterprise license. Subdivision 1. A therapeutic massage enterprise may not be licensed if the enterprise is located on property on which taxes, assessments or other financial claims to the state, county, school district or city are due and delinquent. In the event a suit has been commenced under Minnesota Statutes, sections 278.01 - 278.13, questioning the amount of validity of taxes, the city council may on application waive strict compliance with this provision; no waiver may be granted, however, for taxes or any portion thereof, which remain unpaid for a period exceeding one year after becoming due. '"~ Subd. 2. Zoning compliance. A therapeutic massage enterprise must be located in ari approved zoning district and meet all zoning requirements. (Amended, Bill No. 2008-3) ~ 11881. General license restrictions. Subdivision 1. Posting. A therapeutic massage enterprise license must be posted in a conspicuous place on the premises for which it is used. A person licensed as a therapeutic massage therapist must have in their possession a copy of the license when therapeutic massage services are being rendered. Subd. 2. Area. A therapeutic massage enterprise license is effective only for the compact and contiguous space specified in the approved license application. If the licensed premises are enlarged, altered or extended, the licensee must inform the public safety director. A licensed therapeutic massage therapist may perform on-site massage at a business, public gathering, private home or other site not on the therapeutic massage enterprise premises. Subd. 3, Affiliation with enterprise required. A massage therapist must be employed by, affiliated with or hold a therapeutic massage enterprise business license issued by the City unless a person or place is specifically exempted from obtaining a therapeutic massage enterprise license in section 1188.07 of this code. Subd. 4. Transfer. The license issued is for the person or the premises named on the approved license application. Transfer of a license from place to place or from person to person is not permitted. Subd. 5. Employment of unlicensed massa eg therapists prohibited. No therapeutic massage enterprise shall employ or use any person to perform therapeutic massage who is not licensed as a therapeutic massage therapist under this code, unless the person is specifically exempted from obtaining a therapist license in Section 1188.07 of this code. Subd. 6. Coverings. The massage therapist must require that the person who is receiving the massage will at all times have that person's breasts, buttocks, anus and genitals covered with non- transparent material or clothing. A massage therapist performing therapeutic massage must have the therapist's breasts, buttocks, anus and genitals covered with anon-transparent material or clothing at all times. Subd. 7. Prohibited massage. A massage therapist may not intentionally massage or offer to massage the penis, scrotum, mons veneris, vulva or vaginal area of a person. / [~ Richfield City Code 1188.23 (Rev. 1999) 1188.23. Restrictions re ag rdin~ sanitation and health. Subdivision 1. A therapeutic massage enterprise must be equipped with adequate and conveniently located toilet rooms for the accommodation of its employees and patrons. The toilet room must be well ventilated by natural or mechanical methods and be enclosed with a door. The toilet room must be kept clean and in good repair and be fully and adequately illuminated. Subd. 2. A therapeutic massage enterprise must provide single-service disposal paper or clean linens to cover the table, chair, furniture or area on which the patron receives the massage. If the table, chair or furniture on which a patron receives the massage is made of material impervious to moisture, such table, chair or furniture must be sanitized after each massage. Subd. 3. The therapeutic massage therapist must wash their hands and arms with water and soap, anti-bacterial scrubs, alcohol and other disinfectants prior to and following each massage service performed. Subd. 4. Massage tables, chairs or furniture on which the patron receives the massage must have surfaces that can be readily disinfected after each massage. Subd. S. Rooms in a therapeutic massage enterprise must be fully and adequately illuminated. Subd. 6. A therapeutic massage enterprise must have a janitor's closet that provides for the storage of cleaning supplies. Subd. 7. Therapeutic massage enterprises must provide adequate refuse receptacles that must be emptied as required by this code. Subd. 8. Therapeutic massage enterprises must be maintained in good repair and sanitary condition. Subd. 9. Therapeutic massage enterprises must comply with the requirements of the Minnesota Indoor Clean Air Act. Subd. 10. Therapeutic massage enterprises must take reasonable steps to prevent the spread of infections and communicable diseases on the licensed premises. Subd. 11. Therapeutic massage therapists must wear clean clothing when performing massage services. 1188.25. License term; renewals. Licenses expire annually on December 31st of each year. The license fee will be prorated in 30 day increments for licenses issued after June 30. The public safety director must prepare an application form for the renewal of a license requiring information that the public safety director determines necessary for consideration of the renewal. The renewal application must be made no later than November 30. Within a reasonable period after the completion of the renewal license verification process, the public safety director shall accept or deny the license application in accordance with this division. If the application is denied, the public safety director shall notify the applicant of the determination in writing and by regular and certified mail to the address provided on the application form. The notice shall inform the applicant of their right, i/ Richfield City Code 1188.27 (Rev. 1999) within 14 days after receipt of the notice by the applicant, to request an appeal of the public safety director's denial to the City Council. 1188.27. Suspension; revocation. A license granted under this section may be suspended or revoked by the city council by resolution upon notice and public hearing for any violation of this Chapter, conviction of any crime or misdemeanor or any fraud, misrepresentations or incorrect statements in the license application or in the course of operating or conducting business. A revocation or suspension by the City Council shall be preceded by written notice to the licensee and a hearing. The notice shall give at least 14 days notice of the time and place of the hearing and shall state the nature of the charges against the licensee. The notice shall be mailed by regular and certified mail to the licensee at the most recent address listed on the license application. 1188.29. Temporary therapist license. Subdivision 1. The public safety director may issue a temporary therapeutic massage therapist license as provided in this subsection. Subd. 2. A temporary therapeutic massage therapist license may be issued to a person who: (a) is qualified to hold a massage therapist license under this code; (b) has completed the required application and paid the license fee at least 14 days prior to the effective date of the license. Subd. 3. A temporary license is effective for four consecutive days. A person may not be issued more than three temporary licenses during a 12 month period. The fee for a temporary massage therapist license is provided in appendix D. An investigation fee will be charged for temporary therapeutic massage therapist licenses and is also provided in appendix D. 1188.31. Hours of operation. A licensed therapeutic massage enterprise may not operate for business between the hours of 10:00 o'clock p.m. and 8:00 o'clock a.m. of any day. 1188.33. Ins ecp tions. A peace officer or any properly designated employee of the City or the state of Minnesota may enter, inspect and search the business premises of any therapeutic massage establishment, during business hours without a warrant. ~- Richfield City Code 620.15 (Rev. 1995) 620.15. Construction of section. This section shall not be construed to relieve or lessen the responsibility or liability of any party owning, operating, controlling or installing any wells and water supply systems for damages to persons or property caused by any defect therein nor shall the city be held to assume any liability to any person by reason of the inspection required herein or by reason or certificate of the inspection required herein or by reasons of certificate of inspection issued pursuant thereto. 620.17. Application of state law. All well drilling and any use of water, either surface or underground in the city shall be subject to the regulation of the use of water by the state contained in Minnesota Statutes, Chapter 105, and other applicable state law. Nothing contained in this section or this code shall be interpreted as to limit or abrogate the provisions of Minnesota Statutes, chapter 105 or other applicable law. Section 625 -Premises conducive to high-risk sexual conduct (Added, Bill No. 1995-5, Sec. 3) 625.01. Pu ose. The purpose of this section of the city code is to prescribe regulations governing commercial premises, buildings, and structures that are conducive, by virtue of design and use, to high-risk sexual conduct which can result in the spread of sexually transmitted diseases to persons frequenting such premises, buildings, and structures. 625.03. Findings of the city council. Subdivision 1. The city council of the city of Richfield makes the following findings regarding the need to regulate commercial premises, buildings, and structures that are conducive to the spread of communicable disease of danger to persons in order to further the substantial interest of public health. Subd. 2. The experience of other cities establishes that certain commercial premises, buildings, and structures, or parts thereof, by reason of the design and use of such premises, buildings, or structures are conducive to the spread of communicable disease of danger to persons frequenting such premises, buildings, or structures, as well as to the general public, and that the risk of spreading infectious and contagious diseases can be minimized by regulating such commercial premises, buildings, and structures. Subd. 3. The experience of other cities where such commercial premises, buildings, and structures are present indicates that the risk of spreading the sexually transmittable disease of Acquired Immune Deficiency Syndrome (AIDS) is increased by the presence of such premises, buildings, and structures, because the design or use of such premises, buildings, and structures, or parts thereof can facilitate high-risk sexual conduct. /~ Richfield City Code 625.03, Subd. 4 (Rev. 1995) Subd. 4. Medical publications of the Center for Disease Control of the United States Department of Health and Human Services indicate that the sexually transmittable disease of AIDS is currently irreversible and uniformly fatal. Medical research has further established that the risk factors for obtaining or spreading AIDS are associated with high-risk sexual conduct. 625.05. Definitions. Subdivision 1. The following words and phrases when used in this section shall have the following meanings unless the context indicates otherwise: Subd. 2. Booths, stalls, or partitioned portions of a room or individual room. (i) enclosures specifically offered to persons for a fee or as an incident to performing high-risk sexual conduct, or (ii) enclosures which are part of a business operated on the premises which offers movies or other entertainment to be viewed within the enclosure, including enclosures wherein movies or other entertainment is dispensed for a fee. The phrase "booths, stalls, or partitioned portions of a room or individual room" does not mean enclosures which are private offices used by the owners, managers or persons employed by the premises for attending to the tasks of their employment, and which are not held out to the public or members of the establishment for hire or for a fee or for the purpose of viewing movies or other entertainment for a fee, and are not open to any persons other than employees. Subd. 3. Doors, curtains or portal partitions. Full, complete, non-transparent closure devices through which one cannot see or view activity taking place within the enclosure. Subd. 4. Hazardous site. Any commercial premises, building or structure, or any part thereof, which is a site of high-risk sexual conduct as defined herein. Subd. 5. High-risk sexual conduct. (a) fellatio; (b) anal intercourse; and/or (c) vaginal intercourse with persons who engage in sexual acts in exchange for money. Subd. 6. Open to an adiacent public room so that the area inside is visible to persons in the adjacent public room. Either the absence of any entire "door, curtain or portal partition" or a door or other device which is made of clear, transparent material such as glass, plexiglass or other similar material meeting building code and safety standards, which permits the activity inside the enclosure to be entirely viewed or seen by persons outside the enclosure. Subd. 7. Public health official. An agent or employee of the city charged with the enforcement of the state or local health laws. I~ Richfield City Code 625.07 (Rev. 1995) 625.07. Public health regulations. Subdivision 1. No commercial building, structure, premises or part thereof, or facilities therein shall be so constructed, used, designed or operated in the city for the purpose of engaging in, or permitting persons to engage in, sexual activities which include high-risk sexual conduct. Subd. 2. No person shall own, operate, manage, rent, lease, or exercise control of any commercial building, structure, premises, or portion or part thereof in the city, which contains: (a) Partitions between subdivisions of a room, portion or part of a building, structure or premises having an aperture which is designed or constructed to facilitate sexual activity, including but not limited to vaginal intercourse, anal intercourse, or fellatio, between persons on either side of the partition. (b) "Booths, stalls, or partitioned portions of a room or individual room" as defined herein which have "doors, curtains or portal partitions" as defined herein unless such booths, stalls, partitioned portions of a room or individual room have at least one side open to an adjacent public room so that the area inside is visible to persons in the adjacent public room as defined herein. Booths, stalls, and/or partitioned portions of a room or individual room that are so open to an adjacent public room shall be lighted in a manner that the persons in the area used for viewing motion pictures or other forms of entertainment are visible from the adjacent public rooms, but such lighting shall not be of such intensity as to prevent the viewing of the motion pictures or other offered. entertainment. 625.09. Exce tp ions. The regulations set forth in this section shall not apply to premises, buildings, or structures that are lawfully operating and licensed as hotels, motels, apartment complexes, condominiums, townhomes, or boarding houses which are subject to other general health and sanitation requirements under state and local law. 625.11. Health enforcement powers. Subdivision 1. In exercising powers conferred by this or any other section of this code relating to communicable diseases, the public health official shall be guided by the most recent instructions, opinions and guidelines of the center for disease control of the United States Department of Health and Human Services which relate to the spread of infectious diseases. Subd. 2. In order to ascertain the source of infection and reduce its spread, the public health official, and persons under the public health official's direction and control, shall have full power and authority to inspect or cause to be inspected, and to issue orders regarding any commercial building, structure or premises, or any part thereof, which may be a site of high-risk sexual conduct. If the public health official determines that a hazardous site as defined herein exists, the public health official shall declare it to be a public health hazard and public health nuisance and shall then: s ~5 Richfield City Code 625.11, Subd. 2 (a) (Rev. 1995) (a) Notify the manager, owner, or tenant of the hazardous site that the public health official has reasonable belief that the premises, building or structure is a hazardous site as defined herein, (b) Issue two written warnings at least 10 days apart to the manager, owner, or tenant of the premises stating the specific reasons for the public health official's opinion that the premises, building, or structure is a hazardous site as defined herein, (c) Once such notices and warnings have been issued, the public health official or the public health official's appointee shall proceed as follows: (1) After the manager, owner or tenant of the premises has been notified in writing as to the basis of the public health official's determination, the manager, owner or tenant shall have 10 days from the date of the last warning to request a hearing before the public health official or the public health official's appointee for the determination as to the existence of such hazardous site. If the manager, owner or tenant of the premises does not request a hearing within 10 days of the date of the last warning notice, the public health official shall then cause the premises to be posted with a warning advising the public that the premises have been declared a hazardous site to take specified corrective measures to prevent high- risk sexual conduct from taking place within the premises. (2) If the manager, owner, or tenant of the premises requests a hearing, the hearing shall be held before the public health official or the public health official's appointee at a date not more than 30 days after demand for a hearing. After considering all evidence, the public health official or the public health official's appointee shall make a determination as to whether the premises constitute a hazardous site, as defined herein and issue a decision based upon all hearing evidence presented. If the public health official or the public health official's appointee makes a determination that the premises constitute a hazardous site, the public health official shall then issue orders to the manager, owner, or tenant of the premises to take corrective measures to prevent high-risk sexual conduct from taking place within the premises and cause the premises to be posted with a warning advising the public that the premises have been declared a hazardous site. (3) If, within 30 days from issuance of the orders to the manager, owner, or tenant of the hazardous site, the public health official determines that such corrective measures have not been undertaken, the public health official may order the abatement of the hazardous site as a public nuisance, which shall be enforced by mandatory or prohibitory injunction in a court of competent jurisdiction, or may secure a court order for the closure of the premises constituting the hazardous site until the premises, building, or structure is in compliance with the regulations set forth in section 9.14 of this section. 625.13. Criminal enalties. Any person violating any provision of this section or any person who removes, destroys or defaces warnings posted on premises by the public health official pursuant to this section shall be guilty of a misdemeanor. /~ Richfield City Code 1195.09 (1) (Rev. 2008) (1) The establishment may be open only between the hours of 7:00 a.m. and 7:00 p.m. (m) The premises shall be maintained in a state of good repair at all times and shall be kept free of litter, trash, debris and weeds. (n) Underground storage tanks shall be removed as required by the city. (o) Licenses shall be granted only to establishments located in an approved zoning district. (Amended, Bill No. 2008-3) (p) (Repealed, Bill No. 2008-3) 1195.11. Suspension or revocation. If the city manager determines that the licensee has violated any of the conditions for licensure contained in subsection 1195.09, the manager shall notify the council of the nature of the violation and request that it consider taking action to suspend or revoke the license. A copy of the notice shall be mailed, or otherwise delivered, to the licensee at the licensed premises. The council shall consider the matter at its next regularly scheduled meeting, at least ten days following the date of mailing or delivery of the notice. At the hearing, the licensee or its repre- sentative shall have an opportunity to rebut any of the information contained in the manager's notice and to offer evidence in mitigation thereof. Following the hearing, the council shall determine whether the evidence of violation is established and whether the license should be suspended or revoked. In considering suspension of the license, the council may place additional and further conditions upon the licensee, if the council concludes that such additional conditions will assist in the orderly operation of the business. 1195.13. Relationship to other licenses or permits. Businesses located in C-2 districts of the city which lawfully operate as gasoline service stations, service station stores, public garages or car sale lots may continue to engage in those aspects of an automobile detailing establishment which are permitted as part of their lawful operation without the license required by this section. Section 1196 -Adult establishments (Added, Bill No. 1995-5, Sec. 1) 1196.01. Findin sg_ and purpose. Studies conducted by the Minnesota attorney general, the American Planning Association and cities such as St. Paul; Indianapolis; Alexandria, Minnesota; Rochester, Minnesota; Phoenix, Arizona; Los Angeles, California; Seattle, Washington; have studied the impacts that adult establishments have in those communities. These studies have concluded that adult establishments have adverse impact on the surrounding neighborhoods. Those impacts include increased crime rates, lower property values, increased transiency, neighborhood blight and potential health risks. Based on these studies and findings, the city council concludes: I~ Richfield City Code 1196.03 (Rev. 1995) (a) Adult establishments have adverse secondary impacts of the types set forth above. (b) The adverse impacts caused by adult establishments tend to diminish if adult establishments are governed by locational requirements, licensing requirements and health requirements. (c) It is not the intent to prohibit adult establishments from having a reasonable opportunity to locate in the city. (d} Minnesota Statutes, section 462.357, allows the city to adopt regulations to promote the public health, safety, morals and general welfare. (e) The public health, safety, morals and general .welfare will be promoted by the city adopting regulations governing adult establishments. 1196.03. Definitions. Subdivision 1. The following terms have the meanings given them below. Subd. 2. Adult establishment. A business engaged in any of the following activities or which utilizes any of the following business procedures or practices: (a) a business that is conducted exclusively for the patronage of adults and as to which minors are specifically excluded from patronage, either by operation of law or by the owners of such business, except any business licensed under chapter XII of the Richfield city code; (b) any business that has at least 20% of its floor area (not including storerooms, stock areas, bathrooms, basements, attics or any portion of the business not open to the public) devoted to items, merchandise or other material that is distinguished or characterized by an emphasis on material depicting, exposing, describing, discussing or relating to specified sexual activities or specified anatomical areas; or (c) any adult use as defined in subdivision 3 of this section. Subd. 3. Adult use. An adult use is any of the activities and businesses described below: (a) Adult bodv paintin studio. An establishment or business which provides the service of applying paint or other substance, whether transparent or non-transparent, to the body of a patron when such person is nude. l~ Richfield City Code 1196.03, Subd. 3 (b) (Rev. 1995) (b) Adult bookstore. An establishment or business used for the barter, rental or sale of items consisting of printed matter, pictures, slides, records, audio tape, videotape, or motion picture film if such business is not open to the public generally but only to one or more classes of the public, excluding any minor by reason of age, or if at least 20% of its floor area (not including storerooms, stock areas, bathrooms, basements, attics or any portion of the business not open to the public) is devoted to items, merchandise or other material distinguished or characterized by an emphasis on the depiction or description of "specified sexual activities" or "specified anatomical areas." (c) Adult cabaret. A business or establishment that provides dancing or other live entertainment to patrons if the dancing and live entertainment is distinguished and characterized by an emphasis on the presentation, display, depiction of matter that seeks to evoke, arouse or excite the patrons' sexual or erotic feelings or desire. (d) Adult companionship establishment. A business or establishment that excludes minors by reason of age, and which provides the service of engaging in or listening to conversation, talk or discussion between an employee of the establishment and a customer, if such service is distinguished and characterized by an emphasis on "specified sexual activities" or "specified anatomical areas." (e) Adult conversation/rap parlor. A business or establishment that excludes minors by reason of age, and which provides the services of engaging in or listening to conversation, talk, or discussion, if such service is distinguished and characterized by an emphasis on "specified sexual activities" or "specified anatomical areas." (f) Adult health sport club. A health/sport club which excludes minors by reason of age, if such club is distinguished and characterized by an emphasis on "specified sexual activities" or "specified anatomical areas." (g) Adult hotel or motel. A hotel or motel from which minors are specifically excluded from patronage and where material is presented which is distinguished and characterized by an emphasis on matter depicting, describing or relating to "specified sexual activities" or "specified anatomical areas." (h) Adult massage parlor, health club. A massage parlor or health club which restricts minors by reason of age, and which provides the services of massage, if such service is distinguished and characterized by an emphasis on "specified sexual activities" or "specified anatomical areas." (i) Adult mini-motion picture theater. A business or establishment with a capacity for less than 50 persons used for presenting material if such material is distinguished and characterized by an emphasis on matter depicting, describing or relating to "specified sexual activities" or "specified anatomical areas." l~ Richfield City Code 1196.03, Subd. 3 (j) (Rev. 1995) (j) Adult modeling studio. A business or establishment that provides customers figure models who are so provided with the intent of providing sexual stimulation or sexual gratification to such customers and who engage in "specified sexual activities" or display "specified anatomical areas" while being observed, painted, painted upon, sketched, drawn, sculptured, photographed, or otherwise depicted by such customers. (k) Adult motion picture arcade. Any place to which the public is permitted or invited where coin or slug-operated or electronically, electrically or mechanically controlled or operated still or motion picture machines, projectors or other image-producing devices are maintained to show images to five or fewer persons per machine at any one time, and where the images so displayed are distinguished and characterized by an emphasis on depicting or describing "specified sexual activities" or "specified anatomical areas." (1) Adult motion picture theater. A motion picture theater with a capacity of 50 or more persons used for presenting material if such theater as a prevailing practice excludes minors by reason of age or if such material is distinguished or characterized by an emphasis on "specified sexual activities" or "specified anatomical areas" for observation by patrons. (m) Adult novelty business. A business which has as a principal activity the sale of devices which stimulate human genitals or devices which are designed for sexual stimulation. (n) Adult sauna. A sauna which excludes minors by reason of age, and which provides a steam bath or heat bathing room used for the purpose of bathing, relaxation, or reducing, utilizing steam or hot air as a cleaning, relaxing or reducing agent, if the service provided by the sauna is distinguished or characterized by an emphasis on "specified sexual activities" or "specified anatomical areas." (o} Adult steam room bathhouse facility. A building or portion of a building used for providing a steam bath or heat bathing room used for the purpose of pleasure, bathing, relaxation, or reducing, utilizing steam or hot air as a cleaning, relaxing or reducing agent if such building or portion of a building restricts minors by reason of age and if the service provided by the steam room bathhouse facility is distinguished and characterized by an emphasis on "specified sexual activities" or "specified anatomical areas." Subd. 4. Nude or specified anatomical areas. (a) Less than completely and opaquely covered human genitals, pubic region, buttock, anus, or female breast(s) below a point immediately above the top of the areola; and (b) Human male genitals in a discernibly turgid state, even if completely and opaquely covered. a~ Richfield City Code Subd. 5. Specified sexual activities. 1196.03, Subd. 5 (Rev. 1995) (a) Actual or simulated sexual intercourse, oral copulation, anal intercourse, oral-anal copulation, bestiality, direct physical stimulation of unclothed genitals, flagellation or torture in the context of a sexual relationship, or the use of excretory functions in the context of a sexual relationship, and any of the following sexually-oriented acts or conduct: anilingus, buggery, coprophagy, coprophilia, cunnilingus, fellatio, necrophilia, pederasty, pedophilia, piquerism, sapphism, zooerastia; or (b) Clearly depicted human genitals in the state of sexual stimulation, arousal or tumescence; or (c) Use of human or animal ejaculation, sodomy, oral copulation, coitus, or masturbation; or (d) Fondling or touching of nude human genitals, pubic region, buttocks, or female breast(s); or (e) Situations involving a person or persons, any of whom are nude, clad in undergarments or in sexually revealing costumes, and who are engaged in activities involving the flagellation, torture, fettering, binding or other physical restraint of any such persons; or (f) Erotic or lewd touching, fondling or other sexually oriented contact with an animal by a human being; or (g) Human excretion, urination, menstruation, vaginal or anal irrigation. 1196.05. Location. Subdivision 1. No adult establishment may be located within 1,000 feet of a park, school, church, library or a commercial day care center. Subd. 2. No adult establishment may be located within 1,000 feet of another adult establishment. Subd. 3. No adult establishment may be located within 200 feet of a residential zoning district. Subd. 4. No adult establishment may be located within 100 feet of the right-of--way of an entry street to the city. For purposes of this subdivision, an entry street is defined as Penn Avenue, Lyndale Avenue, Nicollet Avenue, Portland Avenue, Cedar Avenue and 12th Avenue. Subd. 5. The distances set forth in this subsection are to be measured from the nearest outside edge of the building housing the adult establishment, or the outside edge of the premises of the adult business if the adult business is located in a building containing other businesses, to the nearest boundary of the residential zoning district or the nearest boundary of the property containing a park, school, church, library, commercial day care center, or other adult establishment. ~~ Richfield City Code 1196.05, Subd. 6 (Rev. 1995) Subd. 6. The screen wall and loop streets on the north side of 77th Street and east of I-35W were intended to form a barrier between the commercial properties located south of 77th Street and the residential properties north of 77th Street; therefore, the distances set forth in this subsection do not apply across 77th Street, east of I-35W. 1196.07. Additional conditions for adult cabarets. Subdivision 1. The following additional conditions apply to adult cabarets. Subd. 2. No owner, operator or manager of an adult cabaret shall permit or allow any dancer or other live entertainer to perform nude. Subd. 3. No dancer, live entertainer, performer, patron or any other person shall be nude in an adult cabaret. Subd. 4. The owner, operator or manager of an adult cabaret shall provide the following information to the city concerning any persons who dance or perform live entertainment at the adult cabaret. The person's name, home address, home telephone number, date of birth and any aliases. Subd. 5. No dancer, live entertainer or performer shall be under 18 years old. Subd. 6. All dancing or live entertainment shall occur on a platform intended for that purpose and which is raised at least two feet from the level of the floor. Subd. 7. No dancer, live entertainer or performer shall perform any dance or live entertainment closer than 10 feet to any patron. Subd. 8, No dancer, live entertainer or performer shall fondle or caress any patron and no patron shall fondle or caress any dancer or performer. Subd. 9. No patron shall pay or give any gratuity to any dancer, live entertainer or performer. Subd. 10. No dancer, live entertainer or performer shall solicit any pay or gratuity from any patron. 1196.09. Hours of operation. No adult establishment may be open to the public between the hours of 1:00 a.m. and 10:00 a.m. This subsection is not applicable to any business that is subject to the hours of operation limitation in section 605.23, subdivision 4. 1196.11. License required. Subdivision 1. No person shall own or operate an adult establishment without having first secured a license as provided for in this subsection. This subsection is not applicable to any business that must obtain a license required by section 605 of this code. Subd. 2. Application. The application for an adult establishment license shall be submitted on a form provided by the city and shall include: a~ Richfield City Code 1196.11, Subd. 3 (Rev. 1995) (a) If the applicant is an individual, the name, residence, phone number, and birthdate of the applicant. If the applicant is a partnership, the name, residence, phone number, and birthdate of each general and limited partner. If the applicant is a corporation, the names, residences, phone numbers, and birthdates of all those persons holding more than 5% of the issued and outstanding stock of the corporation. (b) The name, address, phone number, and birthdate of the operator and manager of such operation, if different from the owners. (c) The address and legal description of the premises where the adult establishment is to be located. (d) A statement detailing any gross misdemeanor or felony convictions relating to sex offenses, obscenity or the operation of an adult establishment or adult business by the applicant, operator or manager and whether or not the applicant, operator or manager has ever applied for or held a license to operate a similar type of business in other communities. In the case of a corporation, a statement detailing any felony convictions by the owners of more than 5% of the issued and outstanding stock of the corporation, and whether or not those owners have ever applied for or held a license to operate a similar type of business in other communities. (e) The activities and types of business to be conducted. (f) The hours of operation. (g) The provisions made to restrict access by minors. (h) A building plan of the premises detailing all internal operations and activities. Subd. 3. License fee. (a) The annual license fee is set forth in appendix D. (b) Each application for a license shall be submitted to the public safety director and payment made to the city. Each application for a license shall be accompanied by payment in full of the required license fee. Upon rejection of any application for a license, the city shall refund the license fee. (c) All licenses shall expire on the last day of December in each year. Each license shall be issued for a period of one year, except that if a portion of the license year has elapsed when the application is made, a license may be issued for the remainder of the year fora pro rated fee. In computing such fee, any unexpired fraction of a month shall be counted as one month. (d) No part of the fee paid by any license shall be refunded, except that a pro rata portion of the fee shall be refunded in the following instances upon application to the city manager within 30 days from the happening of the event, provided that such event occurs more than 30 days before the expiration of the license: ~~ Richfield City Code 1196.11, Subd. 4 (Rev. 1995) (i) Destruction or damage of the licensed premises by fire or other catastrophe. (ii) The licensee's illness. (iii) The licensee's death. (iv) A change in the legal status making it unlawful for licensed business to continue. (e) Each application shall contain a provision on the application in bold print indicating that any withholding of information or the providing of false or misleading information will be grounds for denial or revocation of a license. Any changes in the information provided on the application or provided during the investigation shall be brought to the attention of the public safety director by the applicant or licensee. If said changes take place during the investigation, said data shall be provided in writing to the public safety director, who shall report the changes to the city council. Failure to report said changes by the applicant or the licensee may result in a denial or revocation of a license. Subd. 4. Investigative fee. The investigative fee for an adult establishment license is set forth in appendix D. Subd. 5. Granting of license. (a} The public safety director, or designee, shall complete their investigation within 30 days after the public safety director receives a complete application and all license and investigative fees.. (b) If the application is for a renewal, the applicant shall be allowed to continue business until the council has determined to renew or refuse to renew a license. (c) If, after such investigation, it appears that the applicant and the place prposed for the business are eligible for a license under the criteria set forth in this subsection, then the license shall be issued by the city council within 30 days after the investigation is completed. Otherwise the license shall be denied. (d) Each license shall be issued to the applicant only and shall not be transferable to another holder. Each license shall be issued only for the premises described in the application. No . license may be transferred to another premise without the approval of the city council. If the licensee is a partnership or a corporation, a change in the identity of any of the principals of the partnership or corporation shall be deemed a transfer of the license. All adult establishments existing at the time of the adoption of this subsection shall be required to obtain an annual license. Subd. 6. Persons ineligible for license. No license shall be granted to or held by any person: (a) Under 21 years of age. (b) Who is overdue or whose spouse is overdue in his or her payment to the city, county or state of taxes, fees, fines or penalties assessed against them or imposed upon them; a~ Richfield City Code 1196.11, Subd. 7 (Rev. 1995) (c) Who has been convicted or whose spouse has been convicted of a gross misdemeanor or felony or of violating any law of this state or local ordinance relating to sex offenses, obscenity offenses or adult establishments; (d) Who is not the proprietor of the establishment for which the license is issued; (e) Who is residing with a person who has been denied a license by the city or -any other Minnesota municipal corporation to operate an adult establishment, or residing with a person whose license to operate an adult establishment has been suspended or revoked within the preceding 12 months; (fl Who has not paid the license and investigative fees required by this subsection. Subd. 7. Places ineligible for license. (a) No license shall be granted for adult establishments on any premises where the applicant or any of its officers, agents or employees has been convicted of a violation of this subsection, or where any license hereunder has been revoked for cause, until one year has elapsed after such conviction or revocation. (b) No license shall be granted for any adult establishment which is not in full compliance with the city code, the city's zoning ordinance, the building code, the fire code, the city's health regulations and all provisions of state and federal law. Subd. 8. Conditions of license. (a) Every license shall be granted subject to the following conditions and all other provisions of this subsection, and of any applicable sections of the city code, the city's zoning ordinance, the building code, the fire code, the city's health regulations and all provisions of state and federal law. (b) All licensed premises shall have the license posted in a conspicuous place at all times. (c) No minor shall be permitted on the licensed premises. (d) Any designated inspection officer of the city shall have the right to enter, inspect, .and search the premises of a licenseee during business hours. (e) Every licensee shall be responsible for the conduct of his/her place of business and shall maintain conditions of order. (f) No adult goods or material services shall be offered, sold, transferred, conveyed, given,. displayed, or bartered to any minor. Subd. 9. Penaltv. (a} Any person violating any provision of this section is guilty of a misdemeanor and upon conviction shall be punished not more than the maximum penalty for a misdemeanor as prescribed by state law. ~~ Richfield City Code 1196.11, Subd. 10 (Rev. 1995) (b) Any violation of this section shall be a basis for the suspension or revocation of any license granted hereunder, In the event that the city council proposes to revoke or suspend the license, the licensee shall be notified in writing of the basis for such proposed revocation or suspension. The council shall hold a hearing for the purpose of determining whether to revoke or suspend the license, which hearing shall be within 30 days of the date of the notice. (c) The city council shall determine whether to suspend or revoke a license. within 30 days after the hearing or within 60 days. of the date of the notice, whichever is sooner, and shall notify the licensee of its decision within that period. Subd. 10. Ri hg_t of appeal. (a) In the event that the council determines to suspend, or revoke a license, such suspension or revocation shall not be effective until 15 calendar days after notification to the licensee by the city of its decision. If, within that 15 days, the licensee commences an action in state or federal court challenging the council's action, then the suspension or revocation shall be stayed until the conclusion of such action. (b) If the city council determines not to renew a license, the licensee may continue its business for 15 calendar days after notification by the city of such non-renewal. If the licensee commences an action in state or federal court within that 15 days for the purpose of determining whether the city acted properly, the licensee may continue in business until the conclusion of the action. (c) If the city council decides not to grant a license to an applicant, the applicant may commence an action in state or federal court within 15 days after notification by the city of the denial for the purpose of determining whether the city acted properly. The applicant shall not commence doing business unless the action is concluded in its favor. (d) Any notification required to be sent by the city is deemed completed when mailed by first class mail to the applicant or licensee at the address listed in the application. ~~_ Richfield City Code Section 605 -Commercial Adult-Oriented Services 605.01 605.01. Regulation of various commercial adult-oriented services. Subdivision 1. Policv statement. In order to protect the public health, safety and welfare and to guard against the inception and transmission of disease, the city council. deems it necessary to provide for the special and express regulation of businesses or commercial enterprises which operate as massage parlors, saunas, rap parlors, conversation parlors, adult sensitivity groups, adult encounter groups, personal escort services, dancing services, hostess services and similar adult oriented services operating under different names. The city council further finds that commercial enterprises such as the type described above, and all other similar establishments whose services include sessions offered to adults, conducted in private by members of the same or the opposite sex, and employing personnel with no specialized training, are susceptible to operation in a manner contravening, subverting or endangering the morals of the community by being the sites of acts of prostitution, illicit sex and occasions of violent crimes, thus requiring close inspection, licensing and regulation. Subd. 2. Current licenses. In the case of commercial enterprises such as those described above which are currently licensed, such establishments may be allowed to retain their licenses but not beyond March 1, 1986, provided that the establishments do not violate the provisions of this section and that the city .council determines that it is in the city's best interest to renew the licenses annually pursuant to the procedures set forth in this section. 605.03. Definitions. Subdivision 1. "Massage" means the rubbing, stroking, kneading, tapping or rolling of the body of another with the hands or objects for the exclusive purpose of physical fitness, relaxation, beautification and for no other purpose. Subd. 2. "Masseur" means a male person who practices or administers a massage. Subd. 3. "Masseuse" means a female person who practices or administers a massage. Subd. 4. "Massage parlor" means any establishment or place providing to the public at large massage services, other than a hospital, sanitarium, rest home, nursing home, boarding home, or other institution for the hospitalization or care of human beings duly licensed under the provisions of Minnesota Statutes, sections 114.50 through 144.69, and other than a health and fitness club as described in subsection 605.37 of this section. Subd. 5. "Massage services" means a business offering or providing massages to others where a fee is charged, whether or not the massage services are rendered at the licensed location. Subd. 6, "Sauna" means a public facility used for the purpose of bathing, reducing or relaxing, which utilizes steam as a cleaning, reducing or relaxing agent. ~~ Richfield City Code 605.03, Subd. 7 Subd. 7. "Rap parlor", "conversation parlor", "adult encounter group" and "adult sensitivity group" mean any person establishment or business advertising, offering, selling, trading or bartering the services of itself, or its employees or agents as nonprofessional counselors, or teachers or therapists who may talk to, discuss or have conversation with patrons or who deal in any way with a patron's physical senses, whether or not other goods or services are simultaneously advertised, offered, sold, traded or bartered and regardless of whether said goods or services are also required to be licensed. Subd. 8, "Personal escort service", "model service", "dancing service" and "hostess service" mean any person, establishment or business advertising, offering, selling, trading or bartering the services of itself or its employees or agents as hostesses, models, dancers, escorts, dates or companions whether or not goods or services are simultaneously advertised, offered, sold, traded or bartered and regardless of whether said goods or services are also required to be licensed. Subd. 9. "Similar adult-oriented services" is meant to include all other services which fall within the definitions of subsection 605.03 but are operated under different names. Subd. 10. "Certificate" means a certificate issued by the city authorizing the holder thereof to practice or administer massage in the city. 605.05. License re uired. No person shall engage in the business of operating an enterprise as defined in subsection 605.03, either exclusively or in connection with any other business enterprise, or hold himself or herself out as being a masseur or masseuse or engaged in or offering services as a model, hostess, dancer, escort or counselor in a rap parlor, conversation parlor, adult sensitivity group or adult encounter group without a license. Whenever any establishment ceases to be licensed as a massage parlor, sauna, rap parlor, conversation parlor, adult encounter group, adult sensitivity group or model service, personal escort service, dancing service, hostess service or similar adult oriented service, whether through the suspension, cancellation, revocation, nonrenewal or lapse of its license, its owners shall immediately remove from public view any sign or display which identifies the establishment as being an enterprise as defined in subsection 603.03. 605.07. Contents of application for license. Subdivision 1. Forms. Application for a license shall on y on the forms provided by the city manager. four complete copies of the application must be submitted to the city manager's office. Subd. 2. Ap lication. The application shall contain the following: (a) address and legal description of the property to be used. (b) the name, address and telephone number of two residents of Hennepin County who may be called upon to attest to the applicant's, manager's or operator's character, as Richfield City Code 605.07, Subd. 2(c) (c) Whether the applicant, manager or operator has ever been convicted of a crime or offense and, if so, complete and accurate information as to the time, place, and nature of such crime or offense, including the disposition thereof. (d) The names and addresses of all creditors of the applicant, owner, lessee or manager insofar as and regarding credit which has been extended for the purposes of constructing, equipping, maintaining, operating, furnishing or acquiring the premises, personal effects, equipment or anything incidental to the establishment, maintenance and operation of a massage parlor, sauna, rap parlor, conversation parlor, adult encounter group, adult sensitivity group, personal escort service, model service, dancing service, hostess service or similar adult-oriented service. (e) If the application is made on behalf of a joint business venture, partnership or any legally constituted business association other than a corporation, it shall submit, along with the application, accurate and complete business records showing the names and addresses of all partners, officers and owners and, in the case of a corporation, the names and addresses of all officers, general managers and members of the board of directors. (fj If the application is made on behalf of a joint business venture, partnership, legally constituted business association or corporation, the applicant shall also submit the names and addresses of any and all creditors who have extended credit for the acquisition, maintenance, operation or furnishing of the establishment. (g) All applicants shall furnish to the city, along with their applications, complete and accurate documentation establishing the interest of the applicant and any other person having an interest in the premises upon which the enterprise is proposed to be located or in the furnishings thereof. Documentation shall be in the form of a lease, deed, contract for deed, mortgage deed, mortgage, credit arrangement, loan agreement, security agreement and any other documents establishing the interest of the applicant or any other person in the operation, acquisition or maintenance of the enterprise offering services as defined in subsection 605.03. (h) The application shall also contain blueprints, diagrams, plans, layouts and the like, showing the construction, revision, remodeling, alteration or additions of or to the premises and specifically showing the layout, design and arrangement of the bathing and restroom facilities and the size and type of equipment and facilities to be used. (i) All applicants shall state whether they are licensed in other communities, and if so, where. (j) All applicants shall state any other licenses for which they have applied within the last ten years and any denial, suspension or revocation of a license along with an explanation of any denial, suspension or revocation. a~ Richfield City Code 605.09 605.09. License fee, license investigation and license year. The annual license fee is $1,500 and the annual fee for the investigation for the purposes of issuing a license is $1,500. Thelicense fee and fee for the investigation of the license shall be paid when the application is filed. In the event that the license is denied upon application, the license fee shall be refunded; however, no part of the license investigation fee shall be returned to the applicant. In the event that the license, once issued, is revoked, cancelled or surrendered, no part of the annual license fee or fee for the investigation for the issuance of a license shall be returned to the applicant unless by express action of the city council. A separate license shall be obtained each calendar year for each place of business. The licensee shall display the license in a prominent place in the licensed premises at all times. A license, unless revoked, is for the calendar year or a part thereof for which it has been issued. The fee for the investigation for issuance of a license must be tendered with each new application for a license if (i) the establishment has violated the provisions of this section or (ii) the department of public safety has received an inordinate number of complaints concerning the establishment or, (iii) the council should act requiring that the investigation fee be paid, or (iv) there is a proposed change of ownership or reapplication for a license wherein additional or different parties other than the original licensee and parties are proposing to be licensed. All licenses granted herein are nontransferable. 605.11. Conditions overning issuance of a license. Subdivision 1. Ap licant. Licenses shall be issued only if the applicant and all of its owners, managers, employees, agents or interested parties are persons of good moral character and repute. Subd. 2. Prior offenses. Licenses may be issued only if the applicant and all of its owners, managers, agents, employees or interested parties are free of convictions for offenses which involve moral turpitude or which relate directly to such person's ability, capacity or fitness to perform the duties and discharge the responsibilities of the licensed activity. Subd. 3. Prior revocation. Licenses shall be issued only to applicants who have not, within three years prior to the date of application, had a license of this type revoked or suspended in or by any community or political entity and whose owners, managers, or any interested parties have not been similarly revoked or suspended. Subd. 4. Cooperation of ap licant. Licenses shall be issued only to applicants who have answered fully and truthfully all of the information requested in the application, who have paid the full license fee and investigation fee, and who have cooperated fully and truthfully with the city in the review of the application. Subd. 5. Awe. If the applicant is a natural person, a license shall be granted only if such person is 18 years of age or older. ~~ Richfield City Code 605.11, Subd. 6 Subd. 6. Zoning. Licenses may only be granted when the premises involved are in complete conformity with the zoning code of the city. Subd. 7. Other code Provisions. Licenses shall be granted only to establishments which meer the safety, sanitary, and building code requirements of the city. Subd. 8. Planning considerations. A license shall not be granted if granting the license (i) would be inconsistent with the comprehensive develop- ment plans of the city of Richfield or (ii) would otherwise have a detrimental effect upon other property or properties in the vicinity. 605.13. Certificate re uired. No person shall engage in or hold himself or herself out as being engaged in the practice of massage nor shall any person administer or practice massage commercially or for hire, or for the exchange of any valuable consideration without first having obtained a certificate as herein provided, except that a certificate shall not be required for any person who is currently registered by the State Board of Medical Examiners or except as elsewhere provided in this section. 605.15. Contents of the application or certificate. Subdivision 1. Forms. Application shall be made on forms provided by the city manager. Subd. 2. Application. The application shall contain the following information together with any other information which the manager may require: (a) evidence of the applicant's educational qualifications, including originals or certified copies of degrees, diplomas or certificates, if any; (b) evidence of applicant's practical qualifications to practice massage; (c) evidence that the applicant is of good moral character; (d) the names and addresses of two persons who are residents of Hennepin County and who can attest to the applicant's character; (e) statement disclosing whether the applicant has ever been convicted of a crime or offense and, if so, information as to the time, place and nature of such crime or offense; (fl evidence in the form of a current certificate from a licensed physician practicing in Minnesota indicating (i) that within the past 30 days he has examined the applicant, and (ii) that such examination was for the purpose of determining whether applicant had any communicable disease and (iii) that as a result of such examination he believes that applicant is not suffering from a communicable disease; and (g) evidence that the applicant is at least 18 years of age. ~~ Richfield City Code 605.17, Subd. 3 Subd. 3. Certificate fee, certificate investigation fee and certificate vear. The annual certificate fee shall be $50 and an investigation fee for the purposes of issuing a certificate is $100. The certificate fee and fee for the investigation of the certificate shall be paid when the application is filed. In the event that the certificate is denied upon application, the certificate fee shall be refunded; however, no part of the certificate investigation fee shall be returned to the applicant. In the event that the certificate, once issued, is revoked, cancelled or surrendered, no part of the annual certificate fee or fee for the investigation for the issuance of a certificate shall be returned to the applicant unless by express action of the council. A separate certificate shall be obtained each calendar year. The certificate holder shall display the certificate in a prominent place on the premises of the certificate holder at all times. A certificate, unless revoked, is for the calendar year or a part thereof for which it has been issued. The fee for the investigation for issuance of a certificate must be tendered with each new application for a certificate if the applicant has violated the provisions of this section. A certificate permitting the holder thereof to practice massage is nontransferable. 605.19. Conditions Governing issuance of the certificate. Subdivision 1. A licant. Certificates shall be issued only to persons of good moral character and repute and persons who are in good health and free from any communicable disease. Subd. 2. Prior offenses. Certificates may be issued only to persons free of convictions offenses which involve moral turpitude or which. relate directly to the person's ability, capacity or fitness to perform the duties and discharge the responsibility of the occupation. Subd. 3, Prior revocation. Certificates may not be issued to persons who, within one year prior to the date of application, have been denied certification licensing or who have had their certificate or license revoked or suspended by any community political entity or by the State of Minnesota. Subd. 4. Cooperation of ap licant. Certificates may be issued only to persons who have fully and truthfully answered all of the information requested in the application and have paid the full certification fee and certification investigation fee. Subd. 5. Awe. Certificates may be issued only to persons 18 years of age or older. 605.21. Granting or denial of licenses and certificates. Subdivision 1. Application review. License appilcations and certificate applications shall be reviewed by the department of public safety, planning department, and such other departments as the manager shall deem necessary. The review of license applications shall include an inspection of the premises covered by the application to determine whether the premises conform to applicable code requirements. Licenses shall be issued upon the approval of the city council only after a public hearing has been conducted. 3~ Richfield City Code 605.21, Subd. 2 Subd. 2. Tenn of license. The general provisions of chapter X of this code relating to the issuance of licenses shall govern except as they are inconsistent or in conflict with the provisions of this section. A license permitting the conduct of an establishment offering services as a massage parlor, sauna, rap parlor, conversation parlor, adult encounter group, adult sensitivity group, personal escort service, model service, dancing service, hostess service or other similar adult-oriented service is nontransferable and nonrenewable, and application must be made each year for a license pennitting and allowing the conduct of such business for the succeeding year. Subd. 3. Term of certificate. A certificate permitting the holder thereof to practice or administer massage commercially is nonrenewable and nontransferable and application must be made each year for a certificate permitting and allowing the holder thereof to administer or practice massage for the succeeding year. 605.23. Restrictions and regulations. Subdivision 1. Compliance with law. The licensee and any persons in his or her employ or agents or officers thereof and any and all persons with an interest in said business shall comply with applicable ordinances, regulations and laws of the city of Richfield, the state of Minnesota, and the United States. Subd. 2. Person in charge. If the licensee is a partnership or corporation, the applicant shall designate a person to be manager and in responsible charge of the business and employees. Such person shall remain responsible for the conduct of the. business and employees until another suitable person has been designated in writing by the licensee. The licensee shall promptly notify the department of public safety in writing of any such change, indicating the name, address and telephone number of the new manager and the effective date of such change. Subd. 3. Inspections. Every licensee shall allow an examination and inspection of every part of the premises by any police, fire or health authority of the city during normal business hours four times each year. Refusal to allow such inspection or to answer the request of city police, fire or health authority to be admitted to a licensed premises shall be grounds for suspension or revocation of all licenses. Subd. 4. Hours. The licensed premises shall not be open for business nor shall patrons be permitted on the premises between the hours of 9:00 p.m. and 8:00 a.m. on any day. Subd. 5, Identification. Upon demand of any police officer, a person employed in a licensed premises must identify himself by giving his true legal name and his correct address. Subd. 6..A~e. No person under 18 years of age may be employed in an establishment requiring a license under the provisions of this subsection. ~3 Richfield City Code 605.23, Subd. 7 Subd. 7. List of employes. The, licensee shall furnish the department of public safety with a list of current employees, indicating their names and addressess and designating the names and duties of the employees within the licensed premises. The licensee shall promptly notify the department of public safety of any additions to or deletions from the list of employees or changes in their job descriptions or duties. Subd. 8. Cleanliness. The licensed premises must be kept and maintained in a sanitary condition defined as being free from the vegetative cells of pathogenic microorganisms and all equipment, personal property, tables, beds, towels, clothing and the like used in or for the licensed premises shall also be maintained in a sanitary condition as defined herein. Subd. 9. Certificates for practice of massage. No licensee shall employ any person as a masseur or masseuse without first insuring that the employee possesses a valid certificate for the administration or practice of massage, except as otherwise provided in this section. Subd. 10. Photographs certificates. Every person to whom a certificate is issued shall appear personally at the department of public safety to receive delivery of the certificate and upon such appearance, shall be photographed for identification purposes. One copy of the photograph shall be permanently affixed to the certificate and a second copy thereof shall be kept in the files of the department of public safety. Subd. 11. Display of Certificates. Except as otherwise provided in this section, any person acting as a masseur or masseuse shall have his or her certificate displayed in a prominent place at his or her place of employment and upon demand by any police officer or other authorized officer or agent of the city, any person engaged in practicing massage shall identify himself or herself giving his or her true legal name, correct address and phone number. Subd. 12. Location chance. Except as otherwise provided in this section, any person practicing massage within the city shall initially advise the city of his or her address and telephone number and shall further advise the city of any changes in address or telephone number within 30 days of such change. Subd. 13. Clients. Except as otherwise provided in this ordinance, it is unlawful for a masseur to practice massage upon any person except a male and for a masseuse to practice massage on any person except a female. Subd. 14. Clothing. Any masseur or masseuse practicing massage shall remain fully clothed in a nontransparent uniform or clothing at all times. At all times during the operation of any enterprise as defined in subsection 605.03, both employees and customers must be and remain fully clothed in nontransparent clothing. 605.25. Construction and maintenance requirements. Subdivision 1. Locker rooms. Each licensed premises shall have a separate restroom and separate locker room for members of each sex. 3'~ Richfield City Code 605.25, Subd. 2 Subd. 2, .Materials. All massage rooms, locker rooms, restrooms and bathrooms used in connection therewith shall be constructed of materials, including ceramic tile, quarry tile, glazed-finish cement block or other similar material, which are impervious to moisture, bacteria, mold or fungus growth and shall be maintained in a sanitary condition defined as being completely free from the vegetative cells of pathogenic microorganisms. The floor-to-wall joints shall be constructed to provide a sanitary cove with a minimum radius of one inch. All equipment, personal property, beds, towels, clothing and the like used in the massage parlor shall be of a sanitary design and kept in a sanitary condition. Subd. 3. Restrooms. All restrooms shall be provided with mechanical ventilation with 2 cfin per square feet of floor area, a hand washing sink equipped with hot and cold running water under pressure, sanitary towels and a soap dispenser. Subd. 4. Li tin . All rooms in the licensed premises including, but not limited to, massage rooms, sauna rooms, restrooms, bathrooms, rap rooms, conversation rooms, modeling rooms, dancing rooms, janitor's closets, hallways and reception areas shall be illuminated with not less than 30 foot candles of illumination, measured 30 inches from the floor. Subd. 5. Janitors closets. Each licensed premises shall have a janitor's closet which shall provide for the storage of cleaning supplies. .The closet shall have mechanical ventilation with 2 cfin per square foot of floor area. Such closet shall include a mop sink. Subd. 6. Repair and sanitation. Floors, walls and equipment in massage rooms, sauna rooms, restrooms, bathrooms, rap rooms, conversation rooms, modeling rooms and dancing rooms must be kept in a state of good repair and sanitary at all times. Linen and other materials shall be stored at least 12 inches off the floor. Clean towels, washcloths and linens must be available for each customer. Subd. 7, Lockers. Individual lockers shall be made available for use by patrons. Such lockers shall have separate keys for locking. Subd. 8. Refuse. Such establishments shall provide adequate refuse receptacles which shall be emptied as required. 605.27, Health and disease control. No person while afflicted with any disease in a communicable form or while a carrier of such disease or while afflicted with boils, infected wounds, sores or any acute respiratory infection may work in or use the services of any licensed premises. No person known or suspected of being afflicted with any such disease or condition shall be employed or permitted in such area or capacity. 605.29. Revocation. suspension or nonrenewal of license. The license may be revoked, suspended or not renewed by the city council upon recommendation of the city manager by showing that the licensee, its owners, manager, employees, agents or any other interested parties have engaged in any of the following conduct: ~~ Richfield City Code 605.33 (a) Fraud, deception or misrepresentation in connection with the securing of the license. (b) Habitual drunkenness or intemperance in the use of drugs including, but not limited to, the use of drugs defined in either 26 U.S.C. section 4731 or Minnesota Statutes, section 152.02, barbiturates, hallucinogenic drugs, amphetamines, benzedrine, dexedrine or other sedatives, depressants, stimulants or tranquilizers. (c) Engage in conduct involving moral turpitude or permitting or allowing others within their employ or agency to engage in conduct involving moral turpitude or failing to prevent agents, officers, or employees from engaging in conduct involving moral turpitude. (d) Failure to fully comply with any requirements of the ordinances of the city regarding sanitary and safety conditions, zoning requirements, building code requirements or ordinances, the violation of which involves moral turpitude, or failure to comply fully with any requirements of this section. (e) Conviction of an offense involving moral turpitude by any court of competentjurisdiction. (fl Operation of the establishment without a valid license or during periods in which the license has been suspended or revoked. (g) Engaging in any conduct which would constitute grounds for refusal to issue a license herein. 605.31. A eal. Subdivision 1. Procedure. The licensee may appeal such suspension, revocation or nonrenewal to the city council. The council shall consider the appeal pursuant to the procedures set forth in section 1005.21 of this code. The council may appoint a committee of the council or an independent hearing officer to hear the matter, report findings of fact and a recommendation for disposition to the council. Hearings on the appeal shall be open to the public and the licensee shall have the right to appear and be represented by legal counsel and to offer evidence in its behalf. At the conclusion of the hearing,the council may order: (a) that the revocation, suspension or nonrenewal be affirmed; or (b) that the revocation suspension or nonrenewal be lifted and that the license be returned to the license holder. Subd. 2. Additional requirements. The city council may base either suspension or issuance of the certificate upon any additional terms, conditions and stipulations which they may, in their sole discretion, impose. 605.33. Revocation suspension or nonrenewal of certificate. Certification may be revoked or suspended by the city manager or not renewed by the city council for any of the following: 3~ Richfield City Code 605.35 (a) Fraud, deception or misrepresentation in connection with the securing of certification. (b) Habitual drunkenness or intemperance in the use of drugs including, but not limited to, the use of drugs defined in either 26 U.S.C. section 4731 or Minnesota Statutes, section 152.02, barbiturates, hallucinogenic drugs, amphetamines, benzedrine, dexedrine or other sedatives, depressants, stimulants or tranquilizers. (c) Conduct inimical to the interests of the public health, safety, welfare or morals. (d) Engaging in conduct involving moral turpitude. (e) Failure to fully comply with the requirements of this section. (f) Conviction of an offense involving moral turpitude. 605.35. A eals. Subdivision 1. Procedure. The certificate holder may appeal such suspension, revocation or nonrenewal to the city council. The council. shall consider the appeal pursuant to the procedures set forth in 1005.21 of this code. The council may appoint a committee of the council or an independent hearing officer to hear the matter and report findings of fact and a recommendation for disposition to the council. Hearings on the appeal shall be open to the public and the certificate holder shall have the right to appear and be represented by legal counsel and to offer evidence in behalf of the certification. At the conclusion of the hearing, the council may order: (a) that the revocation, suspension or nonrenewal be affirmed; (b) that the revocation, suspension or nonrenewal be lifted and that the certificate be returned to the certificate holder. Subd. 2. Additional reauirements. The city council may base either suspension or issuance of the certificate upon any additional terms, conditions and stipulations which they may, in their sole discretion, impose. 605.37. Prohibited acts. Except as provided elsewhere in this section, no employer shall employ a person to practice or administer massage nor permit, suffer or allow a person to practice or administer massage unless that person has been granted a valid certificate pursuant to this section and every employer shall require that the certification be prominently and openly displayed on the premises in plain view. 605.39. Massa eg distin uished. The practice of massage is hereby declared to be distinct from the practice of medicine, surgery, osteopathy, chiropractic, physical therapy or podiatry, and persons duly licensed in this state to practice medicine, surgery, osteopathy, chiropractic, physical therapy or podiatry, nurses who work solely under the direction of any such persons, athletic directors and trainers are hereby expressly excluded from the provisions of this section. Beauty culturists and barbers who do not give, or hold themselves out to give, massage treatments, as defined herein, other than are customarily given in such shops or places of business for the purpose of beautification only, shall be exempt from the provisions of this section. 3~ Richfield City Code 605.41 605.41. Exceptions. Subdivision 1. Criteria. This ordinance does not apply to bona fide health/sports establishments which meet the following criteria: (a) The establishment has conducted business in the city for one year and is in good repute. (b) The primary purpose of the establishment is health and fitness; massage service is subsidiary. (c) No more than 20% of the establishment revenue is derived from massage. (d) The financial records of the establishment are at all times available to the city for inspection. (e) The establishment has an ongoing membership list of which is available to city officials for inspection at any time. Subd. 2. Fee waived. Establishments which meet the above provisions shall not be required to pay the annual license fee or investigation fee, unless specifically ordered by the city council. Masseurs and masseuses employed by such establishments are not required to be certified under this section. Subd. 3. Additional exce tions. In addition, this section does not apply to nor include: (a) bona fide legal, medical, psychiatric, psychological, family or marriage counseling services by a person, persons or businesses appropriately licensed by the state of Minnesota or by local units of government or any other appropriate licensing authority; (b) bona fide financial counseling services or bona fide educational institutions completely complying with state and local regulations or the regulation of any licensing authorities; (c) bona fide non-profit organizations or institutions, including those organized in compliance with section 501(c)(3) of the Internal Revenue Code of 1986, or to seminars, panel discussions or group classes sponsored by such bona fide non-profit organizations or institutions. 605.43. Liability for the crimes of another. Every person who commits or attempts to commit, conspires to commit or aids and abets in the commission of any act constituting a violation of this section or any act, which constitutes an omission and, therefore, a violation of this section, whether individually or in connection with one or more persons or as principal, agent or accessory, shall be guilty of such offense and every person who falsely, fraudulently, forcibly or willfully, induces, causes, coerces, requires, permits or directs another to violate any of the provisions of this section is likewise guilty of such offense. 3~ J CITY COUNCIL MINUTES Richfield, Minnesota Special. Worksession April 13, 2010 CALL TO ORDER The meeting was called to order by Mayor Goettel at 5:33 p.m. ROLL CALL Council Members Present: Debbie Goettel, Mayor; Pat Elliott; Fred Wroge; Sue Sandahl; and Tom Fitzhenry. Staff Present: Steven L. Devich, City Manager; Mike Eastling, Public Works Director; Jim Topitzhofer, Recreation Services Director; Brad Sveum, Fire Services Director; Wayne Kewitsch, Assistant Fire Chief; Pam Dmytrenko, Assistant to the City Manager; and Cheryl Krumholz, Recording Secretary. Item #1 DISCUSSION REGARDING PARKS CAPITAL IMPROVEMENT PLAN (COUNCIL MEMO NO. 47) Recreation Services Director Topitzhofer discussed the capital improvement plan related to parks. He also discussed the insurance coverage for the proposed skate park, including insurance requirements and maintenance responsibilities. Recreation Services Director Topitzhofer stated the Community Services Commission recommended aTier-One skate park. Roger Schmidt, 7504 Aldrich Avenue, explained the concept and design for a skate park, including community interest levels, site selection criteria for Augsburg Park, and budget. He suggested the City Council move forward on the skate park and hold open houses for the public to review designs of a streetscape plaza. Council Member Elliott asked Mr. Schmidt if skateboarders find aTier-One skate park acceptable or will there be lobbying for aTier-Two in the future. Special Worksession Minutes -2- April 13, 2010 Mr. Schmidt responded that what he has developed is acceptable based on uniqueness rather than challenges. City Manager Devich reviewed the existing capital improvement plan and recommended plan. He clarified that liquor operations funds are to be used for capital projects, not specifically designated for recreation projects, although that, historically, is the primary choice. The City Council decides the use of the funds. Council Member Wroge expressed concern regarding using liquor funds for other non- recreational projects. Council Member Fitzhenry stated support for the skate park and liked the idea of skateboarders taking ownership. Council Member Sandahl stated the skate park is needed. Council Member Elliott stated concerns regarding self-policing the site. He questioned the annual long-term budget impacts and what design could be prepared with the current funding. Council Member Wroge expressed concern regarding enforcement of rules with no supervision being required. The City Council consensus was to proceed with designing aTier-One skate park this year. Item #2 DISCUSSION REGARDING FIRE STAFFING MODELS (COUNCIL MEMO NO. 49) Fire Services Director Sveum discussed several alternative fire staffing models, including concepts, costs, and comparisons to the current model. He also reviewed impacts of callbacks and overtime. Fire Services Director Sveum stated the Governor has signed legislation regarding residency requirements for new hires. City Manager Devich stated City Council direction will be needed at budget time regarding staffing models. He discussed cuts in services should be for every City department, the callback issue requiring staff turnover to make the legislation effective, his goals to preserve City positions, and his proposing a staff salary adjustment in 2011 to stay competitive with other cities. City Manager Devich requests City Council direction on the continued review of fire staffing models. Council Member Wroge expressed concern regarding a salary adjustment. Mayor Goettel stated support to retain the Richfield Fire Department but budget cuts are necessary. Council Member Fitzhenry stated demographics may indicate an interest in part-time firefighter positions. Fire Services Director Sveum responded the response time requirement would need to be considered. Special Worksession Minutes -3- April 13, 2010 The City Council consensus was to have discussions continue between the firefighters and the City and return to the City Council with proposed staffing models for their consideration. Representative Linda Slocum discussed her involvement with the new legislation. ADJOURNMENT The meeting was adjourned by unanimous consent at 6:55 p.m. Date Approved: Cheryl Krumholz Recording Secretary Debbie Goettel Mayor Steven L. Devich City Manager J CITY COUNCIL MEETING MINUTES Richfield, Minnesota Regular Meeting April 13, 2010 CALL TO ORDER The meeting was called to order by Mayor Goettel at 7:05 p.m. ROLL CALL Members Present: Debbie Goettel, Mayor; Sue Sandahl; Pat Elliott; Fred Wroge; and Tom Fitzhenry. Staff Present: Steven L. Devich, City Manager; Mike Eastling, Public Works Director; John Stark, Community Development Director; Jim Topitzhofer, Recreation Services Director; Corrine Heine, City Attorney; and Cheryl Krumholz, Recording Secretary. OPEN FORUM Barb Weinstock, 7520 10th Avenue, requested the City Council review the multi-pet licensing process and fee. PRESENTATION OF COLORS AND PLEDGE OF ALLEGIANCE Mayor Goettel led the audience in the Pledge of Allegiance. APPROVAL OF MINUTES M/Sandahl, S/Wroge to_approve the minutes of (1) Special City Council Worksession of March 23, 2010 and f2) Regular City Council Meeting of March 23, 2010. Motion carried 5-0. Council Meeting Minutes -2- April 13, 2010 Item #1 PRESENTATION OF PROCLAMATION DESIGNATING MAY 1, 2010 AS CITY OF RICHFIELD SILVER STAR BANNER DAY Mayor Goettel read and presented a proclamation designating May 1, 2010 as City of Richfield Silver Star Banner Day to representatives of the Fred Babcock Veterans of Foreign Wars Post #5555 and the Minneapolis/Richfield American Legion Post #435. Item #2 PRESENTATION OF PROCLAMATION DESIGNATING CITY OF RICHFIELD EARTH DAY/ARBOR MONTH IN APRIL 2010 hunt. Recreation Services Director Topitzhofer announced the upcoming Earth Day scavenger Mayor Goettel presented a proclamation designating City of Richfield Earth Day/Arbor Month in April 2010 to Recreation Services Director Topitzhofer. Item #3 ANNUAL MEETING WITH TRANSPORTATION COMMISSION Marty Kirsch, Transportation Commission Chair, provided a report on the Commission's activities and goals. Item #4 COUNCIL DISCUSSION • WALK A MILE IN HER SHOES • HATS OFF TO HOMETOWN HITS Teresa Rosen, Cornerstone, announced the April 13 Walk a Mile in Her Shoes event at the Mall of America. Council Member Wroge acknowledged the efforts of the Middle School AVID for distributing the revised Welcome to Richfield booklet. Recreation Services Director Topitzhofer explained the television commercial regarding Memorial Day activities at Veterans Memorial Park is being aired in error. Council Member Fitzhenry acknowledged Public Work's quick response to placing barricades to block vehicles using the empty lot at 66th Street and Richfield Parkway. Council Member Sandahl acknowledged the volunteers assisting seniors with tax preparation at the Community Center. Council Member Fitzhenry requested the multi-pet licensing process be reviewed, including length of license, inspections by community service officers and cost of licenses. Council Meeting Minutes -3- April 13, 2010 The City Council consensus was to consider multi-pet licensing costs during budget discussions. Mayor Goettel announced the April 16 National Health Care Decisions Day at the Community Center. Item #5 COUNCIL APPROVAL OF AGENDA M/Wroge, S/Sandahl to approve the agenda. Motion carried 5-0. Item #6 CONSENT CALENDAR A. Consideration of approval of first reading of transitory ordinance vacating Market Drive street right-of-way and scheduling public hearing and second reading for April 27, 2010 S.R. No. 54 B. Consideration of approval of first reading of ordinance relating to municipal elections, amending Sections 4.02 and 4.06 of Richfield City Charter and scheduling public hearing and second reading for May 11, 2010 S.R. No. 55 C. Consideration of approval of renewing auction service contract with Adesa Minneapolis for 2010/2011 auctioning forfeited vehicles from Public Safety/Police S.R. No. 56 D. Consideration of approval of bid minutes/tabulation and award of contract to Wilson Custom Tree for 2010 diseased tree removal from private property in amount of $78,811 S.R. No. 57 E. Consideration of approval of bid minutes/tabulation and award of contract to Valley Paving, Inc. for mill and overlay and Ice Arena parking lot projects in amount of $788,157.46 S.R. No. 58 F. Consideration of approval of extending 2009 curb and gutter and miscellaneous concrete repair contract with Ron Kassa Construction, Inc. in amount of $99,612.50 S.R. No. 59 G. Consideration of approval of purchase of equipment and chemicals from JRK Seed for injection treatment of ash trees in amount not to exceed $50,000 S.R. No. 60 M/Goettel, S/Elliott to approve the Consent Calendar. Motion carried 5-0. Item #7 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM CONSENT CALENDAR None. Council Meeting Minutes -4- April 13, 2010 Item #8 PUBLIC HEARING REGARDING ISSUANCE OF NEW ON-SALE WINE AND 3.2 PERCENT MALT LIQUOR LICENSES FOR JOY'S PATTAYA THAI RESTAURANT, LLC, 7545 LYNDALE AVE S.R. NO. 61 Council Member Elliott presented Staff Report No. 61. M/Fitzhenry, S/Wroge to close public hearing. Motion carried 5-0. M/Elliott, S/Sandahl to approve the issuance of new on-sale wine and 3.2 percent malt liquor licenses for Joy's Pattaya Thai Restaurant, LLC, 7545 Lyndale Avenue. Motion carried 5-0. Item #9 PUBLIC HEARING REGARDING CITY GRANTING COMLUX AMERICA, LLC A LOAN OF MINNESOTA INVESTMENT FUND GRANT MONIES IN AMOUNT OF $1,000,000 AND RESOLUTION APPROVING DOCUMENTS RELATED TO LOAN S.R. NO. 62 Mayor Goettel presented Staff Report No. 62. Council Member Wroge questioned the Revolving Loan Fund being City or HRA. City Manager Devich explained the new tool for businesses would be created to follow the DEED models and be a City fund. M/Goettel, S/Sandahl to close public hearing. Motion carried 5-0. M/Goettel, S/Sandahl to the City granting Comlux America, LLC a loan of Minnesota Investment Fund Grant monies in amount of $1,000,000 and that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 10355 RESOLUTION APPROVING MINNESOTA INVESTMENT FUND LOAN AGREEMENT BETWEEN THE CITY AND COMLUX AMERICA, LLC Motion carried 5-0. This resolution appears as Resolution No. 10355. Item #10 CONSIDERATION OF RESOLUTION AUTHORIZING MAJOR SITE PLAN AMENDMENT AT 7700 NICOLLET AVENUE ALLOWING MAIN FLOOR ADDITION FOR MARKET AND BASEMENT AREA FOR ADDITIONAL STORAGE S.R. NO. 63 Council Meeting Minutes -5- April 13, 2010 Council Member Wroge presented Staff Report No. 63. John Gross, owner, stated the new equipment meets all code requirements, including odor control. M/Wroge, S/Goettel that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 10359 RESOLUTION GRANTING APPROVAL OF A MAJOR SITE PLAN AMENDMENT FOR 7700 NICOLLET AVENUE Motion carried 5-0. This resolution appears as Resolution No. 10359. Item #11 CONSIDERATION OF RESOLUTION APPROVING CONTRACT WITH INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 49 FOR CONTRACT PERIOD JANUARY 1, 2010 THROUGH DECEMBER 31, 2010 S.R. NO. 64 Council Member Fitzhenry presented Staff Report No. 64. M/Fitzhenry, S/Sandahl that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 10356 RESOLUTION APPROVING LABOR AGREEMENT BETWEEN THE CITY OF RICHFIELD AND INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 49 BARGAINING UNIT FOR THE YEAR 2010 Motion carried 5-0. This resolution appears as Resolution No. 10356. Item #12 CONSIDERATION OF RESOLUTION APPROVING CONTRACT WITH POLICE SUPERVISORS LAW ENFORCEMENT LABOR SERVICES LOCAL 162 FOR CONTRACT PERIOD JANUARY 1, 2010 THROUGH DECEMBER 31, 2010 S.R. NO. 65 Council Member Wroge presented Staff Report No. 65. M/Wroge, S/Fitzhenry that the following resolution be adopted and that it be made part of these minutes: Council Meeting Minutes -6- April 13, 2010 RESOLUTION NO. 10357 RESOLUTION APPROVING LABOR AGREEMENT BETWEEN THE CITY OF RICHFIELD AND LAW ENFORCEMENT LABOR SERVICES (EELS), LOCAL 162 BARGAINING UNIT FOR THE YEAR 2010 Motion carried 5-0. This resolution appears as Resolution No. 10357. Item #13 CONSIDERATION OF RESOLUTION APPROVING CONTRACT WITH POLICE OFFICERS AND DETECTIVE LAW ENFORCEMENT LABOR SERVICES 123 FOR CONTRACT PERIOD JANUARY 1, 2010 THROUGH DECEMBER 31, 2010 S.R. NO. 66 Council Member Sandahl presented Staff Report No. 66. City Manager Devich acknowledged the three unions for negotiating their contracts. M/Sandahl, S/Fitzhenry that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 10358 RESOLUTION APPROVING LABOR AGREEMENT BETWEEN THE CITY OF RICHFIELD AND LAW ENFORCEMENT LABOR SERVICES (EELS), LOCAL 123 BARGAINING UNIT FOR THE YEAR 2010 Motion carried 5-0. This resolution appears as Resolution No. 10358. Item #14 CONSIDERATION OF CAPITAL INFRASTRUCTURE INVESTMENT FOR CITY'S 9-1-1 DISPATCH CENTER IN NEW RICHFIELD MUNICIPAL CENTER S.R. NO. 67 Mayor Goettel presented Staff Report No. 67. Council Member Sandahl questioned the non-recommended items -Alternate #4 - Humidification and Alternate #6 -Sound Masking -stated in the Stahl Construction letter dated February 23, 2010. City Manager Devich stated the decision on dispatch and access flooring is most critical. Council Member Sandahl expressed support for the dispatch infrastructure and requested Alternates #4 and #6 be returned to the City Council for consideration. M/Goettel, S/Fitzhenry to approve consideration of capital infrastructure investment for City's 9-1-1 dispatch center in new Richfield Municipal Center. Council Meeting Minutes -7- April 13, 2010 Motion carried 5-0. Council Member Wroge expressed his concerns that Hennepin County has not provided an answer on allowing more cities to join the County Dispatching Center and associated costs initially and annually. He continued with concerns that there was no time for discussion and there was only one choice now because no information was available. Council Member Fitzhenry stated that Hennepin County does charge for dispatching on property taxes. Item #15 CITY MANAGER'S REPORT • GAS LINE INSPECTION AT 66TH STREET AND PORTLAND AVENUE ROUNDABOUT • FIRE INSPECTIONS Public Works Director Eastling reported on the gas line inspection to begin in mid-April. Council Member Wroge questioned the legal liability of the installing company. City Attorney Heine responded that the contracts are not with the City but rather CenterPoint and its contractor. City Manager Devich reported on the Fire Department and rental licensing inspections program for apartment buildings in Richfield. Item #16 CLAIMS AND PAYROLL M/Wroge, S/Sandahl that the following claims and payrolls be approved: U.S. BANK 04-13-10 A/P Checks: 193460 - 193860 PAYROLL 65433 - 65739; 41469 $ 1,082,697.53 $ 491,111.06 TOTAL Motion carried 5-0. OPEN FORUM $ 1,573,808.59 None. Council Meeting Minutes -8- ADJOURNMENT The City Council meeting was adjourned by unanimous consent at 8:49 p.m. Date Approved: Cheryl Krumholz Recording Secretary Debbie Goettel Mayor April 13, 2010 Steven L. Devich City Manager AGENDA SECTION:. PRESENTATIONS AGENDA ITEM # 3 REPORT # ( $ STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: BRAD SVEUM, FIRE SERVICES DIRECTOR NAME, TITLE ITEM FOR COUNCIL CONSIDERATION: Consideration of a resolution accepting a donation from the Fireman's Fund Insurance Company of a Bullard T-3 Max Thermal Camera to the Richfield Fire Department RECOMMENDED ACTION: By Motion: Approve the resolution accepting the donation to the Richfield Fire Department from the Fireman's Fund Insurance Company of a Bullard T-3 Max Thermal Imaging Camera valued at $8,800. II. BACKGROUND Fireman's Fund Insurance Company provides grants to fire departments through their Heritage Program. RJF Agencies nominated the Richfield Fire Department to be considered for a Heritage Program grant. Fire Department staff met with the administrators of the program to discuss what type of equipment was eligible under the program and decided a thermal imaging camera was a needed item. Thermal imaging cameras allow Firefighters to "see" through smoke. This allows them to search more rapidly for victims, find the seat of the fire more quickly and provide an overall increased level of personal safety while working inside of burning structures. The addition of this thermal imager provides enhanced features over current models and ensures each crew has this important tool available. ~ III. BASIS OF RECOMMENDATION --I 0427FireGrant A. POLICY • Minnesota Statue 465.03 requires all donations to be accepted by resolution of the Council and adopted by two-thirds majority of its members. B. CRITICAL TIMING ISSUES • This donation provides the Fire Department with needed equipment, the purchase of such would otherwise be deferred due to budget constraints. C. FINANCIAL • Due to budget constraints the Fire Department has been unable to purchase a thermal imaging camera through the normal funding process. D. LEGAL • Minnesota State Statute 465.03 requires all donations to be accepted by resolution of the Council and adopted by atwo-thirds majority vote of its members. E. ENVIRONMENTAL CONSIDERATIONS None. IV. ALTERNATIVE RECOMMENDATION~S~ • None V. ATTACHMENTS • Resolution. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representatives from Fireman's Fund Insurance Company • Representatives from RJF Agencies ~I RESOLUTION NO. RESOLUTION AUTHORIZING ACCEPTANCE OF THE DONATION OF A THERMAL IMAGING CAMERA FROM THE FIREMAN'S FUND INSURANCE COMPANY HERITAGE PROGRAM IN ACCORDANCE WITH DONATION AGREEMENTS AND TERMS PRESCRIBED BY THE DONORS WHEREAS, Minnesota Statute 465.03 reads in part as follows: Any city, county school district or town may accept a grant or devise of real or personal property and maintain such property for the benefit of its citizens in accordance with the terms prescribed by the donor. Nothing herein shall authorize such acceptance or use for religious or sectarian purposes. Every acceptance shall be by resolution of the council adopted by two-thirds majority of its members, expressing such terms in full; and WHEREAS, the City of Richfield has been awarded the donation as described below, A Thermal Imaging Camera from the Fireman's Fund Insurance Company Heritage Program. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield, Minnesota, as follows: That the City Council of the City of Richfield hereby accepts the donation of a Bullard T-3 Max Thermal Imaging Camera from the Fireman's Fund Insurance Company Heritage Program valued at $8,800 in accordance with the grant agreements and terms prescribed by the donors. Adopted by the City Council of the City of Richfield, Minnesota this 27th day of April, 2010. ATTEST: Debbie Goettel, Mayor Nancy Gibbs, City Clerk AGENDA SECTION: CONSENT AGENDA ITEM # (gyp REPORT # 69 ~' STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: MELISSA POEHLMAN, CITY PLANNER DEPARTMENT DIRECTOR REVIEW: / / .SIGNATURE REVIEWED BY CITY !/// MANAGER: /J~ .., ITEM FOR COUNCIL CONSIDERATION: Consideration of an amendment to the dynamic sign regulations clarifying the requirement that dynamic displays be structurally connected to the static (non-changing) portion of the sign. I. RECOMMENDED ACTION: By Motion: Conduct a first reading of an ordinance amendment to Richfield City Code Subsection 549.25 Subd. 2(a) related to dynamic sign requirements. II. BACKGROUND On December 11, 2007 the City Council adopted new sign regulations that included rules governing dynamic signs. Considerable research was done prior to the presentation of these recommendations. Staff reported to the Council that the proposed regulations would limit the dynamic display portion of any sign to 35 percent of the total sign area. The current Code language, however, leaves it unclear whether the dynamic display portion of a sign may be a separate sign face from the primary sign or whether it must be contained within, or contiguous to, the primary sign face. At the time the dynamic ..sign ordinance was discussed and adopted, staff had presumed that the dynamic portion of the sign would be contained within or contiguous to the primary sign and the regulations were explained to the Council in this way. Research has shown that static signs help drivers to navigate and in comparison to dynamic signs, reduce last minute lane changes and turns. Staff 042710 - 1st Reading Dynamic Signs also feels that aggregating the signage prevents visual clutter that multiple separate signs can create. The proposed amendment adds language. to remove any ambiguity and ensure that the rule meets the original intent of the ordinance, by requiring that the dynamic display portion of a sign be located contiguous to the static portion of that sign. III. BASIS OF RECOMMENDATION A. POLICY • Stated findings of the City's sign regulations are that: (Section 549.01) o "Signs help citizens find their way to intended destinations[.]" o "The safety of motorists, cyclists, pedestrians and other users of public streets and property is affected by the number, size, location and appearance of signs that unduly divert the attention of drivers[.]" B. CRITICAL TIMING ISSUES • The. proposed amendment clarifies the existing rule. • Research has shown the importance of static signs in helping the public to identify and find intended destinations. Changing messages have been found to detract from this way-finding purpose and can adversely affect driving conduct through last second lane changes, stops or turns. C. FINANCIAL • N/A D. LEGAL • A public hearing was held before the Planning Commission on April 12, 2010. • Notice of the public hearing was published in the Sun Current in accordance with State and Local requirements. • The Planning Commission recommended approval of the proposed amendment. • A second reading is scheduled for May 11, 2010. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Approve the proposed amendment with additional changes. • Deny the proposed amendment. V. ATTACHMENTS • Ordinance VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ~~-I BILL NO. AMENDMENT TO RICHFIELD CITY CODE SUBSECTION 549.25 SUBD. 2(a) RELATED TO DYNAMIC SIGN REQUIREMENTS THE CITY OF RICHFIELD DOES ORDAIN: Section 1 Subsection 549.25, Subdivision 2(a) of the Richfield City Code is amended to read as follows: Subd. 2. Regulations. Dynamic displays on signs are allowed subject to the following conditions: a) Dynamic displays are allowed only on monument and pylon signs for non- residential uses in the residential districts and for all uses m other districts. Dynamic displays may occupy no more than 35 percent of the actual copy and graphic area, and must be contiguous to static copy and graphic area. The remainder of the sign must have the capability to have dynamic displays even if not used. Only one (1) contiguous dynamic display area is allowed on a sign face. Sec. 2 This Ordinance is effective in accordance with Section 3.09 of the Richfield City Charter. Passed by the City Council of the City of Richfield, Minnesota this 11th day of May 2010. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk AGENDA SECTION: CONSFTTT AGENDA ITEM # ~g REPORT # ~n J STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: KRISTIN ASHER, CITY ENGINEER N~tME, TITLE ITEM FOR COUNCIL CONSIDERATION: Consideration of aHresolution terminating a Joint and Cooperative Agreement with the Regional Mutual Aid Association. I. RECOMMENDED ACTION: By Motion: Adopt the attached resolution withdrawing and terminating from the Joint and Cooperative Agreement with the Regional Mutual Aid Association for the use of personnel and equipment during emergencies. II. BACKGROUND In 1984, the City .entered into a joint agreement (as did numerous other Cities) with the Regional Mutual Aid Association to provide mutual aid assistance for Public Works equipment. State laws have subsequently changed making the Joint and Cooperative Agreement unnecessary and our insurance carrier, the League of Minnesota Cities Insurance Trust (LMCIT) is recommending that we terminate this agreement. The attached resolution officially withdraws the City of Richfield from this agreement. However, the City may still provide mutual aid to other Cities as needed and desired and should reference MN Statute 12.331 as the current language to do so. III. BASIS OF RECOMMENDATION 042710MutualAid A. POLICY • Mutual aid may be provided using MN Statute 12.331 as guidance. B. CRITICAL TIMING ISSUES • No critical timing issues have been identified. C. FINANCIAL • Adopting the attached resolution has no financial impact on the City. . D. -LEGAL • The City Attorney will be available to answer questions. E. ENVIRONMENTAL CONSIDERATIONS • No environmental considerations have been identified. IV. ALTERNATIVE RECOMMENDATION(S~ • The Council may choose not to adopt the attached resolution. V. ATTACHMENTS • Resolution withdrawing and terminating the Joint and Cooperative Agreement with the Regional Mutual Aid Association • Original 1984 Joint and Cooperative Agreement • MN Statute 12.331 VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None expected. ~,-1 RESOLUTION NO. RESOLUTION AUTHORIZING WITHDRAWAL AND TERMINATION FROM THE JOINT AND COOPERATIVE AGREEMENT FOR THE USE OF PERSONNEL AND EQUIPMENT DURING EMERGENCIES REGIONAL MUTUAL AID ASSOCIATION WHEREAS, the City of Richfield desires to withdraw and terminate from the Joint and Cooperative Agreement for the use of Personnel and Equipment during emergencies Regional Aid Association approved in 1984; and WHERAS, Article VI of the Agreement allows any party to withdraw at any time upon thirty (30) days written notice to the Secretary of the Regional Mutual Aid Association, who shall thereupon give notice of such withdrawal, and of the effective date thereof, to all other parties. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield as follows: 1. That the City of Richfield shall withdraw from the Joint and Cooperative Agreement for Use of Personnel and Equipment During Emergencies Regional Mutual Aid Association. 2. That the City Manager is directed to submit written notice to the Secretary of the Regional Mutual Aid Association of the City's intent to withdraw from the Joint and. Cooperative Agreement for Use of Personnel and Equipment During Emergencies Regional Mutual Aid Association. Adopted by the City Council of the City of Richfield, Minnesota this 27th day of April, 2010. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk k Y Mrs ~. ~~ ~ . JAS AND CC~C~PEi~ATIVE ,AGREEMENT FAR USE OF PER5fJNN,E1~ AfiID £QUIPNiEiiTT DLTILING EMERGENCIES ItEGIO~~;• MUTLI~L AID ~1SSOCIATIC}N I. PURROSE -The_City/;County reeogniz;es that it ti.as authority pursuant to the prdvsons of the .7o~nt Exercise o:f Powers Act, Sec. 471.59, Minnesota Statutes, t:o enter into an agreement to 3ointly an:d cooperatively exercise a power common to each of the cnn- tracting powers, the result being to establish a regi.anal A~utual-Aid Association representatz~re of the various: commi~ities with aut3iorit~ and. responsibilities relat- ing to utilization of resources to counteract natural and man made disasters common to a31 cflmmurit3es, together with. power and authority to implement such services as het forth... IT. DEFINII"I~N OF T'ERMS~ For tie purposes of this Agreement; the terms defined iz this section shall have the meani~igs den them., ~ubd,. .~.. "Party" means ~.gtverrimental~unit which i.s a party'to this Agreement. Subd. 2. "E3ig;ble party" means a.governmental o.r corporation unit which is entitled to become .a. party to this :Agreement,: at .its os;rr; option: subd, ~. t4Ftequesting partyr' means a party which requests assistance free other parties: ~ubd. 4, `'R~s~ponding party= means a party which provides assistance to a re- questing party: Sub-d. ~. "AssSta~-c~e" in.:cludes personnel, materials, and equipment. Subd: 6.. 'dequesting official" menus the person who has ~ieen designated by the requesting party to request assistance from other parties. ., Subd. 7. "Respc~nd~g offCia~" means the person who has been designated by a " ~~h~t e~ an o wI ar extent- that party s i~ prov%de assistance to . -_-_..- a requesting party. , Sibd. 8. "emergency" means a sudden and unforeseen situation requrin,.g immediate action beyond the requesting partys' capability. III. PARTIES 'Subd. 1. The parties to this Agreement shall consist of the members of the Re- gional ?Mutual Aid Association, Upon the 'adoption of a resolution by its governing body; an:execut.ed copy of this A.grecment shall be forwarded by the meatier party to- g~ether with a certified copy of the resolution authorizing the Agreement. Subd. 2. The Secretary of the Re.gi.orial ,Mutual Aid Association shall maintain a curren~ list of the parties to-this Agreement and, whenever there is a change iii th.e parties to t~iis Agreement, he shall notify the des.gna-teal responding.orfic.ial of each ,. o.f the. Dart3'es of= such. c}~a;ava . . .~' ~-^.fE '' i ;%r ~t, e ., i.. ~, J..... "" ~~+~- ~• n joining th~.Regional Mutual Aid Association, the party shall submit a Iist flf there equip~ei~t to the Association Secretary This equipment Zist shall be updated annually and submitted to the Association Secretary by December 3lst of each year. Subd:. 4. The Association Secretary shall distribute the equipment Iists to alI members. An equipment addendum sheet shall be distributed to all member parties by January 30th of each year. IV. PR~CEDUR£ ~ubd: 1. Each party sha-13 designate,-and keep- on file with the Secretary of the Regronal Mutual Aid Association the name of the person of that party who shall be its requesting official and. responding official.- A party may designate alternate officials to act in the absence of the primary official. ~ubd. 2.. 3Y?hhene~er, in the opinion of a requesting official of a party, there is a need for assistance £ro:m othe-r parties to assist the reques~tin.g party, such rem questing official may, in~li.s discretion, call upon the responding official of any' other party to furnish assistance to and within the boundaries of the requesting art It is the iattertti~or~ of the parties tt~ this contract to cooperate in the event of an~emergency by inaicia~g avazlabie to a re uestin person~iel, materials, and equrppment (without uni3uegde ~yy,necessary or requested . . Snbd. S Upton tl~.e receipt of a request fcr assistance from a party, the respond- ing official f`or any other party may-authorize and direct the personnel of the res- ponding party to grovide a5srstanc.e to thtr re uestin art shall q g p~'ty= Y~~ether the responding p y provide such assistance to the' requesting party anal, if sc~, to what ex- tent such assistance shall be provided shall be rletermi.ned solely by the responding . official. (.subject to .such supervision and drectt~n as may be applicable to him within the gfl~ern~ental structure of the party by which he is em~Ioyed,) Failure to provide assistance will not result in iiabi2ty to a party_- ~ubd., ~.: k~i.eA :~. res,pondin.g party provides assistance under the terms of this Agre~eme~i.t, it may in turn request assistance from other parties as "backup" during th:e time that i~t is provi$ing .assis.tance outside its boundaries. Subd, S. Whenever a responding party has provided assists-ice to a requesting party, the responding official may at any time recall such assistance or any part t3~erPr~f rn -t3~-r_espt~n~:n.~-pares-; zf =~Pes~rd7zg ' s~i~~t j ~ gmd-__~- e.em ---- this is in .the best interest etf h.s own .agency, Subd. 6: When a responding patty supplies equipment and personnel to a request- .ng party, saidequpment anal ~gersonnel shall remairi: under the direction and control of the responding party; shall be paid by the -responding psi-tv; shall be prttPrt.ed by the Worker's Conrpensat.on of the responding party; and shall othe3-wise be deemed to be perforJning their regular duties for the resp:on_ding party. However, the xes- po~dng party shall undertake to coordinate with .the requesting party the assistance which -it provides. The requesting. party s]aall proti~ide all routine futiling and ser•ic- ing of respondents equipment, materials, and assume alI costs thereof during the assistance perfld. -2- Suhd. 7. A responding party shall be responsible for its own personnel., ., equipment and materals and fmr.injuries or death to any gersvnnel or .damage to ~y such equ,pme~tt or materials, except that unused equipment and materials pra- vided by the. responding patty shall be rettn^ned to -the responding party by the requesting part, when circumstances permit this to be done. 'The requesting and responding parties may review an y equipment repaired to determine if such repair was directly related to~th:e emergency opea-ation. If mutually agreed that repairs are required, they shall be the responsibility of the re uestin q g party • _ ~y die- agreement which cannot be resolved by the responding and requesting parties should be resolved by a committee established from-the Regional Mutual Aid Association. Subd. 8. Th.e res vrdn p g party shall. maintain such records of the cyst of lobar, equipment and materials provided; and hours of work yr vpera.tion as deemed necessary for a'ecoarery of ,costs . in the event the incident becmmes eligible for federal yr State Disaster Assistance: ~If declared eligible, these e~sts shall t3zen b~e reimbiased by the requesting party in full or in a prorate share of . assistane:e provided, Subd. 9 The re uestin - q g pay shall not be responsible for any injuries, lvsse~ or damages to persons or property arising out of the ants of any of the personnel of a ~sponding p~"h'. 3~vr shall the res pcmdng party he --~-espnns~Ie for: _ ~J~es, }asses, or cta~uages arising v~ut of the acts of ar~y o~ ttie persr~nnel cif the requesting party or the personne3 of any othe:r.responcing.party. Subd_ Ifl. ?`echnica~ service and assistance of non-emergency nature may be requested and~or provided by the parties to this Agreement. V . INSUFtA~1CE Each party to this Agreement shall iuaantan insurance ,policies covering per- steal and pubT~c- liability in the amount of nt~t less t~a~ $3Qt~, ~~ fnr each of the above mentioned risks and W~irker~s Compensation for its persannel_ Said policies shall cover damage or in3ury caused by negligent operation of-i:ts vehicles while operating under the terms of this Agreement outside of its cflrpvrate limits ar contract areas. Each member shall furnish the association with a Certificate of insurance an the policies in farce, or lettei stating self nsuzance at said limits. VI..., W.IT'H~RAWAL AI3D TERi~fINATOIai Any party may withdraw at any time-.upon thin. y {30) days written notice to th.e Secretaz-y of the Regional Nfut~al Aid Association; such a party may become a party if later PntPr_nb onto this Agree,uerit. ine Secretary of th.e Regional ktbtual Aid Association-shall thereupon give notice of such withdrak al, and of the effective date thereof, to all other parties, as hereinbefore provided. -3- ~J~~`~ VII. EFFECTIVE DA3'E This a~~eement st~a]7 become effective IN 1s1I1'1~ES5 tl#JER~DF, tie enders-fined, ~on behalf of their governmental unit, gave executed ttiis Ag:re~ment pursuant to ai~t}orization by the of on ~`th2 day' of 19 REGIONAL MUTDAL CITY QF RiCHFIE~, I:N~JESOTA AID AS~OCIATIaN ~' y~ resident a J ~ ~ §, By ; ~ , y - -' retary Ci y A1ana~ep ~ _ , /~ a Date: ~~l ~ ~ i3at_ ~'"~~-~~. e: / COUNTI' IjF .~ - ?ATTEST: laP~~C3t/ED JAS 7~3 a M .~'at~i\_ f~ ~XcGt1Tt~3f~s ~~_~ VtL.i::[GE t.TTpRNEY II14Tc, tl/ ) " •` STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) ss ~_ CITY OF RICHFTEhD I; Sylvia K. Bergh;. being. the duly qualified ,and actin clerk of the City-of Richfield g > Hennepin Co_untS', Minnesota, db hereb~r Certify that the forgoing is a true and exact co Resolution No. 6918 Py of Agree~ient for use of Personneliaria'~JE~ui meatCooperative Mutual- Aid Association dated August 13~p1984 Regional and that the same is on file and flf record in my office. ' ________--~i~e~s-un-d=ef- my hand and seal ~- this 20th day of August, 1984 ~.iiy ~lerx City of Richfield - N.el7x] eri3. in C.^.::r t+. ~F' -- ~y ~ iiiuue~Ota ' - ,.. CI~15TI'.iUTI7N AVID BY-LAWS OF ~iE R~3~PiL MUIUAI, Am ASSOCIATION ARTICLE I I~a~e ane3 Parpo~ Sec. Z This orga.~azatori shall ~e known as "The Regional Mutual Aid. ~Assoe%atio~aA. Seca. I ~e p~z~sa Qf ~rshp in this ass~ia~on sha31 die to assist ~. or,~ aro~z ~ an e~e~er;~r~ tc exchange ideas of egui:~ ai3d methods of ~ai~ng with e~aerge~°ic~es acid tai protect the lives and r. o rt of c~~r respec~.ave area$ ~ ttie case o~ P ~ arm e~ergen~ or disaster, 7~~I~rT ~~ ~n TT ["~LIJ. ~1..J..f.L+ Z.i I'~4iib2rs}33 Sec. I Membership in this association shall refer to g~blc works departments, or its eguiva3ent t~e~aa~t~er~t. . I3` Atsy publac wcarlcs c~pattnient 3n the area that can to reciprocal se~vica t~ tie other members o~ said o~r~ar~:~a~ti~r~, a~z3 are from ~cor~ra~d ~i3,3ages, Cities, or C:ots~ti~S, and are approved by a simple majority cif the mership s}~a13 be e3igibl~ fog membership in this assoczati.on. . ~~~~ :_...~ ARI'ZCLE III Dues :~ . ~ Sec. Z Bch de~rtrnent shall ~~yy an annual m~nbership fee of $1 Q . d 0 pe r year, which steal: be due and payable on January 3l of each year. ARZ`ICZ£ IV Officers Sec. I ~ die officers of the association shall be President, Vice President and -a Secretary-Treasurer, and shall r~nstitute the execut%ve CDIiIIIIi'ttee.. Sec. IT .The PresdeDt sha31 have .the fo33owng d~te5: To ca33 all ` me eti ri regular arad special gs, to preside and preserve order at all ~~' to appoint cuFUttees; tsa see that subordinate officers. execute:~~ ~~ cbl~:gat~.ons ar~3 duties of their respective offit~s to the bent of their abil~. 4 Sec. iIZ ~T3ce Frey.dent .'shall have tie follcz,,~ng r3ut3.-es:: To assist the Pre~dez~t in the discharge of his zeg~~a-r duties, ahd in the. event of the absence of the President, to assume the duties of President, Sec. I~ ~e ~ecre~ary-fireasurer sha7:1 have t ~bl3c~wg duties ~o calf m33; to Iseep a regd.. of ali praceed~.ngs of the associatifln to collect all dues- a~ other monies due the association; td pad out said ,monies on the oar~3er of the as.socatic~a; and to send notices of all regular and- speral z~tngs _of the a:~sixiatior~. ~ Secretary shall eke an itemized report of all ~ and- expenses to ~ presented at the first regu3.ar meeting of each year. Zr addition, :tt~ Secze~~y shall m3.ntan a current `lsst of a1~. nbess in the associatflr~ and shall maintain an tip-date list cif members' si~ien3t which shall distrabc~~ed to meiiibers on an anne~a3 hiss. - A~IGZ,E V Meetings ~ ~ ---- Sec. I The regular ~eeti:ng of the association shall lie held in November of each year. 3.ie time and location will be detertrcined b~ the executive . c~araFittee. Sec. II S~ecai meetings shall be called by the President with at feast seven days written r~tae to the mez~ershp:- Sec. IZI ~ sia~Ze majority of the meBbership shall constitute a quorum. Sec. IV 7~se 3~berts Rules of .order shall govern. Sec. V Eat r,~e~er shall have one vote. ~- I ~ electsan of officers shall be held at the regular meeting of _ each year. ~iis election shall .be by secret ballet. Sec. I die of~ic~rs ~ the association shalt be elected for a term of -two years. Sec:. III Zn the event o~ a, va 9 _ cancy occurin in the affic~ of the.~es.dent, the vi-oe president- will sued to that office. ~.he president w~.Il app`iint replant: offices for all vacancies.. - - ARTICLE VII . Cor~ittees _ .;_, ~~. Z ~~ a~ssc»3atic~n shall have the follaang annual committees s E~cecve Filzai ~`zai~,r3g A+as, anr3 Safety. Sec. II cttee ~ have the authority tc regc~st assistance ficam ~' meters flf the a~socat3on. Sec.. TII It shall tae the duty of the Executive Committee to hand7:e all matters that: pertain to state legslati~ an ratters of im~xirtance to the assoc~.aton. Sec. liT It shad. be the duty of tie Film and Trazr~g ~~ds Cor~iittee to preview all rie~a equ3pmer~t graining f tms and tra~ng aids and make recoirdatons~ to the association rF~.ng purc}ia~. .s cxx~anttee may be r,}iatgea w~t-h ma~nta~ng a film and training aid librazy ar~d schedule the by Viers or~3y, It shah. be tie duty of fine Safety C:c~r¢nittee to beep a31. gibers: wised of new safety practices and equignei~t. ___ - _- . _ ~ ~ ARTIC'~LE ~TIiY Atr~enc~rtt and Dissolution Sec. I No amenc~nerat shall be made to these ~'`^L,a~is 'ur~:less proposed at the 1 C~~Li,L i17C'e 4.tt ~ 311 lY r 1 L1~t ll} • -~ TI ~ amer~aerit: requires atwo-thirds majority vote of the entire rrrPSnbership for acceptance. See.. IIZ s association may be disbanded ~; a three-fourths vote of tie er~tir~e ms~ershp of t~i.e association, -rand a pub3shad or server3 notice shah be given to all ~ far that purpose at least one month before such a vote shall be taken. 4 RESOLUTION NO. 6918 A RESaI.UTION A.UTHORIZTNG JOINT AND COOPERATIVE AGREE-i'v1ENT FOR USE OF' PERSONNEL AND EQUIPMENT - REGIONAL MUTUAL AI~i~ ASSOCIAT'TON WHEREAS, th.e City Council of the City of Richfield is the ..official governing body of the City of Ri.ch#'eid;.and '-~HE.AEAS_, the City Council of the City of Richfield has appr~cved the concept of a Mutual Aid Association; and __ --~ WHEREAS, a mutual need exists between Members of the Regional Mutual Aid Association to share and assist cnz another in tie areas of emergency-and disaster cantro3; and. WHEREAS,. the City Hof R%chfield considers it to be in the best ~riterests of the c~~ty Ito enteer into ~ mutual agreement with t-h~ other members of the Regiana7: Mutual Aid. Asso.caticn.. NOi~T, THEREFORE, _BE IT RESOLVED by the City Couneil. o#` the C~t.y of. R~c~field that: the City of Richfield desires to become a me~rtbe.r of the Regor~~al Mutual Aid Association and its ~~,~-e~ctor of Community 5e.rvices~ is its authorized representative, aid the Te~hn~.ca]: Oilerato~s Coordinator its a3ternative representative; and:. B:E. I'T ~'~I~iT~ZER RESOL.VED,. the City of Richf:eld_ enter ir~t~i an agreement with the Regional Mutual Aid Assncat~n a.nd hereby authorizes it.s Mayan and G.ty Manager to sign said agreement in behalf of` said City of Richfield; anal B~E TT FURT~iER RESOLVED that the City Clerk of the City cf' Richfield is Hereby. direete~i to f'orwa.rr a certified copy of this resolution, together with executed eepy of the agre~,~-ent to Charles Henehell} President, Regional Mutual Aid Ass~~ciaton, - 2~6t3 Civic Center Drive, Roseville, Mirine5ota, 55~~3,. ATTEST: 12.331, 2009 Minnesota Statutes Page 1 of 1 Cv t~ -- l l 2009 Minnesota Statutes 12.331 LOCAL ASSISTANCE BETWEEN POLITICAL SUBDIVISIONS. Subdivision 1. Authority between political subdivisions. When the public interest requires it because of an emergency, a political subdivision may request the assistance of another political subdivision. Upon receiving such a request, a political subdivision, called the "sending political subdivision," may go to the assistance of the requesting political subdivision; called the "receiving _political sub_divison." The receiving political subdivision may accept and use the-personnel; equipment; .and supplies of the sending political subdivision as agreed, uponby both political subdivisions. ,, Subd. 2. Responsibility for use of personnel, equipment, supplies. (a) Unless there is a written agreement between the political-subdivisions establishing tie rules-for conducting these _activities, the provisions of paragraphs (b) to (e) shall apply while the political subdivisions are engaged in the activities described in subdivision 1. (b) For the purposes of worker's compensation insurance, the employees, officers, and members of the sending political subdivision have the same powers, duties, rights, privileges, and immunities as if they were performing similar services in the sending political subdivision and are considered to be acting within the scope of and in the course of their regular employment, as employees of the sending political subdivision. (c) For the purposes of chapter 466, the employees and officers of the sending political subdivision are deemed to be employees, as defined in section 466.01, subdivision 6, of the receiving political subdivision. (d) The sending political subdivision shall be responsible for any damages to its equipment. (e) The receiving political subdivision shall reimburse the sending-political subdivision for the ..supplies used and the compensation paid to the officers and members of the forces furnished, during the time when the rendition of aid .prevents them from performing their duties in the sending political subdivision, and for the actual travel and maintenance expenses of the officers and members while so engaged. A claim for loss, damage, or expense in using equipment or supplies or for additional expenses incurred in operating or maintaining them must not be allowed unless within 90 days after the loss, damage, or expense is sustained or incurred, an itemized notice of it, verified by an officer or employee of the municipality having knowledge of the facts, is filed with the clerk of the receiving political subdivision. - Subd. 3. Retroactive effect. Notwithstanding other laws this section is effective retroactive to March 29, 1998. History: 1998 c 383 s 19 hops://www.revisor.mn.gov/statutes/?id=12.331 4/12/2010 AGENDA SECTION: CONSENT AGENDA ITEM # F)C REPORT # 71 STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ROBERT HIIVTGEN, UTILITY SUPERINTENDENT NAME. TITZE ITEM FOR COUNCIL CONSIDERATION: Consideration of the purchase of anew control panel for the lime slakers at the Richfield Water Treatment Plant. I. RECOMMENDED ACTION: By Motion: Approve the purchase of a new Slaker Control panel from Total Control Systems, Inc. at the Richfield Water Treatment Pfant in the amount of $33,893.00. II. BACKGROUND The Richfield Water Treatment Plant provides softened water to the community. Softened water provides many benefits to its users and to the water distribution system including convenient soft water to the users and extended life to the piping system. Richfield's Water Treatment Plant uses a lime softening process. As part of this process, there are mechanical device(s) called a lime slaker. The lime slaker mixes pebble lime with water to make a lime slurry. The lime slurry is added in controlled amounts during the water treatment process to remove the hardness of the water. Over the past few years the utility department has been migrating to a new SCADA (Supervisory,Control and Data Acquisition) system. The SCADA system is a radio communication system that allows staff to track all operating functions of the lime slakers. This new control panel will allow for complete slaker control through the SCADA system. 042710control panel Although there was only one proposal received, staff is recommending the proposal be accepted because Total Control Systems, Inc. is an established contractor with the City and staff does not believe we can. obtain a better price from a reputable contractor that would also. be compatible with City's SCADA System. III. -BASIS OF RECOMMENDATION A. POLICY • The City can contract up to $100,000 by accepting proposals or quotes without going through the formal bidding process. B. CRITICAL TIMING ISSUES • The sooner the new Slaker Control Panel is purchased and installed, the sooner it can be incorporated into the new SCADA (Supervisory .Control and Data Acquisition) system to operate the lime slakers more efficiently. C. FINANCIAL • The approved 2010 Water Budget contains $55,900 for this upgrade (line item 51000-7350). D. LEGAL • All contracts or purchases in excess of $25,000.00 require Council approval E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Council may chose to reject this proposal and direct staff to receive more proposals; however staff does not believe a better price can be obtained from a reputable contractor that would also be compatible with the City's SCADA System. V. ATTACHMENTS • Proposal from Total Control Systems, Inc. for the new Slaker Control Panel. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None dotal - - ; SYSTEMS,I~N-~"~~ April 12, 2010 J _ ~~_, Total Control Systems, Inc V~ 38841 Nyman Drive NE PO Box 40 Stanchfield, MN 55080-0040 Phone 320-396-4442 /Fax 320-396- 4443 To: Robert Hintgen Re: Richfield, Minnesota -Slaker Panel. Total Control Systems, Inc. (TCS) proposes to furnish (only) equipment in accordance to the project plans and specifications to meet the full functional intent of the specifications that were received. Slaker Control panel 480 volt Furnish only, No field installation Including: Slaker Control system Main sw. 30 amp NEMA 3R 2 door stainless steel enclosure 48x60x12 Inner doors Enclosure SS legs (18") and skirts with louvers Incoming power terminal block Motor circuit breakers Control circuit breakers Forward-Reverse-Off-Auto switches, oil tight, 30 mm Pushbutton switches, oil tight 30mm Lamps, LED, oil tight, 30mm Condensation heater 50 watt Starters, Reversing with OL block DC motor controllers Power/Phase monitor Relays Control power TVSS Ethernet Switch Uninterruptible power supply (UPS) Power supply 24 volt Allen-Bradley Compactlogix PLC and cards Allen Bradley Panelview 600 Operator interface Documentation Master PLC program modifications SCADA software and screen additions Master alarm dialer programming Programming, training Existing SCADA modifications Testing and commissioning Price for the control/motor control panel package: $33,893.00 each including tax. Does not include: Grounding materials ~~„~_ Installation of panels Conduit Permits Demolition Any wire external to panel - We acknowledge receipt of Addendum No. . - Terms are Net 30 days from invoice date. No retainage allowed. A 1.5% charge per month added to any past due balance. Price may be dependent on past credit history. - This quote/proposal valid for 60 days. - Work to commence after receipt of an acceptable written purchase order acknowledging acceptance of our terms. - F.O.B. job-site. - Start-up service/training, documentation and equipment adjustment is included as specified. - TCSI does not accept any liquidated damages. - ALL PANELS FURNISHED BY TCS WILL HAVE A UL 508 SERIALIZED OR UL698A ENCLOSED INDUSTRIAL CONTROL PANEL RELATING TO HAZARDOUS LOCATIONS WITH INTRINSICALLY SAFE CIRCUIT EXTENSIONS LABEL, AS REQUIRED. If you have any questions regarding our proposal, please contact our office. We look forward to working with you on this project. Sincerely, TOTAL CONTROL SYSTEMS, INC. AI Doberstein AD/lo AGENDA SECTION: CONSENT AGENDA ITEM # E)D REPORT # 72 STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: CHRIS LINK, OPERATIONS MANAGER STREET/FORESTRY NAME, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of award of contract to North Star Tree Care for removal of diseased boulevard trees for an amount not to exceed $99,000. I. RECOMMENDED ACTION: By Motion: Award a contract to North Star Tree Care for diseased boulevard tree removal for an amount not to exceed $99,000. II. BACKGROUND At the May 26, 2009 Regular City Council Meeting a new Dutch Elm Disease Removal Policy (DED) was approved. At this meeting the following was discussed: • Time Limits • Summer Cut-off Date • Removals to be Completed by City Crews or Contractor • New Level of Service • Funding 2010 Bid Solicitation with Policy The recommended contract award is based on an estimate of 80 trees of assorted sizes using the quotes received from North Star Tree Care ($59,800) and A-1 Sarrf Tree Services ($79,900). The actual number and sizes will depend on the number and sizes of DED trees that will be tagged for removal by the City tree inspector. Staff recommends that the contract be awarded for an amount not to exceed 042710boulevardtreeremoval $99,000 (the actual amount dependent on the number and sizes of trees removed). The quote tabulation sheet is attached. Time Limits Early detection and removal of trees containing DED can help prevent other trees from becoming infected. Early removal prevents the elm bark beetle from maturing and finding other susceptible trees. The approved policy states that trees that have been marked for removal before July 15 must be removed within 30 days. Summer Cut-off Date After a certain date the Dutch Elm Bark Beetle can no longer harm elm trees. The life cycle of the beetle has expired and no new hatches are anticipated. The approved policy states July 15 as a date where infected trees would not have to be removed until April 15 of the following year. Removals to be`Completed by City Crews or a Contractor Staff indicated that there was no time in the early spring/summer months to remove infected trees,- when it is most critical. Staff also stated that crews have not been able to trim new trees that have been recently planted due to the number of DED trees needing to be removed. Without proper trimming trees become unsightly and may become hazardous.. Also trimming gives crews the chance to inspect trees and possibly detect other invasive insects such as Emerald Ash Borer. The approved policy states that in order to remain consistent with the new policy, contractors must be used for tree removal. New Level of Service Removal of diseased trees in the late spring/early summer is a significantly new level of service that the City has not been in a position to provide in the past. Now, with fewer personnel, drastically reduced local government aids and levy limits, this service will require outside personnel and an additional source of funding. Funding If contractors are to be used for removal of boulevard trees a funding source, other than the General Fund, can be established. Franchise fees have been used in the past and the approved policy indicates that franchise fees will be used to fund removals. III. BASIS OF RECOMMENDATION A. POLICY • Since the estimated cost of the work was less than $100,000.00, the formal bidding process was not required and the City can contract by obtaining quotations. • North Star Tree Care submitted the lowest quotation. B. CRITICAL TIMING ISSUES • Approval at the-April 27, 2010, Council meeting will expedite the removal process. Hiring a contractor for tree removal will ensure residents receive their requested new boulevard trees. Hiring a contractor for tree removal allow crews to resume the tree trimming and maintenance program. C. FINANCIAL • Franchise Fees will be used to hire a contractor for summer removals of DED boulevard trees. D. LEGAL • When the purchase of materials, merchandise, equipment or construction exceeds $25,000, authority to purchase shall be submitted to the City Council for consideration. E. ENVIRONMENTAL CONSIDERATIONS • Diseased trees need to be removed to keep the environment healthy and attractive. IV. ALTERNATIVE RECOMMENDATION(S~ • The City Council may choose to reject all quotations and direct staff to obtain more quotations; however, staff does not believe we can obtain a better price from a reputable contractor. V. ATTACHMENTS • Quotation tabulation Approved DED Tree Removal Policy VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None ~ V_ ~~ ~ ~ N I.L _ V ~ ~ ~/ 0 ~ ~ ~ f+ V ~ ~ ~ ~, M W ~~~~ c 0 Q o° °o ~ rn ~ ~ ~ ~ 'yr f~ lC') ~ [-E3 ER O U - L ~ ~^+ 0 _ ~ ~ _ ~ U ~ Q1 L '.N VJ U ~ ~ Q Z x c~ a~ rn U .~ C O C O O Q ~~`>~ City of Richfield Dutch Elm Disease (DED)Tree Removal Policy 1. Introduction The City of Richfield believes it is in the best interest of the residents for the City to assume the basic responsibility for removal of Dutch Elm Disease (DED) trees. The City will provide this service in a safe and cost effective manner, keeping in mind safety, budget, personnel and environmental concerns. The City will use City employees, and /or private contractors to provide this service. 2. Determination of Dutch Elm Disease The City of Richfield Tree Inspector will determine trees that are infected by DED. A tree inspector must carry a tree inspector's license, which is distributed by the Minnesota Department of Natural Resources. To become a licensed tree inspector one must pass a test showing proficiency in DED management, firewood identification, and shade tree management, and attend annual recertification workshops. 3. Marking DED Trees After a tree is determined to be infected with DED the City's Tree Inspector will mark the tree for removal. The Tree Inspector will mark a boulevard tree with an orange dot and a tag with specific number. For private trees, the Tree Inspector will mark the tree with an orange stripe around the circumference of the tree and a numbered tag. All marks will be placed at-breast height. 4. Time Limits for Removal Trees that have been marked for removal before July 15th of a given year must be removed within 30 days. This time limit will help prevent the spread of DED to healthy trees. Trees that have been marked after July 15th of a given year must be removed before April 15th of the following year. After July 15th the Elm Bark Beetle that causes DED is no longer active and will no longer spread for that season. 5. Removals to be Completed by a Contractor Generally, a contractor will remove all trees that are infected with DED. Private trees that are to be removed are the responsibility of the homeowner. If the tree is not removed within the specified time limit a contractor will remove the tree and the cost will be assessed against the property. 6. Funding Franchise Fees will be used to fund boulevard DED removals. Franchise Fees may be adjusted annually to account for the summer removals and anticipated winter removals. 042710boulevardtreeremoval AGENDA SECTION: p~T,TC HF.ARTN(~S AGENDA ITEM # g REPORT # ~~ ~~- STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: MELISSA POEHLMAN, CITY PLANNER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: IGNATU REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Public hearing and second reading of a Transitory Ordinance vacating Market Drive street right-of-way. I. RECOMMENDED ACTION: Conduct and close a public hearing and by motion: Approve a Transitory Ordinance vacating Market Drive street-right-of- wav. II. BACKGROUND In connection with the Lyndale Avenue bridge reconstruction project, the City acquired right-of-way from the Shops at Lyndale property. The land acquisition required relocation of the Shops at Lyndale pylon sign located nearest to Boston Market. Working together with MnDOT and the Shops, the City identified a potential relocation for the sign. The relocation site was located within a platted but never- constructed city street known as Market Drive, on the southeast side of the Boston Market parcel. MnDOT had taken that city street into the state highway system as state right-of-way many years ago, but in 2009 MnDOT determined that it no longer needed that right-of-way and released it to the City's jurisdiction. The City now has the authority to vacate the street, and the Public Works Department has recommended that the street be vacated. 042710- PH & 2nd Reading Market Drive Vacation' III. BASIS OF RECOMMENDATION A. POLICY • The Council may by ordinance vacate a street, alley, public grounds or apart thereof, on its own motion or upon the petition of the owners of half of the land abutting on the street, alley, public grounds or part thereof to be vacated. • No vacation may be made unless it appears in the interest of the public to do so. • Easements for identified utilities have been maintained. B. CRITICAL TIMING ISSUES • CSM Corporation would like to reinstall their pylon sign as soon as possible. C. FINANCIAL • N/A D. LEGAL • Notice of the public hearing was published and sent to property owners and residents as required. • The Cit Attorne has reviewed the attached Transitory Ordinance. E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. AL'T'ERNATIVE RECOMMENDATION(S~ • N/A V. ATTACHIVIENTS • Transitory Ordinance • Maps VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ~, BILL NO. TRANSITORY ORDINANCE NO. AN ORDINANCE VACATING PUBLIC RIGHT-OF-WAY EASEMENTS (MARKET DRIVE) THE CITY OF RICHFIELD DOES ORDAIN: Section 1: The following described lands are subject to the easements as described below for public street right-of-way purposes ("Street Easement"): That part of Market Drive as dedicated in the plat of STRAND'S SECOND ADDITION TO RICHFIELD, according to the recorded plat thereof, Hennepin County, Minnesota, lying southerly of the north line of said Block 2, and its easterly extension thereof, and also which lies northerly of a line drawn parallel with and distant 10.00 feet northerly of the following described line: Commencing at the southwest corner of Lot 2, Block 1, THE SHOPS AT LYNDALE, according to the recorded plat thereof, Hennepin County, Minnesota; thence North 86 degrees 49 minutes 57 seconds East, assumed bearing along the south line of said Lot 2, 482.89 feet, to the point of beginning of said line to be hereinafter described; thence North 73 degrees 22 minutes 25 seconds East, 48.54 feet; thence easterly, 182.55 feet, along a tangential curve, concave to the south, having a radius of 576.26 feet and a central angle of 18 degrees 09 minutes 01 seconds, to the point of compound curvature; thence easterly, 49.20 feet, along a tangential curve, concave to the south, having a radius of 1628.50 feet and a central angle of 01 degrees 43 minutes 52 seconds, to the point of compound curvature; thence easterly, 57.15 feet, along a tangential curve, concave to the south, having a radius of 582.50 feet and a central angle of 05 degrees 37 minutes 17 seconds, to the southeasterly right-of-way line of said Market Drive as dedicated in said plat of STRAND'S SECOND ADDITION TO RICHFIELD, and said line there terminating. All in Hennepin County, Minnesota. Sec. 2: The Street Easement is not open to public travel and is not required for access to the abutting properties. Sec. 3: There are no City-owned public facilities are located in the Street Easement. Sec. 4: The City has notified the service providers for gas, electric, telephone, and cable communications services of the proposed vacation, and the following facilities are reported to be located in the Street Easement: Qwest fiber optic lines and conduit, Xcel Energy underground electric facilities. Sec. 5: The Council finds that there is not a public need fo.r the Street Easement. Sec. 6. The City of Richfield held the first reading on April 13, 2010 and second reading on April 27, 2010. Legal notice was published in the City's official newspaper as required by ordinance. `~ ~`- Sec. 7: The Street Easement is vacated reserving, however, to the public an easement for underground utilities. Sec. 8: The vacation of the Street Easement is effective 30 days following publication of the ordinance. Sec. 9: The City Clerk is directed to prepare. a certificate of completion of vacation proceedings and to record the vacation in the office of the Hennepin County Registrar of Titfes or Hennepin County Recorder, as appropriate. Passed by the City Council of the City of Richfield, Minnesota this 27th day of April 2010. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk Market Drive Vacation 4/10 Context Map 77th Street m c a J Shops at Lyndale Shopping Center Approximate location of vacation 1-494 1-494 0 60 120 240 360 480 Feet QA I:\GIS\Community Development\StafflMelissa\Projects\Zoning Cases\Market Drive vacation -Context Map.mxd -~ ~~ ~`~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~~ ~ ~ II ~ ~ i ~ ~~ hl . A~ ~ J' \ ~. \ \ - -I~ \ ; ~ ~ ~/ j ~!~~ i r f i 1. ~~ ~~~ / II ~~~ - - ~ ~; \ i~ ' i ~ ~ ;s% ~ /% I I~ ~ ,~ .~ ~ ~ I - _. _ ill I ,~, _ _ % i~ :,~~_ ~ ~~ i ~ ~ . I _ I ,- ~~ ~ ~ /~ ~ ~ I ~ lam';} \ '_ ^: ~~ -. ~ ~ i:' _I7 . C ~-= i ~= ~-~ , ~^ - ~ - --- ~~ ~~~ ~ ,I i I I --- - _, -- ._ ~~ i i 'i - - - . ~ I _ ~ - ~- ~ ~ ~~~~~ ~_ - .-_ _ ---~^-~ _f ~' _" ~ ~ ~~~. ~ g y L ~ ~ ti ~~ i ~ d i - z_ i- ---- ~~ ~ j I I ' _ i. _ _ ,`\ I ~ r' I i i 1~ j ~ ~ ~ ~ I ~. ~ , /. i c ~ ~ ~ ~ ,I ` ~ ~ i \ ~i ,~ ~ ~ l --- I ti ~ ~ ~, ~ V ' I !--, o ~ / \ \ I ~ ~ ~ f ~~ ~ ~ ,, ~~~ ~ , -~ ~ ~ ,,, ., r--~ _ ~ ~ \~ \ ~ - °' ~' ~ I ~~ AGENDA SECTION: PDBLIC HEARINGS AGENDA ITEM # 9 REPORT # 74 STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: .~ ITEM FOR COUNCIL CONSIDERATION: Conduct and close a public hearing and consider a resolution adopting a modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the Establishment of the 2010-1 Housing Tax Increment Financing District (aka Woodlake Housing Tax Increment Finance District). I. RECOMMENDED ACTION: By Motion: Conduct and close a public hearing and by motion: Adopt the attached resolution adopting a modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the Establishment of the 2010-1 Housing Tax Increment Financing District (aka Woodlake Housing Tax Increment Finance District). II. BACKGROUND Michael Development has made a proposal to develop the property at 6401 Lyndale Avenue (currently designated as Woodlake Plaza) with 90 units of market-rate rental housing with an affordable component. The proposed project would contain apartment units that are of a much higher amenity-level than is present in the vast majority of existing Richfield apartments. The developer has stated that their level of construction (at a cost of approximately $85,000 per dwelling unit) represents the current standard level of construction in a suburban setting. They believe that a Class A (or luxury level) of apartment (with a 04272010 Woodlake Housing TIF Class A (or luxury level) of apartment (with a construction cost of $100,000 or more per unit) would be inconsistent with the findings of their market analysis. Currently, Woodlake Plaza contains approximately 25,000 square feet of retail space and contains nine commercial tenants, as well as a number of vacant spaces. The current tenants of the existing development are as follows: ^ Donut Connection Premier Pet Salon ^ DS Productions Salon St. George ^ Dr. Otter -Chiropractor Tap's Barber Shop ^ Golden Tan Weight Watchers ^ Metro Financial Mortgage In recent years, occupancy and rental incomes have not been adequate to render this as a feasible retail development. The developers, who also own the existing development, have worked with market analysts to identify the most attractive use as market-rate rental housing with an affordable component. The developers have created a concept plan for market-rate rental housing with 20% affordable units on the current site plus the inclusion of a small Housing and Redevelopment Authority (HRA) owned property that immediately abuts the Woodlake Plaza Center (515 West 64th Street). Their initial financial analysis, however, identifies a funding gap for the project. In order to fill the gap, the developers will be requesting Tax Increment Financing (TIF) for the project in addition to their infusing more of their own equity than is customary in a development project. On March 9, 2010 the City Council made a call for a Public Hearing to be held before the Council on April27, 2010 regarding this potential TIF District. On April 12, 2010, the Planning Commission adopted a resolution finding that the modification to the Richfield Redevelopment Project Area Plan and the establishment of the Woodlake Housing TIF District and TIF Plans are all consistent with Richfield's Comprehensive Plan. On April 19, 2010 the Richfield HRA voted unanimously to adopt a resolution approving the TIF District creation and the Redevelopment Area modification subject to City Council approval. The amount of TIF that the project is anticipated to generate is estimated at $979,226 (net present value) under a .05% inflation model. The proposed use (in cumulative net present value) for the entire life of the TIF District is as follows: ^ $3,525 to the state auditor for administrative costs (required); ^ $97,950 to the Richfield HRA for administrative costs (primarily consulting costs and staff salaries); ^ $822,000 to the developer for reimbursement of eligible costs; and ^ $56,131 to the Richfield HRA for payment of the HRA owned property at 515 West 64th Street. The HRA's public finance consultants Ehlers and Associates (Ehlers) have estimated that the existing development will provide $21,400 in tax revenues to the City of Richfield in 2010; this represents a 3% reduction in Richfield tax generation from the previous year. Ehlers estimated Richfield's "base" tax revenues for the proposed development at $14,080 in 2011 -this is a $7,320 reduction from the current taxes because the Class Rate of the proposed residential development is lower than that of the existing commercial development. If the TIF District were approved, the HRA would receive an estimated annual payment of $8,288 for administration of the TIF District.. If the development were to appreciate in market value by .05% annually, there would be sufficient TIF proceeds to reimburse the Richfield HRA for the value of the property it owns at 515 W. 64th Street. Under this scenario, the City would collect its "base" taxes of $14,080 and the HRA would receive $8,288 in TIF to cover its administrative costs and an average annual payment of $2,250 for reimbursement for the cost of the HRA owned lot. The grand total of annual funds to be received under the proposed financing model, therefore, would be $24,618 compared to the $21,400 projected to be collected if the existing development were to remain. The tax increment being sought is in the form of a "Pay-As-You-Go Note," meaning that the developer would only receive tax increment to the level that the property tax payments would support. In the event that there were insufficient tax revenues to supply the requested TIF to the developer, neither the City nor the HRA would be under any obligation to do so. In other words, the only financial assistance that the developer would receive would be from their own tax payments; if those payments were to be less than projected, the developer would simply receive less. The HRA and state auditor would receive their administrative portions of the tax increment prior to disbursing any TIF to the developer. The only risk to the HRA would be that, if the development does not appreciate by .05% per year, there may be insufficient funds to reimburse the cost of the HRA owned lot at 515 W. 64th Street. If the development were to inflate at a higher rate, the TIF District could be retired sooner. A Housing TIF District differs significantly from a Redevelopment TIF District (which has been the predominant type of TIF District in Richfield in the past). Unlike a Redevelopment District, a Housing TIF District does not require that the property be "blighted" or "substandard." The Primary criteria for a Housing TIF District is to provide affordable housing units. The developer has stated their intention to provide 20% of the apartment units to families earning at or below 50% of the area median income as a means of meeting the requirements of a Housing TIF District. Appendix E of the attached TIF Plan provides those income levels for various sized families. As of the last census (2000), 60% of Richfield's apartment tenants were earning less than the median income; so the development of an apartment complex serving 20% of its tenants earning below the area median income would not be inconsistent with the existing rental housing in the community. The only other recent non-age, restricted apartment development in Richfield is the Oaks on Pleasant development which is required to provide 20% of its units to families in need of affordable housing. If the City Council were to approve this item, then legal counsel would prepare a Development Agreement for consideration by the Richfield HRA which would outline the precise amount of tax increment that the developer would be eligible to receive and the requirements that they must meet in order to do so. III. BASIS OF RECOMMENDATION A. POLICY • On March 9, 2010 the City Council made a call for a Public Hearing to occur before the Council at their April 27, 2010 meeting regarding this issue. • Legal notice was provided,. as required by Minnesota Statutes, regarding this public hearing. • On April 12, 2010 Planning Commission adopted a resolution finding that the TIF District creation and the Redevelopment Area modification are consistent with Richfield's Comprehensive Plan. • On April 19, 2010 the Richfield HRA adopted a resolution approving the TIF District creation and the Redevelopment Area modification subject to City Council approval • The proposed development would conform to the requirements of a Housing TIF District. • The HRA must approve the creation of a new TIF District and the modification of the Redevelopment Area and Plan. B. CRITICAL TIMING ISSUES • The developer has indicated that the appraisal they received as part of seeking financing indicates that the property is valued lower than the current Estimated Market Value assigned by the Hennepin County Assessor's Office. The developer has begun the process to contest their assessed value. A reduction in the assessed value would have the following impacts: o If the proposed development did not occur, the tax revenues to the City for the existing property would be reduced; o If the proposed development did occur, the "base taxes" that the City would collect would decrease, but the tax increment would increase. If the tax increment increased, but the amount of TIF available to the developer remained the same, then the TIF District could be retired sooner. C. FINANCIAL • The developer is seeking up to $822,000 in TIF. • Under a .05% inflation model, there would be sufficient tax increment generated by the proposed development to provide the requested financing to the developer in addition to providing 10% of the increment generated to the HRA for administrative costs, .36% to the state auditor for administrative costs and a net present value of over $56,000 to the HRA as payment for the HRA owned property at 515 West 64th Street. Although the analysis done to date assumes a .05% inflation increase, the Estimated Cash Flow of the Tax Increment (Appendix D) shows a 1.5% inflationary factor. This is done in order to give the budget flexibility in capturing additional tax increment generated by inflation between .05% and 1.5% in a given year in order to make full payment for 515 West 64th Street earlier and/or meet the obligation to the developer earlier in order to decertify the district as soon as possible. • The developer has indicated, and the HRA's Financial Consultant has concurred, that it would not be feasible to develop the proposed rental housing complex without TIF of at least $822,256 (net present value). • Although the developer has requested up to $822,000 in TIF, the TIF Plan identifies $1.4 million in eligible TIF Costs in the budget (at the top of page 2-6).. • To date, the developer has reimbursed the HRA an amount of $5,000 for costs incurred in this project. D. LEGAL • Legal staff has reviewed the modification to the Richfield Redevelopment Project Area Redevelopment Plan and the establishment of the 2010-1 Woodlake Housing TIF District and TIF Plans and the attached resolution. • As stared in City Council Memo #51, the City's. legal counsel has given the opinion that the City/HRA would not be required to provide relocation benefits in the case of this project based on their interpretation of state statutes. E. ENVIIZONMENTAL CONSIDERATIONS • This proposed development is intended to be "transit friendly," and is located along a major transit artery. The project is a finalist for a grant fora "Transit-Oriented-Design Grant from Hennepin County. IV. ALTERNATNE RECOMMENDATION(S~ • Continue this item until a later meeting; • Approve the attached resolution with modification intended to meet the concerns of the City Council; • Do not approve the attached resolution. V. ATTACHMENTS • Resolution • A Modification to the Richfield Redevelopment Project Area Redevelopment Plan and the Tax Increment Financing Plan for the establishment of the 2010-1 Woodlake Housing TIF District. VI. PRINCIl'AL PARTIES EXPECTED AT MEETING • A representative of Ehlers and Associates (the City's Economic Analysis consultant). • Representatives of Michael Development. ~~1 CITY OF RICHFIELD HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA AND ESTABLISHING THE 2010-1 HOUSING TAX INCREMENT FINANCING DISTRICT (WOODLAKE HOUSING) THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Board of Commissioners of the Richfield Housing and Redevelopment Authority (the "HRA") has heretofore established the Richfield Redevelopment Project Area and adopted a Redevelopment Plan therefor. It has been proposed by the HRA and the City that the City adopt a modification to the Redevelopment Plan for the Richfield Redevelopment Project Area (the "Redevelopment Plan Modification") and establish the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03:. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 280 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, on April 12, 2010, approval of the Plans by the HRA on April 19, 2010, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The reports include the Application Packet from. Michael Development and the Market Study by Maxfield Research. The Council. hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05, The City is not modifying the boundaries of Richfield Redevelopment Project Area, but is however, modifying the Redevelopment Plan therefore. Section 2. Findings for the Adoption and Approval of the Plans. ~~~ 2.01. The Council hereby finds that the Plans are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of the 2010-1 Housing Tax Increment Financing District (Woodlake Housing). 3.01. The Council hereby finds that the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11 of the Act. 3.02. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Public Purpose. _ 4.01, The adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As such, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 5. Approval and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Community Development Director. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the Richfield Housing and Redevelopment Authority is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04, The Community Development Director is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Adopted by the City Council of the City. of Richfield, Minnesota this 27th day of April, 2010. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk (Seal) r~ EXHIBIT A RESOLUTION NO. The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: Finding that the 2010-1 Housing Tax Increment Financing District (Woodlake Housing is a housing district as defined in M.S., Section 469.174, Subd. 11. The 2010-1 Housing TIF District (Woodlake Housing) consists of three parcels. The development will consist of 90 units of rental housing. All or a portion of the units which will receive tax increment assistance will meet income restrictions described in M.S. 469.1761 for the duration of the District. At least 20 percent of the units receiving assistance will have incomes at or below 50 percent of statewide median income. Appendix E of the TIF Plan contains background for the above finding. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. This finding is supported by the fact that the development proposed in this plan is a housing district that meets the City's objectives for development and redevelopment. The cost of land acquisition and site and public improvements makes this housing development infeasible without City assistance. Due to the high cost of building affordable new housing in the City and the cost of financing the proposed public improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance. This finding is justified on the grounds that the cost of land acquisition and site and public improvements add to the total development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. This site has been owned and operated by Michael Development for. over 17 years. The site is currently 49% vacant, despite extensive leasing efforts and installation of a new facade and sign band in 2003. In addition, the HRA site has been vacant for several years and was purchased by the HRA in 2007, at which time it became tax exempt. The City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. The City has relied upon budgetary figures and cost estimates submitted by the developer for the development of the proposed rental housing. These analyses show that in order to promote the development of affordable housing in the City, financial assistance is needed to reduce the costs of land acquisition. The construction of the proposed housing is cost prohibitive without the use of tax increment due to several factors, including the following: (1) the difficulty in obtaining low cost financing in the current economic market; (2) the cost of acquisition; (3) affordable housing does not generate sufficient revenues to offset the increased start up costs. The tax increment derived from the TIF District will be used to reimburse the HRA for land acquisition and assist with the refinancing of the other two parcels. With this assistance, the land can be provided to the developer at a significantly reduced cost and therefore help the developer bridge the gap in financing the project. 3. Finding that the TIF Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housinp~ conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission met on April 12, 2010, and reviewed the T1F Plan and found that the TIF Plan conforms to the general development plan of the City. q~ 4. .Finding that the TIF Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. Through the implementation of the TIF Plan, the HRA and City will provide an impetus for affordable residential development, which is desirable or necessary for increased population and an increased need for life-cycle housing within the City. ~'"J As of April 1~, 2010 Draft for Public Hearin~~ Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the Tax Increment Financing Plan for the establishment of the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) (a housing district) within the Richfield Redevelopment Project Area .~~ Richfield Housing and Redevelopment Authority ~~. City of Richfield Hennepin County } State of Minnesota Public Hearing: April 27, 2010 Adopted: E H L E RS Prepared by FREERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com Table of Contents (for reference purposes only) Section 1 -Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area Foreword .................................:........................... 1-1 Section 2 -Tax Increment Financing Plan for the 2010-1 Ho using Tax Increment Financing District (Woodlake Housing) Subsection 2-1. Foreword ............................................:.. 2-1 Subsection 2-2. Statutory Authority ........................................ 2-1 Subsection 2-3. Statement of Objectives ..................................: 2-1 Subsection 2-4. Redevelopment Plan Overview .............................. 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired 2-2 Subsection 2-6. Classification of the District ................................. 2-2 Subsection 2-7. Duration and First Year of Tax Increment of the District ........... 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ............................................ 2-3 Subsection 2-9. Sources of Revenue/Bonds to be Issued ...................... 2-4 Subsection 2-10. Uses of Funds ........................................... 2-5 Subsection 2-11. Fiscal Disparities Election .................................. 2-6 Subsection 2-12. Business Subsidies ....................................... 2-7 Subsection 2-13. County Road Costs ....................................... 2-7 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions ................. 2-8 Subsection 2-15. Supporting Documentation ................................. ~ 2-9 Subsection 2-16. . Definition of Tax Increment Revenues ...................... 2-10 Subsection 2-17. Modifications to the District ................................ 2-10 Subsection 2-18. Administrative Expenses .................................. 2-10 Subsection 2-19. Limitation of Increment ................................... 2-11 Subsection 2-20. Use of Tax Increment .................................... 2-12 Subsection 2-21. Excess Increments ...................................... 2-13 Subsection 2-22. Requirements for Agreements with the Developer .............. 2-13 Subsection 2-23. Assessment Agreements ................................. 2-13 Subsection 2-24. Administration of the District ............................... 2-13 Subsection 2-25. Annual Disclosure Requirements ........................... 2-14 Subsection 2-26. Reasonable Expectations ................................. 2-14 Subsection 2-27. Other Limitations on the Use of Tax Increment ................. 2-14 Subsection 2-28. Summary .............................................. 2-14 Appendix A Project Description ...................................................... A-1 Appendix B Map(s) of the Richfield Redevelopment Project Area and the District ............... B-1 Appendix C Description of Property to be Included in the District ............................ C-1 Appendix D Estimated Cash Flow for the District ........................................ D-1 Appendix E Housing Qualifications for the District ........................................ E-1 Appendix F Findings for the District ................................................... F-1 Section 1-Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area Foreword The following text represents a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area: This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Richfield Redevelopment Project Area. Generally, the substantive changes include the establishment of 2010-1 Housing Tax Increment Financing District (Woodlake Housing. For further information, a review of the Redevelopment Plan for the Richfield Redevelopment Project Area is recommended. It is available from the Community Development Director at the City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Richfield Redevelopment Project Area. Richfield HRA Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area 1_~ Section 2 -Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) Subsection 2-1. Foreword The Richfield Housing and Redevelopment Authority (the "HRA"), the City of Richfield (the "City"), staff and consultants have prepared the following information to expedite the establishment of the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) (the "District"), a housing tax increment financing district, located in the Richfield Redevelopment Project Area. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S.'), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to 469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. Subsection 2-3. Statement of Objectives The District currently consists of 3 parcels of land and adjacent and internal rights-of--way. The District is being created to facilitate the construction of a 90-unit, market rate housing development with an affordable component in the City. Please see Appendix A for further District information. The HRA has not entered into an agreement at the time of preparation of this TIF Plan, but development is likely to occur in summer 2010. The HRA anticipates entering into an agreement with Michael Development. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Richfield Redevelopment Project Area. The activities contemplated in-the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Richfield Redevelopment Project Area and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired -The HRA currently owns one parcel of property within the District. The remaining property located within the District may be acquired by the HRA or City and is further described in this TIF Plan. 2. Relocation -Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the HRA or City may sell to a developer selected properties that it owns or may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of--way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The HRA currently owns one parcel to be included in the District. Subsection 2-6. Classification of the District The HRA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a housing district pursuant to M.S., Section 469.174, Subd. 11 and M.S., Section 469.1761 as defined below: M.S., Section 469.174, Subd.ll: "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts, and that satisfies the requirements of M.S., Section 469.1761. Housing project means a project, or portion of a project, that meets all the qualifications of a housing district under this subdivision, whether or not actually established as a housing district. M.S., Section 469.1761: Subd. 1. Requirement imposed. (a) In order for a tax increment financing district to quay as a housing district: (1) the income limitations provided in this section must be satisfied,' and (2) no more than 20 percent of the square footage of buildings that receive assistance from tax increments may consist of commercial, retail, or other nonresidential uses. (b) The requirements imposed by this section apply to property receiving assistance financed with tax increments, including interest reduction, land transfers at less than the Authority's cost of acquisition, utility service or connections, roads, parking facilities, or other subsidies. The provisions of this section do not apply to districts located within a targeted area as defined in Section 46X.02 Subd 9, clause (e). (c) For purposes of the requirements ofparagraph (a), the authority may elect to treat an addition to an existing structure as a separate building if.• (1) construction of the addition begins more than three years after construction of the existing structure was completed, and (2) for an addition that does not meet the requirements ofparagraph (a), clause (2), if it is treated as a separate building, the addition was not contemplated by the tax increment Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-2 financing plan which includes the existing structure. Subd. 2. Owner occupied housing. For owner occupied residential property, 95 percent of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 1430 of the Internal Revenue Code. Subd. 3. Rental property. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. The requirements of this subdivision apply for the duration of the tax increment financing district. Subd. 4. Noncompliance; enforcement. Failure to comply with the requirements of this section is subject to M.S., Section 469.1771. In meeting the statutory criteria the HRA and City rely on the following facts and findings: • The District consists of 3 parcels. • The development will consist of 90 units ofmulti-family rental housing. • 20% of the units will be occupied by person with incomes less than 50% of median income. Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax increment ofthe District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. l b., the duration of the District will be 25 years after receipt of the first increment by the HRA or City (a total of 26 years of tax increment). The HRA or City elects to receive the first tax increment in 2013, which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2038, or when the TIF Plan is satisfied. The HRA or City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements If the request for certification of the District is filed prior to July 1, 2010, pursuant to M.S. Section 469.174, Subd. 7 and M.S. Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTO) for the parcels owned by the developer will be based on the market values. placed on the property by the assessor in 2009 for taxes payable in 2010 and if the request for certification of the District is filed on or after July 1, 2010, the ONTC of the parcels owned by the developer will be based on the market values placed on the property by the assessor in 2010. The HRA parcel within the District is currently exempt from property taxes. If the HRA conveys its parcel to the developer in calendar year 2010, the ONTC of the parcel will be based on the market value placed on the property by the assessor as of January 2, 2010 for taxes payable in 2011. If the HRA conveys its parcel Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-3 to the developer on or after January 2, 2011, the assessor will determine the market value of the property at the time of transfer of the parcel. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2013) the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2010, assuming the request for certification is made before June 30, 2010. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Richfield Redevelopment Project Area, upon completion of the projects.within the District, will annually approximate tax increment revenues as shown in the table below. The HRA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2013. The Project Tax Capacity (PTC) listed is an estimate of the captured tax capacity of the District in the final year of collection of tax increment (year 26 of the District). Project Estimated Tax Capacity upon Completion (PTC) $146,908 Original Estimated Net Tax Capacity (ONTC) $29 363 Fiscal Disparities Reduction $0 Estimated Captured Tax Capacity (CTC) $117,545 Original Local Tax Rate 1.25524 Estimated Pay 2010 Estimated Annual Tax Increment (CTC x Local Tax Rate) $147 547 Percent Retained by the HRA 100% *Tax capacity includes a 1.5% inflation factor for the duration of the District. The tax cappacity included in this chart is the estimated tax capacity of the District in year 26. The tax capacity of the I3istrict m year one is estimated to be $101,250. Pursuant to M.S, Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certification to-the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-4 The City is reviewing the area to be included in the District to determine if any building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2-9. Sources of Revenue/Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The HRA or City reserves the right to issue bonds or incur other indebtedness as a result of the TIF Plan. As presently proposed, the project within the District will be financed by apay-as-you-go note. In addition, the HRA may enter into an interfund loan pursuant to M.S. Section 469.178 to reimburse itself for funds advanced for the project through the conveyance of land to a developer for less than fair market value. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonds to be issued, or other indebtedness related to the use of tax increment financing, will not exceed $1,627,650 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that $1,527,650 in apay-as-you-go note will be financed with tax increment revenues. It is estimated that an interfund loan of $100,000 will be adopted to pay for HRA land costs and financed through tax increment revenues. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The HRA or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a developer. The total estimated tax increment revenues for the District are expected to be approximately $3,036,000, as shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $3,036,000 The HRA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments from the District in a maximum principal amount of $1,627,650. Such bonds may be in the form of pay-as- you go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of this modification. Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the construction of a 90-unit, market rate housing development with an affordable component. The HRA and City have determined that it will be necessary to provide assistance to the projects for certain District costs, as described. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the table on the following page. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-5 USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $1,000,000 Site Improvements/Preparation $324 050 Public Utilities $p Public Parking Facilities $0 Streets and Sidewalks $0 Administrative Costs (up to 10%) 303 600 PROJECT COST TOTAL $1,627,650 Interest $1,408,350 PROJECT AND INTEREST COSTS TOTAL $3,036,000 For purposes of OSA reporting forms, uses of funds include interfund loans, bond principal, TIF Note principal, and transfers, all in the principal amount of $1,627,650. These amounts are not cumulative, but represent the various forms of"bonds" included within the concept of bonded indebtedness under the TIF Act. The total project cost, including financing costs (interest) listed in the-table above does not exceed the total projected tax increments for the District as shown in Appendix D. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan unless the estimate of the cost of the project, including administrative costs, increases. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. The HRA may. expend funds for qualified housing activities outside of the District boundaries. Subsection 2-11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are followed, the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial-industrial net tax capacity increase between the original year and the ,current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-6 local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. The City will choose to calculate fiscal disparities by clause b. However, it is not anticipated that the District will contain commerciaUindustrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. According to M.S., Section 469.177, Subd. 3: (c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2-12. Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-7 (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; and (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.S., Section 469.175, Subd. 1 a, the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the HRA or City within forty- five days of receipt of this TIF Plan. In the opinion of the HRA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The HRA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. Through an analysis of the project financials, a financing gap exists and assistance is needed to move the project forward. The estimated fiscal impact ofthe District would be as follows if the "but for" test was not met: IMPACT ON TAX BASE Estimated Estimated Captured 2009/Pay 2010 Tax Capacity (CTC) Percent of CTC Total Net Upon Completion to Entity Total Tax Capacity Hennepin County 1,444,128,268 117,545 0.0081% City of Richfield 26,887,191 117,545 0.4372% Richfield ISD No. 280 35,305,263 117,545 0.3329% Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-8 IMPACT ON TAX RATES Estimated Pay 2010 Percent Potential Extension Rates of Total CTC Taxes Hennepin County 0.425610 33.91% 117,545 50,028 City of Richfield 0.498290 39.70% 117,545 58,571 Richfield ISD No. 280 0.249730 19.90% 117,545 29,355 Other 0.081610 6.50% 117,545 9,593 Total 1.255240 100.00% 147,547 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the estimated Pay 2010 rate. The total net capacity for the entities listed above are based on estimated Pay 2010 figures. The District will be certified under the actual Pay 2010 rates, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $3,036,000; (2) Probable impact of the District on citesprovided services and ability to issue debt The probable impact ofthe District on police protection is not expected to be significant. With any addition ofnew residents or businesses, police calls for service will be increased. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or facilities. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The City may have a slight increase in medical related calls; however, the development is not expected to require an increase in capital investment in vehicles or facilities. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. The development in the District will contribute sanitary sewer (SAC) and water (WAC) connection fees. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same is $763,230; Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-9 (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is $1,300,728; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within IS days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2-15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the findings that are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the HRA and City's findings: • Application from Michael Development, January 15, 2010. • Market Study by Maxfield Research, June 4, 2008. Subsection 2-16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements- for districts for which the request for certification was made after August 1, 1993; and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Subsection 2-17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements ofM.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the HRA or-City; 5. Increase in the estimate ofthe cost of the District, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the HRA or City, Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-10 shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S. Section 469.175 Subd. 4(~, the geographic area ofthe District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 11 must be documented. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2-18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City, otheN than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; or 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits ofM.S., Section 469.176, Subd. 3. The county may require payment ofthose expenses by February 15 ofthe year following the year the expenses were incurred. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-11 Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax incrementfinancingdistrictpursuanttoM.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner ofthe parcel in accordance with the tax incrementfinancing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on thatparcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax incrementfinancingplan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity ofthe tax incrementfinancing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 ofthe fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately Apri12014 and report such actions to the County Auditor. Subsection 2-20. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. to finance, or otherwise pay public redevelopment costs ofthe Richfield Redevelopment Proj ect Area pursuant to M.S., Sections 469.001 to 469.047; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-12 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the HRA or City or for the benefit of the Richfield Redevelopment Project Area by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on . the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. Revenues derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in M.S., Sections 469.174, Subcb 11 and 469.1761. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the HRA or City may be included in the cost of a housing project. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for HRA or City administration (up to 10 percent) and the costs of public improvement activities outside the District. Subsection 2-21. Excess Increments Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The HRA or City must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in the Richfield Redevelopment Project Area or the District. Subsection 2-22. Requirements for Agreements with the Developer The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-13 acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the HRA or City concluded an agreement for the development of the property acquired and which provides recourse for the HRA or City should the development not be completed. Subsection 2-23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2-24. Administration of the District Administration of the District will be handled by the Community Development Director Subsection 2-25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. S also provides that an annual statement shall be published in a newspaper of general circulation in the .City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. S and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness ofthe feasibility of developing the project site(s) within the District. Subsection 2-27. Other Limitations on the Use of Tax Increment I. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the the Richfield Redevelopment Project Area pursuant to M.S., Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-14 2. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Tax increment derived from the District must be used solely to finance the cost of housing projects (including administrative expenses and public improvement costs) as defined in M.S. Section 469.174, Subd. 11 and subject to the requirements set forth in M.S. Section 469.1761. Pursuant to M.S. Section 469.1763, Subd. 3 (the "Five Year Rule"), expenditures of tax increment for housing purposes within the Richfield Redevelopment Project Area are considered. to be an activity within the District, and therefore, such costs may be reimbursed with tax increment without regard to the Five Year Rule. Subsection 2-28. Summary The Richfield Housing and Redevelopment Authority is establishing the District to provide an impetus for residential development and provide safe and decent life cycle housing in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113- 1105, telephone (651) 697-8500. Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-15 Appendix A Project Description The 2010-1 Housing TIF District is being established to redevelop the Woodlake Plaza Shopping Center, which is currently a commercial center. According to Michael Development, the property is obsolete as a retail building. The Lyndale Commons development will be located on 2 parcels currently owned by the developer and 1 parcel currently owned by the HRA. The Lyndale Commons development will consist of 90 units of rental housing. Currently the plan will include nine studio apartments, forty-two one bedroom apartments, thirty-five two bedroom apartments and four three bedroom apartments. It is planned that 20 percent of the units will be affordable at 50 percent of median income. The current design provides two three-story elements defining the edge of Lyndale Avenue. Between these two elements, there is a landscaped courtyard that will provide a very "liveable" amenity for the resident, and will provide green space along Lyndale Avenue. Parking is available with sixty-nine below grade and sixty-five above grade stalls. It is anticipated that the developer will be issued apay-as-you-go note. In addition, the HRA will be paid for the property it owns within the District that it conveys to the developer. It is estimated that the fair market value is $80,000; however an appraisal will be completed to determine the actual value. Appendix A-1 Appendix B Map of the Richfield Redevelopment Project Area and the District Appendix g_~ Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights-of--way and abutting roadways identified by the parcels listed below. Parcel Numbers Address Owner 27-028-24-23-0092 6401 Lyndale Avenue South Woodlake Plaza Partnership 27-028-24-23-0060 521 64t'' Street West Woodlake Plaza Partnership 27-028-24-23-0059 515 64t'' Street West Richfield HRA Appendix C-1 Appendix D Estimated Cash Flow for the District Appendix D-1 a N C O m Q O 0 N N M' O O O O O O O O N N N N T T T T N c0 c0 N Ward °~o ~ o o ~~~o 0 0 0 ooo°c~ o oooin ~n~ ono V V 0 7 O N O O N f~ N O N O N N O (O O ~ N N ~ O ~ ~ ~- ~ LL) ~ O ~ ~ N O N V O N ^ X X N (0 '" ~ N ~ N ` ° W a m o ~-o a ~~ U ~ ~ ~ °' ~ ~a io U = ~ ^a ~ ~ Q N p T~ o J N - N K= a~o ~~ ~ o ~ U ~ t0°-'~~ ~°o°o ~°o oo~°'~z Q xN °' _ _ ` " E ~ ? 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N N N v v v N V .. O 0 N 7 n O rn O ~ M N N W to O N U) M ~ N W Q rn ~ ~ N W ~n co ~ co r uri o o i~ rn ~ m ro m u~ cp rn m o N r M N Q O M O ~ N O N t` O Q Q M M M Q Q ~ Oi N Q N rn O N Q ~ 6> N Q cp N O N Q (O M O N Q O O O O O O O N N N N N M M M M Q Q Q Q 0 0 0 o a o o a o 0 0 0 0 0 0 O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O Q a Appendix E Housing Qualifications for the District INCOME R1~~+TRICTIONS - ~-~D.1L'STED F()R F?~1i1L1 SIZE 1'I-IOUti1NG D15TRIC'T) - NENNEPIN GC)UNTI' HENNEPIN C'OLTNTY l~1EI1~I%~N iNGC1ME::~2I3,9UU; , No. of Persons 50% of Median Income 60% of Median Income 1-person $29,350 $32,285 2-person $33,550. $36,905 3-person $37,750 $41,525 4- erson $41,950 $46,145 Source: Department of Housing and Urban Development and Minnesota Housing Finance Agency The two options for income limits on a standard housing district are 20% of the units at 50% of median income or 40% of the units at 60% of median income. There are no rent restrictions for a housing district. ***PLEASE NOTE: THESE NUMBERS ARE ADJUSTED ANNUALLY. ALL INCOME FIGURES REPORTED ON THIS PAGE ARE FOR 2009. UPDATED NUMBERS FOR 2010 HAVE NOT BEEN RELEASED; HOWEVER THEY WILL BE INCORPORATED AS SOON AS THEY ARE AVAILABLE. Appendix E-1 Appendix F Findings for the District The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the 2010-1 Housing Tax Increment Financing District (Woodlake Housing is a housing district as defined in M.S., Section 469.174, Subd. 11. The 2010-1 Housing TIF District (Woodlake Housing) consists of three parcels. The development will consist of 90 units of rental housing. All or a portion of the units which will receive tax increment assistance will meet income restrictions described in M.S. 469.1761 for the duration of the District. At least 20 percent of the units receiving assistance will have incomes at or below 50 percent of statewide median income. Appendix E of the TIF Plan contains background for the above finding. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. This finding is supported by the fact that the development proposed in this plan is a housing district that. meets the City's obj ectives for development and redevelopment. The cost of land acquisition and site and public improvements makes this housing development infeasible without City assistance. Due to the high cost of building affordable new housing in the City and the cost of financing the proposed public improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance. This finding is justified on the grounds that the cost of land acquisition and site and public improvements add to the total development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. This site has been owned and operated by Michael Development for over 17 years. The site is currently 49% vacant, despite extensive leasing efforts and installation of a new fa~~ade and sign band in 2003. In addition, the HRA site has been vacant for several years and was purchased by the HRA in 2007, at which time it became tax exempt. The City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. The City has relied upon budgetary figures and cost estimates submitted. by the developer for the development of the proposed rental housing. These analyses show that in order to promote the development of affordable housing in the City, financial assistance is needed to reduce the costs of land acquisition. The construction of the proposed housing is cost prohibitive without the use of tax increment due to several factors, including the following: (1) the difficulty in obtaining low cost financing in the current economic market; (2) the cost of acquisition; (3) affordable housing does not generate sufficient revenues to offset the increased startup costs. The tax increment derived from the TIF District will be used to reimburse the HRA for land acquisition and assist with the refinancing of the other two parcels. With this assistance, the land can be provided to the developer at a significantly reduced cost and therefore help the developer bridge the gap in financing the project. 3. Finding that the TIFPlan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission met on April 12, 2010, and reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. Appendix F-1 4. Finding that the TIFPIan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. Through the implementation of the TIF Plan, the HRA and City will provide an impetus for affordable residential development, which is desirable or necessary for increased population and an increased need for life-cycle housing within the City. Appendix F-2 AGENDA SECTION: AGENDA ITEM # REPORT # STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 xESOLU~raoNs 10 REPORT PREPARED BY: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ~ BETSY OSBORN, SUPPORT SERVICES MANAGER Ni1M&', TITLE ITEM FOR COUNCIL CONSIDERATION: Council consideration of a disciplinary hearing and resolutions regarding civil enforcement for alcohol establishments in Richfield that recently underwent alcohol compliance checks, conducted by Richfield Public Safety staff, and failed by selling alcohol to underage youth. I. RECOMMENDED ACTION: By Motion: Conduct a disciplinary hearing for the Minneapolis- Richfield American Legion Post 435 that failed an alcohol compliance check, and approve the attached resolution for the first time violating establishment: • Suspending the license to sell alcohol for five (5) consecutive days; and; • Levying a fine against the establishment in the amount of $1,000; and, • Requiring a meeting with the Public Safety Director to present an individual establishment plan to ensure eliminating any future actions of this kind; and, • Requiring a manager to attend alcohol compliance and sales awareness presentation conducted by a private firm, approved by Public Safety with all costs to be paid by the establishment. 0427 American Legion Alcohol Non-Compliance Hearing II. BACKGROUND On March 19, 2010, Richfield Public Safety staff conducted alcohol compliance checks at all of Richfield's alcohol establishments, assisted by one underage youth that is 19 years of age. These compliance checks were the first compliance checks conducted in 2010. Richfield Public Safety staff made arrangements for the minor to enter the establishments with undercover police officers. In one instance, an underage youth was served alcohol. The server was over 18 years of age. The business that made a sale to an underage youth on March 19, 2010 is: • Minneapolis Richfield American Legion Post 435 - 6501 Portland Avenue South This is a first offense for the American Legion. At no time did the minor consume any of the alcohol. The youth presented their IDs, if requested, and at no time attempted to convince anyone that they were of legal age. Establishments were visited at a variety of times, busy or not busy, in an effort to determine if busy times produced more successful buys. It doesn't appear to have made a difference at either time. After each attempt, successful or unsuccessful, the officers identified themselves to the server and issued them a citation if they failed. If the underage youth was unsuccessful in securing alcohol, the clerk was congratulated by officers for doing a good job. The employee that sold alcohol will be charged criminally in court. The action being taken today is for civil enforcement and penalties against the business that holds a license to sell alcohol within the. City. The fine being recommended at this time is intended to recover 100% of the costs for conducting the compliance checks and to penalize the businesses punitively. Compliance checks will continue to occur in the future. It is also recommended that 15% of the punitive fines be designated for future alcohol and tobacco education efforts within the community. III. BASIS OF RECOMMENDATION A. POLICY • Resolution No. 9511 specifies certain improper conduct of alcohol license holders and delineates the progressive discipline that can be expected when violations occur, such as the sale of alcohol to minors. • Staff recommends that the City Council suspend the Minneapolis- Richfield American Legion Post 435 license to sell alcohol for five (5) consecutive days and levy a fine against the establishment in the amount of $1,000 for the first violation. Staff is also proposing that the first time violating establishment attend a mandatory meeting with the Public Safety Director to present their individual establishment's plan to ensure eliminating any future actions of this kind. In addition, one employee, preferably the manager, must attend a mandatory alcohol and sales awareness training session, provided by a private firm approved by Public Safety. The cost of the training is to be paid for by the establishment. B. CRITICAL TIMING ISSUES • It is a violation of Minnesota State Statute and City ordinance to sell alcohol to underage youth. • Civil enforcement penalties taken in the past by the City Council against several establishments have been severe. This was done to send a message to the establishments and the community that the Council will not tolerate this type of violation to continue in the community and that Richfield youth and their well-being are highly valued. • Citizen representatives of the Richfield Advisory Board of Health support severe actions against establishments in an effort to protect the youth of the community and to send a message that youth and their well-being are a high priority in this City. C. FINANCIAL • All costs of conducting compliance checks will be reimbursed through the fines that are levied against an establishment for failing an alcohol compliance check. • Furthermore, 15% of the punitive fines are designated for future alcohol and tobacco educational efforts within the community. D. LEGAL • N/A E. ENVIRONMENTAL CONSIDERATIONS • N/A IV. .ALTERNATIVE RECOMMENDATION(S~ • The Council could decide to take no action against the establishment for the sale of alcohol. to a minor, which would result in no disciplinary action against the establishment. This would, however, send a message to the community that children and their well-being are not a priority in Richfield. • The Council may consider taking more or less severe action against the establishment that sold alcohol to underage youth; however, that would deviate from the guidelines set for progressive discipline in Resolution No. 9511 V. ATTACHMENTS • Resolution. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • A representative from the Minneapolis-Richfield American Legion Post #435 is expected to be in attendance at the meeting and has been notified in writing regarding the City Council meeting date. ~~.._1 RESOLUTION NO. RESOLUTION SUSPENDING THE CLUB ON-SALE AND SUNDAY LIQUOR LICENSES FOR MINNEAPOLIS-RICHFIELD AMERICAN LEGION POST# 435, 6501 PORTLAND AVENUE SOUTH, AND IMPOSING A CIVIL PENALTY FOR FIRST TIME ALCOHOL COMPLIANCE FAILURE WHEREAS, Minneapolis-Richfield American Legion Post #435 ("Licensee") holds a Club On-Sale and a Sunday Liquor License from the City of Richfield; and, WHEREAS, on March 19, 2010 the City of Richfield Public Safety Department conducted a compliance check of the Licensee's establishment; and, during the compliance check, an employee of the Licensee sold alcohol to a minor; and, WHEREAS, this is their first alcohol compliance check failure; and, WHEREAS, the Licensee appeared before the Richfield City Council on April 27, 2010 and admitted the violation and stipulated to the penalty imposed by this resolution. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield as follows: 1. The Licensee's Club On-Sale and Sunday Liquor Licenses are hereby suspended for a period of five (5) consecutive days, commencing on a date to be determined by the Public Safety Director, but to take place within 30 days after their Council appearance. 2. A civil penalty of $1,000 is hereby imposed. On or before May 27, 2010, the Licensee shall deliver a check or money order payable to the City of Richfield in the amount of $1,000. 3. Required to meet with the Director of Public Safety by May 27, 2010 to present a written action plan to ensure future compliance. 4. One staff member, preferably the manager, must attend an alcohol compliance and sales awareness presentation conducted by a private firm, approved by Public Safety, with all costs to be paid by the establishment. Passed by the City Council of the City of Richfield this 27th day of April 2010. Debbie Goettel, Mayor ATTEST: Nancy Gibbs, City Clerk AGENDA SECTION: RESOLDTIONS AGENDA ITEM # 11 REPORT # 7G ~J STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: CHRIS REGIS, FINANCE MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Consideration of the resolution awarding the sale of $1,535,000 General Obligation (G.O.) Bonds, Series 2010A. RECbMMENDED ACTION: By Motion: Approval of the resolution awarding the sale of General Obligation Bonds, Series 2010A, in the aggregate principal amount of $1,535,000; Fixing their form and specifications; Directing their execution and delivery: and providing for their payment. III. BACKGROUND ~ • At the March 23, 2010 City Council meeting, the City Council approved a resolution calling for the sale of $1,535,000 General Obligation Bonds, Series 2010A. The issuance of the 2010A bonds accomplishes two purposes: • The first purpose will use $1,345,000 of the par value of the bonds to provide funding for the purchase of rolling stock and technology equipment for budget years 2010 and 2011. • The debt service of the portion of the 2010A bonds will be supported through a debt service tax levy over a four year period. • The second purpose will utilize the remaining $190,000 of the par value to provide the funding for paving the remaining alleys within the City that require paving. Paving these remaining alleys will fulfill the City policy established in 1981 that dictated the improvement of the City's alleys by concrete paving. • The debt service on the $190,000 par value of the 2010A bonds will be funded equally by a debt service levy and the levying of special assessments against benefited property owners. • Bids on the capital notes are due in the offices of Ehlers & Associates, Inc. on Tuesday April 27, 2010. A representative from Ehlers & Associates, Inc. will be 0427Bond Award of Sale at the City Council meeting to recommend the successful bidder and review attached documents, and provide information that is absent from the resolution and available only after the bidding on the capital notes has closed. Following Ehlers & Associates, Inc. recommendation it would be appropriate for the City Council to award the bond sale to the qualified buyer and undertake other related actions as necessary as delineated in the approving resolution. The anticipated closing on the 2010A Bonds is scheduled for May 19, 2010. III. BASIS OF RECOMMENDATION A. POLICY ` • The issuance of Series 2010A bonds is the fourth instance of debt being issued to fund the purpose of rolling stock and technology equipment. • It has been the City's policy to pave all alleys with concrete and subsequently assess the benefited property owners for the cost of the project. B. CRITICAL TIMING ISSUES • The issuance of the 2010A bonds is the only funding source for the equipment purchases budgeted for 2010 and planned for 2011. • The alley paving project is planned for 2010. C. FINANCIAL • Total Estimated Equipment purchases of 2010 and 2011 will be $1,307,210 and the purchases will be funded entirely by the $1,345,000 par value of the bonds. • The equipment portion of the 2010A bonds will be financed by tax levies in 2010, 2011, 2012 and 2013. • The tax levy amounts will be an estimated $386,560 in 2010, $356,696 in 2011, $357,680 in 2012, and $357,906 in 2013. Equipment to be purchased is as follows: 2010 2011 Estimated Estimated Description Cost Cost Total 1 -Fire Pumper $350,000 $ - $350,000 1 -Jaws of Life 25,000 - 25,000 2 -Mid Size Sedans 44,000 - 44,000 4 -Full Size Police Squads 115,000 - 115,000 3 -Full Size Police Squads - 90,000 90,000 2 -Dump Trucks - 320,000 320,000 4 - 150 Tact Kettle Black Top Trailer - 6,000 6,000 1 - BE-5 Trailer - 6,000 6,000 5 - % Ton Pickup - 32,000 32,000 1 - Toro Z Mower - 16,000 16,000 Network Switches & Servers 22,500 37,090 59,590 PCs & Laptops 66,960 52,050 119,01.0 Presentation Equipment 2,690 3,370 6,060 Printers, Copiers, & Scanners 9,500 62,360. 71,860 Fiber & WiFi Network Equipment 18,360 820 19,180 Expansion of VoIP Phone System 11,820 15,690 27,510 Total $665,830 $641,380 $1,307,210 • The estimated cost of the alley paving project is $180,000, and will be funded through the par value amount of $190,000 of the 2010A bonds. • The debt service on the bonds will be paid from a combination of a debt service tax levy and a special assessment levied against benefited property owners. The split will be 50% debt service tax levy and 50% special assessments. • The debt service tax levy for the alley paving portion of the 2010A bonds will be over a ten year period and average approximately $11,900 per year. D. LEGAL • Legal Counsel has been involved in the bond sale transactions as bond counsel to the City. E. ENVIRONMENTAL CONSIDERATIONS • N/A 1V. ALTERNATIVE KECOMMENDATION(S) ~ • None. ~ V . ATTACHMENTS ~ • Resolution. VI. PRINCIPAL PARTIES EXPECTED AT MEETING ~ • Rebecca Kurtz, Ehlers tS~ Associates, inc. • Jon North, Ehlers & Associates, Inc. Extract of Minutes of Meeting of the City Council of the City of Richfield, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Richfield, Minnesota, was duly held in the City Hall in said City on Tuesday, April 27, 2010, commencing at 7:00 P.M. The following members were present: and the following were absent: ~*~ *~~: :x*~ The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's General Obligation Bonds, Series 2010A, in the aggregate principal amount of $1,535,000. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals are as set forth in EXHIBIT A attached. After due consideration of the proposals, Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: ~ t -a RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION BONDS, SERIES 2010A, IN THE AGGREGATE PRINCIPAL AMOUNT OF $1,535,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Findings and Determinations; Sale of Bonds. 1.01. Capital Notes. It is hereby determined that: (a) The City is authorized by Minnesota Statutes, Chapter 475 and Sections 410.32 and 412.301 (collectively, the "Equipment Financing Act"), to issue its general obligation capital notes on such terms and in such manner as the City determines to finance the purchase of items of capital equipment (the "Equipment"), subject to certain limitations contained in the Act. (b) The City will purchase and acquire various items of Equipment, including those items listed on EXHIBIT B, attached hereto and made a part hereof, and any other equipment that the City may finance with general obligation bonds pursuant to the Equipment Financing Act. (c) As required by the Act, (i) the expected useful life of each item of Equipment is or will be at least as long as the term of the Capital Notes (hereinafter defined); and (ii) the principal amount of the Capital Notes will not exceed 0.25 percent of the market value of taxable property in the City for the year 2010. (d) It is necessary and expedient to the sound financial management of the affairs of the City to issue obligations pursuant to Equipment Financing Act (the "Capital Notes") in the proposed aggregate principal amount of $1,345,000 to provide financing for the purchase of the Equipment. 1.02. Improvement Bonds. It is hereby determined that: (a) Pursuant to Minnesota Statutes, Section 429.091, the City is authorized to issue obligations in an amount deemed necessary to defray in whole or in part the expense incurred and estimated to be incurred in making improvements authorized by Minnesota Statutes, Chapter 429 (the "Improvement Act"). (b) The City has made, duly ordered or let construction contracts for assessable public improvements pursuant to the Improvement Act, including concrete alley paving improvements in the City known as the "2009 Alley Paving Project" (the "Improvement Project"). 2 1~~ (c) It is necessary and expedient to the sound financial management of the affairs of the City to issue obligations pursuant to the Improvement Act (the "Improvement Bonds") in the proposed aggregate principal amount of $190,000 to provide financing for the Improvement Project. 1.03. Issuance of General Obligation Bonds. (a) The City finds it necessary and expedient to the sound financial management of the affairs of the City to issue its General Obligation Bonds, Series 2010A (the "Bonds"), in the aggregate principal amount of $1,535,000, to finance the purchase of the Equipment and to finance the Improvement Project. The proceeds of the Bonds are expected to be expended as follows: Project Designation & Description: Total Project Cost Deposit to Equipment Acquisition Fund $1,308,000 Deposit to Improvement Project Construction Fund 180,000 Deposit to Debt Service Fund (Capitalized Interest) 3,520 Costs of Issuance 28,000 Underwriter's Compensation 15,350 Rounding Amount 130 Total $1 53 (b) The City is authorized by Minnesota Statutes, Section 475.60, subdivision 2(9), to negotiate the sale of the Bonds, it being determined that the City has retained an independent financial advisor in connection with such sale. The actions of the City staff and financial advisors in negotiating the sale of the Bonds are ratified and confirmed in all aspects. 1.04. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser") to purchase the Bonds is found and determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $ (par amount of $1,535,000, [plus original issue premium of $ ,] [less original issue discount of $ ,] less underwriter's discount of $), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2011 % 2017 2012 2018 2013 2019 2014 2020 2015 2021 2016 True interest cost: 1.05. Purchase Contract. The sum of $ ,being the amount proposed by the Purchaser in excess of $1,519,650, shall be credited to the Debt Service Fund hereinafter created or deposited in the Equipment Acquisition Fund or the Improvement Project Construction Fund hereinafter created, as determined by the City Finance Manager in consultation with the City's financial advisor. The City Finance Manager is directed to retain the good faith check of the Purchaser, pending completion of the ii-~ sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.06. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Equipment Financing Act and the Improvement Act (collectively, the "Act") in the total principal amount of $1,535,000, originally dated May 19, 2010, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2011 $ 2017 $ 2012 2018 2013 2019 2014 2020 2015 2021 2016 $1,345,000 of the Bonds (the Capital Notes) maturing in the amounts and on the dates set forth below are being issued to purchase the Equipment: Year Amount Year Amount 2011 $ 2013 $ 2012 2014 $190,000 of the Bonds (the Improvement Bonds) maturing in the amounts and on the dates set forth below are being issued to finance the Improvement Project: Year Amount Amount Year 2012 $ 2017 $ 2013 2018 2014 2019 2015 2020 2016 2021 1.07. Optional Redemption. The City may elect on February 1, 2015, and on any day thereafter to prepay Bonds due on or after February 1, 2016. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [1.08. Term Bonds• Mandator~Redemption. To be completed if Term Bonds are requested by the Purchaser.] 4 ,~-- ~ --~ Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates• Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2011, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City will appoint a note registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ig ster. The Registrar must keep at its principal corporate trust office a note register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. 'The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the note register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the i~~~ principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes Fees and Charles. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated Lost Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate note or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called-for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Re igistrar. The City appoints Wells Fargo Bank, N.A., Minneapolis, Minnesota, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct the resulting business, such corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the note register to the successor Registrar. On or before each. principal or interest due date, without further order of this Council, the City Finance Manager must transmit to the Registrar monies sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. -The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has 6 1~ / been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary note. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the following form: No. R- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD GENERAL OBLIGATION BOND SERIES 2010A Date of Rate Maturity Original Issue CUSIP February 1, 20_ May 19, 2010 Registered Owner: Cede & Co. The City of Richfield, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing February 1, 2011, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by Wells Fargo Bank, N.A., Minneapolis, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2015, and on any day thereafter to prepay Bonds due on or after February 1, 2016. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will l~ notify The Depository Trust Company ("DTC") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by Iot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial institutions and within the $30 million limit allowed by the Code for the calendar year of issue. This Bond is one of an issue in the aggregate principal amount of $1,535,000 all of like original issue date and tenor, except as to number, maturity date, .amount, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on April 27, 2010 (the "Resolution"), for the purpose of providing money to defray expenses incurred or to be incurred in purchasing various items of capital equipment and financing the cost of certain improvements in the City, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 429 and 475 and Sections 410.32 and 412.301, and the principal hereof and interest hereon are payable in part from ad valorem taxes and in part from special assessments levied against property specially benefited by improvements, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory, or charter limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. 8 Il-9 IN WITNESS WHEREOF, the City of Richfield, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: May 19, 2010 CITY OF RICHFIELD, MINNESOTA (Facsimile) (Facsimile) Mayor City Manager CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. WELLS FARGO BANK, N.A. By Its Authorized Representative ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common TEN ENT -- as tenants by entireties UNIF GIFT MIN ACT Custodian (Gust) (Minor) under Uniform Gifts or Transfers to Minors Act, State of JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. 9 I ~- ~o ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. 10 Signature of Date of Registration Registered Owner Officer of Registrar Cede & Co. Federal ID #13-2555119 [End of form of Bond] 3.02. Approving Le ag_1 Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and to cause the opinion to be printed on or accompany each Bond. Section 4. Payment• Security Pledges and Covenants. 4.01, Debt Service Fund and Accounts Maintained in the Debt Service Fund. The Bonds will be payable from the General- Obligation Bonds, Series 2010A Debt Service Fund (the "Debt Service Fund") hereby created. The City will maintain a Capital Notes Account (the ".Capital Notes Account") and an Improvement Bonds Account (the "Improvement Bonds Account") in the Debt Service Fund. (a) Capital Notes Account. The City Finance Manager will timely deposit in the Capital Notes Account the proceeds of the ad valorem taxes (the "Taxes") hereinafter levied for the purchase of the Equipment, which Taxes are pledged to that account of the Debt Service Fund. There is also appropriated to the Capital Notes Account of the Debt Service Fund 87.6% of (i) the capitalized interest financed from Bond proceeds, if any; (ii) any amount over the minimum purchase price of the Bonds paid by -the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.05 hereof; and (iii) the accrued interest .paid by the Purchaser upon closing and delivery of the Bonds, if any. If a payment of principal of or interest on the Capital Notes portion of the Bonds becomes due when there is not sufficient money in the Capital Notes Account to pay the same, the City Finance Manager is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for those advances out of the proceeds of the Taxes when received. (b) .Improvement Bonds Account. The City Finance Manager will timely deposit in the Improvement Bonds Account special assessments (the "Assessments") levied or to be levied for the Improvement Project described herein and Taxes levied for the Improvement Bonds portion of the Bonds, which Assessments and Taxes are pledged to that account of the Debt Service Fund. There is also appropriated to the Improvement Bonds Account of the Debt Service Fund 12.4% of (i) capitalized interest financed from Bond proceeds, if any; (ii) any amount over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.05 hereof; and (iii) the accrued interest paid by the Purchaser upon closing and delivery of the Bonds, if any. If a payment of principal of or interest on the Improvement Bonds portion of the Bonds becomes due when there is not sufficient money in the Improvement Bonds Account to pay the same, the City Finance Manager is directed to pay such principal or interest from the general fund of the City; and the general fund will be reimbursed for those advances out of the proceeds of Assessments when received. 4.02. Eauipment Acquisition Fund. The proceeds of the Capital Notes, less the appropriations made in Section 4.01 hereof, together with any other funds appropriated for the purchase of Equipment, will be deposited in a separate Equipment acquisition fund (the "Equipment Fund") to be used solely to defray expenses of the Equipment. When the Equipment is purchased and the cost thereof paid, the 11 i ~ -~ ~. Equipment Fund is to be closed and any monies remaining therein shall be transferred to the Capital Notes Account of the Debt Service Fund. 4.03. Improvement Project Construction Fund. Proceeds of the Improvement Bonds, less the appropriations made in Section 4.01 hereof, together with any other funds appropriated for the Improvement Project collected during the construction of the Improvement Project, will be deposited in a separate Improvement Project construction fund (the "Construction Fund") to be used solely to defray expenses of the Improvement Project. Any balance remaining in the Construction Fund after completion of the Improvement Project may be used to pay the cost in whole or in part of any other improvement initiated under the Act under the direction of the City Council. When the Improvement Project is completed and the cost thereof paid, the Construction Fund is to be closed and any monies remaining may be deposited in the Improvement Bonds Account of the Debt Service Fund. 4.04. City Covenants. It is hereby determined that the Improvement Project will directly and indirectly benefit abutting property, and the City hereby covenants with the holders from time to time of the Bonds as follows: (a) The City has caused or will cause the Assessments for the Improvement Project to be promptly levied so that the first installment will be collectible not later than 2011 and will take all steps necessary to assure prompt collection, and the levy of the Assessments is hereby authorized. The City Council will cause to be taken with due diligence all further actions that are required for the construction of each improvement financed wholly or partly from the proceeds of the Bonds, and will take all further actions necessary for the final and valid levy of the Assessments and the appropriation of any other funds needed to pay the Bonds and interest thereon when due. (b) In the event of any current or anticipated deficiency in Assessments and Taxes, the City Council will levy additional ad valorem taxes in the amount of the current or anticipated deficiency. (c) The City will keep complete and accurate books and records showing: receipts and disbursements in connection with the Improvements, Assessments levied therefor and other funds appropriated for their payment, collections thereof and disbursements therefrom, monies on hand and, the balance of unpaid Assessments. (d) The City will cause its books and records to be audited at least annually and will furnish copies of such audit reports to any interested person upon request. (e) At least 20% of the cost of the Improvement Project will be specially assessed against benefited properties. 4.05. Pledge of Taxes. The principal of and interest on the Bonds will be paid in part from Assessments and in part from Taxes. For the purpose of paying the principal of and interest on the Capital Notes portion of the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, to be spread upon the tax rolls and collected with and as part of other general taxes of the City. For the purpose of paying the principal of and interest on the Improvement Bonds portion of the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, to be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Capital Notes Account and the Improvement Bonds Account of the Debt Service Fund above provided and will be collected in the years and amounts attached hereto as EXHIBIT C. 12 t I-1~ 4.06. Interfund Loan from Public Improvement Revolving Fund. (a) The City intends to make a series of interfund loans from its Public Improvement Revolving Fund to the Improvement Bonds Account of the Debt Service Fund to offset the difference between principal and interest payments due on the Improvement Bonds and all Assessments collected (the "Interfund Loans"). Upon the making of each such Interfund Loan to the Improvement Bonds Account of the Debt Service Fund, the City shall offset the levy set forth in EXHIBIT C by the same amount. (b) Interest shall accrue on the Interfund Loans at the interest rate set for the Assessments. The Interfund Loans shall be payable from special assessments related to the Improvement Project and not pledged to the Improvement Bonds hereunder and from any other revenues available to the City. Principal and interest payments on the Interfund Loans shall be made at the times any revenue sources are available to make installment payments. All payments shall be applied first to accrued interest, and then to unpaid principal of the Interfund Loans. The principal sum and all accrued interest payable under the Interfund Loans are prepayable in whole or in part at any time by the City without premium or penalty. The City may from time to time amend the terms of the Interfund Loans to the extent permitted by law. 4.07. Certification to Tax~ayer Services Division Manager as to Debt Service Fund Amount. It is determined that the estimated collection of the- foregoing Taxes and Assessments will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levy herein provided is irrepealable until. all of the Bonds are paid, provided that at the time the City makes its annual tax levies, the City Finance Manager may certify to the Taxpayer Services Division Manager of Hennepin County the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during that year by the amount so certified. 4.08. Taxpayer Services Division Manager's Certificate as to Registration. The City Manager is authorized and directed to file a certified copy of this resolution with the .Taxpayer Services Division Manager and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor, City Manager, and City Finance Manager are, authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. .5.03. Payment of Costs of Issuance. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses (other than amounts payable to Kennedy & Graven, Chartered, as Bond Counsel) to U.S. Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial advisor, Ehlers & Associates, Inc. 13 I~-i~ Section 6. Tax Covenant. 6.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take all affirmative action within. its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 6.02. Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds. 6.03. Not Private Activi Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax-Exempt Obli ations. In order to qualify the Bonds as "qualified tax-exempt obligations" within. the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2010 will not exceed $30,000,000; and (d) not more than $30,000,000 of obligations issued by the City during calendar year 2010 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Book-Entry System• Limited Obligation of City. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.06 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from 14 1/- ~ 5 time to time for which DTC holds Bonds as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar) of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person; other than a registered owner of Bonds, of any amount with respect to principal of, premium; if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co." will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket. Issuer Letter of Representations (the "Representation Letter") which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 7.04. Transfers Outside Book-Entry S sY tem. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing .its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary,. so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of; premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing 15 1t--ICS Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. 8.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank.) 16 ~1--~-~ Passed and adopted this 27th day of April, 2010. CITY OF RICHFIELD, MINNESOTA Mayor City Manager Attest: City Clerk 17 I I-i F The motion for the adoption of the foregoing resolution was duly seconded by Member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 18 ~f-l~ EXHIBIT A PROPOSALS A-1 l ~ --~- EXHIBIT B LIST OF EQUIPMENT AND COST Equipment One Fire Pumper One Jaws of Life Two Mid-Sized Sedans Four Full-Sized Police Squads Three Full-Sized Police Squads Two Dump Trucks One 150 Tact Kettle Black Top Trailer One BE-5 Trailer One Half-Ton Pickup One Toro Z Mower Network Switches & Servers PCs & Laptops Presentation Equipment . Printers, Copiers, and Scanners Fiber & WiFi Network Equipment Expansion of VoIl' Phone System Total: Cost $350,000 25,000 44,000 115,000 90,000 320,000 6,000 6,000 32,000 16,000 59,590 119,010 6,060 71,860 19,180 27,510 $1.307.210 B-1 1~-~ ~ EXHIBIT C TAX LEVY SCHEDULES TAX LEVY SCHEDULE FOR CAPITAL NOTES PORTION OF THE BONDS YEAR * TAX LEVY * Year tax levy collected. TAX LEVY SCHEDULE FOR IMPROVEMENT BONDS PORTION OF THE BONDS yE~ * TAX LEVY * Year tax levy collected. C-1 '1 r -2 ~. STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF RICHFIELD ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Richfield, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on April 27, 2010, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's General Obligation Bonds, Series 2010A, in the aggregate principal amount of $1,535,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day of , 2010. City Clerk Richfield, Minnesota (SEAL) lr'-2~ STATE OF MINNESOTA CERTIFICATE OF TAXPAYER SERVICES DIVISION MANAGER AS TO COUNTY OF HENNEPIN TAX LEVY AND REGISTRATION I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Richfield Minnesota (the "City), on April 27, 2010, levying taxes for the payment of the City's General Obligation Bonds, Series 2010A, in the aggregate principal amount of $1,535,000, dated May 19, 2010, has been filed in my office and said bonds have been entered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this day of , 2010. Taxpayer Services Division Manager Hennepin County, Minnesota (SEAL) Deputy RC145-613 (JAE) 366786v2 AGENDA SECTION: PROP. ORDINANCES AGENDA ITEM # 12 REPORT # 7 7 STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY CITY MANAGER: ~ CHRIS LINK, OPERATIONS MANAGER STREET/FORESTRY ITEM FOR COUNCIL CONSIDERATION: Consideration of first reading of the proposed ordinances modifying the electric and gas franchise fees and scheduling a public hearing and second reading for May 25, 2010 for both. I. RECOMMENDED ACTION: By Motion: 1. Approve first reading of the attached ordinance modifying the electric franchise fee on Northern States Power d/b/a Xcel Energy for providing electric service within the City of Richfield and schedule the public hearing and second reading for May 25, 2010. 2. Approve first reading of the attached ordinance modifying the gas franchise fee on CenterPoint Energy for providing gas service within .the City of Richfield and schedule the public hearina and second reading for May 25, 2010. II. BACKGROUND Franchise Fees implemented in 2004 The City first adopted an Electric Franchise Fee Ordinance and Gas Franchise Fee Ordinance in December 2003, to be implemented in early 2004. The franchise ordinances included a fee schedule that incorporated several classifications of properties and the corresponding .monthly fee per meter. The fees ranged from the lowest fee per meter, established for residential property at a monthly meter charge of $1.45 to large commercial and industrial customers at a monthly meter charge of $65 for electric and $1.45 for residential meters and to LVDF (Large Volume-Dual 042710franchise fees Fuel) customers at a monthly meter charge of $10 for gas. The Electric Franchise Agreement limits the Franchise Fee to a maximum of 5% of gross revenues or a current maximum of $3.90 for a residential meter. Targeted Uses Funds generated by the Franchise Fees have been used for street maintenance functions, purchase of replacement trees, and for the removal of boulevard trees infected with Dutch Elm Disease (See attached graphic). The proposed increase will be used to combat tree diseases. • Street Maintenance ($700, 000 annually) Franchise Fees are used to fund the major maintenance of City streets. Major maintenance functions include: o Sealcoat- a thin coat of oil covered by chip rock, o Mill and overlay- the top 2'/2 inches of blacktop is removed and replaced. The City streets are approximately thirty-five years old and in unusually good shape. Many other cities use the special assessment process to fund overlays. • Replacement Trees ($25,000 In 2010) A portion of the funds generated by Franchise Fees goes towards the purchase of replacement trees. As trees are removed due to storm damage or disease, residents may request a replacement tree. A portion of the trees are also planted in City parks. • Boulevard Removals ($99,000 in 2009) Most recently Franchise Fees have been used to remove trees from the boulevard that are infected with Dutch Elm Disease (DED). At the May 26, 2009 City Council Meeting a new DED removal policy was approved that included time limits for removal and funding from the Franchise Fees. Staff will not know the number of DED to be removed in 2010 until the July 15tH date established in the DED policy. • Combating Tree Diseases ($71,000 in 2010) With the emergence of new tree diseases such as Emerald Ash Borer and Two-Lined Chestnut Borer and new methods to be used to combat these diseases a dedicated funding source needs to be established. Inoculation of these trees is a new service that is not included in the Approved 2010. Budget. History of Increase The Franchise Fees have been periodically increased by City Council action over the years, the increases are as followed: Purpose of Increase • 2005 Budget Process ~ 2005 Revenue Package • .2006 Budget Process ~ 2006 Revenue Package • May 26, 2009 City Council Meeting ~ DED Boulevard Tree Removal Amount of Increase $0.15/10% $0.05/3% $0.23/14% Anticipated Increase At the March 9, 2009 and April 13, 2009 City Council Meetings, the Council approved $71,000 in purchases for equipment and chemicals for the treatment of diseased trees, specifically Two-Lined Chestnut Borer at Augsburg Park and .Emerald Ash Borer in boulevard ash trees. Staff informed the Council that the treatment of trees is an added service that was not budgeted. Staff indicated that Franchise Fees may be used as a dedicated funding source for diseased tree treatments. Staff Recommendation Staff is recommending a 9% increase in franchise fees. This increase will amount to a $0.17 increase to residential meters or total of $2.05 for residential gas and electric customers. This amount will generate approximately $71,000 annually, or enough to fund both treatments of ash trees on the boulevards and oak trees in Augsburg Park. Notification Rec~uirement/Cash Flow Issues In accordance with the franchise fee agreement, the City has notified the electric and gas utilitities of the intended franchise fee increase. Staff estimates that-the fee will be implemented commencing in August of 2010. Increasing the Franchise Fees at this time may lead to mid-year cash flow issues because the tree treatment costs are incurred before the fees are collected. The proposed increase will generate enough money in one year to fund the treatment trees Franchise Fee review by June 30, 2011 The City Council approved a Fee Review. date ("Sunset" provision) of June 30, 2011 as part of the Franchise Fee adjustment in 2009. The same Fee Review date of June 30, 2011 is identified in the attached resolutions. III. BASIS OF RECOMMENDATION A. POLICY • The dedicated funds generated from franchise fees provide a reliable funding source for the important infrastructure elements of streets, removal of diseased trees and the purchase of new trees. B. CRITICAL TIMING ISSUES • Any increase to the Franchise fees may cause a cash flow problem for both the General Fund and Franchise Fee Fund because of the following reasons: ~ The money spent for the first year of treatment of trees will occur in the 2010 Budget year ~ Any increase will take a full year to recuperate the total dollar amount of the increase C. FINANCIAL • The cumulative annual fees generated by the 9% increase amount to approximately $71,000. These additional fees will fund the purchase of equipment and chemicals for the treatment of ash and oak trees. • At the March 9, 2009 and April 13, 2009 City Council Meetings, the City Council approved -the purchase of equipment and chemicals for the treatment of diseased trees. D. LEGAL • Schedule public hearings and second readings for May 25, 2010. • The City Attorney has recommended that the City formally adopt the fee schedule increase by amending the electric and gas franchise ordinances. E. ENVIRONMENTAL CONSIDERATIONS • N/A. ALTERNATIVE KECOMMENDATION(S) ~ • None, as the fee schedule change should be memorialized through the Franchise Ordinance. I V . ATTACHMENTS I • Proposed ordinance modifying electric franchise fees • Exhibit A -Electric Franchise Fee Schedule • Proposed ordinance modifying gas franchise fees • Exhibit A -Gas Franchise Fee Schedule • Cash Flow Analysis • Graphic-Target Uses of Franchise Fees VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N~ne_ ~ ~.-~~ ORDINANCE NO. CITY OF RICHFIELD COUNTY OF HENNEPIN STATE OF MINNESOTA AN ORDINANCE MODIFYING THE ELECTRIC FRANCHISE FEE ON NORTHERN STATES POWER D/B/A XCEL ENERGY FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF RICHFIELD THE CITY OF RICHFIELD ORDAINS: SECTION 1. The City of Richfield Municipal Code Appendix E is hereby amended as follows: Subdivision 1. Purpose. The Richfield City Council has determined that it is in the best interest of the City to impose a franchise .fee on those public utility companies that provide natural gas and electric services within- the City of Richfield. (a) Pursuant to City Ordinance No. 2007-5, a Franchise Agreement between the City and Northern States Power Company, d/b/a Xcel Energy, the City has the right to . impose a franchise fee on Xcel Energy in amount and fee design as authorized in Section 9.1 of the Xcel Energy Franchise. (b) Pursuant to City Ordinance 2009-13, the City exercised its right to impose a franchise fee on Xcel Energy. This includes the right to modify the fee amount with the consent of Xcel Energy as to amount and notice period, to which Xcel Energy has consented. Subd. 2. Franchise Fee Statement. Pursuant to Ordinance 2009-13, the franchise fee imposed on Xcel Energy under its Electric Franchise is hereby amended. The amended fee schedule is attached hereto and made a part of this ordinance, commencing with the Xcel Energy's August 2010 billing month. Subd. 3. Payment and Fee Design. The franchise fee shall be payable to the City in accordance with the terms set forth in Section 9.3 of the Franchise. This fee is an account- based fee on each premise and not ameter-based fee. In the event that an entity covered by this ordinance has more than one meter at a single premise, but only one account, only one fee shall be assessed to that account. If a premise has two or more meters being billed at different rates, the Company may have an account for each rate classification, which will result in more than one franchise fee assessment for electric service to that premise. If the Company combines the rate classifications into a single account, the franchise fee assessed to the account will be the largest franchise fee applicable to a single rate classification for energy delivered to that premise. In the event any entities covered by this ordinance have more than one premise, each premise (address) shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any premise, the Company's manner of billing for energy used at all similar premises in the -city will control. 1 ~..~ Subd. 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission allows the utility company to add a surcharge to customer rates to reimburse such utility company for the cost of the fee and that Xcel Energy will surcharge its customers in the City the amount of the fee. Subd. 5. Record Support for Payment. Xcel Energy shall make each payment when due and, if requested by the City, shall provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles, refunds or error corrections. Subd. 6. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 the Franchise Agreement. Subd. 7. EfFective Date of Franchise Fee. Notwithstanding the effective date of this ordinance and notwithstanding any contrary provisions in the Franchise, the effective date of the fee collected under Subdivision 2 of this ordinance is the later of-ten (10) days after the publication or after the sending of written notice enclosing a copy of this adopted ordinance upon Xcel Energy by certified mail. . tt has been agreed to in advance by Xcel Energy's representatives that Xcel Energy will abide by the provisions of this Subdivision 7, provided fee collection will not commence before the later of the Company billing month set forth in subdivision 2 or the first billing month commencing 20 -days after the foregoing effective date of the franchise fee. Subd. 8. Fee Review. The City Council shall begin a review of this Ordinance by June 30, 2011 to determine whether to continue, terminate or modify the fee. If the Council deems it to be in the City's best interest to continue the fee in its current form, no Council action is necessary. If the Council deems it to be in the City's best interest to terminate or modify the fee, the Council shall give Xcel at least sixty (60) days written notice prior to the proposed change. Subject to the City's rights under Minnesota law, the City shall obtain the consent of Xcel to any proposed increase in the fee but may unilaterally decrease or terminate the fee. SECTION 2. This ordinance takes effect as provided herein. Read by the City Council of the City of Richfield this 27th day of April, 2010. Read and passed by the City Council of the City of Richfield this 25th day of May, 2010. Debra Goettel, Mayor Steven Devich, City Manager APPROVED AS TO FORM: Nancy Gibbs, City Clerk EXHIBIT A XCEL ENERGY ELECTRIC FRANCHISE FEE SCHEDULE Class Residential Sm C & I -Non-Dem Sm C & I -Demand Large C & I Fee Per Meter -~-~ 2.05 ~1- 6.33 ~~ 14.08 ~-3:-96 91.51 FRANCHISE FEES ARE TO BE COLLECTED SY THE UTILITY IN THE AMOUNTS SET FORTH IN THE ABOVE SCHEDULE, AND SUBMITTED TO THE CITY ON A QUARTERLY BASIS AS FOLLOWS: January -March collections due by April 30. April -June collections due by July 31. July -September collections due by October 31. October -December collections due by January 31. i 2-~ ORDINANCE NO. CITY OF RICHFIELD COUNTY OF HENNEPIN STATE OF MINNESOTA AN ORDINANCE MODIFYING THE GAS FRANCHISE FEE ON CENTERPOINT ENERGY FOR PROVIDING GAS SERVICE WITHIN THE CITY OF RICHFIELD THE CITY OF RICHFIELD ORDAINS: SECTION 1. The City of Richfield Municipal Code Appendix E is hereby amended as follows: Subdivision 1. Purpose. The Richfield City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas and electric services within the City of Richfield. (a) Pursuant to City Ordinance No. 2003-10, a Franchise Agreement between the City and CenterPoint Energy ("CenterPoint"), the City has the right to impose a franchise fee on CenterPoint in an agreed upon amount and fee design, as set forth in Section 6.1 of the CenterPoint Franchise. (b) Pursuant to City Ordinance 2009-14, the City exercised its right to impose a franchise fee on CenterPoint. This includes the right to modify the fee amount with the consent of CenterPoint as to amount and notice period, to which CenterPoint has consented. -Subd. 2. Franchise Fee Statement. Pursuant to Ordinance 2009-14, the franchise fee imposed on CenterPoint under its Gas Franchise is hereby amended. The amended fee schedule is attached hereto as Exhibit A and made a part of this ordinance, commencing with the CenterPoint's August 2010 billing month. The franchise fee is in lieu of all permit fees otherwise paid by Minnegasco for its use of Public Ways and Public Ground in the City. Subd. 3. Payment. The said franchise fee shall be payable to the City in accordance with the terms set forth as follows. The franchise fee shall be payable quarterly and shall be based on the complete billing months during the period for which payment is to be made. The payment shall be due the last business day of the month following the period for which the payment is made. The fee may be changed by ordinance from time to time, however each change shall meet the same notice requirements and may not occur more often than annually. Such fee shall not exceed any amount, which the Company may legally charge to its customers prior to payment to the City by .imposing a surcharge equivalent to such fee in its rates for Gas service. The Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles or customer refunds. The time and manner of collecting the franchise fee is subject to approval of the Public Utilities Commission, which the Company agrees to use best efforts to obtain. The Company agrees to make its records available for inspection by the City at reasonable times, provided that the City and its designated representative agree in writing not to disclose any information that is not public data which would indicate the amount paid by any identifiable customer or any other information regarding specific customers. ~~`~ Subd. 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission allows the utility company to add a surcharge to customer rates to reimburse such utility company for the cost of the fee and that CenterPoint will surcharge its customers in the City the amount of the fee. Subd. 5. Record Support for Payment. CenterPoint shall make each payment when due and, if requested by the City, shall provide at the time of each payment a statement summarizing how the franchise fee payment was determined., including information showing any adjustments to the total surcharge billed in the period for which the payment is being made to account for any uncollectibles, refunds or error corrections. Subd. 6. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 the Franchise Agreement. Subd. 7. Effective Date of Franchise Fee. Notwithstanding the effective date of this ordinance and notwithstanding any contrary provisions in the Franchise, the effective date of the fee collected under Subdivision 2 of this ordinance is the later of ten (10) days after the publication or after the sending of written notice enclosing a copy of this adopted ordinance upon CenterPoint by certified mail. It has been agreed to in advance by CenterPoint's representatives that CenterPoint will abide by the provisions of this Subdivision 7, provided fee collection .will not commence before the later of the Company billing month set forth in subdivision 2 or the first billing month commencing 20 days after the foregoing effective date of the franchise fee. Subd. 8. Fee Review. The City Council shall begin a review of this Ordinance by June 30, 2011 to determine whether to continue, terminate or modify the fee. If the Council deems it to be in the City's best interest to continue the fee in its current form, no Council action is necessary. If the Council deems it to be in the City's best interest to terminate or modify the fee, the Council shall give CenterPoint at least sixty (60) days written notice prior to the proposed change. Subject to the City's rights under Minnesota law, the City shall obtain the consent of CenterPoint to any proposed increase in the fee but may unilaterally decrease or terminate the fee. SECTION 2. This ordinance takes effect as provided herein. Read by the City Council of the City of Richfield this 27th day of April, 2010. Read and passed by the City Council of the City of Richfield this 25th day of May, 2010. Debra Goettel, Mayor Steven Devich, City Manager APPROVED AS TO FORM: Nancy Gibbs, City Clerk %~-~ EXHIBIT A CENTERPOINT GAS FRANCHISE FEE SCHEDULE Class Fee Per Meter Residential a-8~ 2.05 Comm-A ~-8~ 2.05 Comm/Ind-B ~-1- 6.33 Comm/Ind-C 4z?9-~ 14.08 SVDF-A a-2~ 14.08 SVDF-B 4z?9-~ 14.08 LVDF ~1-i~ 14.08 FRANCHISE FEES ARE TO BE COLLECTED BY THE UTILITY IN THE AMOUNTS SET FORTH IN THE ABOVE SCHEDULE, AND SUBMITTED TO THE CITY ON A QUARTERLY BASIS AS FOLLOWS: January -March collections due by April 30. April -June collections due by July 31. July -September collections due by October 31. October -December collections due by January 31. 12-~ 2010 FRANCHISE FEES CASH FLOW ANALYSIS G/L Date Explanation Debit Credit 1/1/2009 Beginning Cash Balance 72,142.55 1/23/2009 Centerpoint 4th Quarter 2008 66,756.17 4/24/2009 Centerpoint 1st Quarter 2009 68,012.32 4/30/2009 Xcel Energy 1st Quarter 2009 111,697.40 4/30/2009 Xcel Energy 4th Quarter 2008 109,828.03 7/18/2009 Centerpoint 2nd Quarter 2009 67,965.67 7/31/2009 Xcel Energy 2nd Quarter 2009 111,302.57 8/25/2009 Kennedy & Graven (226.80) 9/22/2009 Sun Newspapers (146.58) 10/19/2009 Centerpoint 3rd Quarter 2009 67,537.06 10/31/2009 Xcel Energy 3rd Quarter 2009 110,854.63 12/31/2009 Northstar Tree Care (152,838.69) 12/31/2009 2009 Interest Earnings 3,000.64 12/31/2009 2009 Budgeted Transfers (600,000.00) 716,954.49 (753,212.07) Ending Cash Balance 12-31-2009 35,884.97 Xcel Energy Franchise Fees 445,139.00 Centerpoint Energy Franchise Fees 271,353.00 Street Maintenance (700,000.00) Purchase of Trees (25,000.00) Ash & Oak Tree Treatments (71,000.00) DED Removal (75,000.00) 2009 Gas Increase Estimate 37,862.00 2009 Electric Increase Estimate 64,440.00 2010 Increase Gas 11,523.75 2010 Increase Electric 19,112.50 849,430.25 (871,000.00) Estimated Cash Balance 12-31-2010 14,315.22 O O O N O O N O O N O O CO N O O /z~~ {f3 Efl {A ~3 O -~ -~ N ~ U1 O CJ~ O O O O O O TI ~ ~ ~ n ~ (D TI (OD ^^^_ o~v O n N O O ~ O N CD O ~~ ~~ v O~ m ~ v ~ ~~ N ~p ~ ~ O n O 0 c m v m m 0 (~D 3 0 v c0 0 0 0 rn m °o 0 {~ ff3 {f3 ff3 TI -~ ~I ~I 00 00 ~ O O N N CO ~ ~ O CJl .A U1 O O O O ~ O O O O ~' 0 0 0 0 ~ N fD N ~ ~ ~ o °o °o °o ~--~ Q C C7 _~ ~~ AGENDA SECTION: pTRF.R BIIST .SS AGENDA ITEM # 13 REPORT;# 7$ STAFF REPORT CITY COUNCIL MEETING APRIL 27, 2010 REPORT PREPARED BY: S~EV~N L. DEVICH, CITY MANAGER TITLE REVIEWED BY CITY MANAGER: ITEM FOR COUNCIL CONSIDERATION: Council consideration of adding humidification and sound masking options to the new City Municipal Center. I. RECOMMENDED ACTION: By Motion: Consider directing Wold Architects to initiate Proposal Requests for Humidification and/or Sound Masking systems for the new City Municipal Center. III. BACKGROUND On Feb. 23, 2010, the City Council voted to approve the construction contracts for the Richfield Municipal Center. At the same meeting, the Council voted to reject the add-alternate bids for humidification and sound masking in order to wait to see how construction went and whether there appeared to be leftover funds in the contingency budget to consider using towards either of those systems. The add- alternate bids were: Humidification = $42,000 Sound masking = $54,000. At the April 13, 2010 meeting, Council Member Sandahl asked that these items be brought back to the City Council for further consideration. In response to that request, the item has been scheduled for the April 27, 2010 Council meeting. If the Council determines that it would like to install either or both systems, Wold Architects would issue a Proposal Request (PR) to the relevant contractors (Mechanical for humidification & Parsons (subcontractor for Electrical) for sound masking). In all likelihood, the pricing would be in the ballpark of what the original add-alternate bids came in at, although probably a bit higher. At this time, Wold is very concerned that it is too early in the process to consider adding more costs to the project. There is already a concern about site issues related to the soil. More specifically, the soil borings done some time ago did not 0427Humidification indicate the amount of top soil that Imperial Developers has found on the site, meaning that there will need to be more soil removal from our site increasing the earthwork costs by maybe as much as $35,000. Wold recommends that the Council wait until the site work has been completed and most of any unforeseen costs are found before adding more costs to the project. Moreover, a humidification system can be installed anytime after construction of the building without any additional costs. The sound masking system would be a bit more cost effective to install before the ceilings are in place, but it can also be put in after the building is complete. It might be prudent to first inhabit and utilize the facility for a length of time before determining if either system is necessary. III. BASIS OF RECOMMENDATION A. POLICY • Council Member Sandahl has requested that this item be brought back for consideration at a new Council meeting. According to Sturgis Rules of Order, this is procedurally correct. B. CRITICAL TIMING ISSUES • There is no critical time-sensitive reason to have to consider these options at this time. C. FINANCIAL • There is no funding currently identified for humidification and sound masking in the project budget. • Funding for these systems would have to come from another source or from the project contingency, if there are any funds available at or near project end. • According to Wold Architects, it is not advisable to use any of the contingency funds for humidification or sound masking at this juncture in the construction project because of unforeseen costs that could arise with site work necessitating those funds. D. LEGAL • If the Council wishes to move ahead with these systems, new proposals for these items would be needed. E. ENVIRONMENTAL CONSIDERATIONS • None ALTERNATIVE RECOMMENDATION(S) • The City Council could postpone consideration of this item to a future meeting. V. ATTACHMENTS • None VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Mike Klass. Wold Architects