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HomeMy WebLinkAbout2011 02-14 HRAP Regular Session HRA MEETING City of Brooklyn Center February 14, 2011 AGENDA 1. Call to Order —The HRA requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet, including HRA (Housing and Redevelopment Authority), is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 2. Roll Call 3. Approval of Agenda and Consent Agenda —The following items are considered to be routine by the Housing and Redevelopment Authority (HRA) and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes — Commissioners not present at meetings will be recorded as abstaining from the vote on the minutes. 1. December 13, 2010 — Regular Session 4. Commission Consideration Items a. Resolution Adopting Housing Improvement Area Policy Requested Commission Action: — Motion to adopt resolution. 5. Adjournment HRA Agenda Item No. 3a MINUTES OF THE PROCEEDINGS OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION DECEMBER 13, 2010 CITY HALL — COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Housing and Redevelopment Authority (HRA) met in Regular Session called to order by Chair Tim Willson at 7:02 p.m. 2. ROLL CALL Chair Tim Willson and Commissioners Kay Lasman, Tim Roche, and Dan Ryan. Absent and excused: Commissioner Mark Yelich. Also present were Executive Director /City Manager Curt Boganey, Director of Fiscal and Support Services Dan Jordet, Public Works Director /City Engineer Steve Lillehau , Director of Business and Development G Eitel Assi stant Ci g � p �' tY Manager/Director of Building and Community Standards Vicki Schleuning, City Attorney Charlie LeFevere, and Carla With, Timesaver Off Site Secretarial, Inc. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Lasman moved and Commissioner Roche seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. September 13, 2010 — Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. PRELIMINARY MARKET VALUE LEVY AND BUDGET RESOLUTIONS Executive Director /City Manager Curt Boganey provided a detail presentation of the 2011 budgets and associated levies: General Fund Operations Limited Levy of $6,806,374; Police and Fire Special Levy $5,173,806; 2011 LGA Unallocated Levy of $296,138; 2011 LGA/MVHC Supplemental Cuts Levy of $504,022; Foreclosures Special Levy of $125,000; Housing and Redevelopment Authority of $310,831; Police and Fire Bonds of $695,632; for a total levy of $13,911,803. The proposed 2011 general fund property tax levy, excluding MVHC is $12,366,994, which represents a levy increase of $493,940 or a 4.16% increase over the 2010 i 12/13/10 -1- DRAFT amended budget. Mr. Boganey advised of projects and funding sources included in the 2011 CIP • and concluded his presentation by advising of the remaining actions before the HRA. 1. HRA RESOLUTION NO. 2010 -4 ESTABLISHING A FINAL MARKET VALUE LEVY FOR THE PURPOSE OF DEFRAYING THE COST OF OPERATION, PROVIDING INFORMATIONAL SERVICES AND RELOCATION ASSISTANCE PURSUANT TO THE PROVISIONS OF MINNESOTA STATUTES CHAPTER 469.033 FOR THE CITY OF BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY FOR FISCAL YEAR 2011 Commissioner Roche moved and Commissioner Lasman seconded adoption of HRA RESOLUTION NO. 2010 -4 Establishing a Final Property Tax Levy for the Purpose of Defraying the Cost of Operation, Providing Informational Services and Relocation Assistance Pursuant to the Provisions of Minnesota Statutes Chapter 469.033 for the City of Brooklyn Center Housing and Redevelopment Authority for Fiscal Year 2011. Motion passed unanimously. 2. HRA RESOLUTION NO. 2010 -5 APPROVING THE FINAL BUDGET FOR THE CITY OF BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY PURSUANT TO MINNESOTA STATUTES CHAPTER 469 O Commissioner Ryan moved and Commissioner Lasman seconded adoption of HRA RESOLUTION NO. 2010 -5 Approving the Final Budget for the City of Brooklyn Center Housing and Redevelopment Authority Pursuant to Minnesota Statutes Chapter 469. Motion passed unanimously. 5. ADJOURNMENT Commissioner Lasman moved and Commissioner Ryan seconded adjournment of the Housing and Redevelopment Authority meeting at 7:27 p.m. Motion passed unanimously. • 12/13/10 -2- DRAFT HRA Agenda Item No. 4a Commissioner introduced the following resolution and moved its adoption: HRA RESOLUTION NO. RESOLUTION ADOPTING HOUSING IMPROVEMENT AREA POLICY WHEREAS, Strategic Goal Three (3) of the City Council is to stabilize and improve residential neighborhoods; and WHEREAS, it has been determined that within the City of Brooklyn Center there are townhome developments in need of repair and improvements; and WHEREAS, Minnesota Statutes, Section 428A.Ilto 428A.21 provide a means by which a Housing Improvement Area (HIA) may be established allowing a Townhome Association to petition the City to assist with the financing of approved common area improvement projects; and WHEREAS, the City Council/HRA has reviewed the attached policy and procedures for the consideration of creating a HIA in the City of Brooklyn Center. NOW, THEREFORE, BE IT RESOLVED by the Housing and • Redevelopment Authority in and for the City of Brooklyn Center that the attached Housing Improvement Area Policy is adopted as the Official Policy of the Housing and Redevelopment Authority of the City of Brooklyn Center. February 14, 2011 Date Chair The motion for the adoption of the foregoing resolution was duly seconded by Commissioner 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. City of Brooklyn Center Housing Improvement Area Policy 1. PURPOSE The purpose of this policy is to establish the City's position relating to the use of Housing Improvement Area (HIA) financing for private housing improvements. This policy shall be used as a guide in processing and reviewing applications requesting HIA financing. The City shall have the option of amending or waiving sections of this policy when determined necessary or appropriate. 2. AUTHORITY The City of Brooklyn Center has the authority to establish HIAs under Minnesota Statutes, sections 429A.11 to 428.21. Such authority expires June 30, 2013, subject to extension by future legislation. Within a HIA, the City has the authority to: A. Define and assist in the financing of housing improvements for owner- • occupied housing in the City. B. Levy housing improvement fees. C. Issue bonds or advance funds through an internal loan to pay for housing improvements. The City Council has the authority to review each HIA petition, which includes scope of improvements, association's finances, longterm financial plan and membership support of at least 56% of current owners 3. ELIGIBLE USES OF HIA FINANCING As a matter of adopted policy, the City of Brooklyn Center will consider using HIA financing to assist private property owners only in those circumstances in which the proposed private projects address one or more of the following goals: A. To promote neighborhood stabilization and revitalization by the removal of blight and /or the upgrading of the existing housing stock in a neighborhood. B. To correct housing or building code violations as identified by the City Building • Official. City of Brooklyn Center HIA C. To maintain or obtain FHA mortgage eligibility for a particular condominium or townhome association or single family home within the designated HIA. D. To increase or prevent the loss of the tax base of the City in order to ensure the long term ability of the City to provide adequate services for its residents. E. To stabilize or increase the owner occupancy level with a neighborhood or association. 4. HIA APPROVAL All HIA financed through the City of Brooklyn Center should meet the following minimum approval criteria. However, it should not be presumed that a project meeting these criteria would automatically be approved. Meeting these criteria creates no contractual rights on the part of any Association with the City. A. The project must be in accordance with the Comprehensive Plan and Zoning Ordinances, required changes in the Plan and Ordinances must be under active consideration by the City at the time of approval. B. The HIA financing shall be provided within applicable state legislative ® restrictions, debt limit guidelines and other appropriate financial requirements and policies. C. The project should meet one or more of the above adopted HIA Goals as stated in Section 3 of this policy. D. The application for the creation of the HIA shall be from the Home Owner's Association (HOA). E. The term on the HIA should be the shortest term possible while still making the annual fee affordable to the Association members. If the HIA is financed through issuance of bonds, the bonds will mature in no later than 15 years, and all improvements financed must have a life expectancy of At least 120% of the length of the term of financing If the HIA is financed through a loan of other funds, the terms of the loan will be determined based on the facts of circumstances of that HIA. F. The Association in a HIA should provide adequate financial guarantee to ensure the repayment of the HIA financing and the performance of the administrative requirements of the development agreement. Financial guarantees may include, but are not limited to the pledge of the Association's assets including reserves, operating funds and /or property. City of Brooklyn Center HIA G. The proposed project, including the use of HIA financing, should be supported by a petition of at least 56 % of the owners within the Association requesting the creation of the HIA. The Association should include the results of any membership votes along with the petitions to create the area. H. The Association must have adopted a financial plan, prepared by an Independent third party mutually acceptable to the Association, the City Finance Director and HRA staff, that provides for the Association to finance maintenance and operations of the common elements with the Association and a long -range plan to conduct and finance capital improvements therein, which does not rely upon the subsequent use of the HIA tool. I. HIA financial assistance is considered 'last resort financing' and should not be provided to projects that have the financial feasibility to proceed without the benefit of HIA financing. Evidence that the Association has sought other private financing for the project will be required and should include an explanation and verification that an assessment by the Association is not feasible along with at least two letters from private lenders or other evidence indicating a lack of financing options. J. The Association will be required to enter into a development agreement and disbursement agreement, which may include, but is not limited to the following terms: • Establishment of a reserve fund • Conditions of disbursements • Required dues increases • Notification to new owners of levied fees • Staffing requirements for the Association related to third party involvement annual reporting requirements K. The improvements financed through the HIA should primarily be exterior improvements and internal improvements integral to the operation of the project, e.g. boilers. The improvements must be of a permanent nature. The Association must have a third party conduct a facility needs assessment to determine and prioritize the scope of improvements. L. HIA financing will not be provided to those projects that fail to meet the goals and criteria set forth in this policy, as amended from time to time. M. The financial structure of the project must receive a favorable review by the City's Financial Advisor and Bond Counsel. The review will include a review of performance and level of outstanding debt of previous HIM. City of Brooklyn Center HIA N. The average market value of units in the Association should not exceed the maximum home purchase price for existing homes under the State's first time homebuyer program. (In 2009, the metro amount is $298,125). The Association will be required to pay all third party costs incurred by the City of Brooklyn Center in connection with the HIA if the HIA does not go forward for any reason. If the HIA does go forward the City will pay its third party costs from the administrative charges described in section 5. The Association will be required to enter into contracts for construction of the housing improvements, subject to review and approval of designs and specifications by the City or BCHRA as the implementing entity. The Association will be required to demonstrate that it obtained at least three bids for work on the housing improvements and all contracts must be with contractors who are licensed and insured. S HIA FINANCING Appropriate methods for funding the improvements in an HIA include: A. City issued bond B. Existing City fund balances C. Brooklyn Center Housing and Redevelopment Authority fund balances The Association will pay the City an assessment fee of 2% of the total amount of project or the total amount of all third party costs, which is ever greater to cover administrative costs. This amount may be financed over time by adding to the fee, or the City may elect to finance the administrative charge through proceeds of bonds or an internal loan. The division of the costs for the proposed improvements (i.e. how the fee is spread to unit owners) shall follow the method utilized in the Association's by -laws and declarations call for the fee to be imposed on a basis other than tax capacity or square footage, the City Council must make a finding that the alternative basis is more fair and reasonable. 6.0 BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY Staff from the Brooklyn Center Housing and Redevelopment Authority (BCHRA) along with the City of Brooklyn Center Finance Director will be the primary staff persons working on HIA requests. BCHRA funds may be utilized to fund the improvements to take place in a HIA if both the City Council and the BCHRA Boards authorize the use of such funds. If it is determined that BCHRA funds will be used, the City Council will still be required to make the findings of need regarding the creation of the HIA, adopt an ordinance establishing the HIA and designate the BCHRA as the implementing agency. City of Brooklyn Center HIA If the BCHRA is designated as the implementing agency, and once the appeal period • expires, the BCHRA Board shall hold a public hearing and consider the adoption of a fee resolution that divides the costs of the improvements to the individual owners, except that if the fee is imposed on a basis other than tax capacity or square footage, the City Council must make the finding described in section 5 of this policy. Adopted by the City of Brooklyn Center, on the Day of 2010 • City of Brooklyn Center HIA Strategic Plan Brooklyn Center 2010 Strategic Goals 1. We will ensure a safe and secure community 2. We will aggressively proceed with implementation of City's redevelopment plans 3. We will stabilize and Improve residential neighborhoods 4. We will positively address the community demographic makeup and increasing cultural diversity 5. We will continue to maintain and upgrade City infrastructure improvements 6. We will respond to increased public awareness and interest in environmental sustainability and green community issues Ongoing Goals 1. We will continue to provide streamlined, cost effective quality services with limited resources 2. We will ensure the financial stability of the City 3. We will move toward maintaining or lowering the level of the City's Property taxes 4. We will ensure the city's influence at the legislature 5. We will Improve the image of the City with citizens and those outside of the City's borders 6. We will ensure the City drinking water is high quality and that the storm water is properly managed 2 MEMORANDUM - COUNCIL WORK SESSION DATE: January 21, 2011 • TO: City Council FROM: Curt Bo ane City Man g Y t3' ag SUBJECT: Housing Improvement Area Policy Recommendation: It is recommended that the City ouncil consider providing direction to staff regarding the tY P g g g ro osed Housing Improvement ment Area Policy P p g p o icy Background: At the November 8 Work Session the Council Directed staff to prepare a policy the could be used to authorize the establishment of Housing Improvement Areas. The purpose of the Housing Improvement Areas is to provide a financing vehicle for certain improvements that will stabilize neighborhoods and promote owner occupancy within a neighborhood or townhome association area. Policy Issues: Does the proposed policy provide sufficient direction and guidance consistent with the goals of the City Council? How can the Policy be improved? Council Goals: Strategic: 1. We will stabilize and improve residential neighborhoods Mission: Ensuring an attractive, clean, safe community that enhances the quality of life andpreserves thepublic trust the needs of the market. Mr. Boganey advised that is typically the way organized collection is carried out b a city. tY . Councilmember /Commissioner Lasman supported first finding out whether organized collection was cost effective before spending staff time to develop a strategy. Mayor/President Willson stated it was the majority consensus of the Council/EDA to move forward and look further at the option of organized collection. Mr. Boganey stated staff will develop a strategy and method to determine cost comparisons for consideration by the Council/E at a future meeting. CITY HALL RETREAT Mr. Boganey requested Council/E direction on a date for the annual Council/Staff retreat when goals will be set and orientation provided for the newly elected Member. He stated staff would like to present year -end results at the Council/EDA's January Work Session. The Council/E discussed available dates and it was the majority consensus to schedule the annual Council/Staff retreat on either Saturday, February 12 or 26, 2011. The Council/E agreed with the suggestion of Mr. Boganey to use Mr. Salverda as the facilitator since he was already familiar with the City and would provide continuity. • Councilmember /Commissioner Roche suggested topics for discussion including the Opportunity Site redevelopment, City -wide open house working in tandem with the Minneapolis Realtors Association, and whether the Brooklyn Center school district should be folded. He noted the school district has had seven failed referendums and low test scores so it may be better for Brooklyn Center ter t align tself with a more successful school district. � HOUSING IMPROVEMENT AREA POLICY Mr. Boganey requested Council/E direction regarding establishing a policy to govern the use of Housing Improvement Areas in the City. The creation of a district would allow the City to fund the cost of improvements to common elements of housing structures. He advised that the Mallard Creek Homeowners Association expressed an interest in establishing a Housing Improvement Area. Mr. Boganey reviewed recent changes in the State Statute that raised threshold requirements and minimized the chance the project would not move forward. If approved, staff recommended a requirement for a 56% petition and waiver of veto rights to assure the project cannot be vetoed after the City has invested significant time and expense. It was noted this legislation will sunset in June of 2013. Mr. Boganey reviewed the process that would be used, noting it was fairly involved with strict time frames. The project would be funded through the sale of bonds and the costs assessed against the individual property owners to be paid with their taxes. If not paid, the assessment would become a lien against the property. Mr. Boganey noted that many of the City's 11/08/10 -2- townhomes are aging and this method may be the only option for some townhomes to finance this type of improvements, especially in today's credit environment. Mayor/President Willson asked how the City would recoup staff and administration costs since multiple associations may request this program. Mr. Boganey advised those costs are fully recoverable and would be paid by the association by requiring the posting of a security or bond. Mayor/President Willson asked whether City staff would handle the administration of this process and purchasing bonds. If so, he asked what other tasks staff would not have time to do. Mr. Boganey stated an option is to hire a professional to handle the administration instead of using City staff. Bob Thistle introduced himself and stated this process provides an option for associations who have not put aside sufficient maintenance costs. However, the process is labor intensive, specific, and the statutes are very prescriptive in terms of what has to happen and deadlines. He explained that some cities have determined a flat percentage to cover administrative costs that is applied to the project. Another approach is to set it up as an independent cost center and track all staff time, but is more difficult. Mr. Thistle advised that the statutes are clear that an independent financial study must be completed that ascertains the association does not have the financial wherewithal in the normal market and "but for" the City's assistance, the project could not go ahead. He explained the process that would be followed once the financial study was completed. Mayor/President Willson asked who would qualify for the improvement and about units that have been foreclosed or under bank ownership. Mr. Thistle speculated that someone would still • have the ownership, even if the bank, and the City could levy a special assessment against that unit which would be paid when the unit is sold. He clarified that the assessment is against the property unit, not the individual. Mr. Boganey stated that the significant costs at the beginning of the process for the financial analysis and independent inspection would be borne by the association up front and not incurred by the City. He recommended the City indicate which firms could be used for the financial analysis. It was noted that the City's expenses would not start until later in the process. Mr. Thistle stated the association would be required to provide specific information on unit ownership. He explained that some cities fund the project through a housing fund or community development fund with repayment through assessments while other cities issue bonds. He indicated it would probably not have an impact on the City's bond rating. Mr. Boganey noted it is not unlike the City's typical street reconstruction projects where bonds are sold and the costs assessed. Councilmember /Commissioner Ryan stated there is an interest in maintaining the City's housing stock, which includes townhomes and rental units, and asked if these projects could be funded through TIF District #3. Mr. Boganey answered in the affirmative. Mr. Thistle stated the question is whether that is the best use of those TIF funds. -3- 11/08/10 Councilmember /Commissioner Lasman asked how the Council/EDA would be assured the project is a good investment and the units were not in need of additional maintenance. Mr.. Thistle explained a cost benefit analysis would assure a comprehensive inspection of all units, noting they can only use this method of funding once. Mayor/President Willson asked if an ordinance is needed for each association. Mr. Thistle stated an ordinance would cover an area that may include more than one association. Mayor/President Willson asked if there would be an impact to the City's total bonding authority. Mr. Boganey stated these projects will not have such an impact. Mr. Thistle concurred and advised this would use housing authority revenue bonds that would not count against the City's general obligation tax capacity unless the City has to put money into the project because people were not paying. Councilmember /Commissioner Yelich noted that most townhome associations have an organizational structure to collect and set aside funds to cover property maintenance issues. He asked if some townhome associations were irresponsible or their business model flawed. Councilmember /Commissioner Yelich noted that some projects the City has undertaken, like the Center Pointe property, have not been positive and he was hesitant for the City to get involved with an association that was not well managed. In addition, he was skeptical about financial analysts who speculate and make assumptions on what the future will bring but just want to get the project funded. Councilmember /Commissioner Yelich asked whether the City should be involved at all and if a private resident could request general obligation bonds to put new siding on their house. Mr. Thistle explained that to participate in this program, the townhome associations would be required to give up its ability to be independent, an independent financial analysis would be required, and the City would decide if the project would move forward. In addition, each year of the assessment, the association is mandated, by statute, to prepare and submit independent financial studies to the City. Since the assessment is a lien against the property the City would be paid, even if someone "walks away," when the property is resold. Councilmember /Commissioner Yelich expressed concern that the City will have to wait for payment, impacting cash flow, due to the high number of units on the market. Mr. Thistle explained that the unit owner has to make payment for four years or the property would go to the City and banks have historically paid the taxes because it doesn't want to lose the property. Mr. Boganey stated if the Council/EDA decides to move forward with this program, it would be for the purpose of preserving the City's housing stock and may achieve a second strategic goal of preserving the neighborhood. Councilmember /Commissioner Roche asked if the association is empowered to take the unit owner to court and file a lien if an individual owner is not current with payments. Mr. Boganey stated the association may have some rights if an owner is not meeting its obligation but that is aside from the assessment which would be paid through taxes. Councilmember /Commissioner Ryan stated both Mr. Thistle and Mr. Boganey have indicated that the City has means of recovering cost through assessments as long as a 56% petition and 11/08/10 -4- waiver of veto rights is is required. He felt it was not a matter of past failures but the need to q assure maintenance of the City's housing stock and avoiding blighted con ditions. Councilmember/ Commissioner Ryan stated on that basis, and subject to obtaining more specific information, he is willing to consider this program. Councilmember /Commissioner Lasman stated there is always some risk involved in this type of project but she supported moving forward, to operate it conservatively with checks and balances in place, noting it will avoid larger problems later on. She suggested consideration of a higher Percentage requirement, 60 %, to assure unit owners were more committed, became stakeholders, and were committed to the project. Mayor/President Willson stated his support to move forward subject to addressing concerns to not subsidize, assure the City can recoup all costs, and not put the City at risk. Councilmember /Commissioner Yelich stated he remains very hesitant, felt it would be better to let the market deal with these issues, and did not think assumptions were necessarily true. He did not believe the City should be getting in the business of providing financial services because private companies already provide financing. Councilmember /Commissioner Yelich stated it is the City's business to put standards in place, impose and enforce those standards, but not to finance them. Mr. Thistle stated if authorized, the next step would be for staff to review the policies of other cities to be sure the expectations are clear from both sides. He acknowledged that questions remain to be answered including the matter of associations that have a high percentage of rentals. Mr. Boganey stated the "but for" test is very important and gets to the concerns expressed by Councilmember /Commissioner Yelich. He clarified that if the private sector will respond to the need, the Statute indicates the City cannot move forward with that project. Awas the majority consensus of the Council/EDA to direct staff to draft a policy to govern the use of Housing Improvement Areas, established under Minnesota Statutes, Section 428A for consideration by the Council/EDA. ADJOURNMENT Councilmember /Commissioner Lasman moved and Councilmember /Commissioner Roche seconded adjournment of the City Council/Economic Development Authority Work Session at , 9:01 P.M. Motion passed unanimously. 11108 /10 -5- • STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Work Session of the City Council of the City of Brooklyn Center held on November 8, 2010. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the City Council adopted said minutes at its November 22, 2010, Regular Session. City Clerk Mayor i 11/08/10 -6- MEMORANDUM - COUNCIL WORK SESSION r DATE: November 4, 2010 • TO: City Council FROM: Curt Boganey, City Manae SUBJECT: Housing Improvement Area 1 i Recommendation: It *is recommended that the City Council consider providing direction to staff regarding establishing a Policy to govern the use Housing Improvement Areas in the City Of Brooklyn Center. . a Background: Several months ago I met with the Mallard Creek Homeowners Association, which expressed. an. interest in have the City establish a Housing Improvement Area established under Minnesota Statutes, Section 428A. The creation of a district would allow the City fund the cost of improvements to the common elements of housing structures in the area. The association indicating that there primary interest was in gaining a way to fund -siding for the housing in the association. If a district is established the City would be authorized to sell bonds and to collect repayment as an assessment on the properties benefiting. I have attached a copy of an overview of the law. This law was recently amended in 2010, so that the petitioning percentages have increased. The law has also been extended to. sunset in 2013. As you can see this is fairly extensive set of procedures with very strict time frames. Most critical in our view is that the Statute allows for an ordivance*veto by 45% of the owners long after significant effort and costs have been incurred. For this reason we recommend a 56% petition and a waiver of veto rights requirement from at least 56% of the area owners. Policy Issues: 1. Is the policy needed in order to achieve the Council strategic goal of stable improved neighborhoods? 2. If a policy is adopted, what should be the minimum petition requirements? 3. Should there be a waiver of veto requirement? 4. Are there additional procedural requires needed? Council Goals: Strategic Goal supported by this consideration: We will stabilize and improve residential neighborhoods 1 enclosures Mtsaton Emurhq an attrad M dean, stye community that enhances the quality of life and preserves the public bust . DRAFT CITY OF BROOKLYN CENTER HOUSING IMPROVEMENT AREAS PROCEDURES 1. RECEIVE PETITION -- Signed by owners of at least 56% (50% Statutory Minimum) of housing units within proposed area — Obtain names and addresses of all owners in the area (Assessing) Notify Finance Department t — Notify Inspections 2. PLACE PETITION ON NEXT COUNCIL AGENDA --Memo to Council with map of the area -- Prepare public hearing notices re: establishment of the area -- Individual in charge of project to contact Inspections 3. COUNCIL ACCEPTS PETITION AND ORDERS PUBLIC HEARING --Mail hearing notice to all owners $ Notice to include: time, date and place of hearing and statement that all persons subject to the fee will be heard $ Attach map of the boundaries of the proposed area $ "Owners" are those persons shown on records of County auditor, or equivalent, but other records may be used $ at least 1.0 days before hearing -: $ include that Association will contact for the work, $ include City intends to loan the association funds to complete the project and loan will be repaid by property owners in the improvement area. $ that the terms of the loan will be disclosed prior to the passing of the ordinance establishing the HIA $ that all City costs will be paid by the Association _ -- Publish notice of hearing $ Notice to include: time, date, and place of hearing and statement that all persons subject to the fee will be heard $ At least 7 days before hearing 4. PREPARE ORDINANCE TO ESTABLISH AREA FOR PUBLIC HEARIN G — Ordinance to include: $ Description of portion of the city included in the area $ Basis for the imposition of the fees. $ Number of years fees will be in effect $ A finding that without the Housing Improvement Area the improvements could not be made $ A finding the designation is necessary to preserve the units • 5. COUNCIL HOLDS PUBLIC HEARING C -- Hearing is to include $ Listing of necessary improvements $ Identify the improvements to the common elements $ List of units where the improvements have already been made and are exempt from the fee 6. COUNCIL INTRODUCES ORDINANCE ESTABLISHING THE AREA 7. COUNCIL ADOPTS ORDINANCE --At least 7 days after introduction - -Memo to Council -- Majority of all members (3) needed to adopt --Must be adopted within six months after hearing is closed -- Effective date is 45 days after adoption 8. COPY OF ORDINANCE (OR SUMMARY) SENT TO EACH OWNER -- Within 5 days after adoption. -- Include notice that ordinance can be vetoed if owners of at least 45 % of the units file written objections with the City Clerk before the ordinance takes effect. 9. COPY OF ORDINANCE SENT TO STATE DEPARTMENT OF REVENUE -- Within 30 days after adoption CO 10. DETERMINATION OF CONTRACTORS AND LIAISON — Association works with Inspections 11. FINANCIAL PLAN —prepared for the Housing Improvement Area by independent third party acceptable to City -- Include: $ Method for financing the maintenance and operation of the common elements $ Long range plan to conduct and finance future capital improvements Must be completed before fee resolution can be considered 12. DETZr tMiNE AMOUNT TO BE COLLECTED BY FEES WSESSMENTSI - -Total amount of contracts --City assessment fee (2.4% but not to exceed $500 per unit) — Amount to be paid by each unit — Interest rate (current special assessment rate) 13. COUNCIL SETS DATE FOR HEARING ON FEES — Resolution - and memo to Council 14. PREPARE NOTICE OF HEARING - -Date, time, and plaice of hearing — Estimated total cost of improvements — amount to be charged to each unit - -Right to pay entire fee :Number of years fee will be in effect — Interest rate — Statement that initial petition requirements of M.S. §428A.12 have been met or do not apply —Right of all interested parties to be heard 15. MAIL NOTICE TO OWNERS --At least seven days before hearing 16. PUBLISH HEARING NOTICE - -At least seven days before hearing 17. PREPARE FEE RESOLUTION — Include list of units subject to fees and amount attributable to each unit - -Memo to Council 18. COUNCIL CONDUCTS HEARING ON FEE RESOLUTION - -Take citizen comments and rules on objections . 19. COUNCIL ADOPTS FEE RESOLUTION -- Within six months after close of hearing - -Copy to owners within five days of adoption -- Include notice that resolution can be vetoed by the owners of at least 45% of the units file objections with the City Clerk before effective date -- Effective daze is 45 days after adoption 20. PROCEED WITH PROJECT - -After fee resolution takes effect 0 —May be sooner if owners of more than 55% of the units sign waivers of veto rights 21. PROJECT FINANCING R IN IN G --After all components of an approved project have been contracted for the City', — may issue obligations for financing total project cost -- Obligations aie paid out of fee charge the member of the Associations or through special assessments. - -City may use full faith and credit of the City to secure the obligation - -Such obligations are not consider net. debt of the City i ' 7 MINNESOTA STATUTES 2010 428A.12 a • (2) in the case of operating and maintenance services, the maximum service charge to be C imposed in any year and the maximum number of years, or a statement that the service charge will be imposed for an indefinite number of years, the service charges will be imposed to pay for operation and maintenance services. The resolution may provide that the maximum service charge to be imposed in any year will increase or decrease from the maximum amount authorized in the preceding year based on an indicator of increased cost or a percentage amount established by the resolution. History: 1988 c 719 art 14 s 10, 2009 c 88 art 6 s 11 428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER GENERAL LAW. The establishment of a new special service district after June 30, 2013, requires enactment of a special law authorizing the establishment. History: 1996 c 471 art 8 s 6, 2000 c 493 s 4; 2005 c 152 art is 10; 200c 88 art 2 s 27 HOUSING HAPROVEMENT AREAS 428A.11 HOUSING IMPROVEMENT AREAS; DEFINITIONS. Subdivision 1. Applicability. As used in sections 428A.1 l to 428A.20, the terms defined in this section have the meanings given them. Subd. 2. City. "City" means a home rule charter or statutory city. Subd. 3. Enabling ordinance. "Enabling ordinance" weans the ordinance adopted by the city council establishing the housing improvement area. Subd. 4. Housing improvements. "Housing improvements" has the meaning given in the city's enabling ordinance. Housing improvements may include improvements to common elements of a condominium or other common interest community. Subd. 5. Housing improvement area. "Housing improvement area" means a defined area within the city where housing improvements are made or constructed and, the costs of the improvements are paid in whole or in part from fees imposed within the area. Subd. 6. Housing unit. "Housing unit" means real property and improvemenrts thereon consisting of a one - dwelling unit, or an apartment or unit as described in chapter 515, 515A, or 515B, respectively, that is occupied by a person or family for use as a residence. Subd. 7. Authority. "Authority" means an economic development authority or housing and redevelopment authority created pursuant to section 469.003, 469.0049 or 469.091 or another entity by law to exercise the powers of an authority created pursuant to one of those Sections. Subd. 8. Implementing entity "Implementing entity" means the city or authority designated in the enabling ordinance as responsible for implementing. and administering the housing improvement area History: 1996 c 471 art 8 s 7, 1999 c 11 art 3 s 13,14; 2000 c 490 art 11 s 2,3 428A.12 PETITION REQUIRED. No action may be taken tinder sections 428A.13 and 428A.14 unless owners of 50 percent or more of the housing units that would be subject to fees in the proposed housing improvement Copyright 0 2010 by the Office of the Revisor of Statutes, State of Minnesota. AU Rights Reserved. 8 MINNESOTA STATUTES 2010 428A.13 area file a petition requesting a public hearing on the proposed action with the city clerk. No action may be taken under section 428A.14 to impose a fee unless owners of 50 percent or more of the housing units subject to the proposed fee file a petition requesting a public hearing on the proposed fee with the city clerk or other appropriate official. History: 1996 c 471 art 8 s 8 2010 c 389 art 1 s 22 428A:13 ESTABLISHMENT OF HOUSING IMPROVEMENT AREA. Subdivision ' 1. Ordinance. The governing body of the city may adopt an ordinance establishing one_ or more housing improvement areas. The ordinance must specifically describe the portion of the city to be included in the area, the basis for the imposition of the fees, and the number of years the fee will be in effect. In addition, the ordinance must include findings that without the housing improvement area, the proposed improvements could not be made by the condominium associations or housing unit owners, and the designation is needed to maintain and preserve the housing units within the housing improvement area. The ordnance shall designate the implementing entity. The ordinance may not be adopted until a public hearing has been held regarding the ordinance. The ordinance may be amended by the governing body of the city, provided the governing body complies with the public hearing notice provisions of subdivision 2. Within 30 days after adoption of the ordinance under this subdivision, the governing body shall send a copy of the ordinance to the commissioner of revenue. Subd, Ia. Prerequisites for establishing. Prior to establishment of a housing improvement area, the governing body of the city must: (1) provide full disclosure of public expenditures, as well as the terms of any loalis; bonds, or other financing arrangements for housing improvement area projects; and (2) determine whether the association or the implementing entity will contract for the housing improvements, and ensure that any contracts made by the implementing entity are subject to section 471.345: Subd. 2. Public hearing. The notice of public hearing must include the time and place of hearing, a map showing the boundaries of the proposed area, and a statement that all persons owning housing units in the proposed area that would be subject to a fee for housing improvements will be given an opportunity to be heard at the hearing. Notice of the hearing must be given by publication in the official newspaper of the city. The public hearing must be held at least -seven days after the publication. Not less than ten days before the hearing; notice must also be mailed to the owner of each housing unit within the proposed arm l~or the purpose of giving mailed notice, owners are those shown on the records of the county auditor. Other records may be used to supply the necessary information. At the public hearing a person owning property in the proposed housing improvement area may testify on any issues relevant to the proposed area. The hearing may be adjourned from time to time. The ordinance establishing the area may be adopted at any time within six months after the date of the conclusion of the hearing by a vote of the majority of the governing body of the city. Subd. 3. Proposed housing improvements. At the public hearing held under subdivision 2, the proposed implementing entity shall provide a preliminary listing of the housing improvements to be made in the area The listing shall identify those improvements, if any, that are proposed to be made to all or a portion of the common elements of a condominium. The listing shall also identify those housing units that have completed the proposed housing improvements and are proposed to be exempted from a portion of the fee. In preparing the list the proposed implementing Copyright 0 2010 by the Office of the Revisor of statutes, State of Minnesota. All Rights Reserved 9 MINNESOTA STATUTES 2010 428A.14 entity shall consult with the residents of the area and the condominium Subd. 4. Benefit; objection. Before the ordinance is adopted or at the hearing at which it is to be adopted, the owner of a housing unit in the proposed housing improvement area may file a written objection with the city clerk asserting that the owner's property should not be ineluded in the area or should not be subjected to a fee and objecting to the inclusion of the housing unit in the area, for the reason that the property would not benefit from the improvements. The governing body shall make a determination of the objection within 60 days of its filing. Pending its determination, the governing body may delay adoption of the ordinance or it may adopt the ordinance with a reservation that th e landowner's property may be excluded from the housing improvement area or fee when the deteimination is made: Subd: 5. Appeal to district court. Within 30 days of .pr the determination of the objection, any person aggrieved who is not precluded by failure to object before or at the hearing, or whose failure to object is due to a reasonable cause, may appeal to the district court by. serving a notice upon the mayor or city clerk. The notice shall be filed with the court , .administrator of the district court within ten days after its service. The city clerk shall furnish the appellant .a certified copy of the findings and determination of the governing body. The court may affirm the action objected to or, if the appellant's objections have merit, modify or cancel it. If the appellant. does not prevail upon the appeal, the costs incurred are taxed to the appellant by the court and judgment entered -for them. All objections are deemed waived unless presented on appeal. History: 1996 c 471 art 8 s 9; 2000 c 490 art 11 s 4,S; 2009 c 88 art 2 s 28 428A.141DROVEMENT FEES AUTHORITY; NOTICE AND HEARING. Subdivision 1. Authority. Fees may be imposed by the implementing entity on the housing units within the housing improvement area at. a rate, term, or amount sufficient to produce - revenue required to provide housing improvements in the area to reimburse the, implementing entity for advances made to pay for the housing improvements or to pay principal of interest on, and premiums, if any, on bonds issued by the implementing entity under section 428A.16. The fee can be imposed on the basis of the tax capacity of the housing unit, or the total amount of square footage of the housing unit, or a method determined by the council and specified in the resolution. If a fee is imposed on a basis other than the tax capacity or square footage of the housing unit,. the council must make a finding that the alternative basis for the fee is Mo. re fair and reasonable. Before the imposition of the'fees, a hearing must be held and notice must be published in the official newspaper at least seven days before the hearing and shall be mailed at least seven days before the hearing to any housing unit owner subject to a fee. For purposes Of this section, -the notice mu*t -also include: (1) a statement that all interested persons will be given an.opportuni y to be beard at the hearing regarding a proposed housing improvement fee; (2) the estimated cost of improvements including administrative costs to be paid for in - whole or in part by the fee imposed under the ordinance; (3) the amount to be charged against the particular property; (4) the right of the property owner to prepay the entire fee; (5) the number of years the fee will be in effect; and _ (6) a sthtement that the'petition requirements of section 428A.12-have. either been met or do not apply - to th e proposed fee: Copyright 0 2610 by the Office of the Revisor. of Statutes, State of Miaoesdta. All Rights Raaw. . 10 MINNESOTA STATUTES 2010 428A.17 Within six months of the ublic implementing entity may adopt a resolution hearing, the im . P. g P imposing a fee within the area not exceeding the amount expressed in the notice issued under this section. Prior to adoption of the resolution approving the fee, the condominium associations located in the housing improvement area shall submit to the implementing entity a financial plan prepared { by an independent third- party, acceptable to the - implementing entity and associations, that provides for the associations to finance maintenance and operation of the common elements in the condominium and a long -range plan to conduct.and finance capital improvements. Subd. 2. Levy limit. Fees imposed under this section are not included in the calculation of levies or limits on levies imposed under any law or charter. History: 1996 c 471 art 8 s 10; 2000 c 490 art 11 s 6; 2009 c 88 art 2 s 29 428A.15 COLLECTION OF FEES. The implementing entity may provide for the collection of the housing improvement fees according to the terms of section 428A.05. History: 1996 c 471 art 8 s 11; 2000 c 490 art 11 s 7 428A.16 BONDS. At any time after a contract for the construction of all or part of an improvement authorized under sections 428A.I I to 428A.20 has been entered into or the work has been ordered, the implementing entity may issue obligations in the amount it deems necessary to defray in whole or in part the expense incurred and estimated to be incurred in making the improvement, including every item of cost from inception to completion and all fees and expenses incurred in connection . with the improvement or the financing. The obligations are payable primarily out of the proceeds of the fees imposed under section 428A.14, or from any other special assessments or revenues available to be pledged for their payment under charger or statutory authority, or from two or more of those sources. The governing body of the city, or if the governing bodies are the same or consist of identical membership, the authority may, by resolution adopted prior to the sale of obligations, pledge the full faith, credit, and taxing power of the city to bonds - issued by it to ensure payment of the principal and interest if the proceeds of the fees in the area are insufficient to pay the principal and interest. The obligations must be issued in accordance with chapter 475, except that an election is not required, i and the amount of the obligations are not included in determination of the net debt of the city under the provisions of any law or charter limiting debt. History: 1996 c 471 art 8 s 12; 2000 c 490 art 11 s 8 i 428A.17 ADVISORY BOARD. I The implementing entity may create and appoint an advisory board for the housing improvement area in the city to advise the implementing entity in connection with the planning and construction of housing improvements. In appointing the board, the implementing entity shall consider for membership members of condominium associations located in the housing improvement area. The advisory board shall make recommendations to the implementing entity r, to provide improvements or impose fees within the housing improvement area. Before the `.. adoption of a proposal by the implementing entity to provide improvements within the housing Copyright O 2010 by the*Office of the Revisor of Statutes, State of Minnesota All Rights Reserved 1 11 MINNESOTA STATUTES 2010 428A.21 improvement area, the advisory board of the housing improvement area shall have_an opportunity to review and comment upon the proposal. History: 1996 c 471 art 8 s 13; 2000 c 490 art 11 s 9 \ •428A.18 VETO POWERS. Subdivision 1. Notice of right to file objections. The effective date of-any ordinance or resolution adopted under sections 428A.13 and 428A.14 must be at least 45 days after it is adopted. Within five days after adoption of the ordinance or resolution, a summary. of the ordinance or resolution shall be mailed to the owner of each housing unit included in the multiunit housing improvement area. The mailing shall include a notice that owners subject to a fee have a right to veto the ordinance or resolution by filing the required number of objections with the city clerk before the effective date of the ordinance or resolution and that a copy of the ordinance or resolution is on file with the city clerk for public inspection.. Subd. 2. Requirements for veto. If residents of 45 percent or more of the housing units in the area subject to the fee file an objection to the ordinance adopted by the city under section 428A.13 with the city clerk before the effective date of the ordinance, the ordinance does not become effective. If owners of 45 percent or more of the housing units' tax capacity subject to the fee under section 428A.14 file an objection with the city clerk before the effective date of the resolution, the resolution does not become effective. History: 1996 c 471 art 8 s 14, 1010 c 389 art 1 s 23 428A.19 ANNUAL REPORTS. Each condominium association located within the housing improvement area must, by �. August 15 annually, submit a copy of its audited financial statements to the implementing entity. The city may also, as part of the enabling ordinance, require the submission of other relevant information from the associations. History: 1996 c 471 crt 8 s 15; 2000 c 490 &1 11 s 10 428A.20 SPECIAL ASSESSMENTS: Within a housing improvement area, the governing body of the city may, in addition to the fee authorized. in section 428A.14, special assess housing improvements to benefited property. The governing body of the city may by ordinance adopt regulations consistent with this section. History: 1996 c 471 art 8 s 16 428A.21 DEADLINE FOR HOUSING IIVIPROVEMEN'T DISTRICTS UNDER GENERAL LAW The establishment of anew housing improvement area after June 30;.2013, requires enactment of a special law authorizing the establishment of the area. History:1996 c 471 art 8 s 17; 2000 c49001- Ms 11; 2005 c I52 art 1 s 11; 2009 art 2 s 30 Copyright 0 2010 by the Offige of the Revisor of Statutes;• State of Minnesota. All Rights ReMV4