Loading...
HomeMy WebLinkAbout2019 07-08 CCPCouncil Study Session City Hall Council Chambers J uly 8, 2019 AGE NDA The City C ounc il requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Council pac ket is available to the public. The packet ring binder is located at the entrance of the council chambers. 1.City Council Discussion of Agenda Items and Questions - 6 p.m. 2.M iscellaneous 3.Discussion of Work S ession Agenda Item as T ime P ermits 4.Adjourn C IT Y C O UNC IL M E E T I NG City Hall Council C hambers J uly 8, 2019 AGE NDA 1.Informal Open F orum with City Council - 6:45 p.m. Provides an opportunity for the public to address the Counc il on items which are not on the agenda. Open Forum will be limited to 15 minutes, it is not televised, and it may not be used to make personal attac ks, to air personality grievanc es, to make politic al endorsements, or for political c ampaign purposes. C ounc il Members will not enter into a dialogue with presenter. Questions from the Council will be for clarific ation only. Open Forum will not be used as a time for problem solving or reacting to the c omments made but, rather, for hearing the presenter for informational purposes only. 2.Invocation - 7 p.m. 3.C all to Order Regular Business M eeting The C ity Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Counc il packet is available to the public. The packet ring binder is located at the entrance of the c ouncil chambers. 4.Roll Call 5.P ledge of Allegiance 6.Approval of Agenda and C onsent Agenda The following items are c onsidered to be routine by the C ity Council and will be enac ted by one motion. There will be no separate discussion of these items unless a C ounc ilmember so requests, in whic h event the item will be removed from the c onsent agenda and c onsidered at the end of C ounc il Consideration I tems. a.A pproval of Minutes - Motion to approve the foll owi ng minutes: June 24, 2019 Study Session June 24, 2019 Regul ar Session June 24, 2019 Work Session b.A pproval of L icenses - Motion to approve licenses as presented c.Resolution Authorizing the S ubmission of a B rownfield G ap F inancing P rogram Grant A pplication to Minnesota Brownfields - Motion to approve a resol ution authorizing the submissi on of a Brownfield Gap Financing Program grant application to Minnesota Brownfields d.Resolution Approving an A mendment to the Brooklyn C enter F ire D epartment Relief Association By-L aws - Motion to approve a resoluti on approving an amendment to the Brooklyn Center Fire Department Rel ief Association By-Law e.Resolution Adopting A mendments to the City's Capital P roject F unding Policy - Motion to approve a resoluti on adopting amendments to the Capital Improvements Funding Pol icy of the Brooklyn Center City Council Code of Pol ici es f.Resolution Accepting B id and Awarding a Contract f or Municipal L iquor Store E quipment, Racking & S helving - Motion to approve a resoluti on of the lowest responsible bid and award a contract to St. Cloud Refrigerati on for Municipal Liquor Store Equipment, Racking & Shelving g.Resolution Accepting B id and Awarding a Contract, I mprovement Project No. 2018-10, L if t S tation 2 I mprovement Project - Motion to approve a resolution of the lowest responsible bid and award a contract to PCi Roads, L L C for Improvement Project No. 2018-10, Lift Stati on 2 Improvement Project h.Resolution Relating to a Multifamily R ental Housing F acility and the I ssuance of Conduit Housing Revenue Bonds under Minnesota S tatutes, Chapter 462C , as A mended; Granting P reliminary A pproval T hereto; C alling f or a P ublic Hearing; E stablishing C ompliance with Certain Reimbursement Regulations Under the I nternal R evenue C ode of 1986, as Amended; and Taking Certain Other A ctions with R espect T hereto (R E E X erxes Avenue S enior Housing P roject) - Motion to approve a resoluti on relating to a Multi fami ly Rental Housing Facil ity and the Issuance of Conduit Housing Revenue Bonds under Mi nnesota Statutes, Chapter 462C, as amended; Granting preliminary approval thereto; Calling for a Public Hearing; Establi shi ng Compliance with certain reimbursement regulations under the Internal Revenue Code of 1986, as amended; and Taking certain other actions with respect thereto (REE Xerxes Avenue Seni or Housing Project) 7.P resentations/P roclamations/Recognitions/D onations 8.P ublic Hearings a.O rdinance A mending Ordinance No. 2003-22, Exhibit A ; Xcel Energy Electric F ranchise F ee Schedule - Motion to open Public Heari ng; - Take public comment; - Motion to close Public Hearing; - Motion to adopt an Ordinance Amending Ordinance No. 2003-22, Exhibit A; Xcel Energy Electric Franchi se Fee Schedule b.O rdinance A mending Ordinance No. 2003-23, Exhibit A ; C enterPoint E nergy O perations F ranchise F ee S chedule - Motion to open Public Heari ng; - Take public comment; - Motion to close Public Hearing - Motion to adopt an Ordinance Amending Ordinance No. 2003-23, Exhibit A; CenterPoint Energy Franchi se Fee Schedule c.Resolutions Regarding R emoval of a Parcel from Redevelopment Tax I ncrement F inancing District No. 3 and E stablishing Tax I ncrement F inancing District No. 8 and A pproving a Tax I ncrement Financing P lan - Motion to open public hearing; - Take public comment; - Motion to close public heari ng; - Motion to approve a resoluti on approving the removal of a parcel from Redevelopment Tax Increment Financing District No. 3 within Housing Development and Redevel opment Project No. 1 - Motion to approve a resoluti on approving a modi fi cation to the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 establishing Tax Increment Financing Di stri ct No. 8 therein and approving a Tax Increment Financing Plan therefor 9.P lanning C ommission Items 10.C ouncil Consideration Items 11.C ouncil Report 12.Adjournment COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:Dr. R eggie Ed wards, Deputy C ity Manager F R O M:Barb S uc iu, C ity C lerk S UBJ E C T:Ap p ro val o f Minutes Requested Council Action: - M otion to approve th e followin g min u tes: June 24, 2019 S tu d y S ession June 24, 2019 R egula r S ession June 24, 2019 Work S ession B ackground: In ac cordance with MN S tatute 15.17 and MN S tatute 412.151, sub d .1, attac hed fo r yo ur ap p ro val are the minutes fro m the s tudy session, regular sessio n and work session. B udget Issues: No ne S trategic Priorities and Values: O peratio nal Exc ellence AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e June 24, 2019 S tud y S es s io n 7/3/2019 Bac kup Material June 24, 2019 R egular S ession 7/3/2019 Bac kup Material June 24, 2019 Work S ession 7/3/2019 Bac kup Material 06/24/19 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION JUNE 24, 2019 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Mayor Mike Elliott at 6:00 p.m. ROLL CALL Mayor Mike Elliott and Councilmembers Marquita Butler, April Graves, Kris Lawrence- Anderson, and Dan Ryan. Also present were City Manager Curt Boganey, Deputy City Manager Reggie Edwards, Community Development Director Meg Beekman, Police Chief Tim Gannon, City Attorney Troy Gilchrist. CITY COUNCIL DISCUSSION OF AGENDA ITEMS AND QUESTIONS Councilmember Ryan requested the following correction to the Work Session minutes of June 10, 2019: -Page 5, paragraph 6, line 2, replace “she” with “he.” It was the majority consensus of the City Council to accept the correction to the June 10, 2019, Work Session minutes. MISCELLANEOUS a. Confirmation of Meeting Dates Councilmember Graves requested clarification regarding neighborhood meeting dates. She added she received an invitation to the Riverwood meeting on July 24, 2019. Councilmember Ryan stated the Riverwood meeting is scheduled for July 24, 2019, and the Happy Hollow neighborhood meeting is scheduled for September 17, 2019. Mr. Boganey requested the City Council’s consideration of potential dates for a meeting to review the draft Opportunity Site Master Plan. He added additional community engagement is planned before the final draft is prepared. It was the majority Consensus of the City Council to hold the Opportunity Site Master Draft Plan review meeting on July 1, 2019, at 6:00 p.m. 06/24/19 -2- DRAFT Mr. Boganey requested the City Council’s consideration of potential dates for a Council Retreat. It was the majority consensus of the City Council to hold a Council Retreat on August 30-31, 2019, with alternative dates of September 20-21, 2019. DISCUSSION OF WORK SESSION AGENDA ITEMS AS TIME PERMITS CONCEPT REVIEW FROM COALITION DEVELOPMENT FOR EDA-OWNED PROPERTY AT 61 ST AVENUE N AND BROOKLYN BOULEVARD Community Development Director Meg Beekman requested the City Council’s consideration of a concept review from Coalition Development for EDA-owned property at 3606 61 st Avenue N. She added no motion is on this item. She noted the property would be combined with three other EDA-owned properties. Ms. Beekman stated the proposal is for an apartment development with 113 units in a mix of affordable and market-rate apartments and 114 parking spaces in a combination of underground and surface parking. She added the use is consistent with the City’s plans for the Brooklyn Boulevard corridor, which includes urbanization of land uses with higher density housing and business/commercial development. She noted this area is scheduled for road reconstruction in 2021, and some additional right of way will be required from the developer. Ms. Beekman stated the proposed development blends nicely with the Sanctuary development to which it is adjacent and with which it shares a drive. She added the plan shows green space between the two buildings, shared community patios, and a place-making public artwork feature on the corner. She added access to the development would be limited due to a proposed center median. Ms. Beekman stated Tax Increment Financing is expected to be requested by the developer, and financial analysis will be completed. She added the TIF housing district that will be used, TIF District #6, already exists for the Sanctuary development. She noted the planned development agreement must be extended or move forward with a purchase agreement before the end of July 2019. Ms. Beekman stated the concept review would be discussed at the Planning Commission’s July 2019 meeting. She requested the City Council’s feedback and comments on the concept review. Councilmember Lawrence-Anderson requested clarification regarding the mix of 113 market- rate and affordable units. Ms. Beekman stated the TIF district requires that a certain percentage of units must be affordable. She added rents would be proposed that will meet that percentage, and renters would need to be income qualified. Councilmember Ryan stated when the City Council’s previously reviewed this issue, it was discussed that the TIF requirements would be met by studio apartment rent. Ms. Beekman confirmed this, adding the 1-bedroom apartments also qualify depending upon percentages. 06/24/19 -3- DRAFT Pat Cruikshank, representing Coalition Development, introduced his son and partner, Jackson Cruikshank. He stated a mix of studio and 1-bedroom apartments would meet the TIF affordability requirement. Councilmember Ryan stated rent for market-rate apartments qualify as mixed income, and they represent a subsidy accommodated by market rate, to make the project feasible. Mr. Cruikshank agreed. Councilmember Graves stated she likes the site plan and layout, as they have better flow, and there are two ways to get in and get out. She asked how many trees will be removed. Mr. Cruikshank stated the intent is to save whatever trees can be saved, and remove very few trees, but more trees will be added to replace ones that are removed. Councilmember Ryan stated transit-oriented development is a concept that fits well with Brooklyn Center. He added he is in favor of moving forward. Councilmember Graves asked whether there will be a light or crosswalk at Brooklyn Boulevard. Ms. Beekman stated there would be a curb cut at 61 st Avenue, so there will be full access. She added she is unsure whether the design of Brooklyn Boulevard is far enough along to determine where crosswalks will be. Councilmember Graves stated she lives in this neighborhood, and many people cross Brooklyn Boulevard in the middle of the street to reach the senior home. She added the proposed median would be safer as pedestrians will cross the street and traffic will slow down. Mayor Elliott stated he supports the idea of mixed-income living together and built-in affordability. He asked Mr. Cruikshank what he believes is driving the market. Mr. Cruikshank stated the rising costs of construction, as well as community charges and fees, are responsible for the high costs of new construction. ADJOURN STUDY SESSION TO INFORMAL OPEN FORUM WITH CITY COUNCIL Mayor Elliott adjourned the Study Session to Informal Open Forum at 6:45 p.m. 06/24/19 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION JUNE 24, 2019 CITY HALL – COUNCIL CHAMBERS 1. INFORMAL OPEN FORUM WITH CITY COUNCIL CALL TO ORDER INFORMAL OPEN FORUM The Brooklyn Center City Council met in Informal Open Forum called to order by Mayor Mike Elliott at 6:45 p.m. ROLL CALL Mayor Mike Elliott and Councilmembers, April Graves, Kris Lawrence-Anderson, and Dan Ryan. Councilmember Marquita Butler was absent and excused. Also present were City Manager Curt Boganey, Community Development Director Meg Beekman, Interim Associate Planner Joe Hartmann, Police Chief Tim Gannon, and City Attorney Troy Gilchrist. Mayor Mike Elliott opened the meeting for Informal Open Forum. Harlan Daudt, 6000 York Avenue N, asked whether spending $3 million on a new liquor store is money well-spent, with all the open storefronts in Brooklyn Center. He added he understands all the profits will go to the City’s parks. He noted the proposed location is not a good place for a liquor store. Mr. Daudt stated residents of Brooklyn Center do not want another apartment complex. He added the City Council should ask neighbors if they want a new apartment building and have a referendum. He noted the City Council should serve the City’s residents who already live here and pay taxes. Councilmember Ryan moved, and Councilmember Graves seconded to close the Informal Open Forum at 6:55 p.m. Motion passed unanimously. 2. INVOCATION Mayor Elliot read a quote from the Netherlands on citizen participation as the Invocation: “Citizens and governments are devising new ways of relating to each other and working together in what is often called a “duocracy.” Local governments are starting to support this form of democratic collaboration.” 06/24/19 -2- DRAFT 3. CALL TO ORDER REGULAR BUSINESS MEETING The Brooklyn Center City Council met in Regular Session called to order by Mayor Mike Elliott at 7:00 p.m. 4. ROLL CALL Mayor Mike Elliott and Councilmembers, April Graves, Kris Lawrence-Anderson, and Dan Ryan. Councilmember Marquita Butler was absent and excused. Also present were City Manager Curt Boganey, Community Development Director Meg Beekman, Interim Associate Planner Joe Hartmann, Police Chief Tim Gannon, and City Attorney Troy Gilchrist. 5. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was recited. 6. APPROVAL OF AGENDA AND CONSENT AGENDA Councilmember Ryan moved, and Councilmember Graves seconded to approve the Agenda and Consent Agenda, as amended, with an amendment to the Work Session minutes of June 10, 2019, and the following consent items were approved: 6a. APPROVAL OF MINUTES 1. June 3, 2019 – City Council/Financial Commission Meeting 2. June 10, 2019 – Study Session 3. June 10, 2019 – Regular Session 4. June 10, 2019 – Work Session 6b. LICENSES AMUSEMENT DEVICES LICENSES Mendota Valley Amusement Inc. 390 Richmond Street E. 6110 Brooklyn Boulevard South St. Paul MN 55075 Mendota Valley Amusement Inc. 390 Richmond Street E 6845 Shingle Creek Parkway South St. Paul, MN 55075 GARBAGE HAULERS Darling Ingredients, Inc. 9000 382 nd Avenue Blue Earth MN 56013 Walters Recycling & Refuse 2830 101 st Avenue NE Blaine MN 55449 MECHANICAL A&M Heating & Air Conditioning LLC 22280 Tippecanoe St. NE East Bethel MN 55011 06/24/19 -3- DRAFT All Appliance Installation Plus PO Box 166 Cambridge MN 55008 Binder Heating & Air Conditioning Inc. 222 Hardman Avenue N South St. Paul, MN 55075 Flare Heating & Air Conditioning 9303 Plymouth Avenue N Suite 104 Golden Valley MN 55427 Lennox National Account Services 7150 Boone Avenue Suite 180B Brooklyn Park, MN 55428 Liberty Comfort Systems 627 East River Road Anoka, MN 55303 Majestic Custom Heating & Air Conditioning 8800 Royal Court NW Ramsey MN 55303 Otsego Heating & Air Conditioning 11 1 st Street NW Osseo MN 55369 SIGN HANGER LICENSES SML Sign Maintenance Lighting 700 Tower Drive Medina MN 55340 TRANSIENT ACCOMMODATIONS Best Western Plus 2050 Freeway Boulevard Brooklyn Center MN 55430 RENTAL INITIAL (TYPE IV – one-year license) 7025 Logan Avenue N Fatou Jallow/Summit Properties LLC INITIAL (TYPE II – two-year license) 3501 63 rd Avenue N Oyejola Azum INITIAL (TYPE I – three-year license) 5328-5530 Queen Avenue N Mai Her RENEWAL (TYPE IV – one-year license) 2006 55 th Avenue N Mathias Bingaman RENEWAL (TYPE III – one-year license) 5601 Lyndale Avenue N Riverwalk II Brett Hildreth/ Dragon Property Management 7231 Oliver Avenue N Kathleen Kane RENEWAL (TYPE II – two-year license) 7030 Regent Avenue N Douglas Wahl/Cel Monton RENEWAL (TYPE I – three-year license) 06/24/19 -4- DRAFT 4207 Lakeside Avenue #123 Donna Kabanuk 4207 Lakeside Avenue #140 Joseph Drechsler (met action plan) 4207 Lakeside Avenue #236 Judith Spanberger/MSP Home Rental 6124 Lee Avenue N Jennifer Kuria 5306 Russell Avenue N Donna Reinarz 6c. RESOLUTION NO. 2019-085 ACCEPTING BID AND AWARDING CONTRACT FOR THE CONSTRUCTION OF A MUNICIPAL LIQUOR STORE 6d. RESOLUTION NO. 2019-086 ACCEPTING BID AND AWARDING A CONTRACT, IMPROVEMENT PROJECT NOS. 2018-08 AND 2019-05, BELLVUE AND SOUTHEAST AREA MILL AND OVERLAY IMPROVEMENTS Motion passed unanimously. 7. PRESENTATIONS/PROCLAMATIONS/RECOGNITIONS/DONATIONS -None. 8. PUBLIC HEARINGS 8a. RESOLUTION NO. 2019-087 REGARDING DISPOSITION OF PLANNING COMMISSION APPLICATION NO. 2019-008 FOR APPROVAL OF A PRELIMINARY AND FINAL PLAT AND PLANNED UNIT DEVELOPMENT FOR EASTBROOK ESTATES SECOND ADDITION Interim Associate Planner Joe Hartmann reviewed an application for a Planned Unit Development and preliminary and final plat for Eastbrook Estates 2 nd Addition, a vacated and un-platted property that is proposed for development. Mr. Hartmann stated Centra Homes’ site plan was chosen by the City Council, and they have provided proposed site design for City Council approval. He added the first four homes would be built on 69 th Avenue, with the remaining 26 homes to be built later along with the completion of a road extension. He noted the applicant is proposing narrow lots but no negative impacts. Mr. Hartmann stated the City does not have architectural standards for residential homes, but an architectural committee for the subdivision would review the site plans. He added the developer intends to plant 90 new trees throughout the subdivision. He noted infrastructure will be completed as part of the project and turned over to the City upon its completion. Mr. Hartmann stated the Planning Commission recommended approval of this request at their June 13, 2019 meeting. He added City Staff recommends approval of this request and the first reading of an Ordinance change related to this zoning designation. 06/24/19 -5- DRAFT Councilmember Lawrence-Anderson expressed concern that most of the proposed homes would not have basements. Mr. Boganey stated a public hearing would be held at tonight’s meeting on the PUD, and the second action is required to consider approval of the Ordinance amendment and to second public hearing. Councilmember Ryan moved, and Councilmember Lawrence-Anderson seconded to open the Public Hearing at 7:24 p.m. Motion passed unanimously. Walt Wenholz, 501 69 th Avenue N, stated, about the feasibility of building homes without a basement, there is a new development in Fridley of 26 homes that have been constructed on slab foundations, and they have completely sold out. He added there is a market for homes with no basement. Dorothea Harris, 6713 Aldrich Avenue N, asked whether her property taxes will go up because of this new residential development. She asked what the price of these homes will be, and whether they will have association fees. She expressed concern about power outages in the area. She asked whether the developer has a plan to relocate the deer and other animals currently living on the property. Chereen Nordstrud, 6720 5th Street N, expressed concern about what construction traffic will do to the neighborhood. She added new curb and gutter were just installed. She asked whether construction traffic will be on 5 th Street or 69 th Avenue. Bob Peterson, 6737 5 th Street N, asked how long construction will take. He expressed concern regarding what years of construction will do to their neighborhood community. Shirley Peterson, 6737 5 th Street N, requested clarification about how many houses will go on 5 th Street. Mr. Hartmann stated four homes are proposed for 5 th Street N. Brett Eldrich, 8816 Riverview Lane, Brooklyn Park, stated he is a real estate agent in the area. He added there is a great demand for these types of homes in Brooklyn Center, as many renters who want to move up to a bigger home decide to stay in Brooklyn Center. He expressed the importance of competing with other communities in terms of housing. Brett Elias, 701 69 th Avenue N, stated the two lots next to his property, lots 11 and 12, are 5-6 feet higher in elevation than his property. He added the lots are not big enough for two homes. He expressed concern at the lack of privacy. He asked whether a sound wall will be installed to reduce noise from Highway 252 since so many trees will be removed. He requested that heavy truck traffic be monitored to record any damage to the new roads in the area. 06/24/19 -6- DRAFT Mr. Tate Baxter, representing Centra Homes, stated the homes would have different elevations so they will not look the same. He added four homes on 69 th Avenue would be multi-level homes with 3-car garages. He noted the remaining 26 lots are planned for the slab, and they be 3-bedroom homes with the option for a 4 th bedroom. Mr. Baxter stated the proposed stormwater basins are generally taken over by the City for maintenance and included in the covenants. He added the developer is willing to work with the City on this issue. Mr. Baxter stated the infiltration basin would be 60-70 feet wide, and north of the development property line. He added there would be 100 feet between the two homes, and trees will be planted to screen the area. He noted construction would take 2-2.5 years. Mr. Baxter stated the home prices would be in the range of $300,000-350,000, and the value of the new homes will have a positive effect on the values of surrounding properties. He added it is not anticipated that the development will cause an increase in the property taxes of surrounding properties. He noted power outages are not anticipated, as new utilities will be installed for the subdivision. Mr. Baxter stated he understands the residents’ concerns regarding wildlife and animals, but they generally move on once construction starts. He added he would welcome suggestions about solutions for preserving wildlife. Mr. Baxter stated construction access would be north on 5 th Street connecting to the cul-de-sac at Aldrich Avenue on the project’s west side. He added it would be a construction zone for the duration of construction, but heavy machinery is planned to be brought in on 69 th Avenue, as far to the east as possible to stay out of the main neighborhood. Mr. Baxter stated the homes would be on slabs without basements, as the water table would require that the elevation of the development would need to be raised. He added it comes down to the economics of the site and keeping the homes in an affordable price range. Councilmember Graves stated she was concerned about the lack of basements, but she visited other homes completed by the developer and gained more information and perspective about the market. She added she thinks it is a good idea to have a few homes with basements. Councilmember Graves asked where the developer will start building in order to comply with using existing utilities. The applicant stated a model home on Camden Avenue, and six foundations are planned to be completed this year. He added the model and home, and first foundations will be within 300 feet of the hydrant. Councilmember Lawrence-Anderson asked whether the developer’s contract can include a clause that any repairs to roads would be the responsibility of the developer. She asked whether inspectors could check load limits and watch for damage. 06/24/19 -7- DRAFT Councilmember Ryan stated the construction management plan could include conditions for dealing with traffic and road conditions and can include an escrow deposit for damage. Councilmember Ryan stated Highway 252 is a State highway, and any comments regarding a sound wall should be directed to the Minnesota Department of Transportation (MnDOT). He added improvements to Highway 252 are planned, and public meetings regarding that project would be a good place to bring up the subject of a sound wall. He encouraged residents to attend these meetings. City Attorney Gilchrist stated the security amount for possible damage would be 125% of the entire project. He added the agreement could be written so that the security amount can be accessed to fix any damage due to construction. William Benner, 6736 Camden Avenue, asked whether the property will be cleared of all trees before starting construction. The applicant confirmed this. Mr. Benner stated the homes would have many cars per house, because of the prices of the homes. He added he had been a forester for the City of Brooklyn Center for 38 years, and he does not agree with the development. Councilmember Graves stated she asked about tree removal earlier in the process, and the City Council was told that trees would not be cut down if it was not necessary. The applicant stated they do not intend to save any trees at this point, as it is unclear how stormwater pipes will be installed to meet watershed requirements. He added they intend to plant 90 new trees or 3 trees per lot. He noted the trees would be a combination of 2-2-1/2” caliper decorative and overstory trees, as well as 6-foot tall conifers. An audience member asked how much the developer paid for the land, compared to what the City paid for it. The applicant stated he understood the City paid $250,000 for the land, and Coalition Development had a proposed purchase price of $250,000 which was reduced to $115,000 due to necessary stormwater mitigation that reduced the number of homes that could be built. The audience member expressed frustration at paying for the development from taxpayer’s money. Mr. Boganey stated the property was vacant, and the City and the EDA wanted to acquire it for development purposes. He added the EDA would lose any control over the development of the property if they did not acquire the property. He noted the development would ensure that rather than vacant land, the property will be developed with 32 new homes, meet a housing need in the community, and generate tax revenue far in excess of what would have been generated by a vacant lot. Harlan Daudt asked whether a letter could be sent out to adjoining property owners and a vote be taken to decide whether or not to move forward with the development. 06/24/19 -8- DRAFT City Attorney Gilchrist stated that would not be a binding vote, as the delegation of authority to residents is not allowed under Minnesota law. Glenn Elholz expressed his support for the proposed development. He added Centra Homes has been cooperative and helpful. He noted he thinks the City Council is doing the right thing by moving forward with this proposition. Councilmember Graves moved, and Councilmember Ryan seconded to close the Public Hearing at 7:28 p.m. Motion passed unanimously. Councilmember Graves stated these types of decisions are difficult when residents feel strongly about green spaces in their neighborhoods, especially when old growth trees will be lost. She added the developer would replace the trees, and they will be there for the community’s future residents. She noted Centra Homes has been very responsive to the City’s concerns and has done their best to work with residents. Councilmember Graves stated the City of Brooklyn Center would continue to grow and change. She added the City Council has deliberated this issue and will continue to work with neighborhood residents and the developer moving forward. Councilmember Ryan stated he concurs with the comments of Councilmember Graves. He added he supports the proposed development as the City’s tax base will be enhanced, and the community will be more than reimbursed for the property’s decreased purchase price. He noted the proposed development would improve the City and be a positive change. Mayor Elliott stated he supports a development like this in Brooklyn Center. He added he is concerned about the impact on the neighborhood’s residents, as well as clearing 7.5 acres of forest. He noted he likes the renderings of the proposed home, but he feels he does not fully understand the impact that this development will have on the area. He expressed concern that this is a difficult decision for him. Councilmember Lawrence-Anderson stated she understands that change is never easy. She added there are approximately 450 acres of parks in Brooklyn Center. She noted the proposed development will generate $335,000 in additional property tax revenue but will generate no additional revenue if the land is left vacant. Councilmember Lawrence-Anderson thanked all the residents who came and spoke at tonight’s meeting on this issue. She added she is empathetic, but she will support the development. Councilmember Ryan moved, and Councilmember Graves seconded to adopt RESOLUTION NO. 2019-087 to Approve Planning Commission Application No. 2019-008 for a Preliminary and Final Plat and Planned Unit Development for Eastbrook Estates Second Addition, based on 06/24/19 -9- DRAFT the findings of fact and the submitted plans, as amended by the conditions of approval in the Resolution. Mayor Elliott abstained. Motion passed. Councilmember Graves moved, and Councilmember Ryan seconded to Approve the First Reading of ORDINANCE NO. 2019-05 Amending Chapter 35 of the Zoning Code of Ordinances regarding the zoning classification of Eastbrook Estates Second Addition and set the second reading and public hearing for July 8, 2019. Mayor Elliott abstained. Motion passed. 9. PLANNING COMMISSION ITEMS -None. 10. COUNCIL CONSIDERATION ITEMS 10a. RESOLUTION NO. 2019-088 APPROVING THE STATE OF MINNESOTA JOINT POWERS AGREEMENT WITH THE CITY OF BROOKLYN CENTER ON BEHALF OF ITS POLICE DEPARTMENT REGARDING THE MINNESOTA INTERNET CRIMES AGAINST CHILDREN TASK FORCE (ICAC) Police Chief Tim Gannon reviewed proposed Joint Powers Agreements (JPA’s) for which City Council approval is requested. The JPA’s relate to task forces formed with State funding for training and technology that target specific crimes. Councilmember Graves stated, regarding human trafficking, the City must ensure that victims are not prosecuted. Police Chief Gannon stated they are considered victims under State law. Mayor Elliott asked whether additional support and resources are available from State investigators. Police Chief Gannon confirmed this. Councilmember Lawrence-Anderson asked whether the entire Police force receives training. Police Chief Gannon stated he would support training for all staff. Mayor Elliott requested clarification regarding Standard 3.4 under Financial Task Force Standards, which states “prepare evidence for presentation to federal prosecutors for prosecution.” City Attorney Gilchrist stated that refers to situations where a federal case is being developed, and the City may be called upon to support an investigation. Mayor Elliott asked whether clarification regarding reimbursement. Police Chief Gannon stated the Police force had not been asked to reimburse or submit billing, and training is free of charge. 06/24/19 -10- DRAFT Mayor Elliott asked whether there are additional costs associated with recordkeeping requirements. Police Chief Gannon stated such costs would be minimal, and the Police Department would work with the Finance Department to resolve any issues. Mayor Elliott asked whether the City is covered in the event of actions resulting from its cooperation. City Attorney Gilchrist confirmed this, adding no additional liability insurance is required. Councilmember Graves moved, and Councilmember Ryan seconded to adopt RESOLUTION NO. 2019-088 Approving the State of Minnesota Joint Powers Agreement with the City of Brooklyn Center on Behalf of its Police Department Regarding the Minnesota Internet Crimes Against Children Task Force (ICAC). Motion passed unanimously. 10b. RESOLUTION NO. 2019-089 APPROVING THE STATE OF MINNESOTA JOINT POWERS AGREEMENT WITH THE CITY OF BROOKLYN CENTER ON BEHALF OF ITS POLICE DEPARTMENT REGARDING THE MINNESOTA FINANCIAL CRIMES TASK FORCE (MNFCTF) Councilmember Ryan moved, and Councilmember Lawrence-Anderson seconded to adopt RESOLUTION NO. 2019-089 Approving the State of Minnesota Joint Powers Agreement with the City of Brooklyn Center on Behalf of its Police Department Regarding the Minnesota Financial Crimes Task Force (MNFCTF). Motion passed unanimously. 10c. RESOLUTION NO. 2019-090 APPROVING THE STATE OF MINNESOTA JOINT POWERS AGREEMENT WITH THE CITY OF BROOKLYN CENTER ON BEHALF OF ITS POLICE DEPARTMENT REGARDING THE MINNESOTA HUMAN TRAFFICKING INVESTIGATORS TASK FORCE (MNHITF) Councilmember Lawrence-Anderson moved, and Councilmember Graves seconded to adopt RESOLUTION NO. 2019-090 Approving the State of Minnesota Joint Powers Agreement with the City of Brooklyn Center on Behalf of its Police Department Regarding the Minnesota Human Trafficking Investigators Task Force (MNHITF). motion passed unanimously. 11. COUNCIL REPORT The City Council agreed to forego Council Reports in the interest of time. 12. ADJOURNMENT 06/24/19 -11- DRAFT Councilmember Ryan moved, and Councilmember Graves seconded adjournment of the City Council meeting at 8:53 p.m. Motion passed unanimously. 06/24/19 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA WORK SESSION JUNE 24, 2019 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council/Economic Development Authority (EDA) met in Work Session called to order by Mayor/President Mike Elliott at 9:40 p.m. ROLL CALL Mayor/President Mike Elliott and Councilmembers/Commissioners April Graves, Kris Lawrence-Anderson, and Dan Ryan. Councilmember/Commissioner Marquita Butler was absent and excused. Also present were City Manager Curt Boganey, Community Development Director Meg Beekman, Police Chief Tim Gannon, and City Attorney Troy Gilchrist. CO-RESPONDER MODEL FOR MENTAL HEALTH RELATED 911 CALLS Police Chief Tim Gannon reviewed the issue of the embedded mental health expert model within Police operations. He added he put together some information on different models that are used in local metro area cities, the most common of which is a Crisis Intervention Team (CIT). He noted the City Council/EDA requested an update after several residents came forward asking for a co-responder for mental health calls in Brooklyn Center. Police Chief Gannon reviewed different local cities’ crisis management plans. He added many officers to make contact with a citizen in crisis, do a follow-up report, and request that a specialist make contact the next day. Officers have additional resources and referrals to ensure that a citizen in crisis gets the help they need. This model works well with people who require repeated help. Police Chief Gannon stated Minneapolis police have embedded social workers going out on calls to patients, working as a team with first responders. He reviewed data taken Minneapolis, as well as the St. Paul model. Police Chief Gannon stated Maple Grove Police have case management style with follow up on 911 calls. A lot of agencies are contracting on a case by case basis with Cope. Police Chief Gannon stated the City of Duluth had had a “direct response model” in place for a few years, working with repeat offenders. He added this has been successful and there has been a drop in the number of calls. 06/24/19 -2- DRAFT Mayor/President Elliott stated it makes sense to have the officers trained and able to offer resources, as they are often the ones who make contact when a situation is critical. Police Chief Gannon stated the University of Minnesota Police are starting a CIT program to address with mental health issues on campus. Mayor/President Elliott asked whether calls to other area cities include mental health checks. He asked how much of this issue is related to the opioid drug overdose epidemic. Police Chief Gannon stated it is a big problem, but a small percentage. He added mental health checks are more frequent. Police Chief Gannon stated the City of Brooklyn Center Police Force has 25 officers trained in CIT, as well as a crisis negotiation team. He added officers are required to do additional online training every month. Councilmember/Commissioner Ryan asked how long it would be before the entire police force is fully trained. Police Chief Gannon stated it is a 5-day course, that is prohibitively expensive, but having all the officers trained would be very beneficial. He added he would recommend that all 49 officers receive training. Police Chief Gannon stated he recommends the “case management” style as the best approach. He added another agency could partner with the City to review best practices. Councilmember/Commissioner Ryan stated Hennepin County could be a good resource for Brooklyn Center, and the City of Brooklyn Park might also be able to provide information and feedback. Councilmember/Commissioner Graves stated case management is a good resource but not the only successful method. She added she is happy to see that progress has been made. She noted she is grateful that there is a negotiator team within the Department. Mayor/President Elliott agreed with Councilmember/Commissioner Graves’ comments. He added he would like to see additional options for the City’s response to mental health crises. Councilmember/Commissioner Ryan stated he is satisfied that the City is taking sufficient action with its resources. He added he would consider options subject to the recommendation of Police Chief Gannon. Councilmember/Commissioner Graves stated she would like to learn more about the Duluth model. Police Chief Gannon stated there is a lot of information online. ADJOURNMENT Councilmember/Commissioner Lawrence-Anderson moved, and Councilmember/Commissioner Ryan seconded adjournment of the City Council/Economic Development Authority Work Session at 10:40 p.m. 06/24/19 -3- DRAFT Motion passed unanimously. COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Alix Bentrud , Dep uty C ity C lerk S UBJ E C T:Ap p ro val o f Lic enses Requested Council Action: - M otion to approve licenses a s p resented B ackground: T he following b us ines s es /persons have ap plied fo r C ity licens es as noted . Eac h bus iness/p ers o n has fulfilled the requirements o f the C ity O rd inance governing res pec tive lic enses, submitted ap p ro p riate ap p licatio ns, and p aid proper fees . Ap p licants for rental dwelling lic enses are in c ompliance with C hapter 12 of the C ity C o d e of O rdinanc es , unles s c o mments are no ted b elo w the property addres s o n the attac hed rental rep o rt. T he liquo r lic ens e renewals are based o n p as t prac tic es of d is tance req uirements and may require an amendment in the future. G A R B A G E H A U L ER S Ac e S olid Was te 6601 Mc Kinley S treet NW R ams ey MN 55303 Allied Waste S ervic es 8661 R endova S treet N E Circle P ines M N 55014 Aspen Was te S ys tems Inc 2951 Weeks Ave S E Minneap o lis MN 55414 F armers Unio n Ind us tries LLC dba Mid wes t G reas e P O Bo x 319 R edwo o d F alls MN 56283 R and y's S anitatio n Inc P O Bo x 169 Delano MN 55328 M EC H A N I C A L L I C EN S ES A-ABC Ap plianc e & Heating Inc 8818 7th Ave N G o ld en Valley MN 55427 Air Mec hanic al 16411 Ab erd een S t NE Ham Lake MN 55304 Dean's P rofes s io nal P lumbing 7400 Kirkwood C t N Map le G rove MN 55369 Elements Inc 10044 F landers C t N E #100 Blaine MN 55449 Northern Heating & A/C Inc 9431 Alp ine Dr NW R amsey MN 55303 S trategic Priorities and Values: S afe, S ecure, S tab le C ommunity AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e R ental C riteria 5/22/2019 Bac kup Material 7-8-19 R entals 7/3/2019 Bac kup Material Page 2 of 2 b.Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are “Family or household members” as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of “Domestic Abuse” as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (a). License Category Number of Units Validated Calls for Disorderly Conduct Service & Part I Crimes (Calls Per Unit/Year) No Category Impact 1-2 0-1 3-4 units 0-0.25 5 or more units 0-0.35 Decrease 1 Category 1-2 Greater than 1 but not more than 3 3-4 units Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 Categories 1-2 Greater than 3 3-4 units Greater than 1 5 or more units Greater than 0.50 Property Code and Nuisance Violations Criteria License Category (Based on Property Code Only) Number of Units Property Code Violations per Inspected Unit Type I – 3 Year 1-2 units 0-2 3+ units 0-0.75 Type II – 2 Year 1-2 units Greater than 2 but not more than 5 3+ units Greater than 0.75 but not more than 1.5 Type III – 1 Year 1-2 units Greater than 5 but not more than 9 3+ units Greater than 1.5 but not more than 3 Type IV – 6 Months 1-2 units Greater than 9 3+ units Greater than 3 Pr o p e r t y   A d d r e s s Dw e l l i n g Ty p e Re n e w a l or   I n i t i a l Ow n e r Pr o p e r t y Co d e Vi o l a t i o n s Li c e n s e Ty p e Po l i c e CF S   * Final License Type **Previous License Type *** 52 3 5   D r e w   A v e   N 2   F a m i l y   1 u n i t R e n e w a l J a y   B a t t e n b e r g 0 I 0 I I 42 1 4   L a k e s i d e   A v e 2   F a m i l y   1 u n i t R e n e w a l J a m e s   &   G l o r i a   S h o u l t z 3 I I 0I I I I 33 4 9   4 9 T H   A v e   N S i n g l e R e n e w a l I s a a c   O b i 1 1 I V 0 I V I 13 3 5   6 7 t h   L n   N S i n g l e R e n e w a l D e n n i s   &   S h a n n o n   D a n e 0 I 0 I I I 65 1 9   B e a r d   A v e   N S i n g l e R e n e w a l J a y   V a u g h n 4 I I 0 I I I I 50 1   B e l l v u e   L a S i n g l e R e n e w a l D r a g o n   P r o p e r t y   M a n a g e m e n t 4 I I 0 I I I 65 3 2   F r a n c e   A v e   N S i n g l e R e n e w a l Me r l i n   P r o p e r t i e s / C h e n   Z h o u / MS P   H o m e s   R e n t a l 5I I 1  v a l i d ,   7 / 1 9 / 1 8   th e f t   f r o m   a u t o II I 55 4 2   I r v i n g S i n g l e R e n e w a l D o u g l a s   W a h l   /   C e l   M o n t o n 3 I I 0 I I I 54 4 2   J a m e s   A v e   N S i n g l e   R e n e w a l G e r a l d   S t i g s e l l 2 I 0 I I I 57 2 4   L o g a n   A v e   N S i n g l e R e n e w a l Ko n s t a n t i n   G i n z b u r g   me t   m i t i g at i o n   p la n 4 I I 0 I I I V 64 2 4   M a r l i n   D r S i n g l e R e n e w a l C h a r l e s   J i n g   B r i g h t 6 I I I 0 I I I I 59 3 7   V i n c e n t   A v e   N S i n g l e R e n e w a l J a c k   J o h n s o n 1 5 I V 0 I V I I *  C F S   =   C a l l s   F o r   S e r v i c e   f o r   R e n e w a l   L i c e n s e s   O n l y   ( I n i t i a l   L i ce n s e s   a r e   n o t   a p p l i c a b l e   t o   c a l l s   f o r   s e r v i c e   a n d   w i l l   b e   l i s t ed   N / A . ) **   L i c e n s e   T y p e   B e i n g   I s s u e d ** *   I n i t i a l   l i c e n s e s   w i l l   n o t   s h o w Al l   p r o p e r t i e s   a r e   c u r r e n t   o n   C i t y   u t i l i t i e s   a n d   p r o p e r t y   t a x e s Ty p e   1   =   3   Y e a r         T y p e   I I   =   2   Y e a r             T y p e   I I I   =   1   Y e a r Re n t a l   L i c e n s e s   f o r   C o u n c i l   A p p r o v a l   o n   J u l y   8 ,   2 0 1 9 COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:Meg Beekman, C o mmunity Development Directo r F R O M:Brett Angell, Busines s and Workfo rce Development S p ec ialis t S UBJ E C T:R es o lutio n Autho rizing the S ub mis s io n o f a Brownfield G ap F inanc ing P rogram G rant Ap p licatio n to Minnesota Brownfields Requested Council Action: - M otion to a p p rove a resolu tion a u thorizing the submission of a B rownfield G a p F inancin g P rogra m g rant applica tion to M innesota B rown fields B ackground: Minnesota Brownfields, a no n-profit o rganization, promotes the effic ient c leanup and reus e o f c o ntaminated land as a means of generating economic gro wth, strengthening c o mmunities and enab ling sus tainab le land us e and d evelopment. T he o rganization offers the Brownfield G ap F inancing P ro gram fo r environmental as s es s ments of property in Hennepin C ounty thro ugh funding fro m the C ounty’s Enviro nmental R esp o ns e F und (ER F ). T he maximum ind ividual award und er this p ro gram is up to $15,000 total in a 12-mo nth s pan. T he C ity has id entified that the environmental as s es s ment wo rk whic h will take plac e o n four E DA-owned p arcels lo cated at 61st Avenue and Brooklyn Bo ulevard are eligible fo r this fund ing. Hennepin C ounty recommend ed the C ity of Bro o klyn C enter to apply fo r this fund ing. T he C ity is seeking to ap p ly fo r the Brownfield G ap F inancing P rogram to c o ver the costs o f a P hase 1 Enviro nmental S ite As s es s ment (ES A) fo r the fo ur p ro perties that are currently o wned by the Ec o nomic Develo p ment Autho rity of Brooklyn C enter. T he EDA currently has a p reliminary development agreement with C oalitio n Develo p ment for the red evelopment o f the p arcels . T he c ity antic ip ates a land us e applic ation from C o alition Develo p ment in the coming weeks fo r approval of a 113-unit multifamily res id ential build ing at this loc ation. T he C ity is reques ting a grant award of $2,500 fro m this p ro gram fo r the work listed in the p revio us p aragraph. T he C ity will c oncurrently apply fo r an additio nal environmental grant thro ugh Hennepin C ounty’s Memorand um of Agreement (MO A) fund fo r the P has e I I Environmental S ite Asses s ments for the s ame p ro p erties. Neither p ro gram requires a p erc ent matc h from the C ity. T he environmental wo rk will allow for a comprehensive environmental review of the s ite and determine any p o tential enviro nmental c onc erns that may exist. B udget Issues: T here are no bud get is s ues to c o nsider at this time. S trategic Priorities and Values: Targeted R edevelo p ment AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e R esolution 6/20/2019 R es o lutio n Letter G rant Ap p lic ation 7/1/2019 Bac kup Material Member __________ introduced the following resolution and moved its adoption: RESOLUTION NO. 2019- ___ RESOLUTION IDENTIFYING THE NEED FOR BROWNFIELD GAP FINANCING PROGRAM FUNDING AND AUTHORIZING AN APPLICATION FOR GRANT FUNDS WHEREAS, Minnesota Brownfields, a 501(c)(3) non-profit organization, offers the Brownfield Gap Financing Program funded with an Environmental Response Fund grant from the Hennepin County Department of Environmental Services; and WHEREAS, the City has identified a need to conducted environmental assessments at four parcels located at the intersection of 61 st Avenue and Brooklyn Boulevard and has received a detailed scope of services from Braun Intertec for this work; and WHEREAS, the City has the institutional, managerial and financial capability to adequately manage an Minnesota Brownfield Gap Financing grant; and WHEREAS, the City certifies that it will comply with all applicable laws and regulations as stated in the grant agreement. NOW, THEREFORE, BE IT RESOLVED that, after appropriate examination and due consideration, the governing body of the City: 1. Finds that it is in the best interests of the City’s development goals and priorities for the following proposed Brownfield Gap Financing Program project: Brooklyn Center – Coalition Development 2. Authorizes the Business and Workforce Development Specialist to submit on behalf of the City an application for Brownfield Gap Financing Program grant funds for the Brooklyn Center - Coalition Development environmental project components identified in the application, and to execute such agreements as may be necessary to implement the grant on behalf of the City. July 8, 2019 Date Mayor ATTEST: ___________________ City Clerk 2 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. 1 Brownfield Gap Financing Program Brownfield Gap Financing Program (BGFP) provides small grants to nonprofits for environmental assessment and clean-up of property in Hennepin County. Minnesota Brownfields is the co-administrator of the BGFP. Applications are accepted on a rolling basis and are approved by Hennepin County . Projects will benefit the community through greenspace, open space and natural areas, recreation, affordable housing, education, community centers, and neighborhood level economic development opportunities. Projects may apply for up to $15,000 in total funding in a 12-month span. Please fill out as completely as possible and attaching any additional information that will assist us in evaluating your consultant needs and improving your potential for funding. When completed, please email or send to: Minnesota Brownfields Hava Blair, Program Manager 2801 21 st Ave South Suite 145 Minneapolis, MN 55407 Telephone: 612-513-4301 Email: hblair@mnbrownfields.org Contact Information: Organization: City of Brooklyn Center Organization status (nonprofit, 501c3, etc): Municipality Name and title of contact: Brett Angell, Business and Workforce Development Specialist Phone: (763)569-3301 Fax: (763)569-3360 Email: bangell@ci.brooklyn-center.mn.us Address (street, city, zip): 6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430 2 Project/Site: Name : Brooklyn Center/Coalition Development Project location/address : Multiple Addresses (address – PID): 3606 61 st Ave N - 3411921430052 3600 61 st Ave N - 3411921430051 6107 Brooklyn Blvd - 3411921430049 6101 Brooklyn Blvd - 3411921430050 Site size (acres): 1.79 acres Current/Proposed zoning : Current Zoning: Multiple – C2 Commerce, C1 Service/Office, R1 Single Family Residential Proposed Zoning – PUD/Neighborhood Mixed-Use Current owner/future site owner (If not current owner, is access for environmental investigation available?): Economic Development Authority of Brooklyn Center. Current use (include # of structures/tenants if any): Of the four parcels, one structure remains, which is a single family home that the EDA recently purchased. The majority of the site is vacant. The EDA purchased the properties between August 2012 and March 2019 and subsequently demolished all of the buildings with the exception of the single family home, which will be demolished prior to development. Proposed use : • Describe the redevelopment project (please attach any such information such as map, photos, site design or building plans): The City of Brooklyn Center has entered into a Preliminary Development Agreement with Coalition Development for the re-development of the 4 parcels into a 4-story 113-unit multi- family housing development. This redevelopment is consistent with the City’s 2040 Comprehensive Plan which guided these parcels as Neighborhood Mixed-Use under the newly established Brooklyn Boulevard Overlay District. The Overlay District was established to call attention to land adjacent to the roadway for special consideration at the time of redevelopment. The special considerations look to increase density, provide a wide mix-of uses, and to improve the safety of the corridor by limiting and reducing the total number of access points to the roadway. The proposed development would help advance the goals established by the City Council and Comprehensive Plan and would create a new construction option for those looking to live within Brooklyn Center. Currently, all of the multi-family housing within the City had been built by the mid-1970s and the City has not seen any new multi-family construction. The proposed project would give a multifamily option with more amenities which helps the City retain its existing population and attract new residents. Attached is an architectural rendering and proposed site plan for the proposed project. • How will this project support or benefit the surrounding neighborhood? This project will provide a large benefit to the surrounding neighborhood and the community. The project will create a large investment into the area and will likely help raise tax values for the 3 surrounding properties. The project increases the density on the site in a manner more consistent with what is seen to the property to the north, the Sanctuary Senior Living Facility, which is consistent with the 2040 Comprehensive Plan. The proposed project will give an additional housing option for both existing and future residents. Retaining and attracting new residents to the City will bring an increased tax base that will support the surrounding businesses. What reason do you have to believe that there could be contamination on this site? • If environmental investigations have occurred, please provide the report or summary of investigation results. Environmental investigations have not occurred on this location. The property has not been analyzed so the phase I ESA will give the City a better understanding of any potential contamination and the costs associated with the remediation of the contamination at the time for redevelopment. In the 1980s, the property to the north was listed as a hazardous waste producer. The City is unaware of any contamination that resulted from that or any issues that may have caused. How will the full project be financed? Discuss the status of financing for the project, including: • Amounts secured and sources: • Potential sources: • Contingencies: The project is currently in the conceptual design phase including environmental assessments, building plan creation and land use approvals. The City anticipated receiving a land use application and building plans for the site within the next two months. The proposed project will be applying for tax increment financing through the City. The developer is currently in the process of completing the pro forma for the project. How did you hear about the Brownfield Gap Financing Program? This project was recommended to apply for the Brownfield Gap Financing Program by Hennepin County staff. Grant request amount and use: Please note, projects may request a maximum of $15,000 in a 12-month span. The City of Brooklyn Center is requesting $2,500 to cover the costs of Phase I ESAs. The City of Brooklyn Center and developer Coalition Development have received a scope and cost estimate from Braun for the services listed. The itemized cost estimate and scope of work is attached. The City will also be concurrently applying for a Memorandum of Agreement (MOA) grant through Hennepin County for $17,665 to cover Phase II ESAs for the sites also listed in this application. Supplemental Materials: • Submit an itemized cost estimate from one of our approved contractors. • Submit a current annual or financial report for the applicant. • Please attach a City Council resolution approving the project (not required for Minneapolis projects) 4 Signature: Application must be signed by an officer or individual authorized to sign on behalf of the organization. _____________________________________ __Business and Workforce Development Specialist___ Signature Title __Brett Angell_________________________ ________________________ Name Signature Date COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhard t, F inanc e Direc to r S UBJ E C T:R es o lutio n Approving an Amend ment to the Brooklyn C enter F ire Dep artment R elief As s o ciatio n By-Laws Requested Council Action: - M otion to approve a resolution approving an a men d men t to th e B rooklyn C enter F ire D ep a rtmen t R elief Associa tion B y-L a w B ackground: C urrently the C ity p ays a lump s um of $7,700 to F ire F ighters fo r eac h year of s ervic e o n the Dep artment onc e they have s erved 10 cons ecutive years . T he funding for this b enefit is largely d erived from annual payments received b y the C ity from the S tate of Minnes o ta along with inves tment earnings d erived from pens io n fund inves tments. R arely has the C ity been required to contribute to the fund to meet funding req uirements. Based o n the ac tuarial report fro m Van Iwaarden and As s o ciates as of December 31, 2019 the fund had a b alanc e of $3,405,643 in as s ets and $2,809,184 in liab ilities. T his res ults in a funding level o f 121% fro m the 31 current members. T he target p o licy o f the relief assoc iatio n is to retain at leas t 110% o f the fund req uirements. Based o n this report the As s o ciation req uested that the C ity C ounc il c o ns ider inc reas ing the lump s um p ayment by $800 to $8,500. T his reques t was made at leas t in part to attrac t and retain fire fighters for the d ep artment. T he C ity’s financ ial ad visor, BakerTilly (formerly S p rings ted Inc .), reviewed the Van Iwaard en projec tio ns of the imp act of the proposed $800 inc reas e. T he p ro jectio n sho ws that based on a 5% annual inves tment return the fund ed status o f the pens io n fund wo uld remain over 100%. BakerTilly c o nc lud ed that the assumptio ns and res ulting p ro jections are ac c urate in c o nc luding that the C ity will no t b e req uired to make contributions to maintain the 110% funding levels thro ugh 2032. B udget Issues: Ap p ro val o f this res olution sho uld have no imp ac t on the C ity bud get. Ho wever, as noted in the memo p ro vided b y BakerTilly there is no guarantee of future inves tment interes t rates . T he C ity sho uld und ers tand that it may b e c alled upon to make a contributio n to s upport an increase in annual benefits to $8,500. S trategic Priorities and Values: S afe, S ecure, S tab le C ommunity AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e F R A P ens ion Inc reas e R esolution 7/3/2019 R es o lutio n Letter BakerTilly F R A P ens ion Inc reas e R eview Memo 7/1/2019 Bac kup Material B C F R A P ens io n Increase R eq uest 7/1/2019 Bac kup Material Member introduced the following resolution and moved its adoption: RESOLUTION NO. _______________ RESOLUTION APPROVING AN AMENDMENT TO THE BROOKLYN CENTER FIRE DEPARTMENT RELIEF ASSOCIATION BY-LAWS WHEREAS, the Brooklyn Center Fire Department Relief Association has requested City approval of a benefit increase for retirees; and WHEREAS, such benefit increase would require an amendment of the City of Brooklyn Center Fire Department Relief Association By-laws; and WHEREAS, Van Iwaarden and Associates has conducted an actuarial valuation and benefit study and determined that the anticipated assets available for benefits would be sufficient to support an increase in the annual benefit due to the fact cash and contingency funding balance exceeds the recommended balance of 100% of anticipated needs; and WHEREAS, BakerTilly (formerly Springsted) public finance advisors for the City has reviewed the assumptions and projections used in the report prepared by Van Iwaarden and Associates and has compared those assumptions and projections with information from their detailed analysis performed in 2019 and believe the information to be accurate; and WHEREAS, the actuarial analysis completed by Van Iwaarden and Associates and reviewed by BakerTilly conclude an increase of $800 to the lump sum benefit from $7,700 per year to $8,500 per year of qualified service would not likely have an adverse effect on the fund viability. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that an amendment to the By-laws of the City of Brooklyn Center Fire Department Relief Association to increase the lump sum benefit to $8,500 per year be hereby approved as of January 1, 2019. July 8, 2019 Date Mayor ATTEST: City Clerk 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: RESOLUTION NO. _______________ and the following voted against the same: whereupon said resolution was declared duly passed and adopted. Baker Tilly Municipal Advisors, LLC 380 Jackson St., Ste 300 t. Paul, MN 55101 United States of America T: +1 (651) 223 3000 F: +1 (651) 223 3046 bakertilly.com June 17, 2019 To: Nate Reinhardt From: Patty Kettles Subject: Alternative Fire Relief Association Pension Increase Impacts The City has requested Baker Tilly evaluate the potential fiscal impacts on the City’s contributions for increasing the Fire Relief Association (FRA) retirement benefits from their current level of $7,700/year of service to $8,500/year of service. The goal was to evaluate that the maximum annual benefit could be increased to $8,500 while keeping the relief association funded at 110%. The review was developed based on financial projections using the FRA’s actuarial analyses. They are intended to provide the City with a context for considering these changes to the pension benefit. The assumptions used in this analysis included the following: • The current active membership, retired members, surviving spouses, and deferred vested members as listed in the Brooklyn Center Firefighter’s Relief Association Revised January 1, 2019 Actuarial Valuation of Statutory Funding Requirements report (“Report”) • Retirement at the later of 20 years of service or age 50 • An increase in the number of active members to 40 • When an active member retires, a new member is added to maintain active membership at 40 • Contributions from the State will remain at their 2018 level of $159,147 • Expenses will increase at 3.5% per year • City contributions will be projected to maintain funding at 110% • 5.0% annual return on investments We have reviewed the data provided by the Actuary and have used their annual Actuarial Accrued Liability and Expected Benefit Payments amounts in our analysis. Based on our review of the Report, we believe increasi ng the annual benefit to $8,500 will not result in additional City funding over the 15-year planning period. However, the Report assumes, as allowed per Minnesota State Statues, a 5% return on investments. Should the average annual return on investments fall below 4.93%, the City will be required to contribute funds in the later years. The Relief Associations historical rates of return as reported by the State Auditor are shown in the table below. • 5-year 7.2% • 10-year 4.0% • 20-year 5.6% The 5-year rate of return should be viewed with caution as it does not reflect a full economic cycle where there are recessionary impacts. Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting firm. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Municipal Advisors, LLC The 20-year average rate of return on investments of 5.6% provides a certain level of confidence that the City may not be required to make a contribution at the $8,500 annual benefit level. However, projecting forward interest rates is an uncertain science as many factors affect these rates. If economic conditions cause investment rates to decline the City may be required to make a contribution. Our determination that an annual average investment rate of return below 4.93% indicates the City may be required to make a contribution. While a rate of return less than 4.93% in the early years may not cause an immediate required City contribution, it will definitely impact the need for a City contribution in the mid to later years. The 10-year average rate of return on investments of 4.0% is indicative of what can happen as this period covers much of the great recession. Another indication of the volatility of investment rates of return is the investment rate of return for each of the past five years for the Brooklyn Center Fire Relief Association as shown below: • 2018 -6.2% • 2017 15.3% • 2016 8.3% • 2015 -5.2% • 2014 4.2% A review of the $8,000 lump sum benefit scenario in the Report indicates that an annual investment rate of return below 4.36% may cause a need for City contributions in later years. The important take away is that there is no guarantee of future investment interest rates. The City should understand that it may be called upon to make a contribution to support an i ncrease in annual benefits to $8,500. T E R S o < u C» i 'Ba("[ pp p» A ssOC' April 21, 2019 Curt Boganey, City Manager City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Re: Increase to Fire Pension Dear Mr. Boganey, Enclosed please find information relative to a request to increase the current firefighter pension benefit amount from the current $7700 per-year-of-service to $8500 per-year-of-service. At its annual meeting on April 15, 2019, the Brooklyn Center Firefighters Relief Association (BCFRA) membership approved this increase. Background of the Association The BCFRA is made up of the active paid-on-call members of the Brooklyn Center Fire Department. The purpose of the association is to provide retirement, disability and death benefits to the members or beneficiaries of members of the department. The pension benefit is not only a recruitment tool, but also a way to encourage the part-time/paid-on-call members to "stay on the job" and support retention. The State of Minnesota has provided the major share of funding for the association through distribution of the money collected from a gross earnings tax on fire insurance premiums sold in the state, also known as "2% Money". The funds are allocated back to the departments based on the population and property values in the area served by that department. There is a strong relationship between state fire aid and the number of fire-related calls a fire department responds each year. The state fire aid was established in 1885 and has been the most stable source of funding. The City has not needed to financially support the Relief Association in many years and does not normally need to do so. State law requires that a relief association be governed by a nine-member board of trustees. The BCFRA is directed by six trustees elected by members of the relief association, the fire chief, the city Finance Director, and the Mayor. A minimum of four meetings are held each year to oversee the management of the association's funds. Type of Pension The members of the BCFRA are covered by a defined benefit plan. The benefit level of the plan is determined by the number of members, their length of service, and the value of the relief fund. Actuarial reports are completed by Van lwaarden Associates. When a benefit level increase is warranted a n ap p ro v al req u e st is m ade to the City Council. Investments T he re lie f asso ciatio n's assets are inve sted th rough The Parr-McKnight Wealth Management Group, of W ells Fargo A dv iso rs. T he relief asso ci atio n h as ad o pte d an Investment Policy Statement for the investm e n t fo r o u r p e n sio n fun d . O u r target in vestment allocation is sixty percent in stocks, thirty-five p e rce n t in bo nd s an d fi ve pe rce nt in cash . W e re b alan ce to o u r targ et allo ca tio n an n u ally . T he R e lie f B o ard be lie ves in lo ng -te rm in vesting a n d h as resisted atte m p tin g to tim e m arket m o ve s. Funding Ratios T he B C FR A bo a rd b e lieves th at it h as fi d u ci ary resp o n sib ilitie s to b o th the m e m b e rsh ip an d to the C o u n ci l. T he resp o nsib ility to the m e m b e rsh ip is to see k the hig h e st fi n an ci ally so u n d be n e fi t le ve l. T he resp o n sib ility to the C o u n ci l is to n o t e xp o se the ci ty to an y fi n a n ci al risk w h ich co u ld le ad to m a n d ato ry co ntrib u tio n s. H isto rically afte r th e State an d C ity co ntrib utio n s o u r in vestm e n ts o n ly n e e d e d returns of 2-3% to co ve r n o rm al co sts a n d sta y o ne h u n d red pe rce n t fun d e d . Action Requested T he B C F R A is req u esting to increase in our pension amount from $7,700 to $8,500 per-year-of-service. This is an excellent way to increase the fire fighter compensation package without impacting the city budg e t an d is in lin e w ith the strateg ic prio rity of "S a fe, S ecu re, S tab le C o m m u n ity ." T he last pe n sio n in crease w as $100 in 2018, w h ich b ro u g ht u s to the cu rre nt $7,700 pe r-yea r-o f-se rvice . E nclo se d ple ase fi nd th e Jan u ary 2019 actua rial re po rt fr o m V an lw a a rde n A sso ciates a s w e ll as a su p p le m e n tal re p o rt fr o m A p ril 2019 sp e ci fi cally regard in g th is po te ntial in crease . T he su p p le m e n tal stud y incl u d e s in crease sce nario s of $8,000, $8,500, $8,750, $9,000 a n d $9,300; all u sing a 5% in ve stm e nt retu rn (B l ) an d a co n stan t 40 active fi refi g h te rs. M o re spe ci fi cally, it sh o w s th at a n in cre ase to $8,500 req u ires no co n trib utio n ne ed e d fr o m th e C ity th ro ug ho ut the en tire le n gth of the b e ne fi t stu d y an d it allo w s u s to rem a in fun d e d in excess of o u r go al of 1 10 % (G ). P lease n o te th at the fi re d e p artm e nt h as no t b ee n at the full co m p le m e n t of 40 m e m b e rs fo r m an y years. W ith th e last few ro u n d s of ag g ressiv e h iring, w e rem ain at 29 fi refi g hte rs. H o w eve r, th e stud y used th e a u th o rize d n u m b e r of 40 . In ad d itio n, w e fee l stro n g ly that a 5 % investm e nt retu rn is an ap p ro p riate an d realistic ra te to u se in th is a n alysis, a n d is th e sam e ra te u sed in the last an a lysis. T his req u e st is in line w ith ou r g u id e lin e to re m ain at le ast 11 0 % fun d e d , as w e ll as o u r g o al of pu rsu ing in creases in the p e r-ye ar-o f-se rvice pe nsio n am o u nt w ith m o n ie s ab o ve 11 0 %, as a w ay to co n tin u e to m o ve to w ard th e state allo w ed m axim u m of $10,000. W e resp ectfully req u e st tha t the C ity of B ro o klyn C ente r ap p ro v e th is increase and institu te it o n th e 1 of th e m o n th fo llo w ing its ad o p tio n . T han k yo u in ad v an ce fo r yo u r co nsid e ra tio n an d su p p o rt. S ince re ly, __ / 7 T Ly } <4l C h ris K u m m , B C F R A P resid e nt B R O O K L Y N C E N T E R F IR E F IG H T E R 'S R E LI E F A S S O C IA T IO N January 1, 2019 Actuarial Valuation of Statutory Funding Requirements February 28, 2019 VAN IWAARDEN ASSOCIATES 840 LUMBER EXCHANGE TEN SOUTH FIFTH STREET MINNEAPOLIS, MN 55402-1010 612 .596 .596 0 toll free: 888.596 .596 0 f: 612.596,5999 WWW.VANIWAARDEN.COM VAN IWAARDEN BRO O K LYN CEN T ER FIREFIGHT ER 'S RELI EF ASSOCIA TIO N January 1, 2019 Actuarial Valuation Table of Contents Page Intro duction and summary Introduction and Actuarial Certification Valuation of the Current Plan 1 3 Funding basis results Reconciliation of Plan Assets . . . . . . . . . . Changes in the Unfunded Actuarial Accrued Liability Average Available Financing 4 5 6 Valuation data Summary of Changes in Membership Summary of Participant Data 7 8 Supplementary information Summary of Plan Provisions Summary of Actuarial Methods . . Summary of Actuarial Assumptions Selection of Non-Economic Assumptions Assessment and Disclosure of Risk 9 10 11 13 14 VAN IWAARDEN BR O O KLYN CEN T ER FIR EFIG HT ER 'S RELI EF A SSO CIA T IO N January 1, 2019 Actuarial Valuation , Intro duction and Actuarial Certification Purposes of the valuation This report presents the results of the January 1, 2019 statutory funding valuation for the Brooklyn Center Firefighter's Relief Association. Its sole purpose is to determine the annual municipal obligation to the plan and should not be used for any other purpose. Computations for other purposes, such as plan accounting, may differ significantly from the results shown in this report. This report may not be used for any other purpose, and Van lwaarden Associates is not responsible for the consequences of any unauthorized use. Its content may not be modified, incorporated into or used in other material, or otherwise provided, in whole or in part, to any other person or entity, without our permission. Sources of data The Relief Association supplied the January 1, 2019 data for all active, terminated, and retired members, and asset data for the special fund. We have relied on that data in preparing this report. Changes from the previous valuation Mortality, termination, and disability rates were changed to those used in the most recent Minnesota PERA Police ft Fire Plan actuarial valuation. Summary of valuation results The actuarial accrued liability used for determining the minimum required contribution decreased from $3,287,811 as of January 1, 2017 to $2,809, 184 as of January 1, 2019 primarily due to the normal operation of the plan. Special Fund assets decreased from $3,673,474 as of January 1, 2017 to $3,405,643 as of December 31, 2018. As a result, the plan's funded status increased from 111.73% to 121.23%. The municipal contribution based on the results of this report before any offset for State Aid is $67,773, down from $85,089 determined by the 2017 valuation. The State Aid amount is not yet known, but if the amount stays at the level paid in 2017 ($159,147), the remaining municipal obligation would be $0 annually for fiscal years ending 2020 and 2021. VAN IWAARDEN BROO KLYN CENT ER FIR EFIGHTER'S RELI EF ASSO C IATIO N January 1, 2019 Actuarial Valuation 2 Introduction and Actuarial Certification (continued) Actuarial certification To the best of our knowledge, this report is complete and accurate and all Relief Association liabilities were determined in accordance with generally accepted actuarial principles and practices. Upon receipt of the report, the Relief Association should notify us if you disagree with any information contained in the report or if you are aware of any information that would affect the results that has not been communicated to us. The report will be deemed final and acceptable to the City and the Relief Association unless you notify us otherwise. Chapter 356.216 of Minnesota Statues requires that an actuarial valuation of the fund be conducted periodically. The State Auditor has determined that a valuation must be conducted at least every two years. An actuarial valuation is a calculation to determine the normal cost and accrued liability of the fund and includes a determination of the payment necessary to amortize the unfunded liability over the stated period. The actuarial assumptions and methods are the responsibility of the plan sponsor with the exception of the discount rate which is set by statute and is only appropriate to comply with statutory funding. We have reviewed the other assumptions and believe that they are reasonable estimates of future plan experience, both individually and in the aggregate. We are available to answer questions on the material contained in this report or to provide explanations or further details on the results. The undersigned credentialed actuary is a consulting actuary for Van lwaarden Associates and meets the Qualifications Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. In addition, the undersigned actuary meets the requirements of an "approved actuary" under Minnesota statutes, Section 356.215, Subdivision 1, Paragraph (c). We are not aware of any direct or material indirect financial interest or relationship that could create a conflict of interest or impair the objectivity of our work. Respectfully submitted, Sandra L. Bruns, EA, FSA Consulting Actuary February 28, 2019 L/D/C/R: 4/cl/sb/ek V .02/26/2019 VAN IWAARDEN BROO KLYN CENT ER FIR EFIG HT ER'S RELI EF ASSOC IA TIO N January 1, 2019 Actuarial Valuation 3 Valuation of the Current Plan 2019 2017 A. Actuarial accrued liability (AAL) 1. Active members $ 1,506,172 $ 2,235,748 2. Vested terminated members 1,017,939 680,694 3. Retired members 106,445 197,068 4. Spouses receiving benefits 178,628 174,301 5. Disabled members receiving benefits 0 0 6. Total actuarial accrued liability $ 2,809,184 s 3,287,811 B. Special fund assets $ 3,405,643 $ 3,673,474 C. Unfunded actuarial accrued liability s (596,459) s (385,663) D. Credit for surplus S (59,646) $ (38,566) E. Amortization payment 1 . Amortization period N/A N/A 2. Payment $ 0 $ 0 F. Normal cost $ 111,161 $ 113,828 G. Annual contribution payable: 2020, 2021 2018, 2019 1. Preliminary contribution (D. + E. + F.) $ 51,515 $ 75,262 2. Administrative expense (previous year x 1.035) 16,258 9,827 3. Annual contribution (1. + 2.) $ 67,773 $ 85,089 4. Estimated State Aid (159,147) (146,002) 5. Estimated municipal contribution (3. + 4., not less than zero) $ 0 $ o] H. Funded Status 121.23% 111. 73% VAN IWAARDEN BR O O K LYN CEN T ER FIR EFIG HT ER 'S RELI EF ASSOCIA T IO N January 1, 2019 Actuarial Valuation 4 Reconciliation of Plan Assets 2018 2017 A. Value of assets at beginning of year $ 4,238,325 $ 3,673,474 B. Contributions for the year 1. Municipal contributions 0 0 2. State contributions 159,147 153,366 3. Supplemental benefits 5,000 1,000 4. Total contributions 164,147 154,366 C. Benefits paid during the year (744,211) (131,608) D. Expenses (non-investment) paid from plan assets (15,708) (15,024) E. Investment earnings for the year (236,910) 557,117 F. Asset value on December 31 (sum of A. thru E.) $ 3,405,643 $ 4,238,325 G. Investment return 1. By year -6.2% 15.3% 2. Two year period 4.6% VAN IWAARDEN BROO K LYN CENTER FIREFIGH TER'S RELI EF ASSO CIA TIO N January 1, 2019 Actuarial Valuation 5 Changes in the Unfunded Actuarial Accrued Liability A. Liability gain or loss 1. Expected actuarial accrued liability (ML) a. ML as of January 1, 2017 b. Normal cost 2017 c. Normal cost 2018 d. Benefit payments 2017 e. Benefit payments 2018 f. Interest to December 31, 2018 on a. through e. g. Expected ML on December 31, 2018 (sum of a. through f.) 2. Actual ML on January 1, 2019 a. Before any assumption, method or plan changes b. After assumption and method changes, but before plan changes c. After assumption, method and plan changes 3. Difference from the expected ML a. (Gain) or loss due to plan experience diff from that expected (2.a. -1.g.) b. Due to changes in actuarial assumptions and methods (2.b.-2.a.) c. Due to plan changes (2.c. -2.b.) d. Total (a. + b. + c.) B . A sse t g ain or lo ss 1 . Expected value of assets a. Value of assets on January 1, 2017 b. Benefit payments c. Contributions d. Interest to December 31, 2018 on a., b. and c. e. Expected assets on December 31, 2018 (sum of a. through d.) 2. Actual assets as of December 31, 2018 3. (Gain) or loss due to plan experience different from expected (1.e. - 2.) C. C h a n ge s in th e un fu n d e d a c tu a ria l accru e d lia b ili ty 1. Unfunded ML on January 1, 2017 (A.1.a. -B.1.a.) 2. Expected unfunded ML on December 31, 2018 (A.1.g. - B.1.e.) 3. Changes a. Actuarial (gain) or loss (A.3.a. + B.3.) b. Changes in actuarial methods and assumptions (A.3.b.) c. Changes in plan provisions (A. 3.c.) d. Total change 4. Unfunded ML on December 31, 2018 s 3,287,811 113,828 113,828 (131,608) (744,211) 325,988 2,965,636 2,792,469 2,789,624 2,809,184 (173,167) (2,845) 19,560 (156,452) 3,673,474 (875,819) 318,513 359,176 3,475,344 3,405,643 69,701 (385,663) (509,708) (103,466) (2,845) 19,560 (86,751) (596,459) VAN IWAARDEN BROOK LYN CENT ER FIR EFIG H TER'S RELI EF ASSOCIA TIO N January 1, 2019 Actuarial Valuation 6 Average Available Financing State City Credit for Active Aid Contrib Surplus Total Members 2016 $ 147,002 $ 0 $ 38,566 $ 185,568 32 2017 154,366 0 80,150 234,516 35 2018 164,147 0 59,646 223,793 31 Average available financing for 2019: Minimum Average Available Financing required for $7,700 lump sum multiplier: Maximum lump sum multiplier permitted: Average Financing $ 5,799 6,700 7,219 $ 6,573 4,155 10,000 Notes: • The State Aid and City Contributions shown are those made during the calendar year indicated. • The number of active members is from the State Reporting Form for the year indicated, that is, the number as of December 31. • The average available financing for 2019 is the average for the three years preceeding 2019 (2016 to 2018). See Minnesota Statutes §424A.02. VAN IWAARDEN BROO KLYN CENT ER FIREFIGH TER'S RELI EF ASSOC IA TIO N January 1, 2019 Actuarial Valuation 7 S u m m a ry o f C h a n ge s in M e m b e rsh ip Terminated Active Vested Retired Beneficiaries Disabled Total A . M e m b e rs o n Ja n u a ry 1, 20 17 32 9 10 11 0 62 B . C h a n g e s in the m e m b e r g ro u p 1. New active members 11 11 2. Retirements 0 3. Separation, deferred lump sum (4) 4 0 4. Separation, not vested (3) (3) 5. Separation, disability benefit 0 6. Deaths (1) (5) (5) 7. Lump sum distributions (4) (2) (6) 8. Rehire 0 9. Total changes ( 1) 2 (5) 0 (3) C . M e m b e rs o n J a n u a ry 1, 20 1 9 31 11 5 12 0 59 VAN IWAARDEN BRO O K LYN CENTER FIR EFIG HT ER'S RELI EF ASSOCIA TIO N January 1, 2019 Actuarial Valuation 8 Summary of Participant Data January 1, 2019 January 1, 2017 A. Active Members 1. Number 31 32 2. Average Age 41.5 43.9 3. Average years of service 8.1 11.4 B. Vested terminated members 1 . With deferred benefits a. Number 11 9 b. Total annual deferred benefits $0 $0 c. Average annual benefit 0 0 d. Total lump sum benefits 1,251,471 842,917 e. Average lump sum benefit 113,770 93,657 C. Retirees and beneficiaries 1. Number a. Retirees 5 10 b. Beneficiaries 12 11 c. Disabled retirements 0 0 d. Total 17 21 2. Total annual benefits being paid $47,556 $59,016 3. Average annual benefit being paid 2,797 2,810 D. Total number of participants (A.1. + B.1. + C.1.) 59 62 VAN IWAARDEN BRO O KLYN CENTER FIR EFIGHTER'S RELI EF ASSOCIA TIO N January 1, 2019 Actuarial Valuation 9 Summary of Plan Provisions A. Eligibili ty Active or probationary member of the Relief Association. B. Serv ic e Completed months. C. Lum p Sum Pension The later of age 50 or after completion of 10 years of service. The lump sum pension is based on completed months of service. The current lump sum pension is based on $7,700 per year of service plus a Supplemental Benefit of 10% of the regular lump sum distribution, but not more than $1,000. If a member is both age 50 and has completed 10 years of service, but not 20 years of service, the lump sum pension will be reduced by 4% for each year of service less than 20 years. D. Deferred Lump Sum Pension E. Survivor Benefit F. Plan Changes Since Prior Valuation Termination prior to age 50 with at least 10 years of service. The deferred lump sum pension payable at age 50 is based on the lump sum pension formula and service at date of termination reduced for less than 20 years of service. If a deferred vested member dies before payment, the benefit will be paid to the participant's beneficiary. Years of service times the lump sum rate in effect at the time of death, payable to named beneficiary plus a Supplemental Survivor Benefit in the amount of 20% of the total benefit paid, but not more than $2,000. The lump sum pension was increased from $7,600 to $7,700 per year of service. VAN IWAARDEN B R O O KLYN CENT ER FIR EFIGHTER'S RELI EF ASSO C IA TIO N January 1, 2019 Actuarial Valuation 10 Summary of Actuarial Methods A . A c tu a ria l C o st M e th o d B . A c tu a ria l V a lu e of A sse ts C . Be n e fit s V alu e d The Entry Age Normal actuarial cost method. This actuarial funding method is one of the projected benefit cost methods. The normal cost for each active member is the annual level dollar amount required from the member's entry date to retirement date so that the accumulated contributions at termination or retirement will equal the liability at that time. This cost is expressed as a level annual amount. The actuarial value of assets is equal to the market value of assets. All benefits summarized in the plan provisions section of this report with the exception of the supplemental lump sum benefits. The State reimburses the Special Fund for those benefits, so these payments and reimbursements will be recognized in plan assets as they occur. D . D ata M e th o d s The Relief Association provided census and financial information for the valuation and we have relied on this data in preparing the results in this report. The data was reviewed for reasonableness and consistency, but we have not performed a complete audit. To the extent that census data was collected as of a date later than January 1, 2019, we have assumed that it is reasonably representative of the plan census on the valuation date and used it with only minor adjustments. VAN IWAARDEN BRO OKLYN CENT ER FIR EFIGHTER'S RELI EF ASSO CIATIO N January 1, 2019 Actuarial Valuation 11 Summary of Actuarial Assumptions A . D isco u n t R ate 5% as required by Minnesota statutes B. Mortality Rates used in the July 1, 2018 Minnesota PERA Police Fire Plan actuarial valuation as described below. Pre-retirement: RP-2014 employee generational mortality table projected with mortality improvement scale MP-2017, from a base year of 2006. Post-retirement: RP-2014 annuitant generational mortality table projected with mortality improvement scale MP-2017 from a base year of 2006. Male rates are adjusted by a factor of 0.96. C . W ith d raw al Select and ultimate rates used in the July 1, 2018 Minnesota PERA Police Fire Plan actuarial valuation. Select rates are as follows: First through Third Years 3.0% Ultimate Rates Age Male Female 20 3.00% 3.00% 25 2.60% 2.60% 30 2.10% 2.10% 35 1.60% 1.60% 40 1.25% 1.25% 45 1.25% 1.25% 50 0.00% 0.00% D . D isab ili ty Age-related rates used in the July 1, 2018 Minnesota PERA Police & Fire Plan actuarial valuation. All incidences are assumed to be duty-related. Select Rates are as follows: Age Rate 20 0.11% 25 0.13% 30 0.16% 35 0.19% 40 0.29% 45 0.54% 50 1.04% 55 2.03% 60 0.00% VAN IWAARDEN BROO K LYN CENT ER FIR EFIG H TER'S RELI EF ASSOC IA TIO N January 1, 2019 Actuarial Valuation 12 Summary of Actuarial Assumptions (continued) E. Retirement Active members Vested terminated F. Beneficiary information G. Spouse age difference H. Form of payment I. Supplemental benefits J. Changes since prior valuation We have assumed 50% of active members will retire when reaching retirement eligibility (later of age 50 and 20 years of service); then 50% retire each subsequent year until 100% retirement at the earlier of age 65 or 30 years of service. Less than 20 years With 20-29 years With 30 years of Age of service of service service 50-64 0% 50% 100% 65 100% 100% 100% The later of current age and age 50. 100% of members are assumed to have a beneficiary who will receive survivor benefits. Wives are assumed to be 3 years younger than husbands. Lump sum We have not valued the liability associated with supplemental lump sum benefits in this funding valuation since the State reimburses the Special Fund for those benefits. These payments and reimbursements will be recognized in plan assets as they occur. Mortality, termination, and disability rates were changed to those used in the most recent Minnesota PERA Police & Fire Plan actuarial valuation. VAN IWAARDEN BROO KLYN CENTER FIR EFIGH TER'S RELI EF ASSO CIA TIO N January 1, 2019 Actuarial Valuation 13 Selection of Non-Economic Assumptions The Actuarial Standards Board (ASB) provides coordinated guidance for measuring pension and retiree group benefit obligations through a series of Actuarial Standards of Practice (ASOPs). ASOP No. 35, Selection of Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations, requires that the actuary disclose the rationale used in selecting each non-prescribed non-economic assumption and any changes to non-prescribed non-economic assumptions. The table below summarizes the rationale for selecting the non-prescribed non-economic assumptions. The rationale for assumption changes, along with a description of the assumptions themselves, is included in the Actuarial Assumption and Methods section of the report. Non-Economic Assumptions (non-prescribed) Assumption Rationale for Selecting Assumption Mortality Retirement Termination of Employment Disability Percentage Married and Spouse Ages Rates used in the most recent Minnesota PERA Police Fire Plan actuarial valuation. Due to limited plan-specific data, based on plan's earliest retirement age with allowance for some delayed retirement. Rates used in the most recent Minnesota PERA Police & Fire Plan actuarial valuation. Rates used in the most recent Minnesota PERA Police & Fire Plan actuarial valuation. Based on standard pension plan assumptions. These assumptions have an insignificant impact on plan costs. VAN IWAARDEN BRO O KLYN CENTER FIR EFIGHTER'S RELIEF ASSO CIA TIO N January 1, 2019 Actuarial Valuation 14 Assessment and Disclosure of Risk Actuarial Standard of Practice Number 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions (ASOP 51 ), requires actuaries to identify and assess certain risks that may affect a plan's future financial condition. Some of the primary risks are summarized and defined in the table below. Risk Identification/Definition Investment risk Asset/liability mismatch risk The potential that investment returns will be different than expected The potential that changes in asset values are not matched by changes in liability values Interest rate risk The potential that interest rates will be different than expected Longevity and other demographic The potential that m ortality or other dem ographic experience w ill be risks diff erent than expected Contribution risk The potential that state aid or m unic ipal co ntribution rates are diff erent than what is ultim ately required to fund plan benefits ASO P 51 requires that actuaries qualitatively or quantitatively assess the potential eff ect of these risks on the plan's future financial condition. Methods to assess the risks incl ude scenario tests, sensitivity tests, stress tests, and calculation of actuarial liabilities using a disco unt rate based on m inim al-risk investm ents. Practic al co nsiderations include the usefulness, reliability, tim eliness, and co st eff ic iency of the risk assessm ent m easurem ents. In addition to the risk assessm ent param eters above, ASO P 51 requires that actuaries (1) calculate various plan m aturity m easures and (2) discl ose relevant historic al info rm ation that are significant to understanding plan risks. This report contains basic risk assessm ent info rm ation fo r the plan in accordance w ith ASOP 51. How ever, we reco m m end that em ployers consider additional pension risk analyses to better understand retirem ent plan volatility and the potential im pact on the organization. W e would be glad to discuss potential additional analyses upon request. Plan Maturity Measures Maturity m easures describe how m uch plan liability is attributable to current em ployees vs. fo rm er em ployees (e.g., retirees) and the size of plan assets and liabilities relative to overall payro ll. These m easures include: Participant Maturity Ratio (PMR) Liability Maturity Ratio (LMR) Num ber of retirees divided by total participants Retiree liability divided by total plan liability VAN IWAARDEN BROO KLYN CENT ER FIREFIG HTER'S RELI EF ASSO CIA TIO N January 1, 2019 Actuarial Valuation 15 Assessment and Disclosure of Risk (continued) A recent history of maturity measures is shown below. Some of the primary risks are summarized and defined in the table below. Partici pan t M aturity Ratios 100% 80% 60% 40% 20% 0% ■Active participants ■Vested terminated ■Receiving payments 2009 2010 2011 2013 2015 2017 2019 Li ability M atu rity Ratio s 100% 80% 60% 40% 20% 0% 2009 ■Active participants ■Vested terminated ■Receiving payments 2010 2011 2013 2015 2017 2019 Observations: • The retiree counts and liabilities are steadily decreasing as a percent of the plan's totals. This is because lifetime annuities have been replaced with lump sum payments. VAN IWAARDEN BROO KLYN CENT ER FIR EFIGH T ER 'S RELI EF A SSO CIA T IO N January 1, 2019 Actuarial Valuation 16 Assessment and Disclosure of Risk (continued) Historical Plan Information Historical plan information can provide insight about evolving pension risks, especially as plans mature. Below are historical values for some relevant plan results. Historical Funded Status Information Funding Target Market Value of Funded Liability Assets Percent 2019 $ 2,809,184 $ 3,405,643 121.23% 2017 3,287,811 3,673,474 111.73% 2015 3,084,717 3,508,210 113.73% 2013 3,279,231 3,282,317 100.09% 2011 3,253,686 3,303,595 101.53% 2010 3,113,981 2,916,962 93.67% 2009 3,240,590 2,654,832 81.92% Observations Actual Assumed Investment Investment Return Return -6.22% 5.00% 15.28% 5.00% 4.20% 5.00% 8.30% 5.00% 11.80% 5.00% N/A 5.00% N/A 5.00% • The plan's funded status has steadily increased in recent years. Liabilities have remained relatively stable. VAN IWAARDEN BROO K LYN CENT ER FIREFIG HTER'S RELI EF ASSOCIATIO N January 1, 2019 Actuarial Valuation 17 Assessment and Disclosure of Risk (continued) Defined benefit plans like this one are subject to statutory minimum funding rules. These impose stringent requirements on when and how much money must be contributed to the plan trust. This means that many pension risks are less applicable to Relief Association defined benefit plans. The table below provides analysis of some potential plan risks. Please note that the list of risks and the risk assessments shown are not exhaustive. We would be glad to provide a more detailed risk assessment upon request. Risk Assessment Investment risk Asset/liability mismatch risk Interest rate risk If future investment returns are higher or lower than assumed, then future contributions may need to be increased or decreased to compensate. The plan currently uses an investment return assumption based on statutory requirements of 5%. Per state statues, plan funding liabilities are determined using a 5% interest rate. Since plan assets are invested in a mix of equity and fixed income securities, there is a risk that changes in assets values are not matched by changes in liability values. There is a risk that interest rates could be different than expected under current statutory minimum funding rules. Statutory funding interest rates are currently "stabilized" at 5%. Longevity and other demographic The plan demographic assumptions reflect best estimates of future plan risks Contribution risk experience. However, retirees receiving monthly payments may live longer than expected which would change plan liabilities. Statutory minimum funding rules are relatively conservative and statutorily- mandated, so there is less risk that the plan sponsor will not make the necessary contributions than in other types of plans. VAN IWAARDEN VAN IWAARD EN Retirement planning for employers April 4, 2019 Mr. John R. Polz Treasurer-Brooklyn Center Firefighter's Relief Association 6250 Brooklyn Boulevard Brooklyn Center, MN 55429 Re: Pension Plan Projections with Benefit Increase Dear John: We have prepared a projection of the pension plan assets and liabilities at the following benefit levels: $8,000, $8,500, $8,750, $9,000 and $9,300. The projections reflect a constant active membership of 40 firefighters. Under the $8,750, $9,000 and $9,300 benefit level scenarios an estimated municipal contribution is required in the future. Background We were hired by the Relief Association to prepare a projection of the pension plan's liabilities, assets and funded status under five different benefit levels. The projections are to include a constant active membership of 40 firefighters. This letter documents the results of the projections. Projection and Assumptions The actuarial accrued liability and normal cost for each year of the projection was calculated using the discount rate, mortality, retirement, disability and withdrawal assumptions stated in the January 1, 2019 valuation report. When a member died, retired or terminated, a new firefighter was added. The new firefighter was assumed to be 32 years old. The Special Account asset balance for each year of the projection was calculated using the benefit payments generated from the liability projection, a constant State Aid contribution of $159,147 (the 2018 actual State Aid contribution), expenses increasing at 3.5% per year, and an assumed rate ofretum of 5%. All transactions (contributions and distributions) were assumed to occur mid-year. The municipal contribution, if any, was determined as the normal cost for the year plus/minus the amortization of any unfunded accrued liability/surplus plus expenses less the State Aid contribution. VAN IWAARDEN ASSOCIATES 840 LUMBER EXCHANGE BUILDING TEN SOUTH FIFTH STREET MINNEAPOLIS, MN 55402-1010 612.596.5960 toll free: 888.596.5960 f:612. 596,5999 WWW.VANIWAARDEN.COM April4,2019 Page 2 of 2 Results • Under both the $8,000 and $8,500 benefit levels there would be no municipal contribution. • Under the $8,750 benefit level, a municipal contribution would be required beginning in 2030. It starts at approximately $3,900 and grows to $12,000 in 2034. • Under the $9,000 benefit level, a municipal contribution would be required beginning in 2024. It starts at approximately $1,000 and grows to $24,000 in 2034. • Under the $9,300 benefit level, a municipal contribution would be required beginning in 2020. It starts at approximately $1,500 and grows to $34,000 in 2034. The attached exhibits for each benefit level show the details of the calculations. Please let me know if you have any questions or if there are other projections you'd like us to run. Sincerely, Sandra Bruns, FSA, EA, MAAA Consulting Actuary L/D/CIR: 3/ctl/slb/emk VAN IW AA RDEN ASSOCIATES 840 LUMBER EXCHANGE BUILDING TEN SOUTH FIFTH STREET MINNEAPOLIS, MN 55402-1010 612.596.5960 toll free: 888. 596.5960 f 612. 596.5999 WW W .VANIW AARDEN.CO M B R O O K L Y N C E N T E R F IR E F IG H T E R 'S R E L IE F A S S O C IA T IO N P R O J E C T IO N $8 ,0 0 0 L u m p S u m P e n s io n V a lu a t io n Y e a r 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 L u m p s u m m u lt ip li e r 7 ,7 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 A. Actuarial Accrued Liability (AAL) 1. AAL $2,809,184 $2,227,779 $2,462,877 $2,206,260 $2,404,852 $2,474,691 $2,618,344 $2,474,966 $2,668,887 2. Normal Cost 111,161 159,890 157,148 161,023 161,046 161,095 161,142 161,541 161,754 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,405,643 2,855,370 3,100,607 2,868,942 3,078,095 3,161,751 3,317,611 3,193,402 3,398,202 3. Expected Benefit Payments (846,420) (42,919) (519,584) (77,628) (209,656) (142,663) (422,852) (95,131) (228,885) 4. Expected Contributions 159,147 159,147 159,147 159,147 159,147 159,147 159,147 159,147 159,147 5. Expected Expenses (prior year x 3.5%) (15,708) (16,258) (16,827) (17,416) (18,026) (18,657) (19,310) (19,986) (20,686) 6. Interest to end of val year 152,708 145,268 145,599 145,050 152,191 158,033 158,805 160 771 167,650 7. Assets at end of val year 2,855,370 3,100,607 2,868,942 3,078,095 3,161,751 3,317,611 3,193,402 3,398,202 3,475,428 C. Unfunded AAL 0 0 0 0 0 0 0 0 0 D. Credit for surplus 59,646 62,759 63,773 66,268 67,324 68,706 69,927 71,844 72,932 E. _Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 0 0 F. Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 51,515 97,131 93,375 94,755 93,722 92,389 91,215 89,697 88,822 2. Administrative Expense (prior year x 3.5%) 15,708 16,258 16,827 17,416 18,026 18,657 19,310 19,986 20,686 3. Annual Contribution (1.+2.) 67,223 113,389 110,202 112,171 111,748 111,046 110,525 109,683 109,508 4. Estimated State Aid (prior year x 0%) (159,147) (159,147) (159,147) (159,147) (159,147) (159,147) (159,147) (159,147) (159,147) -- 5. Estimated Municipal Contribution (3. +4.) 0 0 0 0 0 0 0 0 0 G. Funded Status 121% 128% 126% 130% 128% 128% 127% 129% 127% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $8,000 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VA N IWAA RD EN B R O O K L Y N C E N T E R F IR E F IG H T E R 'S R E LI E F A S S O C IA T IO N P R O J E C T IO N $8 ,0 0 0 L u m p S u m P e n s io n V a lu a t io n Y e a r 2 0 2 8 2 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 4 L u m p s u m m u lt ip li e r 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 8 ,0 0 0 A. Actuarial Accrued Liability (AAL) 1. AA L $2,732,234 $2,890,238 $2,994,731 $3,157,929 $3,387,404 $3,509,438 $3,737,070 2. Normal Cost 161,670 160,453 162,248 162,311 162,348 162,438 158,182 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,475,428 3,645,216 3,764,067 3,938,469 4,177,473 4,311,484 4,548,377 3. Expected Benefit Payments (141,623) (198,851) (149,677) (94,355) (207,615) (112,919) (223,786) 4. Expected Contributions 159,147 159,147 159,147 159,147 159,147 159,147 159,147 5. Expected Expenses (prior year x 3.5%) (21,410) (22,159) (22,935) (23,738) (24,569) (25,429) (26,319) 6. Interest to end of val year 173 674 180,714 187,867 197,950 207,048 216,094 225,145 7. Assets at end of val year 3,645,216 3,764,067 3,938,469 4,177,473 4,311,484 4,548,377 4,682,564 C. Unfunded AAL 0 0 0 0 0 0 0 D. Credit for surplus 74,319 75,498 76,934 78,054 79,007 80,205 81,131 E. Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 F. Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 87,351 84,955 85,314 84,257 83,341 82,233 77,051 2. Administrative Expense (prior year x 3.5%) 21,410 22,159 22,935 23,738 24,569 25,429 26,319 3. Annual Contribution (1.+2.) 108,761 107,114 108,249 107,995 107,910 107,662 103,370 4. Estimated State Aid (prior year x 0%) (159,147) (159, 147) (159,147) (159,147) (159, 147) (159,147) (159, 147) 5. Estimated Municipal Contribution (3.+4.) 0 0 0 0 0 0 0 - G. Funded Status 127% 126% 126% 125% 123% 123% 122% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $8,000 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VA N IWAA RDEN BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION PROJECTION $8,500 Lump Sum Pension Valuation Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 Lump sum multiplier 7,700 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 A. Actuarial Accrued Liability (AAL] 1. AAL $2,809,184 $2,309,728 $2,559,299 $2,295,991 $2,506,717 $2,590,376 $2,748,736 $2,615,208 $2,821,857 2. Normal Cost 111,161 169,883 166,969 171,086 171,112 171,163 171,213 171,637 171,864 B.Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,405,643 2,855,370 3,100,493 2,847,515 3,052,747 3,133,338 3,286,167 3,153,314 3,351,341 3. Expected Benefit Payments (846,420) (43,031) (540,371) (80,408) (211,410) (144,234) (429,751) (99,784) (242,050) 4. Expected Contributions 159,147 159,147 159,147 159,147 159,147 159,147 159,147 159,147 159,147 5. Expected Expenses (prior year x 3.5%) (15,708) (16,258) (16,827) (17,416) (18,026) (18,657) (19,310) (19,986) (20,686) 6. Interest to end of val year 152,708 145,265 145,073 143,909 150,880 156,573 157,061 158,650 164,977 7. Assets at end of val year 2,855,370 3,100,493 2,847,515 3,052,747 3,133,338 3,286,167 3,153,314 3,351,341 3,412,729 C. Unfunded AAL 0 0 0 0 0 0 0 0 0 D Credit for surplus 59,646 54,564 54,119 55,152 54,603 54,296 53,743 53,811 52,948 E. _Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 0 0 F._Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 51,515 115,319 112,850 115,934 116,509 116,867 117,470 117,826 118,916 2. Administrative Expense (prior year x 3.5%) 15.708 16,258 16,827 17,416 18,026 18,657 19,310 19,986 20.686 3. Annual Contribution (1.+2.) 67,223 131,577 129,677 133,350 134,535 135,524 136,780 137,812 139,602 4. Estimated State Aid (prior year x 0%) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) 5. Estimated Municipal Contribution (3.+4.) go 0 0 0 0 0 0 0 0 0 --- G. Funded Status 121% 124% 121% 124% 122% 121% 120% 121% 119% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $8,500 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VAN IWAARDEN BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION PROJECTION $8,500 Lump Sum Pension Valuation Year 2028 2029 2030 2031 2032 2033 2034 Lump sum multiplier 8,500 8,500 8,500 8,500 8,500 8,500 8,500 A. Actuarial Accrued Liability (AAL 1. AA L $2,889,645 $3,057,889 $3,169,169 $3,342,720 $3,586,596 $3,716,222 $3,957,960 2. Normal Cost 171,775 170,482 172,389 172,455 172,495 172,591 168,069 B Spe cial Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,412,729 3,571,339 3,674,660 3,835,791 4,064,300 4,179,941 4,403,528 3. Expected Benefit Payments (149,470) (210,399) (158,263) (99,585) (220,016) (119,484) (237,355) 4. Expected Contributions 159,147 159,147 159,147 159,147 159,147 159,147 159,147 5. Expected Expenses (prior year x 3.5%) (21,410) (22,159) (22,935) (23,738) (24,569) (25,429) (26,319) 6. Interest to end of val year 170,343 176.732 183,182 192,685 201,079 209,353 217,563 7. Assets at end of val year 3,571,339 3,674,660 3,835,791 4,064,300 4,179,941 4,403,528 4,516,564 C. Unfunded AAL 0 0 0 0 0 0 0 D. Credit for surplus 52,308 51,345 50,549 49,307 47,770 46,372 44,557 E._Amortization Paym ent 1. Amortization Period 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 F Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 119,467 119,137 121,840 123,148 124,725 126,219 123,512 2. Administrative Expense (prior year x 3.5%) 21,410 22,159 22,935 23,738 24,569 25,429 26,319 3. Annual Contribution (1.+2.) 140,877 141,296 144,775 146,886 149,294 151,648 149,831 4. Estimated State Aid (prior year x 0%) (159,147) (159, 147) (159 147) (159, 147) (159,147) (159, 147) (159, 147) 5. Estimated Municipal Contribution (3.+4.) 0 0 0 0 0 0 0 eJJJJJAJJAA G. Funded Status 118% 117% 116% 115% 113% 112% 111% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $8,500 L/O/C/R: 4/ctl/slb/emk 4/3/2019 VA N IWAA RD EN BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION PROJECTION $8,750 Lump Sum Pension Valuation Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 Lump sum multiplier 7,700 8,750 8,750 8,750 8,750 8,750 8,750 8,750 8,750 A.Actuarial Accrued Liability (AAL] 1. AA L $2,809,184 $2,350,703 $2,607,510 $2,340,856 $2,557,649 $2,648,218 $2,813,932 $2,685,330 $2,898,342 2. Normal Cost 111,161 174,879 171,880 176,118 176,144 176,198 176,249 176,685 176,919 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,405,643 2,855,370 3,100,435 2,836,802 3,040,073 3,119,132 3,270,446 3,133,270 3,327,911 3. Expected Benefit Payments (846,420) (43,087) (550,764) (81,798) (212,287) (145,019) (433,201) (102,110) (248,632) 4. Expected Contributions 159,147 159,147 159,147 159,147 159,147 159,147 159,147 159,147 159,147 5. Expected Expenses (prior year x 3.5%) (15,708) (16,258) (16,827) (17,416) (18,026) (18,657) (19,310) (19,986) (20,686) 6. Interest to end of val year 152,708 145,264 144 811 143,338 150,225 155,843 156,188 157,590 163.641 7. Assets at end of val year 2,855,370 3,100,435 2,836,802 3,040,073 3,119,132 3,270,446 3,133,270 3,327,911 3,381,381 C. Unfunded AAL 0 0 0 0 0 0 0 0 0 D. Credit for surplus 59,646 50,467 49,293 49,595 48,242 47,091 45,651 44,794 42,957 E._Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 0 0 F_Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 51,515 124,412 122,587 126,523 127,902 129,107 130,598 131,891 133,962 2. Administrative Expense (prior year x 3.5%) 15.708 16,258 16,827 17 416 18,026 18.657 19.310 19,986 20,686 3. Annual Contribution (1.+2.) 67,223 140,670 139,414 143,939 145,928 147,764 149,908 151,877 154,648 4. Estimated State Aid (prior year x 0%) (159, 147) (159.147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) (159, 147) 5. Estimated Municipal Contribution (3.+4.) 0 0 0 0 0 0 0 0 0 --- G. Funded Status 121% 121% 119% 121% 119% 118% 116% 117% 115% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $8,750 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VAN IWAA RD EN - BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION PROJECTION $8,750 Lump Sum Pension Valuation Year 2028 2029 2030 2031 2032 2033 2034 Lump sum multiplier 8,750 8,750 8,750 8,750 8,750 8,750 8,750 A._Actuarial Accrued Liability (AAL] 1. AA L $2,968,350 $3,141,714 $3,256,388 $3,435,116 $3,686,191 $3,819,614 $4,068,405 2. Normal Cost 176,827 175,496 177,459 177,527 177,568 177,667 173,012 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,381,381 3,534,402 3,629,957 3,784,453 4,011,702 4,125,722 4,353,933 3. Expected Benefit Payments (153,394) (216,173) (162,556) (102,200) (226,216) (122,767) (244,140) 4. Expected Contributions 159,147 159,147 159,147 163,037 166,331 169,586 172,485 5. Expected Expenses (prior year x 3.5%) (21,410) (22,159) (22,935) (23,738) (24,569) (25,429) (26,319) 6. Interest to end of val year 168,678 174 740 180,839 190,150 198,474 206,821 215,247 7. Assets at end of val year 3,534,402 3,629,957 3,784,453 4,011,702 4,125,722 4,353,933 4,471,206 C. Unfunded AAL 0 0 0 0 0 0 0 D. Credit for surplus 41,303 39,269 37,357 34,934 32,551 30,611 28,553 E. _Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 FE._Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 135,524 136,227 140,102 142,593 145,017 147,056 144,459 2. Administrative Expense (prior year x 3.5%) 21,410 22,159 22.935 23,738 24,569 25,429 26,319 3. Annual Contribution (1.+2.) 156,934 158,386 163,037 166,331 169,586 172,485 170,778 4. Estimated State Aid (prior year x 0%) (159, 147) (159, 147) (159, 147) (159, 147) (159,147) (159,147) (159,147) -- 5. Estimated Municipal Contribution (3.+4.) 0 0 3,890 7,184 10,439 13,338 11,631 G. Funded Status 114% 112% 111% 110% 109% 108% 107% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $8,750 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VAN IWAARDEN BROOKLYN CENTER FIRE FIGHTER'S RELIEF ASSOCIATION PROJECTION $9,000 Lump Sum Pension Valuation Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 Lump sum multiplier 7,700 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 A. Actuarial Accrued Liability (AAL] 1. AA L $2,809,184 $2,391,678 $2,655,721 $2,385,721 $2,608,581 $2,706,061 $2,879,128 $2,755,451 $2,974,827 2. Normal Cost 111,161 179,876 176,791 181,150 181,177 181,232 181,284 181,733 181,973 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,405,643 2,855,370 3,100,378 2,826,088 3,027,399 3,104,925 3,254,724 3,114,104 3,309,386 3. Expected Benefit Payments (846,420) (43,143) (561,158) (83,188) (213,164) (145,804) (436,650) (104,437) (255,214) 4. Expected Contributions 159,147 159,147 159,147 159,147 159,147 159,147 160,003 163,034 165,854 5. Expected Expenses (prior year x 3.5%) (15,708) (16,258) (16,827) (17,416) (18,026) (18,657) (19,310) (19,986) (20,686) 6. Interest to end of val year 152,708 145,262 144,548 142,768 149,569 155,113 155,337 156.670 162,718 7. Assets at end of val year 2,855,370 3,100,378 2,826,088 3,027,399 3,104,925 3,254,724 3,114,104 3,309,386 3,362,058 C. Unfunded AAL 0 0 0 0 0 0 0 0 0 D. Credit for surplus 59,646 46,369 44,466 44,037 41,882 39,886 37,560 35,865 33,456 E. Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 0 0 F._Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 51,515 133,507 132,325 137,113 139,295 141,346 143,724 145,868 148,517 2. Administrative Expense (prior year x 3.5%) 15,708 16,258 16,827 17.416 18,026 18,657 19,310 19,986 20,686 3. Annual Contribution (1.+2.) 67,223 149,765 149,152 154,529 157,321 160,003 163,034 165,854 169,203 4. Estimated State Aid (prior year x 0%) -- (159,147) (159,147) (159, 147) (159, 147) (159,147) (159,147) (159,147) (159,147) (159,147) 5. Estimated Municipal Contribution (3.+4.) 0 0 0 0 0 856 3,887 6,707 10,056 G. Funded Status 121% 119% 117% 118% 116% 115% 113% 113% 111% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $9,000 L/O/C/R: 4/ctl/slb/emk 4/3/2019 VAN IWAA RDEN BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION PROJECTION $9,000 Lump Sum Pension Valuation Year 2028 2029 2030 2031 2032 2033 2034 Lump sum multiplier 9,000 9,000 9,000 9,000 9,000 9,000 9,000 A. Actuarial Accrued Liability (AAL] 1.AA L $3,047,056 $3,225,540 $3,343,607 $3,527,512 $3,785,787 $3,923,007 $4,178,850 2. Normal Cost 181,879 180,510 182,529 182,599 182,642 182,743 177,955 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,362,058 3,520,397 3,622,292 3,786,390 4,025,978 4,148,828 4,388,776 3. Expected Benefit Payments (157,318) (221,947) (166,850) (104,815) (232,416) (126,049) {250,925) 4. Expected Contributions 169,203 171,789 173,183 177,595 180,449 183,192 185,590 5. Expected Expenses (prior year x 3.5%) (21,410) (22,159) (22,935) (23,738) (24,569) (25,429) (26,319) 6. Interest to end of val year 167,865 174,212 180,700 190,546 199,386 208,234 217147 7. Assets at end of val year 3,520,397 3,622,292 3,786,390 4,025,978 4,148,828 4,388,776 4,514,269 C. Unfunded AAL 0 0 0 0 0 0 0 D. Credit for surplus 31,500 29,486 27,869 25,888 24,019 22,582 20,993 E._Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 F._Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-O.) 150,379 151,024 154,660 156,711 158,623 160,161 156,962 2. Administrative Expense (prior year x 3.5%) 21,410 22,159 22,935 23,738 24,569 25,429 26,319 3. Annual Contribution (1.+2.) 171,789 173,183 177,595 180,449 183,192 185,590 183,281 4. Estimated State Aid (prior year x 0%) (159, 147) (159. 147) (159, 147) (159, 147) (159, 147) (159,147) (159,147) 5. Estimated Municipal Contribution (3.+4.) --- 12,642 14,036 18,448 21,302 24,045 26,443 24,134 --- G. Funded Status 110% 109% 108% 107% 106% 106% 105% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $9,000 L/O/C/R: 4/ctl/slb/emk 4/3/2019 VAN IWAA RD EN BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION PROJECTION $9,300 Lump Sum Pension Valuation Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 Lump sum multiplier 7,700 9,300 9,300 9,300 9,300 9,300 9,300 9,300 9,300 A._Actuarial Accrued Liability (AAL) 1.AA L $2,809,184 $2,440,847 $2,713,574 $2,439,559 $2,669,700 $2,775,472 $2,957,363 $2,839,596 $3,066,609 2. Normal Cost 111,161 185,872 182,684 187,189 187,216 187,273 187,327 187,791 188,039 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,405,643 2,855,370 3,100,309 2,814,801 3,015,570 3,099,559 3,259,920 3,129,173 3,336,027 3. Expected Benefit Payments (846,420) (43,210) (573,630) (84,856) (214,216) (146,746) (440,790) (107,229) (263,113) 4. Expected Contributions 159,147 159,147 160,678 160,837 167,081 170,655 173,521 176,381 178,819 5. Expected Expenses (prior year x 3.5%) (15,708) (16,258) (16,827) (17,416) (18,026) (18,657) (19,310) (19,986) (20,686) 6. Interest to end of val year 152,708 145,260 144 271 142,204 149.149 155,109 155,832 157,688 164 177 7. Assets at end of val year 2,855,370 3,100,309 2,814,801 3,015,570 3,099,559 3,259,920 3,129,173 3,336,027 3,395,224 C. Unfunded AAL 0 0 0 0 0 0 0 0 0 D. Credit for surplus 59,646 41,452 38,674 37,524 34,587 32,409 30,256 28,958 26,942 E. _Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 0 0 F._Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 51,515 144,420 144,010 149,665 152,629 154,864 157,071 158,833 161,097 2. Administrative Expense (prior year x 3.5%) 15,708 16,258 16.827 17 416 18,026 18.657 19,310 19,986 20,686 3. Annual Contribution (1.+2.) 67,223 160,678 160,837 167,081 170,655 173,521 176,381 178,819 181,783 4. Estimated State Aid (prior year x 0%) (159, 147) (159,147) (159,147) (159, 147) (159, 147) (159, 147) (159, 147) (159. 147) (159, 147 5. Estimated Municipal Contribution (3.+4.) --- 0 1,531 1,690 7,934 11,508 14,374 17,234 19,672 22,636 --- G. Funded Status 121% 117% 114% 115% 113% 112% 110% 110% 109% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $9,300 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VA N IWAA RD EN BROOKLYN CENTER FIRE FIGHTER'S RELIEF ASSOCIATION PROJECTION $9,300 Lump Sum Pension Valuation Year 2028 2029 2030 2031 2032 2033 2034 Lump sum multiplier 9,300 9,300 9,300 9,300 9,300 9,300 9,300 A. Actuarial Accrued Liability (AAL] 1. AAL $3,141,502 $3,326,131 $3,448,270 $3,638,387 $3,905,302 $4,047,077 $4,311,384 2. Normal Cost 187,942 186,527 188,614 188,686 188,730 188,834 183,887 B. Special Fund Assets 1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 2. Assets at valuation date 3,395,224 3,563,291 3,672,724 3,846,145 4,097,300 4,227,568 4,478,596 3. Expected Benefit Payments (162,026) (228,876) (172,001) (107,953) (239,857) (129,988) (259,067) 4. Expected Contributions 181,783 183,980 184,970 189,104 191,648 194,099 196,214 5. Expected Expenses (prior year x 3.5%) (21,410) (22,159) (22,935) (23,738) (24,569) (25,429) (26,319) 6. Interest to end of val year 169,720 176,488 183,387 193,743 203,046 212,345 221,700 7. Assets at end of val year 3,563,291 3,672,724 3,846,145 4,097,300 4,227,568 4,478,596 4,611,124 C. Unfunded AAL 0 0 0 0 0 0 0 D. Credit for surplus 25,372 23,716 22,445 20,776 19,200 18,049 16,721 E._Amortization Payment 1. Amortization Period 0 0 0 0 0 0 0 2. Payment 0 0 0 0 0 0 0 F.Annual Contribution Payable 1. Preliminary Contribution (A.2.+E.-D.) 162,570 162,811 166,169 167,910 169,530 170,785 167,166 2. Administrative Expense (prior year x 3.5%) 21,410 22,159 22.935 23,738 24,569 25,429 26.319 3. Annual Contribution (1.+2.) 183,980 184,970 189,104 191,648 194,099 196,214 193,485 4. Estimated State Aid (prior year x 0%) (159, 147) (159, 147) (159, 147) (159, 147) (159. 147) (159, 147) (159, 147) 5. Estimated Municipal Contribution (3.+4.) -- 24,833 25,823 29,957 32,501 34,952 37,067 34,338 AA G. Funded Status 108% 107% 107% 106% 105% 104% 104% Assumptions 5% investment return Contributions and distributions occur mid-year Expenses increase at 3.5% per year Constant 40 active firefighters State Aid remains constant at $159,147 Lump sum multiplier of $9,300 L/D/C/R: 4/ctl/slb/emk 4/3/2019 VAN IWAA RD EN COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhard t, F inanc e Direc to r S UBJ E C T:R es o lutio n Adopting Amend ments to the C ity's C apital P ro jec t F unding P o licy Requested Council Action: - M otion to approve a resolution adop tin g a men d men ts to the C a p ita l Im p rovements F undin g P olicy of the B rooklyn C en ter C ity C ouncil C ode of P olicies B ackground: O n January 13, 2014 the C ity C ounc il adopted a C apital Imp ro vement F unding P o licy that provid es a recurring sourc e of fund ing for the C ity’s 15-year C apital Imp ro vement P lan. T he P o licy was up d ated by the C ity C ounc il o n No vember 27, 2017 and inc o rp o rated in the C ity C ouncil C od e of P olicies – S ection 2.23 F und B ala nce a n d C la ssification P olicy. T he C apital Improvements F und acc o unts for large expend itures (exceeding $50,000) for municipal b uild ings , furnis hings, eq uipment, c o mp uter/radio s ystems , park and trail improvements , and c ap ital p ro jects made p o s s ib le through o uts id e funding s o urc es . T he P olic y s pec ific ally identifies fund ing sourc es of the C apital Imp ro vements F und as follows : 1. Each year, fo llo wing the c o mp letion o f the annual audit (typic ally July) the year-end fund balance of the G eneral F und will be reviewed for s urp lus o p erating fund s . T he aud ited year-end G eneral F und unas s igned fund balance that exc eed s 52% of the next year ’s G eneral F und operating bud get will b e trans ferred to the C apital Imp ro vements F und. 2. Each year, fo llo wing the c o mp letion o f the annual audit (typic ally July) the year-end cash balance of the Brooklyn C enter Liquo r operatio ns will be reviewed for s urplus operating fund s . T he audited year-end Liq uor F und unres tric ted cash balance that exceeds three and a half months of the next year’s b udgeted o p erating exp ens es and o n year o f budgeted capital need s will be trans ferred to the C apital Improvements F und . 3. O n an annual b as is , the C ity will receip t the greater o f $650,000 (o r the full amount if les s than $650,000) o f Loc al G overnment Aid (L G A) received O R 50 perc ent of total LG A. 4. P ro ject c os t s haring grants from R egio nal, C ounty, S tate or F ed eral governments. 5. Tax inc rement funds as applic ab le. 6. Allo cated inves tment earnings b as ed o n the fund’s cash balance Any remaining fund balance at year-end in the C apital Imp ro vements F und will b e c arried forward to fund future capital imp ro vement p ro jects as id entified in the C ity’s C ap ital Impro vement P lan. In 2017/2018 the C ity hired the S heneho n C ompany to d o a market study fo r the liq uor o p erations . A recommend atio n fro m that market s tud y was to utilize $1.3 million in excess c as h fro m the Liq uor F und toward s sto re o wners hip. T he market s tudy analyzed comparable municipal liquo r s to res and found that the municipal p eer group c arried 24.5% o f their as s ets in c as h, c o mp ared to the C ity o f Bro o klyn C enter whic h carried 68% o f our as s ets in c as h. Us ing the peer group average o f 24.5% and as s ets held by the Liq uor F und as of 12/31/2018 o f $3.2 millio n, this would eq uate to c as h b alanc e of $790,000. S taff concurs that a reduc tio n to the liquo r s tore c as h is ap p ro p riate, but believes a meas ure b as ed on operation and c ap ital needs continues to b e more of an ap p ro p riate reflectio n o f c as h requirements . S taff rec o mmend ation is to red uc e the req uirement in c urrent p o licy from 3.5 mo nths of o p erating expens es to 2 mo nths . A comparison o f the calc ulatio n b as ed on the 12/31/2018 cash balance and 2019 b udget is provid ed below. T he c alculatio ns us ed fo r the comparison, inc lud e the o ne-time us e of $900,000 in liq uor fund c as h b alanc e toward s the ac q uis itio n o f property and the c ons tructio n o f the new liquo r s tore. B udget Issues: T he proposed c as h req uired fo r operatio ns wo uld b e reduced fro m $1,852,481 to $1,058,561, whic h maintains a balance s till above the current munic ip al peer gro up average or 24.5% of as s ets as cash. If approved , the recommend ed trans fer to the C ap ital Improvements F und for 2019 wo uld be $325,487. T here would be no trans fer under the c urrent polic y. T he p ro pos ed p o licy c hange, is a one-time adjus tment, and will have a minimal effect o n future annual trans fer amounts as it will c o ntinue to be a fo rmula b as ed on operating and capital need s . S trategic Priorities and Values: S afe, S ecure, S tab le C ommunity AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e C apital Improvements F unding P o licy R eso lutio n 7/1/2019 R es o lutio n Letter C apital Improvements F unding P o licy - P ropos ed C hanges 7/1/2019 Exhib it Member introduced the following resolution and moved its adoption: RESOLUTION NO. _______________ RESOLUTION ADOPTING AMENDMENTS TO THE CAPITAL IMPROVEMENTS FUNDING POLICY OF THE BROOKLYN CENTER CITY COUNCIL CODE OF POLICIES WHEREAS, the City Council of the City of Brooklyn Center adopted an amended Fund Balance and Classification Policy on November 27, 2017, that included the Capital Improvements Funding Policy, within the City Council Code of Policies; and WHEREAS, revisions to the Financial Policies Section 2.23 Fund Balance and Classification Policy have been reviewed by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that Financial Policies Section 2.23 Fund Balance and Classification Policy attached hereto as Exhibit 1 be incorporated into the Code of Policies and hereby adopted. July 8, 2019 Date Mayor ATTEST: City Clerk 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. FINANCIAL POLICIES 2.23 Fund Balance and Classification Policy Capital Project Funds a. Capital Improvements Fund - Large capital expenditures for municipal buildings, furnishings, equipment, computer/radio systems, park and trail improvements, and capital projects made possible through outside funding sources, are accounted for in the Capital Improvements Fund. i. Funding Sources: a. Each year, following the completion of the annual audit (typically July) the year- end fund balance of the General Fund will be reviewed for surplus operating funds. The audited year-end General Fund unassigned fund balance that exceeds 52% of the next year’s General Fund operating budget will be transferred to the Capital Improvements fund. b. Each year, following the completion of the annual audit (typically July) the year- end cash balance of the Brooklyn Center Liquor operations will be reviewed for surplus operating funds. The audited year-end Liquor Fund unrestricted cash balance that exceeds three and a half months two months of the next year’s budgeted operating expenses and one year of budgeted capital equipment needs will be transferred to the Capital Improvements fund. c. On an annual basis, the City will receipt the greater of $650,000 (or the full amount if less than $650,000) of Local Government Aid (LGA) received OR 50 percent of total LGA. d. Project cost sharing grants from Regional, County, State or Federal governments. e. Tax increment funds as applicable f. Allocated investment earnings based on the fund’s cash balance Any remaining fund balance at year-end in the Capital Improvements Fund will be carried forward to fund future capital improvement projects as identified in the City’s Capital Improvement Plan. COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhard t, F inanc e Direc to r S UBJ E C T:R es o lutio n Ac cepting Bid and Award ing a C o ntract for Munic ipal Liq uor S tore Eq uipment, R acking & S helving Requested Council Action: - M otion to approve a resolution of the lowest resp onsible bid and a ward a contract to S t. C lou d R efrig eration for M unicipal L iq u or S tore E quip men t, R a cking & S helvin g B ackground: Bids fo r Municipal Liq uor S tore Equipment, R ac king & S helving were received and opened on June 27, 2019. T he p ro ject b id inc luded walk-in c o o ler/beer cave (p anels, s liding glas s d o o r, pallet racking, and refrigeratio n), s ales floor shelving and moving and ins talling o wner s upp lied racking fro m the previo us s tore. T he C ity s ep arated thes e items from the bid for c o ns truc tion o f the munic ip al liq uor sto re, bec ause of the s p ecialty of the fixtures and eq uipment and that it wo uld likely be mo re cost effective to have these items under a separate c ontrac t. T he C ity wo rked with a vend o r to help des ign the s p ecific ations and was provid ed a c o s t es timate fro m that vendo r that exceeded $200,000, whic h exceeded the C ity’s thresho ld and req uired the contrac t to be c ompetitively b id . Two bids were rec eived and res ults are tabulated below: Bidder Base Bid S t. C lo ud R efrigeration $170,910 S tan Morgan & As s o ciates $198,500 T he lo west res pons ib le b as e b id o f $170,910 was sub mitted by S t. C lo ud R efrigeration (S C R Inc .) of S t. C lo ud, Minnes ota. S C R Inc. has the experience, eq uipment and c ap acity to q ualify as the lowes t respo ns ible b id d er fo r the projec t. T he C ity p revious ly wo rked with S C R Inc . at S to re #1 when we completed the beer cave. B udget Issues: T he lo w bid amo unt of $170,910 is 18.6 p ercent under the es timated cost of $210,000. T he C ity will coordinate with B2 Builders (the b uilding c o nstruc tio n c o ntracto r) and S t. C lo ud R efrigeratio n to comp lete this wo rk at the ap p ro p riate time d uring the b uildings cons tructio n. S trategic Priorities and Values: S afe, S ecure, S tab le C ommunity AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e R esolution Award ing C ontrac t fo r Liquo r S tore Eq uipment 7/1/2019 R es o lutio n Letter Equip ment & F ixture S p ecific ations 7/1/2019 Bac kup Material Equip ment & F ixtures Image 7/1/2019 Bac kup Material Member introduced the following resolution and moved its adoption: RESOLUTION NO. _______________ RESOLUTION ACCEPTING BID AND AWARDING CONTRACT FOR MUNICIPAL LIQUOR STORE EQUIPMENT, RACKING & SHELVING WHEREAS, pursuant to an advertisement for bids for Municipal Liquor Store Equipment, Racking & Shelving, two bids were received, opened and tabulated by the City Finance Director on the 27 th day of June 2019. Said bids were as follows: Bidder Base Bid St. Cloud Refrigeration $170,910 Stan Morgan & Associates $198,500 WHEREAS, it appears that St. Cloud Refrigeration (SCR Inc.) of St. Cloud, Minnesota is the lowest responsible bidder; and WHEREAS, the City reasonably expects to spend monies from the Municipal Liquor fund on a temporary basis to pay the expenditures described in this resolution; and WHEREAS, the City reasonably expects to reimburse itself for such expenditures from the proceeds of taxable or tax exempt bonds, the debt service of which is expected to be paid from property taxes or municipal liquor operation revenues. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, as follows: 1. The Finance Director is hereby authorized and directed to enter into a contract with St. Cloud Refrigeration (SCR Inc.) St. Cloud, Minnesota, in the name of the City of Brooklyn Center for Municipal Liquor Store Equipment, Racking & Shelving, according to the plans and specifications on file in the office of the City Finance Director. 2. This resolution is intended to constitute official intent, for purposes of Treasury Regulations Section 1.150-2(d) and any successor law, regulation, or ruling, to issue taxable or tax exempt reimbursement bonds, in an amount not to exceed $4 million, to finance the acquisition, construction and equipping of the property described above and a municipal liquor store to be located thereon. This resolution will be modified to the extent required or permitted by Treasury Regulations or any successor law, regulation, or ruling. RESOLUTION NO. _______________ July 8, 2019 Date Mayor ATTEST: City Clerk 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. BROOKLYN CENTER LIQUOR Equipment & Fixture Specifications 1 WALK IN COOLER / BEER CAVE: PANELS: • Manufacturer: Carroll Coolers or Approved Equal (See Exhibit A) • External (O.D.): 62’4" Width x 30’0” Depth x 13'0" Height • Wood rail construction cooler fabricated of modular design and construction. Finishes: • Exterior Walls/Ceiling: Stucco Galvanized - 26 Ga. • Interior Walls/Ceiling: Stucco Galvanized/Embossed White – 26 Ga. Panel Construction: • Foamed-in-place polyurethane, heat cured and bonded to the metal skin. Tongue and grove edges on adjoining sides of every panel with a flexible vinyl gasket around the interior and exterior of each tongue edge. • Walls: 4" UL Listed Class 1 Foam • Ceilings: 4" UL Listed Class 1 Foam • NSF, UL, UI FI25 Flame Spread Certified • Warranty: Panels to be free from defects in material and workmanship under normal use and service. Panels are warranted against delamination for a period of ten (10) years. • Buck openings: (1) 72” Width x 96” Height (for double acting door) and (1) 113-3/4” Width x 82” Height (for sliding door) Accessories: • Ceiling Hangers • Wood Screeds • Lag Down Ceilings • (2) Digital Thermometer/ Switch • (2) Vapor Proof Light Fixture (Bulb not included) • (2) 80”x102” Strip Curtain (8” Strips) Model #401SA80880102 BEER CAVE ENTRANCE DOOR: Sliding Glass Door: • Manufacture: Commercial Styline (See Exhibit B) • Model: ABC Beer Cave Entrance Door: HH (1) 120” Width Frame and Door • Part #04A2AHAA-NL-B-B-OXXO; Surface Mount Profile • Satin black smooth frame, split sliding opens, net opening 73 1/8” Width x 82” Height • ADA Compliant, DOE 2017 Compliant; Energy Efficient, vacuumed insulated glass (no-heat glass pack technology) • Heated / Insulated Header and Side Rails • 10 Year Glass Pack Warranty • Net Cooler Opening: 113-3/4” Width x 82” Height • Professional Installation included CONVEYOR SHELVING: Conveyor Shelving: Per Attached Drawing • Manufacture: BOF Conveyor Shelving (See Exhibit C) • Model: Nyla-Track II • (2) 236-1/2” Width Racking Systems at 5’0” Depth with 2” Uprights at 91-1/2” Height • Each Run Consists of (3) 30D Facings and (1) 265 Facing: o (7) Levels of 6 Pack Narrow Slides and (1) Top Level of Bare Frame with Wire Grid Decking o (7) Levels of Black Aluminum Price Tag Moldings • Galvanized Metal Framing BROOKLYN CENTER LIQUOR Equipment & Fixture Specifications 2 Mr. David Hunt Design-Build Consulting, LLC Re: Brooklyn Center Liquor Store Preliminary Budget WALK IN COOLER / BEER CAVE: CONT. DOUBLE ACTING ENTRANCE DOOR: Cooler Service Door: • Manufacturer: Senneca Holdings Chase Doors or Approved Equal (See Exhibit D) • Model Number: Durulite Retailer • Finished Net Opening Required: 6’0" Width x 8'0" Height • Medium Duty, Rotomolded Door, and Tube Style Frame (Primed Steel –painted by others). • Front Finish: White; Back Finish: White - Colors must be confirmed with architect • Equal Unit Configuration o Panel 1: Door swing left hand – 1 ½” Thick Foam Core Door, ABS framed window - black, rectangular/square with clear polycarbonate 16”x16” window - centered on door, 60” from floor; Impact Protection Back AND Front Standard Bumper – Black, 36” Height; Push Plate Back AND Front 4” x 16” – Polyethylene. o Panel 2: Door swing right hand – 1 ½” Thick Foam Core Door, ABS framed window - black, rectangular/square with clear polycarbonate 16”x16” window - centered on door, 60” from floor; Impact Protection Back AND Front Standard Bumper – Black, 36” Height; Push Plate Back AND Front 4” x 16” – Polyethylene. Storage Room Service Door: • Manufacturer: Senneca Holdings Chase Doors or Approved Equal (See Exhibit D) • Finished Net Opening Required: 6’0" Width x 8'0" Height • Medium Duty, Rotomolded Door, and Tube Style Frame (Primed Steel –painted by others). • Front Finish: White; Back Finish: White - Colors must be confirmed with architect • Equal Unit Configuration o Panel 1: Door swing left hand – 1 ½” Thick Foam Core Door, ABS framed window - black, rectangular/square with clear polycarbonate 16”x16” window - centered on door, 60” from floor; Impact Protection Back AND Front Standard Bumper – Black, 36” Height; Push Plate Back AND Front 4” x 16” – Polyethylene. o Panel 2: Door swing right hand – 1 ½” Thick Foam Core Door, ABS framed window - black, rectangular/square with clear polycarbonate 16”x16” window - centered on door, 60” from floor; Impact Protection Back AND Front Standard Bumper – Black, 36” Height; Push Plate Back AND Front 4” x 16” – Polyethylene. REFRIGERATION: REFRIGERATION: Condensing Units for Beer Cave: • Manufacturer: Climate Control or Approved Equal (See Exhibit E) • Description: Split System Med Temp R448A Air Cooled, Scroll Remote Outdoor Condensing Units • Model: (2) MOZO060M63CF • Horsepower: 6 hp Scroll Air-Cooled Unit • Extras: Liquid line, filter, drier, sight glass installed, insulated and heated receiver • Electrical: 208-230/3/60, • Warranty: Compressor-motor warranty extended to 5-years, parts only, no labor • (4) Center Mount & (2) Low Profile Evaporators for Cooler or Approved Equal (See Exhibit E) • Manufacturer: Climate Control • Description: (2) Air defrost Center Mount Coils and (1) Air defrost Low Profile Coil per Condensing Unit • Model: (4) TLC134SGE / (2) LSC140SGK • Extras: Control Option: Electronic intellGen Refrigeration Controller (IRC) unit with factory mounted, tested and Calibrated with an electronic expansion valve, pressure transducer, temperature sensors, control board and User interface • Factory Installed EC Fan Motors • Electrical: 115/1/60 • Exterior of all evaporator cabinets to be painted white • Price as option: intellGen Webserver Card (iWC) which enable local and remote monitoring on any phone, tablet, or PC BROOKLYN CENTER LIQUOR Equipment & Fixture Specifications 3 Mr. David Hunt Design-Build Consulting, LLC Re: Brooklyn Center Liquor Store Preliminary Budget STORE SHELVING PACKAGE: SALES FLOOR: Per Attached Drawing • Manufacture: Lozier Shelving (See Exhibit F) • (7) 20’ Double Sided Gondola Runs; 22” Low Base; 48” Height; Solid Marteck Backs (CHR), Metal color: Q88. o Each Gondola Run has (2) Flush Merchandising Panel 48” High x 48” Wide, w/ Solid Marteck Backs (CHR) and Metal color: Q88. • (2) 8’ Double Sided Gondola Runs; 22” Low Base; 48” Height; Solid Marteck Backs (CHR), Metal color: Q88. o Each Gondola Run has (2) Flush Merchandising Panel 48” High x 48” Wide, w/ Solid Marteck Backs (CHR) and Metal color: Q88. • (1) 42’ Single Sided Wall Run; 22” Low Base; 48” Height; Solid Marteck Backs (CHR), Metal color: Q88. o Wall Run has (2) Laminated 48” High x 25” Wide (CHR) End Panels • (1) 40’ Single Sided Wall Run; 22” Low Base; 48” Height; Solid Marteck Backs (CHR), Metal color: Q88. o Wall Run has (2) Laminated 48” High x 25” Wide (CHR) End Panels • (1) 16’ Double Sided Gondola Run; 16” Low Base; 48” Height; Pegboard Backs (CHR), Metal color: Q88. o Gondola Run has (2) Flush Merchandising Panel 48” High x 36” Wide, w/ Pegboard Back Front and Solid Marteck Back (CHR) and Metal color: Q88. • (1) 12’ Single Sided Wall Run; 22” Low Base; 48” Height; Solid Marteck Backs (CHR), Metal color: Q88. o Wall Run has (2) Laminated 48” High x 25” Wide (CHR) End Panels • (1) 4’ Single Sided Wall Run; 22” Low Base; 48” Height; Solid Marteck Backs (CHR), Metal color: Q88. o Wall Run has (2) Laminated 48” High x 25” Wide (CHR) End Panels • (1) 6’ Single Sided Wall Run; 13” Low Base; 84” Height; Solid Marteck Backs (CHR), Metal color: Q88. Wall Run has (2) Laminated 84” High x 16” Wide (CHR) End Panels. Note: Secure to perimeter wall. • (12) 36” Width x 13” Depth TL Shelves – Color: Q88 • (4) 36” Width x 22” Depth TL Shelves – Color: Q88 • (302) 48” Width x 22” Depth TL Shelves – Color: Q88 • Colors: CHR (Black) Q88 (SilverVein) - Colors must be confirmed with architect • Manufacture: Lozier Shelving (See Exhibit G) • (1) 64’ Single Sided Wall Heavy Duty; 22” Low Base Heavy Duty; 120” Height; Solid Marteck Backs (CHR), Metal color: Q88 with Upright Anchors, w/ Heavy Duty Multi-Function, 17- 96” width x 22” deep Wire Grid Shelf (Heavy Duty), and (2) 96” width x 22” deep Wood Shelf. (4) Shelf Supports Per Sections; Back Combination 1-42”H, 1-48”H, 1-24”H. Note: Secure to perimeter wall at 7’6” and 9’6” (See Instructions). Wall Run Has (1) Laminated 120” Height x 25” Wide (CHR) End Panels – Left Hand • (10) Galvanized Upright Wall Bracket, slot mount, end • (9) Galvanized Upright Wall Bracket, slot mount, center • Colors: CHR (Black) Q88 (SilverVein) - Colors must be confirmed with architect BEER CAVE PALLET SHELVING: Per Attached Drawing • Manufacture: Teilhaber Shelving or Approved Equal (See Exhibit H) • 35’ Width x 36” Depth – south wall • Consists of: (2) Levels each section; wire grid decking; 12’0” high standards – 3” x 3”; 84” Width Beams - 4 ½” Thick • Steel Color: Painted Black • Include Rack Protector for all new front uprights AND (12) additional Rack Protectors for existing pallet racking BROOKLYN CENTER LIQUOR Equipment & Fixture Specifications 4 Mr. David Hunt Design-Build Consulting, LLC Re: Brooklyn Center Liquor Store Preliminary Budget LABOR AND DELIVERY: INSTALLATION OF EQUIPMENT AND FIXTURE PACKAGES: Installation of Walk-in Beer Cave Panel Package: Setting wall and ceiling panels for walk-in beer cave cooler and installation of (2) double acting entrance doors. Installation of entrance glass door at separate time as panels to allow for sheetrock to be applied to boxes. Installation of Refrigeration Systems: Condensing units to be located on roof of building. Includes: Permit, crane service, piping material and pipe covering, refrigerant, labor to set condensing units in place, hang evaporators, and labor to pipe refrigeration and drain lines, start and check for proper operation and 1 year labor warranty. Installation of Gravity Flow Shelving and Pallet Shelving: Setting in place gravity flow shelving uprights and top & bottom shelves (remaining shelf installation by owner). Strip curtains hung and supported by panel and gravity flow uprights. Top shelf of gravity flow racking to use wire grid decking for storage. Installation of pallet racking according to manufactures specifications. Relocation of Customer Supplied Existing Pallet & Back Room Shelving and Reach in Coolers/Freezer: Coordination with owner for removal and relocation of (2) 3 door display coolers and (1) 2 door display freezer and current back room and pallet racking. FREIGHT TO JOBSITE: Freight to jobsite for all equipment and fixtures. Receiving equipment and fixtures at jobsite and unloading of trucks, hauling into building, and inspection of equipment for damage. Note there is no loading dock available. SPECIAL NOTES: • All electrical hook up and Beer Cave Lighting by Electrician • Roof penetrations, roofing, or building core drilling by General Contractor • Pallet Racking and Wall Shelving Backing by General Contractor BROOKLYN CENTER LIQUOR Brooklyn Center, Minnesota Date: April 5, 2019 Scale: 3/16" = 1'0" WA L K I N B E E R C O O L E R 13 ' 0 " h i g h - w h i t e i n t e r i o r B U L L E T I N B O A R D UP SPR. MI C R O W A V E U. C . FR I D G E CO M P . u b a n k BU L L E T I N B D 2" WATER 6" FIRE G F I G F I G F I G F I 6 6 D C 8 8 G F I G F I D C D C D C D C D C DC DC DC DC EL E C . L A T C H OR S T R I K E & KE Y C A R D EL E C . L A T C H OR S T R I K E & KE Y C A R D EL E C . L A T C H OR S T R I K E & KE Y C A R D EL E C . L A T C H OR S T R I K E & KE Y C A R D EL E C . L A T C H OR S T R I K E & KE Y C A R D PA N I C PA N I C PA N I C EL E C . L A T C H OR S T R I K E & KE Y C A R D EL E C . L A T C H OR S T R I K E & KE Y C A R D EL E C . L A T C H OR S T R I K E & KE Y C A R D D C D C D C DC DC DO O R B U Z Z E R DO O R CH I M E SE N S O R DO O R B U Z Z E R AN D D O O R CH I M E SP E A K E R DO O R C H I M E OV E R R I D E O F F I C E O F F I C E O F F I C E O F F I C E O F F I C E O F F I C E 12 ' W a l l R u n , 2 2 " D e c k s , 4 8 " H i g h w/ 3 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 4' W a l l R u n , 2 2 " D e c k , 4 8 " H i g h w/ 3 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 6' W a l l R u n , 1 3 " D e c k , 8 4 " H i g h w/ 6 r o w s o f 1 3 " s h e l v e s & e n d p a n e l s 16 ' G o n d o l a R u n , 1 6 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 1 5 " s h e l v e s & e n d p a n e l s 40 ' W a l l R u n , 2 2 " D e c k s , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 42 ' W a l l R u n , 2 2 " D e c k s , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 64 ' W a l l R u n , 2 2 " D e c k s , 1 2 0 " H i g h w/ 5 r o w s o f 2 2 " s h e l v e s & ( 1 ) L H e n d p a n e l wit h w i d e s p a n h e a v y d u t y r a c k i n g w i t h 2 r o w s o f w i r e g r i d s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s (7 ) L e v e l s o f ( 3 ) 5 8 " & ( 1 ) 5 0 . 5 " W i d e S h e l v e s x 5 ' D e e p w i t h 6 p a c k s l i d e s a n d 3 0 " D e e p f l a t t o p g r i d shelf (5) 12' High x 36" Deep x 84" Length Pallet Racking w/ 2 rows of shelves, 3 levels e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s e n d c a p b y o t h e r s re a c h i n c o o l e r s b y o t h e r s ic e m e r c h a n d i s e r b y o t h e r s 8'0 " h i g h s t r i p c u r t a i n 8'0 " h i g h s t r i p c u r t a i n NO T E : S H I F T E D S T U D W A L L S 1 ' 0 " W I D E R OW N E R S U P P L I E D R A C K I N G - M O V E D & I N S T A L L E D B Y E Q U I P MENT SUPPLIER CH A S E D O O R : D u r u l i t e H D T r a f f i c D o o r 72 " W i d t h x 9 6 " H e i g h t N e t O p e n i n g CH A S E D O O R : D u r u l i t e H D T r a f f i c D o o r 72 " W i d t h x 9 6 " H e i g h t N e t O p e n i n g 12 0 " W i d t h Au t o m a t i c E n t r a n c e D o o r (S u r f a c e M o u n t e d ) CR O S S S E C T I O N " A " SA L E S F L O O R - AN C H O R I N G W A L L S E C T I O N 2X 4 B l o c k i n g U p r i g h t CR O S S S E C T I O N " B " PA L L E T R A C K I N G S E C T I O N - 2X 1 2 & 2 x 6 B L O C K I N G 2X 1 2 B l o c k i n g L e v e l 2 S h e l f L e v e l 1 S h e l f U p r i g h t (2 ) 7 2 " A N D ( 3 ) 6 0 " X 2 8 " D E E P S E C T I O N S - V E R I F Y S H EL F L A Y O U T W I T H O W N E R OW N E R S U P P L I E D R A C K I N G - M O V E D & I N S T A L L E D B Y E Q U I P MENT SUPPLIER (2 ) 7 2 " A N D ( 2 ) 6 0 " X 2 6 " D E E P S E C T I O N S - V E R I F Y S H ELF LAYOUT WITH OWNER (7 ) L e v e l s o f ( 3 ) 5 8 " & ( 1 ) 5 0 . 5 " W i d e S h e l v e s x 5 ' D e e p w i t h 6 p a c k s l i d e s a n d 3 0 " D e e p f l a t t o p g r i d shelf O W N E R S U P P L I E D C O O L E R - M O V E D & I N S T A L L E D B Y E Q U I P M E N T S U P P L I E R O W N E R S U P P L I E D C O O L E R - M O V E D & I N S T A L L E D B Y E Q U I P M E N T S U P P L I E R O W N E R S U P P L I E D F R E E Z E R - M O V E D & I N S T A L L E D B Y E Q U I P M E N T S U P P L I E R O W N E R S U P P L I E D C O O L E R - M O V E D & I N S T A L L E D B Y E Q U I P M E N T S U P P L I E R Cr o s s S e c t i o n " A " Cr o s s S e c t i o n " B " 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s re m o v e 4 8 " s e c t i o n h e r e re m o v e 4 8 " s e c t i o n h e r e 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s 20 ' G o n d o l a R u n , 2 2 " D e c k , 4 8 " H i g h w/ 2 r o w s o f 2 2 " s h e l v e s & e n d p a n e l s OW N E R S U P P L I E D R A C K I N G - M O V E D & I N S T A L L E D B Y E Q U I P ME N T S U P P L I E R (4 ) 8 4 " X 3 6 " D E E P S E C T I O N S - S E E D E T A I L F O R S H E L F LA Y O U T - A D D N E W R A C K P R O T E C T O R S OW N E R S U P P L I E D R A C K I N G - M O V E D & I N S T A L L E D B Y E Q U I P ME N T S U P P L I E R (5 ) 8 4 " X 2 8 " D E E P S E C T I O N S - S E E D E T A I L F O R S H E L F LA Y O U T - A D D N E W R A C K P R O T E C T O R S BL O C K I N G I N S T A L L E D B Y GE N E R A L C O N T R A C T O R BL O C K I N G I N S T A L L E D B Y GE N E R A L C O N T R A C T O R Ne w R a c k Pro t e c t o r 2X 6 B l o c k i n g 5 ' 0 " 5 ' 0 " 62' 4" 30 ' 0 " 6' 5 " 6' 5 " 19 ' 8 - 1 / 2 " 1 0 ' 0 " 0 ' 6 " 8 ' 0 " 9 ' 5 " 4 ' 6 " 8 ' 0 " 1 2 ' 0 " 4 ' 6 " C r o s s S e c t i o n " B " Cross Section "B" 1 0 ' 6 " COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Do ran C o te P.E. Direc tor of P ublic Wo rks S UBJ E C T:R es o lutio n Ac cepting Bid and Award ing a C o ntract, Impro vement P ro ject No. 2018-10, Lift S tatio n 2 Improvement P ro jec t Requested Council Action: - M otion to approve a resolution of the lowest resp onsible bid and award a contract to P C iR oa d s, L L C for Improvement P roject N o. 2018-10, L ift S ta tion 2 Imp rovement P roject B ackground: Bids fo r the Lift S tation 2 Improvement P rojec t were s ched uled to be received and opened o n June 5, 2019, however, no bids were rec eived. T he projec t was re-ad vertis ed and bids were received and opened on June 26, 2019. Two b id s were rec eived and the res ults are tabulated b elo w: Bidders Total Amount B id P C iR oads, LLC $997,000.00 Magney C ons tructio n, Inc . $1,438,700.00 O f the two b id s rec eived , the lo west b as e bid of $977,000 was sub mitted b y P C iR oads, LLC of S t. Mic hael, Minnesota. T he city’s c o nsultant has reviewed the b id s and is recommend ing award ing the contrac t to P C iR o ad s , LLC . T his c o ntracto r has the experience, eq uipment and c ap acity to q ualify as the lowes t res p o nsible bidder fo r the p ro ject and that they have wo rked o n o ther similar projec ts in the past. B udget Issues: T he b id amo unt of $997,000 is over the 2018 C apital Improvement P rogram (C I P ) b udgeted for this work. T he total estimated bud get includ ing contingenc ies , adminis tratio n, engineering and legal was $850,000 and is amended to $1,100,000, an ap p ro ximate 29 perc ent increase to the originally bud geted amount (s ee attac hed R es o lutio n – C o s ts and R evenues tab les ). F unding for this projec t is und er the S anitary S ewer Utility F und , which has enough c as h b alanc e to absorb the ad d itional c o s t. S trategic Priorities and Values: S afe, S ecure, S tab le C ommunity AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e R esolution 7/1/2019 C o ver Memo Bid Evaluation 7/2/2019 Bac kup Material Member introduced the following resolution and moved its adoption: RESOLUTION NO._______________ RESOLUTION ACCEPTING BID AND AWARDING A CONTRACT, IMPROVEMENT PROJECT NO. 2018-10, LIFT STATION 2 IMPROVEMENT PROJECT WHEREAS, pursuant to an advertisement for bids for Improvement Project No. 2018-10, bids were received, opened and tabulated by the City Clerk and City Engineer on the 26 th day of June, 2019. Said bids were as follows: Bidders Total Amount Bid PCiRoads, LLC $997,000.00 Magney Construction, Inc. $1,438,700.00 WHEREAS, the City Engineer recommends that the contract be awarded based on the total base bid; WHEREAS, it appears that PCiRoads, LLC of St. Michael, Minnesota is the lowest responsible bidder. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, that 1. The Mayor and City Manager are hereby authorized and directed to enter into a contract with PCiRoads, LLC of St. Michael, Minnesota in the name of the City of Brooklyn Center, for Improvement Project No. 2018-10, according to the plans and specifications therefore approved by the City Council and on file in the office of the City Engineer. 2. The estimated project costs and revenues are as follows: Amended COSTS Estimated per Low Bid Construction Cost $ 780,000 $ 997,000 Engineering and Administrative $ 50,000 $ 100,000 Contingency $ 20,000 $ 3,000 TOTAL $ 850,000 $1,100,000 Amended REVENUES Estimated per Low Bid Sanitary Sewer Utility $ 850,000 $1,100,000 RESOLUTION NO._______________ July 8, 2019 Date Mayor ATTEST: City Clerk 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. H:\BRCN\R22118055\6_Plans-Specs\B_Bid Tabulation\Bid Evaluation Letter_SGN.docx June 27, 2019 Mr. Michael Weber Public Utilities Supervisor City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Re: Bid Results Lift Station No. 2 Rehabilitation BMI Project No. R22.118055 Dear Mr. Weber, Bids were received from all 2 contractors by 10:00 a.m. on Wednesday June 26, 2019 and are summarized below: Bidders Total Amount Bid PCiRoads, LLC $997,000.00 Magney Construction, Inc. $1,438,700.00 The bid package did not contain any wording or ambiguities so as to force the Contractor to build in additional contingencies. We feel that the bids received were competitive and responsive and rebidding of the project would not provide any cost savings. PCiRoads, LLC sumbitted the lowest responsive and responsible bid. We recommend that the contract be awarded to PCiRoads, LLC for the total amount of $997,000. Sincerely, BOLTON & MENK, INC. Steve Nelson, P.E. Project Manager COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhard t, F inanc e Direc to r S UBJ E C T:R es o lutio n R elating to a Multifamily R ental Ho using F acility and the Issuanc e of C o nduit Ho us ing R evenue Bond s und er Minnes o ta S tatutes , C hap ter 462C , as Amend ed ; G ranting P reliminary Ap p ro val T hereto ; C alling for a P ub lic Hearing; Es tab lis hing C o mp lianc e with C ertain R eimburs ement R egulations Und er the Internal R evenue C o d e of 1986, as Amended; and Taking C ertain O ther Ac tions with R espec t T hereto (R EE Xerxes Avenue S enior Ho using P ro ject) Requested Council Action: - M otion to approve a resolution rela tin g to a M ultifamily R enta l H ou sing F acility a n d th e Issu a n ce of C onduit H ousing R evenue B on d s u n d er M innesota S tatu tes, C h a p ter 46 2 C , a s a men d ed ; G ranting p reliminary a p p roval th ereto; C allin g for a P u b lic H ea rin g ; E sta b lishing C ompliance with certa in reimbursemen t reg u lation s u n d er the Intern a l R evenue C ode of 1986, as a men d ed ; and Ta king certa in oth er a ctions with respect th ereto (R E E X erxes Avenue S enior H ousing P roject) B ackground: O n F ebruary 11, 2019 the C ity C ounc il ap p roved a res olution calling fo r a pub lic hearing on a p ropos ed cond uit d eb t is sue fo r the R EE Xerxes Avenue S enior Hous ing P ro ject with a maximum aggregate p rinc ipal amo unt of the bonds to b e is s ued to financ e the projec t of $19,000,000. R eal Es tate Eq uities , Inc. is no w req uesting an amendment fro m the o riginal p rinc ip al amount of up to $38,000,000. R eal Es tate Equities, Inc. will utilize the is s uanc e of c o nduit b o nds to financ e the ac q uisitio n, cons tructio n, and eq uipping o f an ap p ro ximately 140 unit s enior rental hous ing fac ility and related amenities loc ated at 5801 Xerxes Avenue No rth. T he b o nds mus t receive an alloc ation o f the bond ing authority of the S tate o f Minnesota. An applic ation for s uc h an allo catio n mus t be made p ursuant to the req uirements o f Minnes o ta S tatutes , C hapter 474A and p reliminary approval of the is s uance o f Bo nds by the C ity C o uncil is s ufficient to autho rize the s ubmission of an applic ation to the S tate o f Minnesota fo r an allo catio n of bond ing authority with respec t to the Bond s to finance the pro jec t. R eal Estate Equities has s ubmitted an ap plic ation for cond uit revenue bo nd p ro ject financ ing along with the ap p licable fee. C ity s taff and b o nd attorney have reviewed the ap p lication and concur that meets the c riteria s et fo rth in the C ity’s cond uit debt adminis trative guidelines . If the resolutio n is approved a p ublic hearing will be held o n or after Augus t 12th, 2019. A b rief p res entatio n o n the proc es s will b e prepared and p res ented as an introductio n to the public hearing. B udget Issues: T he to tal ad ministrative fee that the C ity will rec eive fo r the issuanc e will be ap p ro ximately $127,000. T he Bond s will not c o nstitute a charge, lien, or enc umbrance, legal o r equitable, upon any property o f Bro o klyn C enter. T he is s uance o f the Bond s will no t affec t the C ity’s credit rating. S trategic Priorities and Values: Targeted R edevelo p ment AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e R esolution C alling for P ublic Hearing o n C ond uit Debt - R E E S enio r Hous ing 7/3/2019 R es o lutio n Letter 588417v1BR291-395 Council Member introduced the following resolution and moved its adoption: RESOLUTION _______ RELATING TO A MULTIFAMILY RENTAL HOUSING FACILITY AND THE ISSUANCE OF CONDUIT HOUSING REVENUE BONDS UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED; GRANTING PRELIMINARY APPROVAL THERETO; CALLING FOR A PUBLIC HEARING; ESTABLISHING COMPLIANCE WITH CERTAIN REIMBURSEMENT REGULATIONS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT THERETO (REE XERXES AVENUE SENIOR HOUSING PROJECT) NOW, THEREFORE, BE IT RESOLVED by the City Council (the “Council”) of the City of Brooklyn Center, Minnesota (the “City”), as follows: Section 1. Recitals. (a) The City is a home rule charter city and political subdivision duly organized and existing under the Constitution and laws of the State of Minnesota. (b) Pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Act”), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue bonds to provide funds to finance or refinance multifamily rental housing developments located within the City. (c) Real Estate Equities, Inc. (or a limited partnership or other entity to be formed thereby or affiliated therewith the “Borrower”), has proposed that the City issue its revenue bonds, pursuant to the Act, in one or more series at one time or from time to time. (d) The Borrower initially proposed bonds in the amount of $19,000,000 and the Borrower has now requested that the City issue its revenue bonds or other obligations in the approximate aggregate principal amount of up to $38,000,000, in one or more series, issued simultaneously or sequentially, bearing interest at fixed and/or variable rates, to be offered publicly and/or privately paced (the “Bonds”) in connection with the Project described below. (e) The proceeds of the Bonds are proposed to be loaned by the City to the Borrower to be applied by the Borrower to (i) finance the acquisition, construction, and equipping of an approximately 140 unit senior rental housing facility and related amenities to be located on the northern portion of the property at 5801 Xerxes Avenue North in the City (the “Project”); (ii) fund one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) pay interest on the Bonds during the construction of the Project, if necessary; and (iv) pay the costs of issuing the Bonds. (f) As a condition to the issuance of the Bonds, the City must adopt a housing program providing the information required by Section 462C.03, subdivision 1a of the Act (the “Housing Program”). (g) Prior to the issuance of the Bonds, a public hearing will be held and notice of the public hearing will be published in accordance with the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”) and Section 462C.04, subdivision 2 of the Act. 588417v1BR291-395 (h) Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the “Allocation Act”) and preliminary approval of the issuance of the Bonds by the Council is sufficient to authorize the submission of an application to the State of Minnesota for an allocation of bonding authority with respect to the Bonds to finance the Project. Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the Council hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of the acquisition, construction, and equipping of a multifamily rental housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan will be applied to: (i) the acquisition, construction, and equipping of the Project; (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) the payment of interest on the Bonds during the construction of the Project, if necessary; and (iv) the payment of the costs of issuing the Bonds. The City will enter into one or more loan agreements between the City and the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (c) In preliminarily authorizing the issuance of the Bonds and the financing of the acquisition, construction, and equipping of the Project and related costs, the City’s purpose is to further the policies of the Act. (d) The Bonds will be special, limited obligations of the City payable solely from the revenues pledged to the payment thereof under the loan agreements (or other revenue agreement) referred to above, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 3. Public Hearing. The City Council will conduct a public hearing on the Housing Program, the Project, and the issuance of the Bonds by the City at a regular or special meeting on a date to be determined by the City staff for which proper notice may be given as provided below. Notice of such hearing (the “Public Notice”) will be published as required by Section 462C.04, subdivision 2 of the Act and Section 147(f) of the Code. The City Clerk of the City is hereby authorized and directed to publish the Public Notice, in substantially the form attached hereto as EXHIBIT A as required by Section 462C.04. At the public hearing, reasonable opportunity will be provided for interested individuals to express their views, both orally and in writing, on the Project, the Housing Program, and the proposed issuance of the Bonds. Section 4. Housing Program. Kennedy & Graven, Chartered, acting as bond counsel with respect to the Project and the Bonds (“Bond Counsel”) shall prepare and submit to the Metropolitan Council for its review a draft Housing Program to authorize the issuance by the City of up to approximately $38,000,000 in revenue bonds in one or more series to finance the acquisition, construction, and equipping of the Project by the Borrower. Section 5. Submission of an Application for an Allocation of Bonding Authority. The City Council hereby authorizes the submission of an application for allocation of bonding authority pursuant to 588417v1BR291-395 Section 146 of the Code and the Allocation Act in accordance with the requirements of the Allocation Act. The Mayor of the City or the City Manager and Bond Counsel are hereby authorized and directed to take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority to Minnesota Management & Budget. Section 6. Preliminary Approval. The City Council hereby provides preliminary approval to the issuance of the Bonds in the approximate aggregate principal amount of up to $38,000,000 to finance all or a portion of the costs of the Project pursuant to the Housing Program of the City, subject to: (i) review of the Housing Program by the Metropolitan Council; (ii) a public hearing as required by the Act and Section 147(f) of the Code; (iii) receipt of an allocation of the bonding authority from the State of Minnesota; (iv) final approval following the preparation of bond documents; and (v) final determination by the City Council that the financing of the Project and the issuance of the Bonds are in the best interests of the City. Section 7. Reimbursement of Costs under the Code. (a) The United States Department of the Treasury has promulgated regulations governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the “Regulations”) require that the City adopt a statement of official intent to reimburse an original expenditure not later than 60 days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within 18 months after the later of: (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than 3 years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the Bonds. (b) To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, costs of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.150-2(j)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iv) expenditures in a “de minimis” amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than 60 days before the date of adoption of this resolution of the City. (c) Based on representations by the Borrower, as of the date hereof, there are no funds of the Borrower reserved, allocated on a long term-basis, or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside), to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. 588417v1BR291-395 Section 8. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Bonds, whether or not the Bonds are issued. Section 9. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Borrower. If, as a result of information made available to or obtained by the City during its review of the Project, it appears that the Project or the issuance of Bonds to finance or refinance the costs thereof is not in the public interest or is inconsistent with the purposes of the Act, the City reserves the right to decline to give final approval to the issuance of the Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the City Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. Section 10. Prior Resolution Not Superseded. Resolution No. 2019-025, adopted by the City Council on February 11, 2019, is supplemented and restated but not superseded by this Resolution. Section 11. Effective Date. This Resolution shall be in full force and effect from and after its passage. July 8, 2019 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Councilmember _______________________ 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. A-1 588417v1BR291-395 EXHIBIT A NOTICE OF PUBLIC HEARING ON A HOUSING PROGRAM AND THE ISSUANCE OF CONDUIT REVENUE BONDS FOR A MULTIFAMILY HOUSING PROJECT (REE XERXES AVENUE SENIOR HOUSING PROJECT) NOTICE IS HEREBY GIVEN that the City Council of the City of Brooklyn Center, Minnesota (the “City”) will conduct a public hearing on Monday, __________, 2019 at 7:00 p.m., or as soon thereafter as the matter may be heard, at the City Hall at 6301 Shingle Creek Parkway in the City on a proposal of Real Estate Equities, Inc. (or a limited partnership or other entity to be formed thereby or affiliated therewith the “Borrower”) that the City finance the acquisition, construction, and equipping of certain rental housing developments, hereinafter described, by the issuance of conduit revenue bonds or other obligations (the “Bonds”) pursuant to Minnesota Statutes, Chapter 462C, as amended, and that the City adopt a housing program for such bonds. The proceeds of the Bonds are proposed to be loaned by the City to the Borrower to be applied by the Borrower to (i) finance the acquisition, construction, and equipping of an approximately 140 unit senior rental housing facility and related amenities to be located on the northern portion of the property at 5801 Xerxes Avenue North in the City (the “Project”); (ii) fund one or more reserve funds to secure the timely payment of the Bonds, if necessary; (iii) pay interest on the Bonds during the construction of the Project, if necessary; and (iv) pay the costs of issuing the Bonds. The Project will be owned by the Borrower. The estimated maximum aggregate principal amount of the Bonds to be issued to finance the Project is $38,000,000. The Bonds if and when issued will be special, limited obligations of the City, and the Bonds and interest thereon will be payable solely from the revenues and assets pledged to the payment thereof. No holder of any Bond will have the right to compel any exercise of the taxing power of the City to pay the Bonds or the interest thereon, nor to enforce payment against any property of the City except money payable by the Borrower to the City and pledged to the payment of the Bonds. Before issuing the Bonds, the City will enter into an agreement with the Borrower, whereby the Borrower will be obligated to make payments at least sufficient at all times to pay the principal of and interest on the Bonds when due. Following the public hearing the Council will consider a resolution approving a housing program prepared in accordance with the requirements of the Act and granting approval to the issuance of the Bonds. A copy of the housing program will be on file at City Hall, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430, Monday through Friday until the date of the Public Hearing. At the time and place fixed for the Public Hearing, the City Council will give all persons who appear or submit comments in writing to the City Council prior to the hearing, an opportunity to express their views with respect to the proposal. In addition, interested persons may file written comments respecting the proposal with the City to the attention of Nate Reinhardt, City Finance Director at (763) 569-3300 at or prior to said public hearing. Publish _________, 2019. COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhard t, F inanc e Direc to r S UBJ E C T:O rdinanc e Amending O rdinanc e No . 2003-22, Exhib it A; Xc el Energy Electric F ranc his e F ee S c hedule Requested Council Action: - M otion to op en P u b lic H ea rin g ; - Take p u b lic comment; - M otion to close P u b lic H ea rin g ; - M otion to adop t a n O rd inance Amen d ing O rd inance N o. 2003-22, E xhib it A; X cel E n erg y E lectric F ranchise F ee S chedule B ackground: T he C ity C o uncil ad o p ted two res o lutio ns o n December 8, 2003 which estab lis hed franc his e fees with the two large non-municipal utility c o mp anies in Brooklyn C enter; Xc el Energy (electric ity) and C enterP oint Energy (natural gas). T hes e fees are charged to the res p ec tive utility comp anies fo r the use of pub lic right-o f-way and o ther pub lic gro und s in the d elivery of s ervic es to their c usto mers . O n May 28, 2019 C ity C o uncil approved the firs t read ing o f amendments to O rd inance 2003-22, whic h p ro p o s ed a three perc ent inc reas e to the Xcel Energy franchis e fee. Xc el Energy has been notified and is in agreement with the p ro p o s ed increase and will rec eive a c o p y o f the revised franc his e fee o rd inance if ado p ted. T he C ity anticipates collec ting $700,000 in total franc his e fee revenue for 2019. T hese fund s are c red ited to the S treet R ec ons tructio n F und, whic h is us ed to fund the p o rtion of street projec ts that c anno t be as s essed as o utlined in the 15-year C ap ital Improvement P lan. T he franc hise fee agreements allow the C ity to inc reas e the fee. T he agreement with Xcel limits the franc his e fee to two p ercent of total annual revenues d erived fro m the C ity and limits the inc reas e to no t mo re than three p ercent every three years. T he Xc el agreement runs through 2023, with a claus e that allo ws for a reo p ener if we d es ire to amend the agreement fo r spec ific p rovis io ns the c o mp any has agreed to with two o r more c ities s inc e the franc his e agreement was ad o p ted. T he C ity is no t aware o f any such provis io ns that would allow for a reopener. Increasing thes e franc his e fees requires a minimum of a s ixty-day no tic e to Xcel and a p ublic hearing to amend the franchis e fee ordinanc e. T he monthly impac t o n p ro p erties o f the p ropos ed franc hise fee increases are as follows : Xc el Energy (elec tric ity) C urrent Monthly P ro p o s ed Mo nthly Monthly Inc reas e F ee P er P remis e F ee P er P remise R esidential $1.60 $1.65 $0.05 S mall C &I No n Demand 4.00 4.25 0.25 S mall C &I Demand 22.00 22.75 0.75 Large C &I 100.00 103.00 3.00 P ub lic S treet Lights , Muni P ump ing 13.00 13.50 0.50 Based o n the prop o s ed c hanges, a res id ential p ro p erty wo uld s ee a $0.05 monthly inc reas e ($0.60 annual inc reas e) in franc his e fees for Xcel Energy. B udget Issues: T he proposed inc reas es in the franchis e agreements with Xcel and C enterP oint amo unt to an es timated $23,000 annual inc reas e in revenue. If ap p roved , the 2020 S treet R ec o nstruc tio n F und bud get will be adjus ted to reflect this inc reas e. S trategic Priorities and Values: Key Transportatio n Investments AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e Xc el Energy F ranc his e F ee O rd inance 2019 6/17/2019 O rdinanc e P ub lic Hearing F ranc hise F ees - P res entatio n 6/27/2019 P res entation CITY OF BROOKLYN CENTER Notice is hereby given that a Public Hearing will be held on the 8th day of July 2019, at 7 p.m. or as soon thereafter as the matter may be heard at the City Hall, 6301 Shingle Creek Parkway, to consider an amendment of Ordinance No. 2003-22. Auxiliary aids for persons with disabilities are available upon request at least 96 hours in advance. Please contact the City Clerk at 763-569-3300 to make arrangements. ORDINANCE NO. ____________________ AN ORDINANCE AMENDING ORDINANCE NO. 2003-22, EXHIBIT A; XCEL ENERGY ELECTRIC FRANCHISE FEE SCHEDULE THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER DOES ORDAIN AS FOLLOWS: Section 1. Exhibit A of Ordinance No. 2003-22 setting the rates for a franchise fee on Xcel Energy for providing electric service within the City of Brooklyn Center is hereby amended as follows: EXHIBIT A XCEL ENERGY ELECTRIC FRANCHISE FEE SCHEDULE Class Fee Per Premise Residential $1.65 per month Small Commercial & Industrial – Non-Demand $4.25 per month Small Commercial & Industrial – Demand $22.75 per month Large Commercial & Industrial $103.00 per month Public Street Lighting $13.50 per month Municipal Pumping – Non-Demand $13.50 per month Municipal Pumping – Demand $13.50 per month Section 2. This ordinance amendment shall become effective for service billings by Xcel Energy after December 31, 2019. Adopted this 8 day of July, 2019. Mayor ATTEST: City Clerk Date of Publication Effective Date Pr o p o s e d F r a n c h i s e F e e s Pu b l i c H e a r i n g Oc t o b e r 8 , 2 0 1 8 Re v i e w Ci t y   C o u n c i l   – P u b l i c   H e a r i n g ,   J u l y   8 ,   2 0 1 9 Na t e   R e i n h a r d t ,   F i n a n c e   D i r e c t o r Fr a n c h i s e F e e s • Oc t o b e r   8 ,   2 0 1 8 • Fr a n c h i s e   f e e s   w e r e   e s t a b l i s h e d ,   u n d e r   M i n n e s o t a   S t a t u t e   ( 2 1 6 B . 36), to allow  ci t i e s   t o   i m p o s e   a   f e e   o n   u t i l i t y   c o m p a n i e s   f o r   t h e   u s e   o f   p u b l ic   r i g h t ‐ o f ‐ w a y   an d   o t h e r   p u b l i c   g r o u n d s   i n   t h e   d e l i v e r y   o f   s e r v i c e s   t o   t h e i r   c ustomers. • As s i s t   c i t i e s   t o   c o v e r   c o s t s   o f   m a i n t a i n i n g   a g i n g   i n f r a s t r u c t u r e,   w i t h o u t   r a i s i n g   pr o p e r t y   t a x e s . • Fe e s   a r e   c o n s i d e r e d   m o r e   e q u a l l y   d i s t r i b u t e d   t h a n   p r o p e r t y   t a x e s, and paid  by   a l l   u t i l i t y   c u s t o m e r s   ( e v e n   t h o s e   w h o   d o n ’ t   c u r r e n t l y   p a y   p r operty taxes)  • Ad v a n t a g e s : • Co v e r   a   w i d e r   b a s e   t h a n   p r o p e r t y   t a x e s • Di v e r s i f i e s   t h e   C i t y ’ s   r e v e n u e   s o u r c e s • Re l i a b l e   s o u r c e s   o f   r e v e n u e • Fl a t   f e e   e a s y   t o   a d m i n i s t e r   a n d   e l i m i n a t e s   s e a s o n a l   f l u c t u a t i o n s 2 Ba c k g r o u n d • Oc t o b e r   8 ,   2 0 1 8 • De c e m b e r   8 ,   2 0 0 3   – C i t y   C o u n c i l   a d o p t e d   t w o   r e s o l u t i o n s   w h i c h   es t a b l i s h e d   f r a n c h i s e   f e e s   w i t h   X c e l   E n e r g y   a n d   C e n t e r P o i n t   E n e rgy. • $7 0 0 , 0 0 0   e s t i m a t e d   a n n u a l   r e v e n u e s   ( X c e l   ‐ $ 4 3 5 , 0 0 0 ,   C e n t e r P o i n t  ‐ $2 6 5 , 0 0 0 ) • Re v e n u e   r e c e i p t e d   t o   S t r e e t   R e c o n s t r u c t i o n   f u n d   a n d   p r o v i d e s   a   fu n d i n g   s o u r c e   f o r   s t r e e t   p r o j e c t s . • Fe e s   l a s t   i n c r e a s e d   J a n u a r y   2 0 1 7 . 3 Ag r e e m e n t s • Xc e l   E n e r g y • Ex i s t i n g   f r a n c h i s e   a g r e e m e n t   e f f e c t i v e   t h r o u g h   2 0 2 3 .   • Fr a n c h i s e   f e e s   c a n n o t   e x c e e d   2 %   o f   t o t a l   a n n u a l   r e v e n u e s   d e r i v e d from the City. • Al l o w s   f o r   a   r e o p e n e r   i f   w e   d e s i r e   t o   a m e n d   t h e   a g r e e m e n t   f o r   s pecific  pr o v i s i o n s   X c e l   h a s   a g r e e d   t o   w i t h   t w o   o r   m o r e   o t h e r   C i t i e s . • In c r e a s e   i n   f r a n c h i s e   f e e   r e q u i r e s   a   s i x t y ‐ d a y   n o t i c e . 4 Ag r e e m e n t s ( c o n t i n u e d ) • Ce n t e r P o i n t   E n e r g y • Ex i s t i n g   f r a n c h i s e   a g r e e m e n t   e f f e c t i v e   t h r o u g h   2 0 3 5 .   • Le s s   r e s t r i c t i v e   t h a n   X c e l   – r e q u i r e s   t h a t   f r a n c h i s e   f e e   f o r m u l a  i s   n o n ‐ di s c r i m i n a t o r y   o r   p l a c e   t h e   c o m p a n y   a t   a   c o m p e t i t i v e   d i s ‐ a d v a n t age. • In c r e a s e   i n   f r a n c h i s e   f e e   r e q u i r e s   a   n i n e t y ‐ d a y   n o t i c e . 5 Pr o p o s e d F r a n c h i s e F e e S c h e d u l e • Xc e l   E n e r g y • Pr o p o s e d   t h r e e   p e r c e n t   i n c r e a s e   ( a d j u s t e d   f o r   r o u n d i n g ) • Es t i m a t e d   i n c r e a s e   i n   a n n u a l   r e v e n u e   o f   $ 1 5 , 0 0 0 6 Ty p e Cu r r e n t   M o n t h l y   Fe e   P e r   P r e m i s e Pr o p o s e d   M o n t h l y   Fe e   P e r   P r e m i s e Mo n t h l y   In c r e a s e Re s i d e n t i a l $ 1 . 6 0 $ 1 . 6 5 $ 0 . 0 5 Sm a l l   C o m m e r c i a l   &   I n d u s t r i a l   No n ‐ D e m a n d 4 . 0 0 4 . 2 5 0 . 2 5 Sm a l l   C o m m e r c i a l &   I n d u s t r i a l       De m a n d 22 . 0 0 2 2 . 7 5 0 . 7 5 La r g e   C o m m e r c i a l   &   I n d u s t r i a l 1 0 0 . 0 0 1 0 3 . 0 0 3 . 0 0 Pu b l i c   S t r e e t   L i g h t s ,   M u n i P u m p i n g 13 . 0 0 1 3 . 5 0 0 . 5 0 Pr o p o s e d F r a n c h i s e F e e S c h e d u l e • Ce n t e r P o i n t   E n e r g y • Pr o p o s e d   t h r e e   p e r c e n t   i n c r e a s e   ( a d j u s t e d   f o r   r o u n d i n g ) • Es t i m a t e d   i n c r e a s e   i n   a n n u a l   r e v e n u e   o f   $ 8 , 0 0 0 7 Ty p e Cu r r e n t   M o n t h l y   Fe e   P e r   P r e m i s e Pr o p o s e d   M o n t h l y   Fe e   P e r   P r e m i s e Mo n t h l y   In c r e a s e Re s i d e n t i a l $ 1 . 6 1 $ 1 . 6 6 $ 0 . 0 5 Co m m e r c i a l A 1. 6 8 1 . 7 4 0 . 0 6 Co m m e r c i a l   I n d u s t r i a l   B 5 . 4 6 5 . 6 3 0 . 1 7 Co m m e r c i a l C 2 1 . 8 4 2 2 . 5 0 0 . 6 6 SV D F A 54 . 5 9 5 6 . 2 3 1 . 6 4 SV D F   B 10 4 . 8 1 1 0 7 . 9 6 3 . 1 5 LV D F 10 4 . 8 1 1 0 7 . 9 6 3 . 1 5 Re q u e s t e d C o u n c i l A c t i o n • Oc t o b e r   8 ,   2 0 1 8 • Tw o   s e p a r a t e   p u b l i c   h e a r i n g s : • Xc e l   E n e r g y   F r a n c h i s e   F e e   S c h e d u l e • Ce n t e r P o i n t   E n e r g y   F r a n c h i s e   F e e   S c h e d u l e • Mo t i o n   t o   o p e n   p u b l i c   h e a r i n g ( s ) • Fo l l o w i n g   c l o s e   o f   t h e   p u b l i c   h e a r i n g ( s ) : • Mo t i o n   t o   a d o p t   a n   O r d i n a n c e   A m e n d i n g   O r d i n a n c e   N o .   2 0 0 3 ‐ 2 2 ,   E x hibit A;  Xc e l   E n e r g y   E l e c t r i c   F r a n c h i s e   F e e   S c h e d u l e • Mo t i o n   t o   a d o p t   a n   O r d i n a n c e   A m e n d i n g   O r d i n a n c e   N o .   2 0 0 3 ‐ 2 3 ,   E x hibit A;  Ce n t e r P o i n t   E n e r g y   F r a n c h i s e   F e e   S c h e d u l e 8 COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhard t, F inanc e Direc to r S UBJ E C T:O rdinanc e Amending O rdinanc e No . 2003-23, Exhib it A; C enterP o int Energy O p erations F ranc hise F ee S c hedule Requested Council Action: - M otion to op en P u b lic H ea rin g ; - Take p u b lic comment; - M otion to close P u b lic H ea rin g - M otion to adop t a n O rd inance Amen d ing O rd inance N o. 2003-23, E xhib it A; C en terP oint E n erg y F ra n ch ise F ee S chedule B ackground: T he C ity C o uncil ad o p ted two res o lutio ns o n December 8, 2003 which estab lis hed franc his e fees with the two large non-municipal utility c o mp anies in Brooklyn C enter; Xc el Energy (electric ity) and C enterP oint Energy (natural gas). T hes e fees are charged to the res p ec tive utility comp anies fo r the use of pub lic right-o f-way and o ther pub lic gro und s in the d elivery of s ervic es to their c usto mers . O n May 28, 2019 C ity C o uncil approved the firs t read ing o f amendments to O rd inance 2003-23, whic h p ro p o s ed a three perc ent inc reas e in the C enterP o int Energy franchis e fee. C enterP oint has b een no tified and is in agreement with the proposed increase and will rec eive a c o p y of the revis ed franc his e fee ord inance if ad o p ted. T he C ity anticipates collec ting $700,000 in total franc his e fee revenue for 2019. T hese fund s are c red ited to the S treet R ec ons tructio n F und, whic h is us ed to fund the p o rtion of street projec ts that c anno t be as s essed as o utlined in the 15-year C ap ital Improvement P lan. T he franchis e fee agreements allow the C ity to inc reas e the fee. T he C enterP o int agreement c alls for changes to the franc hise fee to b e c omparable to adjus tments made to franc his e fees with Xc el. T he agreement als o req uires that the fee formula is no n-disc riminatory o r plac e the c o mp any at a c o mp etitive d is ad vantage. T he C enterP o int franc his e agreement runs through 2035. Increasing these franchis e fees requires a minimum of ninety-day notice to C enterP oint and a pub lic hearing to amend the franc his e fee ordinanc e. T he monthly impac t o n p ro p erties o f the p ropos ed franc hise fee increases are as follows : C enterP oint Energy (natural gas ) C urrent Monthly F ee P er P remis e P ro p o s ed Mo nthly F ee P er P remise Monthly Inc reas e R esidential $1.61 $1.66 $0.05 C ommerc ial A 1.68 1.74 0.06 C ommerc ial Ind us trial B 5.46 5.63 0.17 C ommerc ial C 21.84 22.50 0.66 S VDF A 54.59 56.23 1.64 S VDF B 104.81 107.96 3.15 LVDF 104.81 107.96 3.15 Based o n the proposed changes , a residential p ro p erty wo uld s ee $0.05 monthly inc reas e ($0.60 annual inc reas e) in franc his e fees for C enterP o int Energy. B udget Issues: T he propo s ed increases in the franc hise agreements with Xc el and C enterP o int amount to an es timated $23,000 annual increase in revenue. If approved , the 2020 S treet R econs tructio n F und b udget will b e adjus ted to reflect this inc reas e. S trategic Priorities and Values: Key Transportatio n Investments AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e C enterP oint F ranc his e F ee Increase O rdinanc e 2019 6/17/2019 R es o lutio n Letter F ranchis e F ee P ub lic Hearing - P res entation 6/27/2019 P res entation CITY OF BROOKLYN CENTER Notice is hereby given that a Public Hearing will be held on the 8th day of July 2019, at 7 p.m. or as soon thereafter as the matter may be heard at the City Hall, 6301 Shingle Creek Parkway, to consider an amendment of Ordinance No. 2003-23. Auxiliary aids for persons with disabilities are available upon request at least 96 hours in advance. Please contact the City Clerk at 763-569-3300 to make arrangements. ORDINANCE NO. ____________________ AN ORDINANCE AMENDING ORDINANCE NO. 2003-23, EXHIBIT A; CENTERPOINT ENERGY OPERATIONS WITHIN THE CITY OF BROOKLYN CENTER FEE SCHEDULE THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER DOES ORDAIN AS FOLLOWS: Section 1. Exhibit A of Ordinance No. 2003-23 setting the rates for a franchise fee on CenterPoint Energy for providing natural gas service within the City of Brooklyn Center is hereby amended as follows: EXHIBIT A CENTERPOINT ENERGY GAS FRANCHISE FEE SCHEDULE Class Fee Per Premise Residential $1.66 per month Commercial A $1.74 per month Commercial Industrial B $5.63 per month Commercial C $22.50 per month SVDF A $56.23 per month SVDF B $107.96 per month LVDF $107.96 per month Section 2. This ordinance amendment shall become effective for service billings by CenterPoint Energy after December 31, 2019. Adopted this 8th day of July, 2019. Mayor ATTEST: City Clerk Date of Publication Effective Date Pr o p o s e d F r a n c h i s e F e e s Pu b l i c H e a r i n g Oc t o b e r 8 , 2 0 1 8 Re v i e w Ci t y   C o u n c i l   – P u b l i c   H e a r i n g ,   J u l y   8 ,   2 0 1 9 Na t e   R e i n h a r d t ,   F i n a n c e   D i r e c t o r Fr a n c h i s e F e e s • Oc t o b e r   8 ,   2 0 1 8 • Fr a n c h i s e   f e e s   w e r e   e s t a b l i s h e d ,   u n d e r   M i n n e s o t a   S t a t u t e   ( 2 1 6 B . 36), to allow  ci t i e s   t o   i m p o s e   a   f e e   o n   u t i l i t y   c o m p a n i e s   f o r   t h e   u s e   o f   p u b l ic   r i g h t ‐ o f ‐ w a y   an d   o t h e r   p u b l i c   g r o u n d s   i n   t h e   d e l i v e r y   o f   s e r v i c e s   t o   t h e i r   c ustomers. • As s i s t   c i t i e s   t o   c o v e r   c o s t s   o f   m a i n t a i n i n g   a g i n g   i n f r a s t r u c t u r e,   w i t h o u t   r a i s i n g   pr o p e r t y   t a x e s . • Fe e s   a r e   c o n s i d e r e d   m o r e   e q u a l l y   d i s t r i b u t e d   t h a n   p r o p e r t y   t a x e s, and paid  by   a l l   u t i l i t y   c u s t o m e r s   ( e v e n   t h o s e   w h o   d o n ’ t   c u r r e n t l y   p a y   p r operty taxes)  • Ad v a n t a g e s : • Co v e r   a   w i d e r   b a s e   t h a n   p r o p e r t y   t a x e s • Di v e r s i f i e s   t h e   C i t y ’ s   r e v e n u e   s o u r c e s • Re l i a b l e   s o u r c e s   o f   r e v e n u e • Fl a t   f e e   e a s y   t o   a d m i n i s t e r   a n d   e l i m i n a t e s   s e a s o n a l   f l u c t u a t i o n s 2 Ba c k g r o u n d • Oc t o b e r   8 ,   2 0 1 8 • De c e m b e r   8 ,   2 0 0 3   – C i t y   C o u n c i l   a d o p t e d   t w o   r e s o l u t i o n s   w h i c h   es t a b l i s h e d   f r a n c h i s e   f e e s   w i t h   X c e l   E n e r g y   a n d   C e n t e r P o i n t   E n e rgy. • $7 0 0 , 0 0 0   e s t i m a t e d   a n n u a l   r e v e n u e s   ( X c e l   ‐ $ 4 3 5 , 0 0 0 ,   C e n t e r P o i n t  ‐ $2 6 5 , 0 0 0 ) • Re v e n u e   r e c e i p t e d   t o   S t r e e t   R e c o n s t r u c t i o n   f u n d   a n d   p r o v i d e s   a   fu n d i n g   s o u r c e   f o r   s t r e e t   p r o j e c t s . • Fe e s   l a s t   i n c r e a s e d   J a n u a r y   2 0 1 7 . 3 Ag r e e m e n t s • Xc e l   E n e r g y • Ex i s t i n g   f r a n c h i s e   a g r e e m e n t   e f f e c t i v e   t h r o u g h   2 0 2 3 .   • Fr a n c h i s e   f e e s   c a n n o t   e x c e e d   2 %   o f   t o t a l   a n n u a l   r e v e n u e s   d e r i v e d from the City. • Al l o w s   f o r   a   r e o p e n e r   i f   w e   d e s i r e   t o   a m e n d   t h e   a g r e e m e n t   f o r   s pecific  pr o v i s i o n s   X c e l   h a s   a g r e e d   t o   w i t h   t w o   o r   m o r e   o t h e r   C i t i e s . • In c r e a s e   i n   f r a n c h i s e   f e e   r e q u i r e s   a   s i x t y ‐ d a y   n o t i c e . 4 Ag r e e m e n t s ( c o n t i n u e d ) • Ce n t e r P o i n t   E n e r g y • Ex i s t i n g   f r a n c h i s e   a g r e e m e n t   e f f e c t i v e   t h r o u g h   2 0 3 5 .   • Le s s   r e s t r i c t i v e   t h a n   X c e l   – r e q u i r e s   t h a t   f r a n c h i s e   f e e   f o r m u l a  i s   n o n ‐ di s c r i m i n a t o r y   o r   p l a c e   t h e   c o m p a n y   a t   a   c o m p e t i t i v e   d i s ‐ a d v a n t age. • In c r e a s e   i n   f r a n c h i s e   f e e   r e q u i r e s   a   n i n e t y ‐ d a y   n o t i c e . 5 Pr o p o s e d F r a n c h i s e F e e S c h e d u l e • Xc e l   E n e r g y • Pr o p o s e d   t h r e e   p e r c e n t   i n c r e a s e   ( a d j u s t e d   f o r   r o u n d i n g ) • Es t i m a t e d   i n c r e a s e   i n   a n n u a l   r e v e n u e   o f   $ 1 5 , 0 0 0 6 Ty p e Cu r r e n t   M o n t h l y   Fe e   P e r   P r e m i s e Pr o p o s e d   M o n t h l y   Fe e   P e r   P r e m i s e Mo n t h l y   In c r e a s e Re s i d e n t i a l $ 1 . 6 0 $ 1 . 6 5 $ 0 . 0 5 Sm a l l   C o m m e r c i a l   &   I n d u s t r i a l   No n ‐ D e m a n d 4 . 0 0 4 . 2 5 0 . 2 5 Sm a l l   C o m m e r c i a l &   I n d u s t r i a l       De m a n d 22 . 0 0 2 2 . 7 5 0 . 7 5 La r g e   C o m m e r c i a l   &   I n d u s t r i a l 1 0 0 . 0 0 1 0 3 . 0 0 3 . 0 0 Pu b l i c   S t r e e t   L i g h t s ,   M u n i P u m p i n g 13 . 0 0 1 3 . 5 0 0 . 5 0 Pr o p o s e d F r a n c h i s e F e e S c h e d u l e • Ce n t e r P o i n t   E n e r g y • Pr o p o s e d   t h r e e   p e r c e n t   i n c r e a s e   ( a d j u s t e d   f o r   r o u n d i n g ) • Es t i m a t e d   i n c r e a s e   i n   a n n u a l   r e v e n u e   o f   $ 8 , 0 0 0 7 Ty p e Cu r r e n t   M o n t h l y   Fe e   P e r   P r e m i s e Pr o p o s e d   M o n t h l y   Fe e   P e r   P r e m i s e Mo n t h l y   In c r e a s e Re s i d e n t i a l $ 1 . 6 1 $ 1 . 6 6 $ 0 . 0 5 Co m m e r c i a l A 1. 6 8 1 . 7 4 0 . 0 6 Co m m e r c i a l   I n d u s t r i a l   B 5 . 4 6 5 . 6 3 0 . 1 7 Co m m e r c i a l C 2 1 . 8 4 2 2 . 5 0 0 . 6 6 SV D F A 54 . 5 9 5 6 . 2 3 1 . 6 4 SV D F   B 10 4 . 8 1 1 0 7 . 9 6 3 . 1 5 LV D F 10 4 . 8 1 1 0 7 . 9 6 3 . 1 5 Re q u e s t e d C o u n c i l A c t i o n • Oc t o b e r   8 ,   2 0 1 8 • Tw o   s e p a r a t e   p u b l i c   h e a r i n g s : • Xc e l   E n e r g y   F r a n c h i s e   F e e   S c h e d u l e • Ce n t e r P o i n t   E n e r g y   F r a n c h i s e   F e e   S c h e d u l e • Mo t i o n   t o   o p e n   p u b l i c   h e a r i n g ( s ) • Fo l l o w i n g   c l o s e   o f   t h e   p u b l i c   h e a r i n g ( s ) : • Mo t i o n   t o   a d o p t   a n   O r d i n a n c e   A m e n d i n g   O r d i n a n c e   N o .   2 0 0 3 ‐ 2 2 ,   E x hibit A;  Xc e l   E n e r g y   E l e c t r i c   F r a n c h i s e   F e e   S c h e d u l e • Mo t i o n   t o   a d o p t   a n   O r d i n a n c e   A m e n d i n g   O r d i n a n c e   N o .   2 0 0 3 ‐ 2 3 ,   E x hibit A;  Ce n t e r P o i n t   E n e r g y   F r a n c h i s e   F e e   S c h e d u l e 8 COU N C IL ITEM M EM ORAN D UM DAT E:7/8/2019 TO :C urt Bo ganey, C ity Manager T HR O UG H:N/A F R O M:Meg Beekman, C o mmunity Development Directo r S UBJ E C T:R es o lutio ns R egarding R emoval of a P arc el from R ed evelo p ment Tax Increment F inanc ing Dis tric t No . 3 and Es tablishing Tax Inc rement F inanc ing Dis tric t No . 8 and Approving a Tax Increment F inancing P lan Requested Council Action: - M otion to op en public h ea rin g ; - Take p u b lic comment; - M otion to close public h ea rin g ; - M otion to approve a resolution approving th e remova l of a p a rcel from R edevelopment Tax Increment F in a n cing D istrict N o. 3 with in H ou sin g D evelopment and R edevelopmen t P roject N o. 1 - M otion to approve a resolution approving a modifica tion to th e R ed evelopment P lan for H ou sin g D evelopment a n d R ed evelop men t P roject N o. 1 esta b lishin g Tax Incremen t F in a n cing D istrict N o. 8 th erein a n d approvin g a Ta x In cremen t F in a n cing P lan therefor B ackground: O n F eb ruary 22, 2019, the C ity rec eived an ap p licatio n for pub lic financ ial as s is tance from R eal Es tate Eq uities (the “Developer”). T he Developer reques ted tax increment financing (T I F ) to p ro vide the neces s ary as s is tance for c o nstruc tion o f 270-units o f affo rd ab le rental hous ing within the C ity; 127-units o f non-age res tric ted hous ing and 143-units o f s enior ho using, all of whic h would b e affo rd ab le to p ers o ns or ho useholds at or belo w 60% of the area med ian income (AMI) and wo uld b e both rent and inc o me restricted as no ted b elo w: T he C ity will b e c reating a ho using T I F d is tric t with a 26-year term. It is anticipated that the firs t tax inc rement will be received in 2021 s o the Dis tric t would terminate on Dec ember 31, 2046. It s ho uld be noted that the E DA only antic ip ates provid ing 16 years o f as s is tance for the p ro ject(s ) s o in year 17, the C ity C o uncil at that time c an cho s e to either d ec ertify the Dis tric t early, or keep the Dis tric t open and collec t the remaining ten (10) years of T I F for use on future affordable ho using projec ts (it s hould b e noted that any future C o uncil in year 17 through 26 c o uld cho o s e to dec ertify the Dis trict early). W hen b o th p ro jec ts are completed , the Dis tric t will generate ap p ro ximately $486,000/year in T I F. T he C ity anticipates provid ing two (2) P ay-As -You-G o (PAYG O ) T I F No tes whic h will b e paid fro m 90% o f the annual T IF generated fro m the Dis trict. T he ED A will retain 10% o f the annual T I F (approximately $48,600/year) for adminis trative c o s ts of the Dis tric t or for use on o ther affordab le ho using (rental or owner- o cc upied) hous ing p ro jects . After red evelopment the taxable market value is es timated to be ap p ro ximately $48.6 millio n ($22.86 million for the workforc e ap artments and $25.74 million fo r the s enio r ap artments). O nc e the PAYG O no tes are paid, the p ro jects will generate ap p ro ximately $232,000 in annual revenue fo r the C ity. Interfu n d L oan T he C ity’s Ec o nomic Develo pment Autho rity (EDA) is o verseeing the ad ministration and d evelopment within the above referenc ed T I F District. As p art of this ad ministration, the E DA may need to loan fund s from various EDA fund s to this Dis tric t to temp o rarily financ e ad ministrative c o s ts no t c o vered by R eal Es tate Eq uities esc row. S tate S tatute requires that the EDA ap p ro ve a res o lution authorizing an internal (interfund) lo an to the res p ective T I F Distric t and s et the terms for reimb ursement of the c o s ts to b e repaid with tax increments from the res pec tive T I F Dis tric t. T he language autho rizing an interfund lo an fo r up to $50,000 from the EDA to the T I F Dis tric t is inc luded in the res o lutio n establis hing the T I F District. T he interfund loan would be paid with future T I F from the Dis tric t (the EDA’s 10% ad min p o rtion). As fund s are ad vanc ed they will bear an interes t rate o f 5%, whic h is the current, maximum interes t rate that can be c harged. It s hould be noted that $50,000 is a maximum amo unt and that it may never need to be drawn up o n if there are no additio nal adminis trative c o s ts charged to the Dis tric t that are no t the respons ibility o f the Developer. C o mp leting this actio n p ro vides the EDA with the mos t flexibility to reimburs e its elf in the future if and when E DA fund s are advanc ed and T I F fund s are availab le from the newly c reated T I F Dis tric t. R emova l of P arcel from T I F D istrict 3 T he C ity and EDA es tab lis hed T I F district No . 3 (Earle Bro wn F arm P rojec t) in 1994 whic h enc o mp as s ed a large area of the C ity. T his district includ ed the former Jerry’s F o o d site lo c ated at 5801 Xerxes Avenue, id entified as parc el number 03-118-21-14-0024. T he C ity and EDA are creating T I F Dis tric t No. 8: R eal Estate Eq uities , on this p arcel fo r the d evelopment of 270 affo rd able rental ho using units. S inc e the parc el is alread y contained within T I F Dis tric t No . 3, the C ity is req uired to remove it prior to the estab lis hment of the new hous ing T I F d is tric t. T he parc el was o c c upied b y a build ing when T IF Dis trict No. 3 was c reated and s ince then the build ing has b een d emo lis hed . Due to this, the C ity is required to ho ld a p ublic hearing o n its remo val s inc e the tax capac ity of the p arc el is lower to d ay then when it was when T I F d is tric t No. 3 was estab lis hed. It sho uld b e noted that removal of this parc el fro m T I F Dis tric t No . 3 will ac tually have a p o s itive impac t on the District (alb eit q uite small) s inc e the p arc el has been generating negative inc rement fo r the Dis tric t d ue to the current tax cap ac ity b eing less than the base tax c apac ity. Both res o lutions require a p ublic hearing. T he p ublic hearing c an b e c o mbined to includ e c o mments regarding b o th ac tions . B udget Issues: T he proposed ac tion wo uld have no impac t on the b udget. All c o s ts as s oc iated with the c reation and ad ministration o f the T IF district will be p aid b y the Develo p er and /or future generated increment. S trategic Priorities and Values: Targeted R edevelo p ment AT TAC HME N T S : Desc rip tion Up lo ad Date Typ e R esolution Approving Mo d ificatio n to the R ed evelopment P lan for Ho using Develo p ment and R edevelo p ment P ro ject No. 1, Estab lis hing Tax Increment F inancing Dis tric t No. 8 T herein and Approving a Tax Increment F inancing P lan therefor 7/2/2019 R es o lutio n Letter R esolution Approving the R emo val o f a P arc el from R edevelo p ment Tax Inc rement F inanc ing Dis tric t No . 3 7/2/2019 R es o lutio n Letter Tax Increment F inanc ing P lan Estab lis hing T I F Dis tric t No . 8 7/2/2019 Bac kup Material 587108v2BR291-400 CITY OF BROOKLYN CENTER COUNTY OF HENNEPIN STATE OF MINNESOTA Member _______________________ introduced the following resolution and moved its adoption: RESOLUTION NO. ______ RESOLUTION APPROVING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO. 1, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 8 THEREIN AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR WHEREAS, it has been proposed that the Economic Development Authority of the City of Brooklyn Center, Minnesota (the “EDA”) modify the Redevelopment Plan for its Housing and Redevelopment Project No. 1 (the “Redevelopment Project”); establish Tax Increment Financing District No. 8: Real Estate Equities (a housing district) (“TIF District No. 8”) within the Redevelopment Project; and adopt the related Tax Increment Financing Plan (the “TIF Plan”) therefor; all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”), Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.1081, all inclusive, as amended, (collectively, and together with the TIF Act, the “Act”), and all as reflected in that certain document entitled in part “Modification of the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities (a Housing District),” dated June 7, 2019 (collectively, the “Plans”), presented for consideration by the City Council (the “Council”) of the City of Brooklyn Center, Minnesota (the “City”); WHEREAS, the Council has investigated the facts relating to the Plans and certain information and material (collectively, the “Materials”) relating to the TIF Plan and to the activities contemplated in TIF District No. 8 have heretofore been prepared and submitted to the Council and/or made a part of the City files and proceedings on the TIF Plan. The Materials include the tax increment application made and other information supplied by Real Estate Equities, Inc., a Minnesota corporation (or one or more limited partnerships or other entities to be formed thereby or affiliated therewith, the “Developer”) as to the activities contemplated therein, the items listed under the heading “Supporting Documentation” in the TIF Plan, and information constituting or relating to (1) why the assistance satisfies the so-called “but for” test and (2) the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Materials, 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; WHEREAS, the City has performed all actions required by law to be performed prior to the adoption and approval of the Plans, including but not limited to notice to the County Commissioner representing the area of the County to be included in TIF District No. 8, delivery of the Plans to Hennepin County and Independent School District No. 281 (Robbinsdale), and 2 587108v2BR291-400 the holding of a public hearing by the City thereon following notice thereof published in accordance with state law; WHEREAS, the Council has considered the documentation submitted in support of TIF District No. 8 and the Plans and has taken into account the information and knowledge gained in hearings upon and during consideration of other matters relating to the proposed development; WHEREAS, TIF District No. 8 is being established to facilitate the acquisition, construction and equipping of an approximately 270-unit rental housing development, including workforce housing and senior housing, and related amenities (the “Development”) to be constructed by the Developer; NOW, THEREFORE, BE IT RESOLVED by the City Council (the “Council”) of the City of Brooklyn Center, Minnesota (the “City”), as follows: Section 1. Findings for the Adoption and Approval of the Plans. 1.01. The Council finds that the boundaries of the Project Area are not being expanded and the Redevelopment Plan is not being modified other than to incorporate the establishment of TIF District No. 8 therein and therefore the Council reaffirms the findings and determinations originally made in connection with the establishment of the Redevelopment Project area and the adoption of the Redevelopment Plan therefor. 1.02. The Council hereby finds that TIF District No. 8 is in the public interest and is a “housing district” within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or 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; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. The Development to be constructed in TIF District No. 8 will consist of approximately 270 units of workforce or senior rental housing. The Developer has represented that at least 40% of the units (i.e., 108 units) will be rented to and occupied by individuals or families whose income is not greater than 60% or less of area median income and that no more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 1.03. The Council hereby makes the following additional findings in connection with TIF District No. 8: (a) The Council further finds that the proposed development, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: 3 587108v2BR291-400 The construction of the Development would not be undertaken in the reasonably foreseeable future. The property has remained undeveloped for several years despite previous efforts to redevelop the property. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new development. The Developer has represented that it could not proceed with the Development without the tax increment assistance to be provided to the Developer. The Developer has provided the City its estimated Development proforma outlining project sources and uses as well as projected rent, vacancy and financing assumptions. City staff and the City’s advisors reviewed the information and have determined the Development is not feasible without the proposed assistance due to anticipated rent levels and market returns not supporting the development costs. Based on the review, the City does not expect that a development of this type would occur in the reasonably foreseeable future but for the use of tax increment assistance. (b) The Council further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. The specific basis for such finding being: The TIF Plan will generally compliment and serve to implement policies adopted in the City’s comprehensive plan. The development contemplated on the property is in accordance with the existing zoning for the property, as modified in accordance with an approved planned unit development agreement. (c) The Council further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of TIF District No. 8 by private enterprise. The specific basis for such finding being: The proposed development to occur within TIF District No. 8 is primarily low and moderate income senior or workforce housing. The development will increase the taxable market valuation of the City, and the number of available low and moderate income senior and workforce housing units in the City. 1.04. The City elects to retain all of the captured tax capacity to finance the costs of TIF District No. 8 and the Redevelopment Project and elects to delay the receipt of the first increment until tax payable year 2021. 1.05. The provisions of this Section 1 are hereby incorporated by reference into and made a part of the TIF Plan and the findings set forth in Appendix C to the TIF Plan are hereby incorporated by reference into and made a part of this Resolution. 4 587108v2BR291-400 1.06. The Council further finds that the Plans are intended and in the judgment of the Council their effect will be to promote the public purposes and accomplish the objectives specified in the TIF Plan for TIF District No. 8 and the Redevelopment Plan for the Redevelopment Project. Section 2. Approval and Adoption of the Plans; Policy on Interfund Loans and Advances. 2.01. TIF District No. 8 is hereby established and 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 Finance Director. Approval of the Plans does not constitute approval of any project or a development agreement with any developer. The Business and Development Director is hereby directed to request, in writing, the Hennepin County Auditor to certify the new TIF District No. 8 and to file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 2.02. The Council hereby approves a policy on interfund loans or advances (“Loans”) for TIF District No. 8, as follows: (a) The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses in an amount up to $1,750,780, interest in an amount up to $6,978,073 and other development costs in an amount up to $10,529,725) payable from TIF District No. 8, as provided in the TIF Plan as originally adopted or as it may be amended, may need to be financed on a short-term and/or long-term basis via one or more Loans, as may be determined by the City Finance Director from time to time. (b) The Loans may be advanced if and as needed from available monies in the City’s general fund or other City fund designated by the City Finance Director. Loans may be structured as draw-down or “line of credit” obligations of the lending fund(s). (c) Neither the maximum principal amount of any one Loan nor the aggregate principal amount of all Loans may exceed may exceed $19,258,578 outstanding at any time. (d) All Loans shall mature not later than February 1, 2047 or such earlier date as the City Finance Director may specify in writing. All Loans may be pre-paid, in whole or in part, whether from tax increment revenue, tax increment revenue bond proceeds or other eligible sources. (e) The outstanding and unpaid principal amount of each Loan shall bear interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Loan, or any part of it, is first made, subject to the right of the City Finance Director to specify a lower rate (but not less than the City’s then-current average investment return for similar amount and term). 5 587108v2BR291-400 (f) Such Loans within the above guidelines are pre-approved. The Loans need not take any particular form and may be undocumented, except that the City Finance Director shall maintain all necessary or applicable data on the Loans. (g) In particular the City authorizes an interfund loan to be advanced from Redevelopment Tax Increment Financing District No. 3, in the amount of up to $50,000, to pay administrative expenses not paid by the Developer, to be repaid, not later than February 1, 2047, from tax increments of TIF District No. 8 to the extent not otherwise pledged to other obligations of TIF District No.8, with interest thereon at 4% per annum from the date advanced until repaid in full unless otherwise provided, in writing, by the City Finance Director. July 8, 2019 Date Mayor ATTEST: City Clerk 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. 6 587108v2BR291-400 CITY CLERK’S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Brooklyn Center, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a duly called and regularly held meeting of the City Council of said City held on July 8, 2019, with the original minutes thereof on file in my office and I further certify that the same is a full, true, and correct transcript thereof insofar as said minutes relate to the tax increment and related actions referenced therein with respect to the Economic Development Authority of the City of Brooklyn Center, Minnesota’s Housing and Redevelopment Project No. 1 and Tax Increment Financing District No. 8 therein. WITNESS My hand this ____ day of July, 2019. _______________________________________ City Clerk Brooklyn Center, Minnesota 586972v1BR291-400 CITY OF BROOKLYN CENTER COUNTY OF HENNEPIN STATE OF MINNESOTA Member _______________________ introduced the following resolution and moved its adoption: RESOLUTION NO .____ APPROVING THE REMOVAL OF A PARCEL FROM REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 3 WITHIN HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO. 1. WHEREAS, the Economic Development Authority of the City of Brooklyn Center, Minnesota (the “EDA”) and the City of Brooklyn Center, Minnesota (the “City”) have heretofore created Redevelopment Tax Increment Financing District No. 3 (the “TIF District”) within Housing Development and Redevelopment Project No. 1 (the “Project Area”) and approved a tax increment financing plan (the “TIF Plan”) for the TIF District, pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”) and other applicable laws, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.1081, all inclusive, as amended, (collectively, and together with the TIF Act, the “Act”); and WHEREAS, the following parcel (the “Property”) was included in the TIF District: Parcel Identification No. 03 -118 -21 -14 -0024 WHEREAS, the City desires by this resolution to amend the TIF Plan to remove the Property from the TIF District, thereby reducing the size thereof (the “TIF Plan Modification”); and WHEREAS, the EDA and City have investigated the facts relating to the TIF Plan Modification and have performed all actions required by law to be performed prior to the adoption and approval of the proposed TIF Plan Modification, including, but not limited to, notification of Hennepin County and Independent School District No. 281 (Robbinsdale), having taxing jurisdiction over the property in the TIF District, and the holding by the City of a public hearing on the date hereof upon published notice as required by law; and WHEREAS, the Property being removed from the TIF District has a current market values below the frozen value thereof and, therefore, the EDA and City may make the TIF Plan Modification to remove the Property from the TIF District only upon the notice and after the discussion, public hearing, and findings required for approval of the original TIF Plan pursuant to Section 469.175, Subdivision 4 of the TIF Act. 586972v1BR291-400 NOW THEREFORE, BE IT RESOLVED by the City Council (the “Council”) of the City of Brooklyn Center, Minnesota (the “City”), as follows: Section 1. Findings for the TIF Plan Modification. The Council hereby reaffirms the original findings for the TIF District and the findings made in connection with all subsequent modifications, including that when the TIF District was established, the TIF District was, and currently is, a redevelopment district and that, in the opinion of the City, (i) the proposed development of the Property would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; (ii) the increased market value of the Property that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan; (iii) that the TIF Plan Modification conforms to the general plan for the development or redevelopment of the City as a whole; (iv) that the TIF Plan Modification will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the project by private enterprise, which findings are further supported by the resolutions of the City and the EDA, adopted on the date hereof, establishing Tax Increment Financing District No. 8: Real Estate Equities (a housing district) in connection with the proposed development of the Property. Section 2. Public Purpose. The adoption of the TIF Plan Modification conforms in all respects to the requirements of the Act and will help provide opportunities for additional redevelopment and will improve the tax base. These public purposes and benefits exceed any benefits expected to be received by private developers, who will receive assistance only in the amount needed to make the proposed development on the Property financially feasible. Section. 3 Approval and Adoption of the TIF Plan Modification. 3.01. The TIF District and the TIF Plan are hereby amended to remove the Property and the TIF Plan Modification is hereby approved. Approval of the TIF Plan Modification does not constitute approval of any project or a development agreement with any developer. 3.02. City staff is authorized to file this resolution as evidence of the TIF Plan Modification with the Commissioner of Revenue, the Office of the State Auditor and the Hennepin County Auditor. 3.03. City staff, the City’s advisors and legal counsel are authorized and directed to proceed with the implementation of the TIF Plan Modification. July 8, 2019 Date Mayor ATTEST: City Clerk 586972v1BR291-400 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. 586972v1BR291-400 CITY CLERK’S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Brooklyn Center, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a duly called and regularly held meeting of the City Council of said City held on July 8, 2019, with the original minutes thereof on file in my office and I further certify that the same is a full, true, and correct transcript thereof insofar as said minutes relate to the tax increment and related actions referenced therein with respect to the Economic Development Authority of the City of Brooklyn Center, Minnesota’s Housing and Redevelopment Project No. 1 and the removal of a parcel from Redevelopment Tax Increment Financing District No. 3 therein. WITNESS My hand this ____ day of July, 2019. _______________________________________ City Clerk Brooklyn Center, Minnesota MODIFICATION OF THE REDEVELOPMENT PLAN Housing Development and Redevelopment Project No. 01 - AND - TAX INCREMENT FINANCING PLAN Establishment of Tax Increment Financing District No. 8: Real Estate Equities (a housing district) Brooklyn Center Economic Development Authority City of Brooklyn Center, Hennepin County, Minnesota Public Hearing: July 8, 2019 Table of Contents Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 01 ........................................................................................................................................... 2 Foreword ....................................................................................................................... 2 Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities. 3 Foreword ....................................................................................................................... 3 Statutory Authority .......................................................................................................... 3 Statement of Objectives .................................................................................................. 3 Redevelopment Plan Overview ........................................................................................ 3 Description of Property in the District and Property to be Acquired ...................................... 4 Classification of the District ............................................................................................. 4 Duration and First Year of Tax Increment of the District ..................................................... 5 Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ................................................................ 5 Sources of Revenue/Bonds to be Issued .......................................................................... 6 Uses of Funds ............................................................................................................... 7 Estimated Impact on Other Taxing Jurisdictions ................................................................ 7 Supporting Documentation .............................................................................................. 9 Administration of the District ............................................................................................ 9 Appendix A: Map of Housing Development and Redevelopment Project No. 01 and the District......................................................................................................................... 10 Appendix B: Estimated Cash Flor of the District .............................................................. 11 Appendix C: Findings Including But/For Qualifications ..................................................... 12 City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 2 Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 01 Foreword The following text represents a Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 01. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Housing Development and Redevelopment Project No. 01. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 8: Real Estate Equities. For further information, a review of the Redevelopment Plan for Housing Development and Redevelopment Project No. 01 is recommended. It is available from the Community Development Director at the Brooklyn Center City Hall. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Housing Development and Redevelopment Project No. 01. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 3 Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities Foreword The Brooklyn Center Economic Development Authority (the “EDA”), the City of Brooklyn Center (the "City"), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 8: Real Estate Equities (the "District"), a housing tax increment financing district, located in Housing Development and Redevelopment Project No. 01. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S."), Sections 469.090to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, 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 Housing Development and Redevelopment Project No. 01. Statement of Objectives The District currently consists of one parcel of land and adjacent and internal rights-of-way. The District is being created to facilitate the development of 270 units of affordable rental housing in the City. Development will include 127 units of workforce housing and 180 units of senior housing. The City anticipated entering into an agreement with Real Estate Equities and development on Phase I (workforce) is expected to begin in 2019 and the senior housing will commence in 2020. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for Housing Development and Redevelopment Project No. 01. 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 Housing Development and Redevelopment Project No. 01 and the District. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the 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 City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 4 necessary legal requirements, the City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. 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 below. The parcel is currently in Tax Increment Financing District No. 3 and will be removed prior to the establishment of the TIF District. Please also see the map in Appendix A for further information on the location of the District. The EDA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the EDA or City only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Classification of the District The EDA 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. In meeting the statutory criteria, the EDA and City rely on the following facts and findings: ▪ The District consists of one parcel. ▪ The development will consist of 270 units of affordable rental housing in the City. ▪ 100% of the units will be occupied by persons with incomes at or below 60% 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, 273.112, or 273.114 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Parcel number Address Owner 03-118-21-14-0024 5801 Xerxes Ave.Ilex Group City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 5 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 of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b., the duration of the District will be 26 years. The EDA and City elect to receive the first tax increment in 2021, 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 2046, or when the TIF Plan is satisfied. The EDA and City reserve the right to decertify the District prior to the legally required date. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2019 for taxes payable 2020. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2021) 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 EDA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2020, assuming the request for certification is made before June 30, 2020. The ONTC and the Original Local Tax Rate for the District appear in the table below (Pay 2019 rate was used since 2020 rates are not yet available). 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 Housing Development and Redevelopment Project No. 01, upon completion of the projects within the District, will annually generate tax increment revenues as shown in the table below. The EDA 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 2021. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 6 Note: Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 25. The tax capacity of the District in year one is estimated to be $76,200. Pursuant to M.S., Section 469.177, Subd. 4, the City 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. The EDA and City have reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. 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 EDA and City reserve the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go note and interfund loan. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA 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 total estimated tax increment revenues for the District are shown in the table below: The EDA 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 $12,280,505. Such bonds may be in the form of pay-as-you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Project estimated Tax Capacity upon completion 648,465$ Original estimated Net Tax Capacity 4,042 Estimated Captured Tax Capacity 644,423$ Original Local Tax Rate 152.5150%Pay 2019 Estimated Annual Tax Increment 982,841$ Percent Retainted by the City 100% Project Tax Capacity SOURCES Tax Increment 17,507,798$ Interest 1,750,780 TOTAL 19,258,578$ City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 7 Uses of Funds Currently under consideration for the District is a proposal to facilitate to facilitate the development of 270 units of affordable housing. The EDA and City have determined that it will be necessary to provide assistance to the projects for certain District costs, as described. The EDA and City have 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 following table. 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 the Sources of Revenue section. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the development contemplated by the TIF Plan would occur without the creation of the District. However, the EDA and City have determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: USES Land/Building Acquisition 1,000,000$ Site Improvements/Preparation 750,000$ Utilities 350,000$ Affordable Housing 7,429,725$ Other Qualifying Improvements 1,000,000$ Administrative Costs (up to 10%)1,750,780$ PROJECT COST TOTAL 12,280,505$ Interest 6,978,073 PROJECT AND INTEREST COSTS TOTAL 19,258,578$ Entity 2018/Pay 2019 Total Net Tax Capacity Estimated Captured Tax Capacity (CTC) upon completion Percent of CTC to Entity Total Hennepin County 1,817,980,868 644,423 0.0354% City of Brooklyn Center 18,867,746 644,423 3.4155% Robbinsdale ISD 281 97,653,903 644,423 0.6599% Impact on Tax Base City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 8 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the Pay 2019 rate. The total net capacity for the entities listed above are based on Pay 2019 figures. The District will be certified under the Pay 2020 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 $17,507,798; (2) Probable impact of the District on city provided services and ability to issue debt. An impact of the District on police protection is expected. The current site is a vacant parking lot adjacent to a heavily used transit facility. The transit facility currently generates a high volume of police calls, some of which spill onto this site. It is anticipated that the development will reduce the amount of spillover activity from the transit center and increase the amount of positive activity on the site. Further, the increase in transit users generated from the development will likely have a positive effect on the transit facility. 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 existing buildings, which will be eliminated by the new development, have public safety concerns that include several unprotected old buildings with issues such as access, hydrant locations, and converted structures. The City does not expect that the proposed development, in and of itself, will necessitate new 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 is expected to contribute an estimated $668,465 (269 units at $2,485/unit) in sanitary sewer 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 Entity Pay 2019 Extension Rate Percent of Total CTC Potential Taxes Hennepin County 41.8610%27.45% 644,423 $ 269,762 City of Brooklyn Center 71.8600%47.12% 644,423 463,082 Robbinsdale ISD 281 29.9090%19.61% 644,423 192,740 Other 8.8850%5.83% 644,423 57,257 Total 152.5150%100.00% $ 982,841 Impact on Tax Rates City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 9 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 $3,443,372; (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 $4,805,389; (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 15 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. 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 determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the District. (i) In making said determination, reliance has been placed upon (1) written representation made by the developer to such effects; and (2) City staff awareness of the feasibility of developing the project site within the District, which is further outlined in t he City Council resolution approving the establishment of the TIF District and in Appendix C. (i) A comparative analysis of estimated market value both with and without establishment of the TIF District and the use of tax increments has been performed. Such analysis is included with the cashflow in Appendix B and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the TIF District and the use of tax increments. Administration of the District Administration of the District will be handled by the Community Development Director. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 10 Appendix A: Map of Housing Development and Redevelopment Project No. 01 and the District I S L A N D S O F P E A C E P A R K (A N O K A C O U N T Y ) WEST F IRESTATION HEN NEP IN CO .LI B R A RY & GOV E RNMENT SERVICE CEN TER P A L M E R L A K E P R E S E R V E A R E A U .S . P O S T O F F I C E WA TERTOWERNo. 2 EV E R GREENPARK LA K E S ID E PARK(T RI A N G L E PARK) PUB L I C WORKSMAINTENANCE FA CI LI TY ST . A L P H ONSUS SCH OOL WI L LOW LANEEARLY CHI LDHOOD C EN TER LIQUOR ST O R E 2 LIQUOR ST O R E 1 N EW MILL E NNIUM AC A D EMY EASTFIRE ST A TION EV E RGREENELEMENTARY SCH OOL R I V E R D A L E P A R KEAST PA LMERLAKE PARK WE S T P A LMERLAKE PARK PA L ME R LAKEELEMENTARY SC H OOL WIL LOW LANE PA RK A R B O R E T U M O R C H A R D L A N E P A R K N O MP ENGACADEMY M O U N D C E M E T E R Y FREEWAYPARK GA R D E N CITYELEMENTARY SC H OOL MA R LINPARK WA TERTOWERNo.1 FIREHOUSEPARK BRO OK LYN CENTER HIG H SCHOOL EA RLEBROWN EL E ME NTARYSCHOOL B E L L V U E P A R K CEN TENNIALPARK CITYHALL CEN TE R BROOKGOLF COURSE WA TERTOWERNo. 3 KYL AWNPARK NORT HPORTELEMENTARY SC H OOL N OR T H PORTPARK H AP PY HOLLOW PA RK EA RL E B ROWNHERITAGE C EN TER GR A N D VIEWPARK LIONSPARK N O R T H M I S S I S S I P P I R E G I O N A L P A R K CAH LA NDERPARK WA NGSTADPARK PO LICESTATION TW IN LA KE PA RK GARDENCITY PA RK PA L ME R LAKEPARK COMM U NITYCENTER 0 0.5 10.25 Mi l es Hou s ing D ev elop men t an d R ede velop ment Project No. 1 and Tax In creme nt F inancing (TIF) District No. 8 ² Legend TIF P rojectBoundary Line TIF Dis tr i ct No. 8 C it y Border V I N C E N T A V E . N . U P T O N A V E . N . NORTHWAY DR. CO. RD . NO.10 W A S H B U R N A V E . N . 58T H AV E. N. ADMIR AL LA. A V E 60T H AVE. N. 59T H AV E. N. X E R X E S A V E . N . Y O R K A V E . N . Z E N I T H A V E . N . A B B O T T A V E . N . B E A R D N O R T H W A Y N O R T H P O R T D R . B R O O K L Y N B L V D . X E R X E S A V E . N . 56TH. AVE. N. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 11 Appendix B: Estimated Cash Flow for the District 6/4/2019 Base Value Assumptions - Page 1 Real Estate Equities - No Inflation Brooklyn Center, MN 127 Workforce Apartments and 143 Senior Apartments ASSUMPTIONS AND RATES DistrictType:Housing District Name/Number: County District #:Exempt Class Rate (Exempt)0.00% First Year Construction or Inflation on Value 2019 Commercial Industrial Preferred Class Rate (C/I Pref.) Existing District - Specify No. Years Remaining First $150,000 1.50% Inflation Rate - Every Year:3.00%Over $150,000 2.00% Interest Rate:4.00%Commercial Industrial Class Rate (C/I)2.00% Present Value Date:1-Aug-20 Rental Housing Class Rate (Rental)1.25% First Period Ending 1-Feb-21 Affordable Rental Housing Class Rate (Aff. Rental) Tax Year District was Certified:Pay 2020 First $150,000 0.75% Cashflow Assumes First Tax Increment For Development:2021 Over $150,000 0.25% Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit) Assumes Last Year of Tax Increment 2046 First $500,000 1.00% Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25% Incremental or Total Fiscal Disparities Incremental Homestead Residential Class Rate (Hmstd. Res.) Fiscal Disparities Contribution Ratio 33.7006%Pay 2019 First $500,000 1.00% Fiscal Disparities Metro-Wide Tax Rate 143.9920%Pay 2019 Over $500,000 1.25% Maximum/Frozen Local Tax Rate: 152.515%Pay 2019 Agricultural Non-Homestead 1.00% Current Local Tax Rate: (Use lesser of Current or Max.)152.515%Pay 2019 State-wide Tax Rate (Comm./Ind. only used for total taxes)42.4160%Pay 2019 Market Value Tax Rate (Used for total taxes)0.26683%Pay 2019 Building Total Percentage Tax Year Property Current Class After Land Market Market Of Value Used Original Original Tax Original After Conversion Map ID PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap. 1 03-118-21-14-0024 Ilex Group 5801 Xerxes Ave.1,617,000 1,617,000 33%539,000 Pay 2020 C/I Pref.10,030 Aff. Rental 4,042 1 1,617,000 0 1,617,000 539,000 10,030 4,042 Note: 1. Base values are for pay 2020 based upon review of County website on May 8, 2019. 2. Located in SD #281 and WS #8 Area/ Phase Tax Rates BASE VALUE INFORMATION (Original Tax Capacity) Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Brooklyn Center\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 8 - Real Estate Equities (Jerry's Food Site)\TIF Run - FINAL 6/4/2019 Base Value Assumptions - Page 2 Real Estate Equities - No Inflation Brooklyn Center, MN 127 Workforce Apartments and 143 Senior Apartments Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes Area/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./Units Value Class Tax Capacity Capacity/Unit 2019 2020 2021 2022 Payable 1 Workforce Apt 180,000 180,000 127 22,860,000 Aff. Rental 152,400 1,200 50%100%100%100%2022 2 Sr. Apt 180,000 180,000 143 25,740,000 Aff. Rental 171,600 1,200 0%50%100%100%2023 TOTAL 48,600,000 324,000 Subtotal Residential 270 48,600,000 324,000 Subtotal Commercial/Ind.0 0 0 Note: 1. Market values are based upon estimates. Total Fiscal Local Local Fiscal State-wide Market Tax Disparities Tax Property Disparities Property Value Total Taxes Per New Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq. Ft./Unit Workforce Apt 152,400 0 152,400 232,433 0 0 60,997 293,430 2,310.47 Sr. Apt 171,600 0 171,600 261,716 0 0 68,682 330,398 2,310.47 TOTAL 324,000 0 324,000 494,149 0 0 129,679 623,828 Note: 1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors which cannot be predicted. Total Property Taxes 623,828 Current Market Value - Est.539,000 less State-wide Taxes 0 New Market Value - Est.48,600,000 less Fiscal Disp. Adj.0 Difference 48,061,000 less Market Value Taxes (129,679)Present Value of Tax Increment 9,789,626 less Base Value Taxes (6,165) Difference 38,271,374 Annual Gross TIF 487,983 Value likely to occur without Tax Increment is less than:38,271,374 WHAT IS EXCLUDED FROM TIF?MARKET VALUE BUT / FOR ANALYSIS TAX CALCULATIONS PROJECT INFORMATION (Project Tax Capacity) Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Brooklyn Center\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 8 - Real Estate Equities (Jerry's Food Site)\TIF Run - FINAL 6/4/2019 Tax Increment Cashflow - Page 3 Real Estate Equities - No Inflation Brooklyn Center, MN 127 Workforce Apartments and 143 Senior Apartments TAX INCREMENT CASH FLOW Project Original Fiscal Captured Local Annual Semi-Annual State Admin.Semi-Annual Semi-Annual PERIOD % of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax Payment OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36%10%Increment Value Yrs.Year Date - - - - 02/01/21 100%76,200 (4,042) - 72,158 152.515%110,051 55,026 (198) (5,483) 49,345 47,429 0.5 2021 08/01/21 100%76,200 (4,042) - 72,158 152.515%110,051 55,026 (198) (5,483) 49,345 93,927 1 2021 02/01/22 100%238,200 (4,042) - 234,158 152.515%357,125 178,563 (643) (17,792) 160,128 241,861 1.5 2022 08/01/22 100%238,200 (4,042) - 234,158 152.515%357,125 178,563 (643) (17,792) 160,128 386,893 2 2022 02/01/23 100%328,572 (4,042) - 324,530 152.515%494,956 247,478 (891) (24,659) 221,928 583,959 2.5 2023 08/01/23 100%328,572 (4,042) - 324,530 152.515%494,956 247,478 (891) (24,659) 221,928 777,161 3 2023 02/01/24 100%338,429 (4,042) - 334,387 152.515%509,990 254,995 (918) (25,408) 228,669 972,328 3.5 2024 08/01/24 100%338,429 (4,042) - 334,387 152.515%509,990 254,995 (918) (25,408) 228,669 1,163,669 4 2024 02/01/25 100%348,582 (4,042) - 344,540 152.515%525,474 262,737 (946) (26,179) 235,612 1,356,953 4.5 2025 08/01/25 100%348,582 (4,042) - 344,540 152.515%525,474 262,737 (946) (26,179) 235,612 1,546,447 5 2025 02/01/26 100%359,039 (4,042) - 354,997 152.515%541,424 270,712 (975) (26,974) 242,764 1,737,864 5.5 2026 08/01/26 100%359,039 (4,042) - 354,997 152.515%541,424 270,712 (975) (26,974) 242,764 1,925,528 6 2026 02/01/27 100%369,811 (4,042) - 365,768 152.515%557,851 278,926 (1,004) (27,792) 250,129 2,115,095 6.5 2027 08/01/27 100%369,811 (4,042) - 365,768 152.515%557,851 278,926 (1,004) (27,792) 250,129 2,300,945 7 2027 02/01/28 100%380,905 (4,042) - 376,863 152.515%574,772 287,386 (1,035) (28,635) 257,716 2,488,677 7.5 2028 08/01/28 100%380,905 (4,042) - 376,863 152.515%574,772 287,386 (1,035) (28,635) 257,716 2,672,729 8 2028 02/01/29 100%392,332 (4,042) - 388,290 152.515%592,200 296,100 (1,066) (29,503) 265,531 2,858,642 8.5 2029 08/01/29 100%392,332 (4,042) - 388,290 152.515%592,200 296,100 (1,066) (29,503) 265,531 3,040,911 9 2029 02/01/30 100%404,102 (4,042) - 400,060 152.515%610,151 305,075 (1,098) (30,398) 273,579 3,225,022 9.5 2030 08/01/30 100%404,102 (4,042) - 400,060 152.515%610,151 305,075 (1,098) (30,398) 273,579 3,405,523 10 2030 02/01/31 100%416,225 (4,042) - 412,183 152.515%628,640 314,320 (1,132) (31,319) 281,870 3,587,847 10.5 2031 08/01/31 100%416,225 (4,042) - 412,183 152.515%628,640 314,320 (1,132) (31,319) 281,870 3,766,597 11 2031 02/01/32 100%428,712 (4,042) - 424,669 152.515%647,685 323,842 (1,166) (32,268) 290,409 3,947,150 11.5 2032 08/01/32 100%428,712 (4,042) - 424,669 152.515%647,685 323,842 (1,166) (32,268) 290,409 4,124,163 12 2032 02/01/33 100%441,573 (4,042) - 437,531 152.515%667,300 333,650 (1,201) (33,245) 299,204 4,302,961 12.5 2033 08/01/33 100%441,573 (4,042) - 437,531 152.515%667,300 333,650 (1,201) (33,245) 299,204 4,478,254 13 2033 02/01/34 100%454,820 (4,042) - 450,778 152.515%687,504 343,752 (1,238) (34,251) 308,263 4,655,312 13.5 2034 08/01/34 100%454,820 (4,042) - 450,778 152.515%687,504 343,752 (1,238) (34,251) 308,263 4,828,899 14 2034 02/01/35 100%468,465 (4,042) - 464,423 152.515%708,314 354,157 (1,275) (35,288) 317,594 5,004,233 14.5 2035 08/01/35 100%468,465 (4,042) - 464,423 152.515%708,314 354,157 (1,275) (35,288) 317,594 5,176,130 15 2035 02/01/36 100%482,519 (4,042) - 478,477 152.515%729,749 364,874 (1,314) (36,356) 327,205 5,349,755 15.5 2036 08/01/36 100%482,519 (4,042) - 478,477 152.515%729,749 364,874 (1,314) (36,356) 327,205 5,519,977 16 2036 02/01/37 100%496,995 (4,042) - 492,952 152.515%751,826 375,913 (1,353) (37,456) 337,104 5,691,909 16.5 2037 08/01/37 100%496,995 (4,042) - 492,952 152.515%751,826 375,913 (1,353) (37,456) 337,104 5,860,470 17 2037 02/01/38 100%511,904 (4,042) - 507,862 152.515%774,566 387,283 (1,394) (38,589) 347,300 6,030,725 17.5 2038 08/01/38 100%511,904 (4,042) - 507,862 152.515%774,566 387,283 (1,394) (38,589) 347,300 6,197,641 18 2038 02/01/39 100%527,262 (4,042) - 523,219 152.515%797,988 398,994 (1,436) (39,756) 357,802 6,366,232 18.5 2039 08/01/39 100%527,262 (4,042) - 523,219 152.515%797,988 398,994 (1,436) (39,756) 357,802 6,531,518 19 2039 02/01/40 100%543,079 (4,042) - 539,037 152.515%822,112 411,056 (1,480) (40,958) 368,619 6,698,462 19.5 2040 08/01/40 100%543,079 (4,042) - 539,037 152.515%822,112 411,056 (1,480) (40,958) 368,619 6,862,132 20 2040 02/01/41 100%559,372 (4,042) - 555,329 152.515%846,961 423,480 (1,525) (42,196) 379,760 7,027,444 20.5 2041 08/01/41 100%559,372 (4,042) - 555,329 152.515%846,961 423,480 (1,525) (42,196) 379,760 7,189,513 21 2041 02/01/42 100%576,153 (4,042) - 572,110 152.515%872,554 436,277 (1,571) (43,471) 391,236 7,353,207 21.5 2042 08/01/42 100%576,153 (4,042) - 572,110 152.515%872,554 436,277 (1,571) (43,471) 391,236 7,513,690 22 2042 02/01/43 100%593,438 (4,042) - 589,395 152.515%898,916 449,458 (1,618) (44,784) 403,056 7,675,781 22.5 2043 08/01/43 100%593,438 (4,042) - 589,395 152.515%898,916 449,458 (1,618) (44,784) 403,056 7,834,693 23 2043 02/01/44 100%611,241 (4,042) - 607,198 152.515%926,068 463,034 (1,667) (46,137) 415,231 7,995,195 23.5 2044 08/01/44 100%611,241 (4,042) - 607,198 152.515%926,068 463,034 (1,667) (46,137) 415,231 8,152,550 24 2044 02/01/45 100%629,578 (4,042) - 625,535 152.515%954,035 477,018 (1,717) (47,530) 427,770 8,311,479 24.5 2045 08/01/45 100%629,578 (4,042) - 625,535 152.515%954,035 477,018 (1,717) (47,530) 427,770 8,467,291 25 2045 02/01/46 100%648,465 (4,042) - 644,423 152.515%982,841 491,421 (1,769) (48,965) 440,686 8,624,661 25.5 2046 08/01/46 100%648,465 (4,042) - 644,423 152.515%982,841 491,421 (1,769) (48,965) 440,686 8,778,945 26 2046 02/01/47 Total 17,571,054 (63,256) (1,750,780) 15,757,018 Present Value From 08/01/2020 Present Value Rate 4.00%9,789,626 (35,243) (975,438) 8,778,945 Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Brooklyn Center\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 8 - Real Estate Equities (Jerry's Food Site)\TIF Run - FINAL City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 12 Appendix C: Findings Including But/For Qualifications 1.01. The Council finds that the boundaries of the Project Area are not being expanded and the Redevelopment Plan is not being modified other than to incorporate the establishment of TIF District No. 8 therein and therefore the Council reaffirms the findings and determinations originally made in connection with the establishment of the Redevelopment Project area and the adoption of the Redevelopment Plan therefor. 1.02. The Council hereby finds that TIF District No. 8 is in the public interest and is a “housing district” within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or 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; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. The Development to be constructed in TIF District No. 8 will consist of approximately 270 units of workforce or senior rental housing. The Developer has represented that at least 40% of the units (i.e., 108 units) will be rented to and occupied by individuals or families whose income is not greater than 60% or less of area median income and that no more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 1.03. The Council hereby makes the following additional findings in connection with TIF District No. 8: (a) The Council further finds that the proposed development, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: The construction of the Development would not be undertaken in the reasonably foreseeable future. The property has remained undeveloped for several years despite previous efforts to redevelop the property. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new development. The Developer has represented that it could not proceed with the Development without the tax increment assistance to be provided to the Developer. The Developer has provided the City its estimated Development proforma outlining project sources and uses as well as projected rent, vacancy and financing assumptions. City staff and the City’s advisors reviewed the information and have determined the Development is not feasible without the proposed assistance due to anticipated rent levels and market returns not supporting the development costs. Based on the review, the City does not expect that a development of this type City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 13 would occur in the reasonably foreseeable future but for the use of tax increment assistance. (b) The Council further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. The specific basis for such finding being: The TIF Plan will generally compliment and serve to implement policies adopted in the City’s comprehensive plan. The development contemplated on the property is in accordance with the existing zoning for the property, as modified in accordance with an approved planned unit development agreement. (c) The Council further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of TIF District No. 8 by private enterprise. The specific basis for such finding being: The proposed development to occur within TIF District No. 8 is primarily low- and moderate-income senior or workforce housing. The development will increase the taxable market valuation of the City, and the number of available low- and moderate-income senior and workforce housing units in the City. E conomic Development Authority City Hall - Council Chambers J uly 8, 2019 AGE NDA 1.Call to Order The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Counc il packet, including E D A (E conomic Development Authority ), is available to the public. The packet ring binder is located at the entrance of the council chambers. 2.Roll Call 3.Approval of Consent Agenda The following items are considered to be routine by the Economic Development Authority (E D A) and will been acted by one motion. There will be no separate disc ussion of these items unless a Commissioner so requests, in whic h event the item will be removed from the c onsent agenda and considered at the end of Commission Consideration I tems. a.Approval of Minutes - Motion to approve minutes from June 24, 2019 4.Commission Consideration Items a.Resolutions Regarding Removal of a Parcel from Redevelopment Tax I ncrement Financing District No. 3 and E stablishing Tax I ncrement Financing District No. 8 and Approving a Tax I ncrement Financing Plan - Motion to approve a resolution approvi ng the removal of a parcel from Redevelopment Tax Increment Financing Distri ct No. 3 wi thi n Housing Development and Redevelopment Project No. 1 - Motion to approve a resolution approvi ng a modi fi cation to the Redevel opment Plan for Housi ng Development and Redevelopment Project No. 1 establ ishing Tax Increment Fi nanci ng Di strict No. 8 therein and approving a Tax Increment Fi nanci ng Plan therefor 5.Adjournment ED A ITEM MEMOR ANDUM DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:Dr. R eggie Edwards , Deputy C ity Manager F R O M:Barb S uciu, C ity C lerk S UBJ EC T:Approval of Minutes Background: S trategic Priorities and Values: O perational Exc ellenc e AT TAC HME N T S: Desc ription Upload Date Type June 24, 2019 EDA Minutes 7/3/2019 C over Memo 06/24/19 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION JUNE 24, 2019 CITY HALL – COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Mike Elliott at 9:00 p.m. 2. ROLL CALL President Mike Elliott and Commissioners April Graves, Kris Lawrence-Anderson, and Dan Ryan. Commissioner Marquita Butler was absent and excused. Also present were Executive Director Curt Boganey, Community Development Director Meg Beekman, Police Chief Tim Gannon, and City Attorney Troy Gilchrist. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Ryan moved, and Commissioner Graves seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. May 28, 2019 – Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2019-12 APPROVING A PURCHASE AGREEMENT AND CONVEYANCE OF CERTAIN PROPERTY TO CENTRA HOMES LLC Community Development Director Meg Beekman reviewed a proposed purchase agreement with Centra Homes LLC for development of a 7.5-acre property owned by the Economic Development Authority (EDA). She added the property was acquired using TIF #3 pooled funds with the intent of redeveloping the land into single-family homes. Ms. Beekman stated Centra Homes was selected to develop a site plan for 30-35 move-up single family homes with an average home price of $332,000. She added the purchase agreement $115,000 stipulates that Centra Homes would pay an earnest amount and conduct due diligence 06/24/19 -2- DRAFT and obtain financing, closing on the property on or before September 30 for a purchase price of $115,000. Commissioner Lawrence-Anderson stated residents of that neighborhood have asked about damage to the streets for which they were recently assessed. Ms. Beeman stated a pre-inspection would be conducted, which would document the condition of the streets before work commences. Commissioner Graves requested clarification regarding why the City does not have residential design standards, and whether that is typical for cities. Ms. Beekman stated the City of Brooklyn Center had been fully developed for many years, and landscape and design standards are generally required for new residential developments. She added the City Council could review this issue and consider the addition of residential design and landscaping standards. She noted this type of standard is especially helpful in a city like Brooklyn Center, where there are many mature trees, and tree removal guidelines might be required for redevelopment projects. Commissioner Graves stated she would support consideration of residential design standards as a future work session agenda item. Mr. Boganey stated that it is a topic that could be addressed by the Zoning Task Force. Ms. Beeman agreed. Commissioner Ryan moved, and Commissioner Lawrence-Anderson seconded to open the public hearing at 9:10 p.m. Motion passed unanimously. There were no comments Commissioner Graves moved, and Commissioner Ryan seconded to close the public hearing at 9:11 p.m. Motion passed unanimously. Commissioner Ryan stated he appreciates that residents are concerned about disruption to their neighborhood. He added the contractor and the City would do everything possible to minimize inconvenience. He noted this is a great opportunity for the City to provide move-up homes and bring the undeveloped residential property into more productive use. Commissioner Ryan moved, and Commissioner Lawrence-Anderson seconded to adopt RESOLUTION NO. 2019-12 Approving a Purchase Agreement and Conveyance of Certain Property to Centra Homes LLC. President Elliott abstained. Motion passed. 06/24/19 -3- DRAFT 4b. CONSIDERATION OF A TERM SHEET BETWEEN REAL ESTATE EQUITIES AND THE ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER REGARDING TAX INCREMENT FINANCING Ms. Beekman reviewed a concept plan proposed by Real Estate Equities for EDA-owned property at 5801 Xerxes Avenue N. A Planned Unit Development (PDA) Agreement was approved by the City Council on June 10, 2019, for a residential community comprised of two buildings with senior living and workforce housing. The project qualifies for a 26-year TIF housing district, as requested by the applicant. The estimated market value of the property after construction would be $33.3 million and would generate $360,000 annually in property taxes. Ms. Beekman stated City Staff recommends the creation of a 26-year TIF district of $1.6 million pay as you go, likely to be paid off in 16 years. The EDA would retain 10% of the increment over the life of the note repayment that could be utilized to cover the City’s costs and other housing projects. The City can choose to keep the District open for the full 26 years. Ms. Beekman stated TIF District income limits would apply, which would be 40% of units at 60% AMI. She added this is a statutory requirement for TIF districts. Commissioner Ryan requested confirmation that the TIF note is the obligation of the developer and not the City. Ms. Beekman confirmed this. Commissioner Ryan asked whether the length of the TIF District is a legal requirement. Ms. Beekman confirmed this, adding there is a maximum length specified in State statute. Commissioner Ryan asked whether the TIF district could be applied to other projects. Ms. Beekman stated City Staff is proposing that this TIF district will be applied to this property only, but it can be spent outside the district for eligible development opportunities if the additional increment is produced. Commissioner Lawrence-Anderson asked when the developer will pay their full property tax revenue to the City. Ms. Beekman stated additional taxes besides the base tax that are generated off the development after the project is constructed are paid by the developer. She added they would receive a refund of 90% to pay off the TIF note up to the amount of the note or after 16 years. Commissioner Graves asked what the TIF district this will be, and whether there are a few districts close to ending. Ms. Beekman stated this would be TIF District #8. She added Districts 1 and two are no longer active and were decertified. She noted TIF #3 decertifies in 2021. She noted she could provide additional detail on each of the TIF Districts for the City Council’s review. Commissioner Ryan stated the development is dependent upon this modest subsidy. He added these sets aside City revenue over 16 years to provide an asset to the community for seniors and working families. 06/24/19 -4- DRAFT Commissioner Ryan moved, and Commissioner Lawrence-Anderson seconded to direct City Staff to prepare an agreement consistent with the term sheet. Motion passed unanimously. 5. ADJOURNMENT Commissioner Ryan moved, and Commissioner Graves seconded adjournment of the Economic Development Authority meeting at 9:30 p.m. Motion passed unanimously. ED A ITEM MEMOR ANDUM DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:N/A F R O M:Meg Beekman, C ommunity Development Director S UBJ EC T:R esolutions R egarding R emoval of a P arc el from R edevelopment Tax Inc rement F inanc ing District No. 3 and Establis hing Tax Inc rement F inanc ing District No. 8 and Approving a Tax Inc rement F inanc ing P lan Background: As part of the es tablis hment o f a tax inc rement financing d is tric t, the C ity C o unc il mus t hold a p ublic hearing and both the C ity C ounc il and EDA mus t approve the T I F plan and the establis hment of the dis tric t. O n F ebruary 22, 2019, the C ity received an ap p licatio n for p ublic financial assistanc e from R eal Estate Equities (the “Develo p er”). T he Developer req ues ted tax increment financing (T I F ) to p ro vide the nec es s ary as s is tance fo r cons truction o f 270-units of affordable rental hous ing within the C ity; 127-units o f non-age res tric ted hous ing and 143-units of s enior hous ing, all of whic h would be affordable to p ers o ns o r hous eholds at o r below 60% of the area median income (AMI) and wo uld be b o th rent and inc o me restricted as noted below: T he C ity will be c reating a ho using T I F district with a 26-year term. It is antic ipated that the firs t tax increment will be rec eived in 2021 s o the Dis tric t wo uld terminate o n Dec emb er 31, 2046. It s hould b e noted that the EDA o nly anticipates p ro viding 16 years o f as s is tance for the p ro ject(s ) s o in year 17, the C ity C o uncil at that time c an c hose to either d ecertify the Dis trict early, or keep the District o p en and collec t the remaining ten (10) years o f T I F fo r use o n future affo rd ab le hous ing projec ts (it s hould b e no ted that any future C o uncil in year 17 through 26 could c hoose to decertify the District early). W hen both projec ts are c o mp leted, the District will generate ap p ro ximately $486,000/year in T I F. T he C ity anticipates p ro viding two (2) P ay-As -You-G o (PAYG O ) T I F Notes whic h will be p aid from 90% o f the annual T I F generated from the District. T he EDA will retain 10% of the annual T I F (approximately $48,600/year) fo r ad ministrative costs o f the Dis tric t o r fo r use on other affordable ho using (rental or owner- occ upied) hous ing projec ts. After redevelo p ment the taxab le market value is es timated to be approximately $48.6 million ($22.86 million for the wo rkforc e apartments and $25.74 million for the s enior ap artments). O nc e the PAYG O notes are p aid , the projects will generate approximately $232,000 in annual revenue for the C ity. Interfund L oan T he C ity’s Economic Development Authority (EDA) is overseeing the adminis tration and development within the above referenced T I F Dis trict. As part o f this ad ministration, the EDA may need to loan funds from various EDA funds to this Dis tric t to temporarily finance ad ministrative c o s ts not covered by R eal Estate Equities esc row. S tate S tatute req uires that the EDA approve a res o lutio n authorizing an internal (interfund ) loan to the res pective T I F Dis tric t and set the terms fo r reimburs ement o f the c o s ts to be repaid with tax inc rements from the respec tive T I F Dis tric t. T he language autho rizing an interfund lo an for up to $50,000 fro m the EDA to the T I F District is inc luded in the res olution es tab lis hing the T I F District. T he interfund lo an would be p aid with future T I F fro m the Dis tric t (the EDA’s 10% admin portio n). As funds are advanc ed they will bear an interes t rate of 5%, whic h is the current, maximum interest rate that c an be charged. It s hould be noted that $50,000 is a maximum amount and that it may never need to be drawn up o n if there are no additio nal adminis trative c os ts charged to the District that are not the res ponsibility of the Developer. C ompleting this ac tion provid es the EDA with the mo s t flexibility to reimburs e its elf in the future if and when EDA funds are advanced and T I F funds are available from the newly c reated T I F District. R emoval of P arcel from T I F D istrict 3 T he C ity and EDA es tablished T I F dis tric t No. 3 (Earle Brown F arm P roject) in 1994 which encompassed a large area of the C ity. T his dis tric t inc luded the former Jerry’s F ood site loc ated at 5801 Xerxes Avenue, identified as parcel number 03-118-21-14-0024. T he C ity and EDA are c reating T I F District No. 8: R eal Estate Equities , on this parc el for the development of 270 affordable rental hous ing units . S ince the parc el is already contained within T I F District No. 3, the C ity is required to remove it prior to the es tablishment of the new hous ing T I F dis tric t. T he parc el was oc cupied by a building when T I F District No. 3 was c reated and s inc e then the building has been demolis hed. Due to this , the C ity is required to hold a public hearing on its removal since the tax capac ity of the parcel is lower today then when it was when T I F district No. 3 was establis hed. It should be noted that removal of this parcel from T I F Dis tric t No. 3 will actually have a positive impact on the District (albeit quite s mall) since the parc el has been generating negative inc rement for the District due to the current tax capac ity being les s than the bas e tax capac ity. Budget Issues: T he proposed action would have no impact on the budget. All c os ts as s ociated with the creation and administration of the T I F dis tric t will be paid by the Developer and/or future generated inc rement. S trategic Priorities and Values: Targeted R edevelopment AT TAC HME N T S: Desc ription Upload Date Type R esolution Approving the R emoval of a P arc el from R edevelopment Tax Increment F inancing Dis tric t No. 3 7/2/2019 R es olution Letter R esolution Approving the Establis hment of T I F Dis tric t No. 8 7/2/2019 R es olution Letter Tax Increment F inancing P lan Es tablishing T I F Dis tric t No. 8 7/2/2019 Bac kup Material 586972v2BR291-400 Commissioner _______________________ introduced the following resolution and moved its adoption: EDA RESOLUTION NO .____ APPROVING THE REMOVAL OF A PARCEL FROM REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT NO. 3 WITHIN HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO. 1. WHEREAS, the Economic Development Authority of the City of Brooklyn Center, Minnesota (the “EDA”) and the City of Brooklyn Center, Minnesota (the “City”) have heretofore created Redevelopment Tax Increment Financing District No. 3 (the “TIF District”) within Housing Development and Redevelopment Project No. 1 (the “Project Area”) and approved a tax increment financing plan (the “TIF Plan”) for the TIF District, pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”) and other applicable laws, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.1081, all inclusive, as amended, (collectively, and together with the TIF Act, the “Act”); and WHEREAS, the following parcel (the “Property”) was included in the TIF District: Parcel Identification No. 03 -118 -21 -14 -0024 WHEREAS, the EDA desires by this resolution to amend the TIF Plan to remove the Property from the TIF District, thereby reducing the size thereof (the “TIF Plan Modification”); and WHEREAS, the EDA and City have investigated the facts relating to the TIF Plan Modification and have performed all actions required by law to be performed prior to the adoption and approval of the proposed TIF Plan Modification, including, but not limited to, notification of Hennepin County and Independent School District No. 281 (Robbinsdale), having taxing jurisdiction over the property in the TIF District, and the holding by the City of a public hearing on the date hereof upon published notice as required by law; and WHEREAS, the Property being removed from the TIF District has a current market values below the frozen value thereof and, therefore, the EDA and City may make the TIF Plan Modification to remove the Property from the TIF District only upon the notice and after the discussion, public hearing, and findings required for approval of the original TIF Plan pursuant to Section 469.175, Subdivision 4 of the TIF Act. NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the EDA (the “Board”) as follows: Section 1. Findings for the TIF Plan Modification. The Board hereby reaffirms the original findings for the TIF District and the findings made in connection with all subsequent 586972v2BR291-400 modifications, including that when the TIF District was established, the TIF District was, and currently is, a redevelopment district and that, in the opinion of the EDA, (i) the proposed development of the Property would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; (ii) the increased market value of the Property that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan; (iii) that the TIF Plan Modification conforms to the general plan for the development or redevelopment of the City as a whole; (iv) that the TIF Plan Modification will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the project by private enterprise, which findings are further supported by the resolutions of the City and the EDA, adopted on the date hereof, establishing Tax Increment Financing District No. 8: Real Estate Equities (a housing district) in connection with the proposed development of the Property. Section 2. Public Purpose. The adoption of the TIF Plan Modification conforms in all respects to the requirements of the Act and will help provide opportunities for additional redevelopment and will improve the tax base. These public purposes and benefits exceed any benefits expected to be received by private developers, who will receive assistance only in the amount needed to make the proposed development on the Property financially feasible. Section. 3 Approval and Adoption of the TIF Plan Modification. 3.01. The TIF District and the TIF Plan are hereby amended to remove the Property and the TIF Plan Modification is hereby approved. Approval of the TIF Plan Modification does not constitute approval of any project or a development agreement with any developer. 3.02. City staff is authorized to file this resolution as evidence of the TIF Plan Modification with the Commissioner of Revenue, the Office of the State Auditor and the Hennepin County Auditor. 3.03. City staff, the City’s advisors and legal counsel are authorized and directed to proceed with the implementation of the TIF Plan Modification. July 8, 2019 Date Chair ATTEST: Secretary 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: 586972v2BR291-400 and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 587107v3BR291-400 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER, MINNESOTA CITY OF BROOKLYN CENTER COUNTY OF HENNEPIN STATE OF MINNESOTA Commissioner _______________________ introduced the following resolution and moved its adoption: RESOLUTION NO. ______ RESOLUTION APPROVING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO. 1, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 8 THEREIN AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR WHEREAS, it has been proposed that the Economic Development Authority of the City of Brooklyn Center, Minnesota (the “EDA”) modify the Redevelopment Plan for its Housing and Redevelopment Project No. 1 (the “Redevelopment Project”); establish Tax Increment Financing District No. 8: Real Estate Equities (a housing district) (“TIF District No. 8”) within the Redevelopment Project; and adopt the Tax Increment Financing Plan (the “TIF Plan”) therefor; all pursuant to and in conformity with applicable law, Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”), Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.1081, all inclusive, as amended, (collectively, and together with the TIF Act, the “Act”), and all as reflected in that certain document entitled in part “Modification of the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities (a Housing District)” dated June 7, 2019 (collectively, the “Plans”), presented for the Board’s consideration; WHEREAS, the Board has investigated the facts relating to the Plans and certain information and material (collectively, the “Materials”) relating to the TIF Plan and to the activities contemplated in TIF District No. 8 have heretofore been prepared and submitted to the Board and/or made a part of the EDA files and proceedings on the TIF Plan. The Materials include the tax increment application made and other information supplied by Real Estate Equities, Inc., a Minnesota corporation (or one or more limited partnerships or other entities to be formed thereby or affiliated therewith, the “Developer”) as to the activities contemplated therein, the items listed under the heading “Supporting Documentation” in the TIF Plan, and information constituting or relating to (1) why the assistance satisfies the so-called “but for” test and (2) the bases for the other findings and determinations made in this resolution. The Board hereby confirms, ratifies and adopts the Materials, 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; WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption and approval of the Plans, including but not limited to notice to the County Commissioner representing the area of the County to be included in TIF District No. 8, and delivery of the Plans to Hennepin County and Independent School District No. 281 2 587107v3BR291-400 (Robbinsdale); and the City Council has held a public hearing thereon on the date hereof following notice thereof published in accordance with state law; WHEREAS, TIF District No. 8 is being established to facilitate the acquisition, construction and equipping of an approximately 270-unit rental housing development, including workforce housing and senior housing, and related amenities (the “Development”) to be constructed by the Developer. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Economic Development Authority of the City of Brooklyn Center, Minnesota (the “EDA”), as follows: Section 1. Findings for the Adoption and Approval of the Plans. 1.01. The Board hereby finds that the boundaries of the Project Area are not being expanded and the Redevelopment Plan is not being modified other than to incorporate the establishment of TIF District No. 8 therein and therefore the Board reaffirms the findings and determinations originally made in connection with the establishment of the Redevelopment Project area and the adoption of the Redevelopment Plan therefor. 1.02. The Board hereby finds that TIF District No. 8 is in the public interest and is a “housing district” within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or 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; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. The Development to be constructed in TIF District No. 8 will consist of approximately 270 units of workforce or senior rental housing. Developer has represented that at least 40% of the units (i.e., 108 units) will be rented to and occupied by individuals or families whose income is not greater than 60% or less of area median income and that no more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 1.03. The Board hereby makes the following additional findings in connection with TIF District No. 8: (a) The Board further finds that the proposed development, in the opinion of the Board of Commissioners, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: The construction of the Development would not be undertaken in the reasonably foreseeable future. The property has remained 3 587107v3BR291-400 undeveloped for several years despite previous efforts to redevelop the property. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new development. The Developer has represented that it could not proceed with the Development without the tax increment assistance to be provided to the Developer. The Developer has provided the EDA its estimated Development proforma outlining project sources and uses as well as projected rent, vacancy and financing assumptions. City staff and the City’s advisors reviewed the information and have determined the Development is not feasible without the proposed assistance due to anticipated rent levels and market returns not supporting the development costs. Based on the review, the EDA does not expect that a development of this type would occur in the reasonably foreseeable future but for the use of tax increment assistance. (b) The Board further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the EDA as a whole. The specific basis for such finding being: The TIF Plan will generally compliment and serve to implement policies adopted in the City’s comprehensive plan. The development contemplated on the property is in accordance with the existing zoning for the property, as modified in accordance with an approved planned unit development agreement. (c) The Board further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the EDA as a whole for the development of TIF District No. 8 by private enterprise. The specific basis for such finding being: The proposed development to occur within TIF District No. 8 is primarily low and moderate income senior or workforce housing. The development will increase the taxable market valuation of the City, and the number of available low and moderate income senior and workforce housing units in the City. 1.04. The provisions of this Section 1 are hereby incorporated by reference into and made a part of the TIF Plan and the findings set forth in Appendix C to the TIF Plan are hereby incorporated by reference into and made a part of this Resolution. 1.05. The Board further finds that the Plans are intended and in the judgment of the Board their effect will be to promote the public purposes and accomplish the objectives specified in the TIF Plan for TIF District No. 8 and the Redevelopment Plan for the Redevelopment Project. 4 587107v3BR291-400 Section 2. Approval and Adoption of the Plans; Policy on Interfund Loans and Advances. 2.01. TIF District No. 8 is hereby established and the Plans, as presented to the Board 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 City Finance Director. Approval of the Plans does not constitute approval of any project or a development agreement with any developer. The Business and Development Director is hereby directed to request, in writing, the Hennepin County Auditor to certify the new TIF District No. 8 and to file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 2.02. The Board hereby approves a policy on interfund loans or advances (“Loans”) for TIF District No. 8, as follows: (a) The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses in an amount up to $1,750,780, interest in an amount up to $6,978,073 and other development costs in an amount up to $10,529,725) payable from TIF District No. 8, as provided in the TIF Plan as originally adopted or as it may be amended, may need to be financed on a short-term and/or long-term basis via one or more Loans, as may be determined by the City Finance Director from time to time. (b) The Loans may be advanced if and as needed from available monies in any fund or account of the EDA designated by the City Finance Director. Loans may be structured as draw-down or “line of credit” obligations of the lending fund(s). (c) Neither the maximum principal amount of any one Loan nor the aggregate principal amount of all Loans may exceed may exceed $19,258,578 outstanding at any time. (d) All Loans shall mature not later than February 1, 2047 or such earlier date as the City Finance Director may specify in writing. All Loans may be pre-paid, in whole or in part, whether from tax increment revenue, tax increment revenue bond proceeds or other eligible sources. (e) The outstanding and unpaid principal amount of each Loan shall bear interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Loan, or any part of it, is first made, subject to the right of the EDA Finance Director to specify a lower rate (but not less than the EDA’s then-current average investment return for similar amount and term). (f) Such Loans within the above guidelines are pre-approved. The Loans need not take any particular form and may be undocumented, except that the City Finance Director shall maintain all necessary or applicable data on the Loans. (g) In particular the EDA authorizes an interfund loan to be advanced from Redevelopment Tax Increment Financing District No. 3, in the amount of up to $50,000, 5 587107v3BR291-400 to pay administrative expenses not paid by the Developer, to be repaid, not later than February 1, 2047, from tax increments of TIF District No. 8 to the extent not otherwise pledged to other obligations of TIF District No.8, with interest thereon at 4% per annum from the date advanced until repaid in full unless otherwise provided, in writing, by the City Finance Director. July 8, 2019 Date Chair ATTEST: Secretary 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. 6 587107v3BR291-400 SECRETARY’S CERTIFICATE I, the undersigned, being the duly qualified and acting Secretary of the Economic Development Authority of the City of Brooklyn Center, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a duly called and regularly held meeting of the Board of Commissioners of said EDA held on July 8, 2019, with the original minutes thereof on file in my office and I further certify that the same is a full, true, and correct transcript thereof insofar as said minutes relate to the tax increment and related actions referenced therein with respect to the EDA’s Housing and Redevelopment Project No. 1 and Tax Increment Financing District No. 8 therein. WITNESS My hand this ____ day of July, 2019. _______________________________________ Secretary Economic Development Authority of the City of Brooklyn Center, Minnesota MODIFICATION OF THE REDEVELOPMENT PLAN Housing Development and Redevelopment Project No. 01 - AND - TAX INCREMENT FINANCING PLAN Establishment of Tax Increment Financing District No. 8: Real Estate Equities (a housing district) Brooklyn Center Economic Development Authority City of Brooklyn Center, Hennepin County, Minnesota Public Hearing: July 8, 2019 Table of Contents Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 01 ........................................................................................................................................... 2 Foreword ....................................................................................................................... 2 Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities. 3 Foreword ....................................................................................................................... 3 Statutory Authority .......................................................................................................... 3 Statement of Objectives .................................................................................................. 3 Redevelopment Plan Overview ........................................................................................ 3 Description of Property in the District and Property to be Acquired ...................................... 4 Classification of the District ............................................................................................. 4 Duration and First Year of Tax Increment of the District ..................................................... 5 Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ................................................................ 5 Sources of Revenue/Bonds to be Issued .......................................................................... 6 Uses of Funds ............................................................................................................... 7 Estimated Impact on Other Taxing Jurisdictions ................................................................ 7 Supporting Documentation .............................................................................................. 9 Administration of the District ............................................................................................ 9 Appendix A: Map of Housing Development and Redevelopment Project No. 01 and the District......................................................................................................................... 10 Appendix B: Estimated Cash Flor of the District .............................................................. 11 Appendix C: Findings Including But/For Qualifications ..................................................... 12 City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 2 Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 01 Foreword The following text represents a Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 01. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Housing Development and Redevelopment Project No. 01. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 8: Real Estate Equities. For further information, a review of the Redevelopment Plan for Housing Development and Redevelopment Project No. 01 is recommended. It is available from the Community Development Director at the Brooklyn Center City Hall. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Housing Development and Redevelopment Project No. 01. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 3 Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities Foreword The Brooklyn Center Economic Development Authority (the “EDA”), the City of Brooklyn Center (the "City"), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 8: Real Estate Equities (the "District"), a housing tax increment financing district, located in Housing Development and Redevelopment Project No. 01. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S."), Sections 469.090to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, 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 Housing Development and Redevelopment Project No. 01. Statement of Objectives The District currently consists of one parcel of land and adjacent and internal rights-of-way. The District is being created to facilitate the development of 270 units of affordable rental housing in the City. Development will include 127 units of workforce housing and 180 units of senior housing. The City anticipated entering into an agreement with Real Estate Equities and development on Phase I (workforce) is expected to begin in 2019 and the senior housing will commence in 2020. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for Housing Development and Redevelopment Project No. 01. 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 Housing Development and Redevelopment Project No. 01 and the District. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the 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 City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 4 necessary legal requirements, the City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. 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 below. The parcel is currently in Tax Increment Financing District No. 3 and will be removed prior to the establishment of the TIF District. Please also see the map in Appendix A for further information on the location of the District. The EDA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the EDA or City only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Classification of the District The EDA 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. In meeting the statutory criteria, the EDA and City rely on the following facts and findings: ▪ The District consists of one parcel. ▪ The development will consist of 270 units of affordable rental housing in the City. ▪ 100% of the units will be occupied by persons with incomes at or below 60% 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, 273.112, or 273.114 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Parcel number Address Owner 03-118-21-14-0024 5801 Xerxes Ave.Ilex Group City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 5 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 of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b., the duration of the District will be 26 years. The EDA and City elect to receive the first tax increment in 2021, 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 2046, or when the TIF Plan is satisfied. The EDA and City reserve the right to decertify the District prior to the legally required date. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2019 for taxes payable 2020. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2021) 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 EDA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2020, assuming the request for certification is made before June 30, 2020. The ONTC and the Original Local Tax Rate for the District appear in the table below (Pay 2019 rate was used since 2020 rates are not yet available). 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 Housing Development and Redevelopment Project No. 01, upon completion of the projects within the District, will annually generate tax increment revenues as shown in the table below. The EDA 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 2021. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 6 Note: Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 25. The tax capacity of the District in year one is estimated to be $76,200. Pursuant to M.S., Section 469.177, Subd. 4, the City 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. The EDA and City have reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. 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 EDA and City reserve the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go note and interfund loan. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA 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 total estimated tax increment revenues for the District are shown in the table below: The EDA 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 $12,280,505. Such bonds may be in the form of pay-as-you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Project estimated Tax Capacity upon completion 648,465$ Original estimated Net Tax Capacity 4,042 Estimated Captured Tax Capacity 644,423$ Original Local Tax Rate 152.5150%Pay 2019 Estimated Annual Tax Increment 982,841$ Percent Retainted by the City 100% Project Tax Capacity SOURCES Tax Increment 17,507,798$ Interest 1,750,780 TOTAL 19,258,578$ City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 7 Uses of Funds Currently under consideration for the District is a proposal to facilitate to facilitate the development of 270 units of affordable housing. The EDA and City have determined that it will be necessary to provide assistance to the projects for certain District costs, as described. The EDA and City have 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 following table. 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 the Sources of Revenue section. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the development contemplated by the TIF Plan would occur without the creation of the District. However, the EDA and City have determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: USES Land/Building Acquisition 1,000,000$ Site Improvements/Preparation 750,000$ Utilities 350,000$ Affordable Housing 7,429,725$ Other Qualifying Improvements 1,000,000$ Administrative Costs (up to 10%)1,750,780$ PROJECT COST TOTAL 12,280,505$ Interest 6,978,073 PROJECT AND INTEREST COSTS TOTAL 19,258,578$ Entity 2018/Pay 2019 Total Net Tax Capacity Estimated Captured Tax Capacity (CTC) upon completion Percent of CTC to Entity Total Hennepin County 1,817,980,868 644,423 0.0354% City of Brooklyn Center 18,867,746 644,423 3.4155% Robbinsdale ISD 281 97,653,903 644,423 0.6599% Impact on Tax Base City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 8 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the Pay 2019 rate. The total net capacity for the entities listed above are based on Pay 2019 figures. The District will be certified under the Pay 2020 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 $17,507,798; (2) Probable impact of the District on city provided services and ability to issue debt. An impact of the District on police protection is expected. The current site is a vacant parking lot adjacent to a heavily used transit facility. The transit facility currently generates a high volume of police calls, some of which spill onto this site. It is anticipated that the development will reduce the amount of spillover activity from the transit center and increase the amount of positive activity on the site. Further, the increase in transit users generated from the development will likely have a positive effect on the transit facility. 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 existing buildings, which will be eliminated by the new development, have public safety concerns that include several unprotected old buildings with issues such as access, hydrant locations, and converted structures. The City does not expect that the proposed development, in and of itself, will necessitate new 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 is expected to contribute an estimated $668,465 (269 units at $2,485/unit) in sanitary sewer 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 Entity Pay 2019 Extension Rate Percent of Total CTC Potential Taxes Hennepin County 41.8610%27.45% 644,423 $ 269,762 City of Brooklyn Center 71.8600%47.12% 644,423 463,082 Robbinsdale ISD 281 29.9090%19.61% 644,423 192,740 Other 8.8850%5.83% 644,423 57,257 Total 152.5150%100.00% $ 982,841 Impact on Tax Rates City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 9 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 $3,443,372; (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 $4,805,389; (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 15 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. 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 determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the District. (i) In making said determination, reliance has been placed upon (1) written representation made by the developer to such effects; and (2) City staff awareness of the feasibility of developing the project site within the District, which is further outlined in t he City Council resolution approving the establishment of the TIF District and in Appendix C. (i) A comparative analysis of estimated market value both with and without establishment of the TIF District and the use of tax increments has been performed. Such analysis is included with the cashflow in Appendix B and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the TIF District and the use of tax increments. Administration of the District Administration of the District will be handled by the Community Development Director. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 10 Appendix A: Map of Housing Development and Redevelopment Project No. 01 and the District I S L A N D S O F P E A C E P A R K (A N O K A C O U N T Y ) WEST F IRESTATION HEN NEP IN CO .LI B R A RY & GOV E RNMENT SERVICE CEN TER P A L M E R L A K E P R E S E R V E A R E A U .S . P O S T O F F I C E WA TERTOWERNo. 2 EV E R GREENPARK LA K E S ID E PARK(T RI A N G L E PARK) PUB L I C WORKSMAINTENANCE FA CI LI TY ST . A L P H ONSUS SCH OOL WI L LOW LANEEARLY CHI LDHOOD C EN TER LIQUOR ST O R E 2 LIQUOR ST O R E 1 N EW MILL E NNIUM AC A D EMY EASTFIRE ST A TION EV E RGREENELEMENTARY SCH OOL R I V E R D A L E P A R KEAST PA LMERLAKE PARK WE S T P A LMERLAKE PARK PA L ME R LAKEELEMENTARY SC H OOL WIL LOW LANE PA RK A R B O R E T U M O R C H A R D L A N E P A R K N O MP ENGACADEMY M O U N D C E M E T E R Y FREEWAYPARK GA R D E N CITYELEMENTARY SC H OOL MA R LINPARK WA TERTOWERNo.1 FIREHOUSEPARK BRO OK LYN CENTER HIG H SCHOOL EA RLEBROWN EL E ME NTARYSCHOOL B E L L V U E P A R K CEN TENNIALPARK CITYHALL CEN TE R BROOKGOLF COURSE WA TERTOWERNo. 3 KYL AWNPARK NORT HPORTELEMENTARY SC H OOL N OR T H PORTPARK H AP PY HOLLOW PA RK EA RL E B ROWNHERITAGE C EN TER GR A N D VIEWPARK LIONSPARK N O R T H M I S S I S S I P P I R E G I O N A L P A R K CAH LA NDERPARK WA NGSTADPARK PO LICESTATION TW IN LA KE PA RK GARDENCITY PA RK PA L ME R LAKEPARK COMM U NITYCENTER 0 0.5 10.25 Mi l es Hou s ing D ev elop men t an d R ede velop ment Project No. 1 and Tax In creme nt F inancing (TIF) District No. 8 ² Legend TIF P rojectBoundary Line TIF Dis tr i ct No. 8 C it y Border V I N C E N T A V E . N . U P T O N A V E . N . NORTHWAY DR. CO. RD . NO.10 W A S H B U R N A V E . N . 58T H AV E. N. ADMIR AL LA. A V E 60T H AVE. N. 59T H AV E. N. X E R X E S A V E . N . Y O R K A V E . N . Z E N I T H A V E . N . A B B O T T A V E . N . B E A R D N O R T H W A Y N O R T H P O R T D R . B R O O K L Y N B L V D . X E R X E S A V E . N . 56TH. AVE. N. City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 11 Appendix B: Estimated Cash Flow for the District 6/4/2019 Base Value Assumptions - Page 1 Real Estate Equities - No Inflation Brooklyn Center, MN 127 Workforce Apartments and 143 Senior Apartments ASSUMPTIONS AND RATES DistrictType:Housing District Name/Number: County District #:Exempt Class Rate (Exempt)0.00% First Year Construction or Inflation on Value 2019 Commercial Industrial Preferred Class Rate (C/I Pref.) Existing District - Specify No. Years Remaining First $150,000 1.50% Inflation Rate - Every Year:3.00%Over $150,000 2.00% Interest Rate:4.00%Commercial Industrial Class Rate (C/I)2.00% Present Value Date:1-Aug-20 Rental Housing Class Rate (Rental)1.25% First Period Ending 1-Feb-21 Affordable Rental Housing Class Rate (Aff. Rental) Tax Year District was Certified:Pay 2020 First $150,000 0.75% Cashflow Assumes First Tax Increment For Development:2021 Over $150,000 0.25% Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit) Assumes Last Year of Tax Increment 2046 First $500,000 1.00% Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25% Incremental or Total Fiscal Disparities Incremental Homestead Residential Class Rate (Hmstd. Res.) Fiscal Disparities Contribution Ratio 33.7006%Pay 2019 First $500,000 1.00% Fiscal Disparities Metro-Wide Tax Rate 143.9920%Pay 2019 Over $500,000 1.25% Maximum/Frozen Local Tax Rate: 152.515%Pay 2019 Agricultural Non-Homestead 1.00% Current Local Tax Rate: (Use lesser of Current or Max.)152.515%Pay 2019 State-wide Tax Rate (Comm./Ind. only used for total taxes)42.4160%Pay 2019 Market Value Tax Rate (Used for total taxes)0.26683%Pay 2019 Building Total Percentage Tax Year Property Current Class After Land Market Market Of Value Used Original Original Tax Original After Conversion Map ID PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap. 1 03-118-21-14-0024 Ilex Group 5801 Xerxes Ave.1,617,000 1,617,000 33%539,000 Pay 2020 C/I Pref.10,030 Aff. Rental 4,042 1 1,617,000 0 1,617,000 539,000 10,030 4,042 Note: 1. Base values are for pay 2020 based upon review of County website on May 8, 2019. 2. Located in SD #281 and WS #8 Area/ Phase Tax Rates BASE VALUE INFORMATION (Original Tax Capacity) Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Brooklyn Center\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 8 - Real Estate Equities (Jerry's Food Site)\TIF Run - FINAL 6/4/2019 Base Value Assumptions - Page 2 Real Estate Equities - No Inflation Brooklyn Center, MN 127 Workforce Apartments and 143 Senior Apartments Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes Area/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./Units Value Class Tax Capacity Capacity/Unit 2019 2020 2021 2022 Payable 1 Workforce Apt 180,000 180,000 127 22,860,000 Aff. Rental 152,400 1,200 50%100%100%100%2022 2 Sr. Apt 180,000 180,000 143 25,740,000 Aff. Rental 171,600 1,200 0%50%100%100%2023 TOTAL 48,600,000 324,000 Subtotal Residential 270 48,600,000 324,000 Subtotal Commercial/Ind.0 0 0 Note: 1. Market values are based upon estimates. Total Fiscal Local Local Fiscal State-wide Market Tax Disparities Tax Property Disparities Property Value Total Taxes Per New Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq. Ft./Unit Workforce Apt 152,400 0 152,400 232,433 0 0 60,997 293,430 2,310.47 Sr. Apt 171,600 0 171,600 261,716 0 0 68,682 330,398 2,310.47 TOTAL 324,000 0 324,000 494,149 0 0 129,679 623,828 Note: 1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors which cannot be predicted. Total Property Taxes 623,828 Current Market Value - Est.539,000 less State-wide Taxes 0 New Market Value - Est.48,600,000 less Fiscal Disp. Adj.0 Difference 48,061,000 less Market Value Taxes (129,679)Present Value of Tax Increment 9,789,626 less Base Value Taxes (6,165) Difference 38,271,374 Annual Gross TIF 487,983 Value likely to occur without Tax Increment is less than:38,271,374 WHAT IS EXCLUDED FROM TIF?MARKET VALUE BUT / FOR ANALYSIS TAX CALCULATIONS PROJECT INFORMATION (Project Tax Capacity) Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Brooklyn Center\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 8 - Real Estate Equities (Jerry's Food Site)\TIF Run - FINAL 6/4/2019 Tax Increment Cashflow - Page 3 Real Estate Equities - No Inflation Brooklyn Center, MN 127 Workforce Apartments and 143 Senior Apartments TAX INCREMENT CASH FLOW Project Original Fiscal Captured Local Annual Semi-Annual State Admin.Semi-Annual Semi-Annual PERIOD % of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax Payment OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36%10%Increment Value Yrs.Year Date - - - - 02/01/21 100%76,200 (4,042) - 72,158 152.515%110,051 55,026 (198) (5,483) 49,345 47,429 0.5 2021 08/01/21 100%76,200 (4,042) - 72,158 152.515%110,051 55,026 (198) (5,483) 49,345 93,927 1 2021 02/01/22 100%238,200 (4,042) - 234,158 152.515%357,125 178,563 (643) (17,792) 160,128 241,861 1.5 2022 08/01/22 100%238,200 (4,042) - 234,158 152.515%357,125 178,563 (643) (17,792) 160,128 386,893 2 2022 02/01/23 100%328,572 (4,042) - 324,530 152.515%494,956 247,478 (891) (24,659) 221,928 583,959 2.5 2023 08/01/23 100%328,572 (4,042) - 324,530 152.515%494,956 247,478 (891) (24,659) 221,928 777,161 3 2023 02/01/24 100%338,429 (4,042) - 334,387 152.515%509,990 254,995 (918) (25,408) 228,669 972,328 3.5 2024 08/01/24 100%338,429 (4,042) - 334,387 152.515%509,990 254,995 (918) (25,408) 228,669 1,163,669 4 2024 02/01/25 100%348,582 (4,042) - 344,540 152.515%525,474 262,737 (946) (26,179) 235,612 1,356,953 4.5 2025 08/01/25 100%348,582 (4,042) - 344,540 152.515%525,474 262,737 (946) (26,179) 235,612 1,546,447 5 2025 02/01/26 100%359,039 (4,042) - 354,997 152.515%541,424 270,712 (975) (26,974) 242,764 1,737,864 5.5 2026 08/01/26 100%359,039 (4,042) - 354,997 152.515%541,424 270,712 (975) (26,974) 242,764 1,925,528 6 2026 02/01/27 100%369,811 (4,042) - 365,768 152.515%557,851 278,926 (1,004) (27,792) 250,129 2,115,095 6.5 2027 08/01/27 100%369,811 (4,042) - 365,768 152.515%557,851 278,926 (1,004) (27,792) 250,129 2,300,945 7 2027 02/01/28 100%380,905 (4,042) - 376,863 152.515%574,772 287,386 (1,035) (28,635) 257,716 2,488,677 7.5 2028 08/01/28 100%380,905 (4,042) - 376,863 152.515%574,772 287,386 (1,035) (28,635) 257,716 2,672,729 8 2028 02/01/29 100%392,332 (4,042) - 388,290 152.515%592,200 296,100 (1,066) (29,503) 265,531 2,858,642 8.5 2029 08/01/29 100%392,332 (4,042) - 388,290 152.515%592,200 296,100 (1,066) (29,503) 265,531 3,040,911 9 2029 02/01/30 100%404,102 (4,042) - 400,060 152.515%610,151 305,075 (1,098) (30,398) 273,579 3,225,022 9.5 2030 08/01/30 100%404,102 (4,042) - 400,060 152.515%610,151 305,075 (1,098) (30,398) 273,579 3,405,523 10 2030 02/01/31 100%416,225 (4,042) - 412,183 152.515%628,640 314,320 (1,132) (31,319) 281,870 3,587,847 10.5 2031 08/01/31 100%416,225 (4,042) - 412,183 152.515%628,640 314,320 (1,132) (31,319) 281,870 3,766,597 11 2031 02/01/32 100%428,712 (4,042) - 424,669 152.515%647,685 323,842 (1,166) (32,268) 290,409 3,947,150 11.5 2032 08/01/32 100%428,712 (4,042) - 424,669 152.515%647,685 323,842 (1,166) (32,268) 290,409 4,124,163 12 2032 02/01/33 100%441,573 (4,042) - 437,531 152.515%667,300 333,650 (1,201) (33,245) 299,204 4,302,961 12.5 2033 08/01/33 100%441,573 (4,042) - 437,531 152.515%667,300 333,650 (1,201) (33,245) 299,204 4,478,254 13 2033 02/01/34 100%454,820 (4,042) - 450,778 152.515%687,504 343,752 (1,238) (34,251) 308,263 4,655,312 13.5 2034 08/01/34 100%454,820 (4,042) - 450,778 152.515%687,504 343,752 (1,238) (34,251) 308,263 4,828,899 14 2034 02/01/35 100%468,465 (4,042) - 464,423 152.515%708,314 354,157 (1,275) (35,288) 317,594 5,004,233 14.5 2035 08/01/35 100%468,465 (4,042) - 464,423 152.515%708,314 354,157 (1,275) (35,288) 317,594 5,176,130 15 2035 02/01/36 100%482,519 (4,042) - 478,477 152.515%729,749 364,874 (1,314) (36,356) 327,205 5,349,755 15.5 2036 08/01/36 100%482,519 (4,042) - 478,477 152.515%729,749 364,874 (1,314) (36,356) 327,205 5,519,977 16 2036 02/01/37 100%496,995 (4,042) - 492,952 152.515%751,826 375,913 (1,353) (37,456) 337,104 5,691,909 16.5 2037 08/01/37 100%496,995 (4,042) - 492,952 152.515%751,826 375,913 (1,353) (37,456) 337,104 5,860,470 17 2037 02/01/38 100%511,904 (4,042) - 507,862 152.515%774,566 387,283 (1,394) (38,589) 347,300 6,030,725 17.5 2038 08/01/38 100%511,904 (4,042) - 507,862 152.515%774,566 387,283 (1,394) (38,589) 347,300 6,197,641 18 2038 02/01/39 100%527,262 (4,042) - 523,219 152.515%797,988 398,994 (1,436) (39,756) 357,802 6,366,232 18.5 2039 08/01/39 100%527,262 (4,042) - 523,219 152.515%797,988 398,994 (1,436) (39,756) 357,802 6,531,518 19 2039 02/01/40 100%543,079 (4,042) - 539,037 152.515%822,112 411,056 (1,480) (40,958) 368,619 6,698,462 19.5 2040 08/01/40 100%543,079 (4,042) - 539,037 152.515%822,112 411,056 (1,480) (40,958) 368,619 6,862,132 20 2040 02/01/41 100%559,372 (4,042) - 555,329 152.515%846,961 423,480 (1,525) (42,196) 379,760 7,027,444 20.5 2041 08/01/41 100%559,372 (4,042) - 555,329 152.515%846,961 423,480 (1,525) (42,196) 379,760 7,189,513 21 2041 02/01/42 100%576,153 (4,042) - 572,110 152.515%872,554 436,277 (1,571) (43,471) 391,236 7,353,207 21.5 2042 08/01/42 100%576,153 (4,042) - 572,110 152.515%872,554 436,277 (1,571) (43,471) 391,236 7,513,690 22 2042 02/01/43 100%593,438 (4,042) - 589,395 152.515%898,916 449,458 (1,618) (44,784) 403,056 7,675,781 22.5 2043 08/01/43 100%593,438 (4,042) - 589,395 152.515%898,916 449,458 (1,618) (44,784) 403,056 7,834,693 23 2043 02/01/44 100%611,241 (4,042) - 607,198 152.515%926,068 463,034 (1,667) (46,137) 415,231 7,995,195 23.5 2044 08/01/44 100%611,241 (4,042) - 607,198 152.515%926,068 463,034 (1,667) (46,137) 415,231 8,152,550 24 2044 02/01/45 100%629,578 (4,042) - 625,535 152.515%954,035 477,018 (1,717) (47,530) 427,770 8,311,479 24.5 2045 08/01/45 100%629,578 (4,042) - 625,535 152.515%954,035 477,018 (1,717) (47,530) 427,770 8,467,291 25 2045 02/01/46 100%648,465 (4,042) - 644,423 152.515%982,841 491,421 (1,769) (48,965) 440,686 8,624,661 25.5 2046 08/01/46 100%648,465 (4,042) - 644,423 152.515%982,841 491,421 (1,769) (48,965) 440,686 8,778,945 26 2046 02/01/47 Total 17,571,054 (63,256) (1,750,780) 15,757,018 Present Value From 08/01/2020 Present Value Rate 4.00%9,789,626 (35,243) (975,438) 8,778,945 Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Brooklyn Center\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 8 - Real Estate Equities (Jerry's Food Site)\TIF Run - FINAL City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 12 Appendix C: Findings Including But/For Qualifications 1.01. The Council finds that the boundaries of the Project Area are not being expanded and the Redevelopment Plan is not being modified other than to incorporate the establishment of TIF District No. 8 therein and therefore the Council reaffirms the findings and determinations originally made in connection with the establishment of the Redevelopment Project area and the adoption of the Redevelopment Plan therefor. 1.02. The Council hereby finds that TIF District No. 8 is in the public interest and is a “housing district” within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or 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; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. The Development to be constructed in TIF District No. 8 will consist of approximately 270 units of workforce or senior rental housing. The Developer has represented that at least 40% of the units (i.e., 108 units) will be rented to and occupied by individuals or families whose income is not greater than 60% or less of area median income and that no more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 1.03. The Council hereby makes the following additional findings in connection with TIF District No. 8: (a) The Council further finds that the proposed development, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: The construction of the Development would not be undertaken in the reasonably foreseeable future. The property has remained undeveloped for several years despite previous efforts to redevelop the property. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new development. The Developer has represented that it could not proceed with the Development without the tax increment assistance to be provided to the Developer. The Developer has provided the City its estimated Development proforma outlining project sources and uses as well as projected rent, vacancy and financing assumptions. City staff and the City’s advisors reviewed the information and have determined the Development is not feasible without the proposed assistance due to anticipated rent levels and market returns not supporting the development costs. Based on the review, the City does not expect that a development of this type City of Brooklyn Center Tax Increment Financing District No. 8: Real Estate Equities 13 would occur in the reasonably foreseeable future but for the use of tax increment assistance. (b) The Council further finds that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. The specific basis for such finding being: The TIF Plan will generally compliment and serve to implement policies adopted in the City’s comprehensive plan. The development contemplated on the property is in accordance with the existing zoning for the property, as modified in accordance with an approved planned unit development agreement. (c) The Council further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of TIF District No. 8 by private enterprise. The specific basis for such finding being: The proposed development to occur within TIF District No. 8 is primarily low- and moderate-income senior or workforce housing. The development will increase the taxable market valuation of the City, and the number of available low- and moderate-income senior and workforce housing units in the City. Council/E D A Work S ession City Hall Council Chambers J uly 8, 2019 AGE NDA The City C ounc il requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Council pac ket is available to the public. The packet ring binder is located at the entrance of the council chambers. AC T I V E D I S C US S IO N I T E M S 1.L iquor L icense Violation P enalty Discussion 2.Delinquent Utility Billing A ccounts 3.Opportunity S ite Update and Moratorium Discussion 4.F ormer Sears Site Development Strategy Update and Discussion P E ND I NG L I S T F O R F UT URE WO RK S E S S IO NS 1.Pending I tems L ivable Wages L iquor Ordinance/Entertainment Permit -7/22 L iquor Ordinance Updates -7/22 2020 E lections Update -8/26 Discussion on Ordinance process - 7/22 Public Subsidy Policy - 8/12 Youth I n Government - 7/22 Commemoration of 400 years of Slavery A ctivities Police Crisis P revention Options Residential Design Standards S A C Credit P olicy Target P roperty MEMOR ANDUM - C OUNCIL WOR K SESSION DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:Dr. R eggie Edwards , Deputy C ity Manager F R O M:Barb S uciu, C ity C lerk S UBJ EC T:Liquor Lic ense Violation P enalty Dis cus s ion Recommendation: - P rovide direction to staff regarding development of a uniform fee structure for establishments that violate the C ity liquor license ordinance Background: T he C ity C ouncil held a public hearing for an establis hment that had violated the C ity’s liquor lic ense ordinance on January 14, 2019 for s ale of alcohol to a pers on under the age of 21. T he C ity C ounc il direc ted s taff and the C ity Attorney to provide information on the penalties that the C ity has previous ly impos ed for liquor licens e violations (attac hed) and as ked that two resolutions be prepared for its cons ideration –one imposing a c ivil penalty and the other not imposing any penalty. T he C ity C ouncil determined a fine for the es tablishment on January 28, 2019. At the F ebruary 25, 2019, S tudy S es s ion, the C ity C ounc il further disc ussed a uniform method for Liquor C omplianc e C heck fines . S taff gathered additional c omparis on information related to liquor compliance check fines comparisons . Attached are the following: P owerP oint P res entation (4-22-2019) Liquor Violation C ity C omparisons P as t P ractices Liquor Licens e Violations F ines O n April 22, 2019, the C ity C ouncil reviewed additional comparison information provided by staff and continued its dis cus s ion. T he C ity C ounc il raised two ques tions for s taff to further res earch including: D o the comparison cities vary their penalties based upon the type violation (i.e. sale of alcohol to a person under the age of 21, operating without a license or failure to apply for a license, etc.)? No. Any violation of c ity ordinanc es or s tate statutes regarding liquor licens es is addres s ed the s ame. Do c omparis on cities maintain data c orrelating the number of violations in relationship to the level of penalties imposed (i.e. 1s t violation, 2nd violation, 3rd violation, etc .)? Yes. T his is demonstrated in the Liquor Violation C ity C omparis on document provided S taff is seeking direc tion from the C ity C ouncil regarding es tablishment of uniform method of Liquor C omplianc e C heck fines . Policy Issues: P rovide C ity staff with direc tion regarding development of a uniform fee struc ture for es tablishments that violate the C ity liquor lic ense ordinance? S trategic Priorities and Values: S afe, S ecure, S table C ommunity AT TAC HME N T S: Desc ription Upload Date Type P ast P rac tic es Liquor Lic ense Violations F ines 5/21/2019 Bac kup Material Liquor Violation C ity C omparis ons 5/21/2019 C over Memo Liquor Lic ense Violation P owerP oint 4-22-19 5/22/2019 C over Memo Minutes from 2-11-19 5/23/2019 Bac kup Material Minutes from 4-22-19 5/23/2019 Bac kup Material Brooklyn Center Past Practices of Liquor Sale Violation Penalties Occurrence Violation License Penalty Imposed Resolution No. August 2014 Reporting Error Earle Browne Lanes $1,000 2014-173 October 2012 Underage Sun Foods $1,000 2012-133 October 2012 Underage Global Kitchen $1,000 2012-132 July 2011 Underage Scoreboard Pizza $500 / 3-Day Suspension 2011-100 January 2010 Underage Super America $1,000 2010-11 December 2009 Underage American Legion $1,000 2009-159 12 Li q u o r   V i o l a t i o n s   i n   C o m p a r a t i v e   C i t i e s Ci t y 1 s t   V i o l a t i o n 2 n d   V i o l a t i o n 3 r d   V i o l a t i o n 4 t h   V i o l a t i o n 5 t h   V i o la t i o n C o m m e n t s Cr y s t a l $7 5 0 ;     1   d a y   su s p e n s i o n $1 , 5 0 0 ;   3   d a y   su s p e n s i o n 24   m o n t h s   a f t e r   1s t   v i o l a t i o n $2 , 0 0 0 ;   1 0   d a y   su s p e n s i o n 35   m o n t h s   a f t e r   2n d   v i o l a t i o n Re v o c a t i o n 26   m o n t h s   a f t e r   3 r d   vi o l a t i o n Fr i d l e y $ 2 5 0 $ 5 0 0 $ 7 5 0 W i t h i n   a   1 2   m o n t h   r e p o r t i n g   p e r i o d Go l d e n   V a l l e y $5 0 0   p l u s   1   d a y   su s p e n s i o n $1 , 0 0 0   p l u s   3   d a y   su s p e n s i o n $2 , 0 0 0   p l u s   1 0   da y   s u s p e n s i o n Re v o c a t i o n Ma p l e w o o d $ 5 0 0 $ 1 , 0 0 0 $ 2 , 0 0 0 W i t h i n   a   2 4   m o n t h   r e p o r t i n g   p e r i o d   Ne w   H o p e $2 5 0    3   d a y   su s p e n s i o n $7 5 0    1 5   d a y   su s p e n s i o n $1 , 5 0 0    3 0   d a y   su s p e n s i o n Re v o c a t i o n W i t h i n   a   2 4   m o n t h   r e p o r t i n g   p e r i o d   Ri c h f i e l d $1 , 0 0 0 5  d a y   s u s p e n s i o n $1 , 7 5 0   p l u s   7   d a y   su s p e n s i o n   1 2   mo n t h s   a f t e r   1 s t   vi o l a t i o n $2 , 0 0 0   p l u s   1 2   da y   s u s p e n s i o n 24   m o n t h s   a f t e r   2n d   v i o l a t i o n $2 , 0 0 0   p l u s   2 4   mo n t h s   a f t e r   3 r d   vi o l a t i o n * Br o u g h t   b e f o r e   C i t y   Co u n c i l   f o r   re v o c a t i o n   h e a r i n g $2 , 0 0 0 ;   I f   w i t h i n   2 4   m o n t h s   o f   th e   f o u r t h   o f f e n s e ,   t h e   es t a b l i s h m e n t ' s   l i c e n s e   w i l l   b e   re v o k e d   f o r   t h e   r e m a i n d e r   o f   th e   l i c e n s e   y e a r An   e s t a b l i s h m e n t   w h o s e   l i c e n s e   i s   re v o k e d   i s   i n e l i g i b l e   f o r   a   l i c e n s e   f o r   a   pe r i o d   o f   f i v e   ( 5 )   y e a r s   f r o m   t h e   d a t e   of   r e v o c a t i o n . Ro s e v i l l e $ 1 , 0 0 0 $ 2 , 0 0 0 $ 2 , 0 0 0 R e v o c a t i o n Sh o r e v i e w   $5 0 0 $5 0 0   w i t h   3   d a y   su s p e n s i o n   $1 , 0 0 0 5  d a y   su s p e n s i o n $1 , 5 0 0 10   d a y   s u s p e n s i o n Li c e n s e   R e v o k e d Ea c h   v i o l a t i o n   h a s   o n e   ( 1 )   a d d i t i o n a l   co m p l i a n c e   c h e c k .   A l l   c o n s e c u t i v e     vi o l a t i o n s   a r e   w i t h i n   a   3 6   m o n t h   pe r i o d . Wh i t e   B e a r   L a k e C l a s s   A / $ 1 7 5 C l a s s   B / $ 2 7 5 Ot h e r   C i t i e s Br o o k l y n   P a r k $ 5 0 0 $ 7 5 0 $ 1 , 0 0 0 $ 1 , 2 5 0 $ 1 , 5 0 0   a n d   r e v o k e d Mi n n e a p o l i s $5 0 0 $ 1 , 0 0 0 $ 2 , 0 0 0 Ea c h   v i o l a t i o n   w i t h i n   a   2 4   m o n t h   *  I f   t h e   o f f e n s e   o c c u r s   o u t s i d e   o f   t w o   y e a r s   o f   a   t h i r d   o f f e n s e ,  i t   w i l l   b e   c o n s i d e r e d   a   t h i r d   o f f e n s e .   Brooklyn Center Liquor License Violation Penalty Policy Discussion October 8, 2018 Review City Council Meeting, 3/25/19 Request of Action Consider providing direction to staff regarding establishment of a uniform fee structure for establishments that violate the City liquor license ordinance. 22 2 Policy Background •The City Council held a public hearing for an establishment that had violated the City’s liquor license ordinance on January 14, 2019 for sale of alcohol to a person under the age of 21. •The City Council directed staff and the City Attorney to provide information on the penalties the that City has previously imposed for liquor license violations (attached) and asked that two resolutions be prepared for its consideration –one imposing a civil penalty and the other not imposing any penalty. 32 2 Brooklyn Center Past Practices of Liquor Sale Violation Penalties Occurrence Violation License Penalty Imposed Resolution No. August 2014 Reporting Error Earle Browne Lanes $1,000 2014-173 October 2012 Underage Sun Foods $1,000 2012-133 October 2012 Underage Global Kitchen $1,000 2012-132 July 2011 Underage Scoreboard Pizza $500 / 3-Day Suspension 2011-100 January 2010 Underage Super America $1,000 2010-11 December 2009 Underage American Legion $1,000 2009-159 42 Comparable Cities Practices of Liquor Sale To a Person Under 21 Years of Age Violation Penalties Underage Alcohol Sale Violation 1st Violation 2nd Violation 3rd Violation 4th Violation Comments Golden Valley $500 plus 1 day suspension $1,000 plus 3 day suspension $2,000 plus 10 day suspension Revocation 36 Reporting Period Roseville $1,000 $2,000 $2,000 Revocation 36 Reporting Period Fridley $250 $500 $750 12 Reporting Period New Hope $250 plus 3 day suspension $750 plus 15 day suspension $1500 plus 30 day suspension Revocation 24 Reporting Period License Renewal White Bear Class A/$175 Class B/$275 52 Policy Background •The City Council determined a fine for the establishment on January 28, 2019. The fine was a total of $1,000 of which $500 was to be paid immediately. The remaining balance of $500 would be paid only if there was another violation with-in a 12 month period. •On February 25, 2019, Study Session, the Council further discussed a uniform method for Liquor Compliance Check fines. Staff has gathered additional comparison information related to liquor compliance check fines comparisons, which is attached 62 2 Brooklyn Center Tobacco License Violation Penalty Ordinance 2 7 2 2 8 Factors of Good Policy •Fair •Equitable •Consistent •Efficient •Predictable •Rational/Logic •Reasonable 92 2 Policy Issue 1.Is there additional information needed by the Council in order to direct staff in developing a penalty policy for establishments that violate the City liquor license ordinance? 2.If not, what is the Council’s direction regarding developing a penalty policy for establishments that violate the City liquor license ordinance? 10220 MEMOR ANDUM - C OUNCIL WOR K SESSION DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:N/A F R O M:Nate R einhardt, F inance Director S UBJ EC T:Delinquent Utility Billing Ac counts Recommendation: - It is recommended th a t th e C ity C ouncil con sid er providin g d irection to sta ff reg a rd ing charges for delinquent utility billing accounts. Background: T he C ity of Brooklyn C enter certifies approximately 650 (7.5%) of our cus tomer utility ac counts with the average c ertific ation balance o f approximately $735. Based on analys is there are very few c ertified commerc ial/industrial ac counts , o ver 98% of the ac counts being certified are res idential. Approximately 60% of the acc ounts being c ertified in the c urrent year were als o c ertified in the previous year. T he utility fee sc hedule currently inc lud es a quarterly d elinquent ac count charge of 10% o f unp aid balance. T he below c hart shows the impac t of these additional c harges on a typical res idential us er: Utility Cost Comparison Additional c harges included: 1st quarter: $18.06 delinquent c harge ($180.63 * 10%) 2nd quarter: $37.93 delinquent charge ($379.32 * 10%) 3rd quarter: $59.79 delinquent charge ($597.89 * 10%) 4th quarter: $83.83 delinquent charge ($838.30 * 10%) C ertific ation: $30.00 certification fee, $27.60 spec ial assessment interes t Delinquent c harges are typic ally us ed as a metho d to collec t and enc o urage timely payments and as a method to recoup any additio nal c os ts that would res ult from delinq uent payments . However, the C ity has been s uc cessful in c ollecting delinquent payments through the spec ial assessment certification process. C os t impact c onsiderations for delinquent acc ounts: T he C ity does inc ur additional costs on d elinquent acc ounts, this oc curs as a res ult of penalty notices s ent for delinquent ac counts . T he s p ecial assessment proc es s d o es req uire additio nal adminis trative time (processing, publishing, collec ting and reconciling). Acc ounts that are not paid on time, impact the timing of c as h flow and inves tment earnings. After reviewing thes e c o ns ideratio ns , staff believes the d elinquent c harges b eing c o llected are muc h higher than the as s o ciated c os t. O f the items ab o ve, the penalty notices o nly o cc ur as a res ult o f having a delinquent charge and the o ther two c an b e recovered through the appropriate spec ial assessment c ertific ation fee and interes t charge. In 2018 ac ro s s all utility funds the C ity c o llected a total amo unt o f $296,661 in delinq uent charges and $26,460 in certificatio n fees for d elinquent utility acc ounts. T his is eq uivalent to 3% o f $10.2 millio n in to tal utility charges. T he b igges t impac t is on the water utility where $150,000 in delinq uent c harges are c ollec ted, whic h is equivalent to 4.7% o f to tal water utility charges. Modifications to delinquent c harges would have an impac t on the revenues collec ted and rates for thes e funds. It could be viewed that the delinquent c harges are providing an equivalent subs idy in utility rates /c harges to those that pay their utility bills on time. S taff d id reac h o ut to other c ities to gain insight o n their delinq uent utility polic ies and prac tic es . A table is attached to the memo that provides c omparis on information with thos e c ities. As a res ult of the analysis, the following cons iderations will be pres ented at the work session: 1. R educ e quarterly delinq uent c harges on utility ac counts from “G reater of $3.00 or 10% of unpaid balanc e” to “No additional charge”. a. Utility c us tomers wo uld no lo nger b e p enalized for not b eing ab le to afford their c urrent utility bill or fo r mis s ing a utility p ayment deadline. T he C ity would see a small reduction in costs and administrative time, as a res ult of eliminating penalty notic es o n utility c os ts. However, this would res ult in a reduc tion in C ity utility revenues as a result of no longer collec ting delinquent c harges . 2. Increase certification fee for collec tion with property taxes from “$30.00” to “$50.00”. a. T he certificatio n proc es s req uires additio nal no tic es b e mailed to property owners , public hearings, Hennepin C ounty fees , and additional time to adminis ter and trac k collec tions . 3. Modify the minimum outstanding b alanc e o wed for ac tive ac counts to be entered into the certification process from $30.00 to an outs tanding balance owed of $150.00. a. C urrently fo r ac tive ac c o unts to b e c ertified they mus t owe a b alanc e o f at least $30.00 to the C ity. T he amount is below a minimum res idential quarterly bill of $130.36 and well below a typical res idential quarterly bill. T his change wo uld dec reas e the amount of ac counts that go to certification and allo w ac counts that might have missed one q uarterly p ayment a c hance to c atc h up. Policy Issues: Is C ity C ounc il supportive of the following c hanges to utility fee s chedules? 1. R educ e quarterly delinq uent c harges on utility ac counts from “G reater of $3.00 or 10% of unpaid balanc e” to “No additional charge”. 2. Increase certification fee for collec tion with property taxes from “$30.00” to “$50.00”. 3. Modify the minimum outstanding b alanc e o wed for ac tive ac counts to be entered into the certification process from $30.00 to an outs tanding balance owed of $150.00. S trategic Priorities and Values: R es ident Ec onomic S tability AT TAC HME N T S: Desc ription Upload Date Type UB C ity S urvey 7/1/2019 Bac kup Material Delinquent UB P res entation 7/3/2019 P res entation Ap p l e   V a l l e y Br o o k l y n   C e n t e r Co o n   R a p i d s Ed e n   P r a i r i e Ed i n a Fa r m i n g t o n La k e v i l l e Ma p l e   G r o v e Mi n n e t o n k a Ramsey Robbinsdale Ho w   o f t e n   d o e s   y o u r   c i t y   c e r t i f y   ut i l i t y   a c c o u n t s ?     Tw i c e A n n u a l l y O n c e   a   y e a r On c e   a   y e a r   i n   No v e m b e r On c e   p e r   y e a r At   l e a s t   o n c e   p e r   y e a r .     I n t e r i m   ce r t i f i c a t i o n   f o r   d e l i n q u e n t   ac c o u n t   b a l a n c e s   >   $ 2 , 0 0 0 Sp r i n g   &   F a l l   f o r   f i n a l l e d   ac c o u n t s   –   F a l l   f o r   a c t i v e   p a s t   du e   a c c o u n t s On c e   a   y e a r   i n   t h e   f a l l O n c e   e a c h   y e a r . A n n u a l l y O n c e   i n   t h e   f a l l Ar e   a l l   a c c o u n t s   c e r t i f i e d   o r   o n l y   th o s e   o v e r   ‘ x ’   d o l l a r s ?     $5 0   m i n i m u m   b a l a n c e A c c o u n t s   o v e r   $ 3 0 $ 5 0   A m o u n t s   o v e r   $ 4 0 O v e r   $ 5 0. Ac c o u n t s   w i t h   d e l i n q u e n t   ba l a n c e s   > $ 5 0   o r   ' f i n a l l e d '   ac c o u n t s   w i t h   b a l a n c e   > $ 0   a r e   ac t u a l l y   c e r t i f i e d . Fi n a l l e d   b i l l s   g r e a t e r   t h a n   $ 1 0 ,   St o r m   d r a i n a g e   ( a n n u a l   ac c o u n t s )   g r e a t e r   t h a n   $ 2 5 ,   an d   a c t i v e   a c c o u n t s   g r e a t e r   th a n   $ 3 2 Mi n i m u m   o f   $ 2 5 . 0 0   f o r   Re s i d e n t i a l   a n d   $ 5 0 . 0 0   fo r   C o m m e r c i a l On l y   t h o s e   w i t h   de l i n q u e n c i e s   a b o v e   $2 5 0 . Accounts over $20 original amount (before fee & interest)Over $100 Wh a t   p e n a l t y   d o   y o u   c h a r g e   f o r   la t e   u t i l i t y   p a y m e n t s ?     4. 5 %   ( o f   t h e   u n p a i d   ba l a n c e )   p e r   q u a r t e r    ( 1 . 5 %   f o r   m o n t h l y   ac c o u n t s ) 10 %   p e n a l t y   o n   a l l   ou t s t a n d i n g   u t i l i t y   ba l a n c e s 10 % 1 %   p e r   m o n t h 5%   o f   ou t s t a n d i n g   ba l a n c e 10 %   o n   t h e   c u r r e n t   b i l l Pe n a l t i e s   i n   g e n e r a l   a r e   a   1 . 5 %   of   t h e   u n p a i d   b a l a n c e   o r   $ 1   wh i c h e v e r   i s   g r e a t e r .     10 %   o n   t h e   c u r r e n t   b i l l 10 %   o f   q u a r t e r l y   ba l a n c e   d u e ,   n o t   co m p o u n d a b l e 10% late fee Late payments is 10% Wh a t   d o   y o u   a d d   f o r   a   ce r t i f i c a t i o n / a d m i n i s t r a t i o n   f e e   to   a c c o u n t s   t h a t   a r e   c e r t i f i e d ? $5 0   $ 3 0   c e r t i f i c a t i o n   f e e $ 3 5   a s s e s s i n g   f e e $ 5 5   $ 3 0   $ 3 5   $ 3 5   d o l l a rs $ 3 0   $ 5 0   $30 administrative fee $50  Wh a t   i n t e r e s t   r a t e / a s s e s s m e n t   ad d e d   t o   a c c o u n t s   w h i c h   a r e   ce r t i f i e d ?     8% Ch a n g e s   f r o m   y e a r   t o   y e a r ,   th i s   y e a r   i t   w a s   4 % va r i e s ,   b u t   t h i s   y e a r   it   i s   1 . 5 2 % We   u s e   t h e   2 0   y e a r   mu n i c i p a l   b o n d   p l u s   2%   ( T h i s   y r   i s   4 % ) 6. 5 % 8 . 0 % 1 8 % 4 % 1 0 % 5.5% interest rate for certified accounts 8% for UB De l i n q u e n t U t i l i t y Bi l l i n g A c c o u n t s Oc t o b e r 8 , 2 0 1 8 Re v i e w Ci t y   C o u n c i l   W o r k   S e s s i o n ,   J u l y   8 ,   2 0 1 9 Na t e   R e i n h a r d t ,   F i n a n c e   D i r e c t o r Ut i l i t y B i l l i n g C e r t i f i c a t i o n • Oc t o b e r   8 ,   2 0 1 8 • Ap p r o x i m a t e l y   6 5 0   ( 7 . 5 % )   o f   c u s t o m e r   u t i l i t y   a c c o u n t s   a r e   ce r t i f i e d   o n   a n   a n n u a l   b a s i s . • 98 %   r e s i d e n t i a l • 60 %   w e r e   c e r t i f i e d   t h e   p r e v i o u s   y e a r • Av e r a g e   a m o u n t   o f   $ 7 3 5 • De l i n q u e n t   U t i l i t y   B i l l i n g   – P r o c e s s   R e v i e w   T e a m   • Cr o s s ‐ f u n c t i o n a l   t e a m   o f   s t a f f   m e m b e r s   r e v i e w e d   p r o c e s s ,   n o t i f i cations,  pe e r   c o m p a r i s o n s ,   a n d   d e l i n q u e n t   c h a r g e s   f o r   p o t e n t i a l   i m p r o v e m ents.2 Ut i l i t y C o s t C o m p a r i s o n • Im p a c t   o f   a d d i t i o n a l   c h a r g e s   o n   u n p a i d   b a l a n c e s   ( c u r r e n t   q u a r t e rly  de l i n q u e n t   a c c o u n t   c h a r g e   o f   1 0 %   o f   u n p a i d   b a l a n c e ) 3 Co n s i d e r a t i o n s • Ci t y ’ s   l e v e l   o f   s u c c e s s   t o   c o l l e c t   t h r o u g h   t h e   s p e c i a l   a s s e s s m e nt   c e r t i f i c a t i o n   pr o c e s s • Ad d i t i o n a l   c o s t   c o n s i d e r a t i o n s : • Pe n a l t y   n o t i c e s   s e n t   t o   d e l i n q u e n t   a c c o u n t s   ( C i t y   c o s t   i s   a b o u t  7 0   c e n t s   i n   s t a f f ,   m a t e r i a l   a n d   po s t a g e   p e r   n o t i c e ) • Sp e c i a l   a s s e s s m e n t   p r o c e s s   r e q u i r e s   a d d i t i o n a l   a d m i n i s t r a t i v e   t im e   ( p r o c e s s i n g ,   p u b l i s h i n g ,   co l l e c t i n g   a n d   r e c o n c i l i n g ) • Ac c o u n t s   n o t   p a i d ,   i m p a c t   t h e   t i m in g   o f   c a s h   f l o w   a n d   i n v e s t m e n t  e a r n i n g s • St a f f   b e l i e v e s   d e l i n q u e n t   c h a r g e s   b e i n g   c o l l e c t e d   a r e   m u c h   h i g h er   t h a n   t h e   as s o c i a t e d   c o s t . 4 20 1 8 D e l i n q u e n t C o l l e c t i o n s • $2 9 6 , 6 6 1   i n   t o t a l   d e l i n q u e n t   c o l l e c t i o n s   a c r o s s   a l l   u t i l i t y   f u n ds • Eq u i v a l e n t   t o   3 %   o f   t o t a l   u t i l i t y   c h a r g e s   ( $ 1 0 . 2   m i l l i o n ) • $1 5 0 , 0 0 0   o f   d e l i n q u e n t   c h a r g e s   c o ll e c t e d   i n   w a t e r   u t i l i t y   ( 4 . 7 %  o f   w a t e r   u t i l i t y   r e v e n u e s )   • $2 6 , 4 6 0   c o l l e c t e d   i n   r e l a t e d   c e r t i f i c a t i o n   c h a r g e s • Mo d i f i c a t i o n s   t o   d e l i n q u e n t   c h a r g e s   w o u l d   i m p a c t   r e v e n u e s   c o l l e ct e d / u t i l i t y   r a t e s 5 Su r v e y R e s p o n s e s 6 Po l i c y I s s u e s • Is   t h e   C i t y   C o u n c i l   s u p p o r t i v e   o f   t h e   f o l l o w i n g   c h a n g e s   t o   u t i l it y   f e e   s c h e d u l e s ? 1. R e d u c e   q u a r t e r l y   d e l i n q u e n t   c h a r g e s   o n   u t i l i t y   a c c o u n t s   f r o m   “G r e a t e r   o f   $ 3 0 . 0 0   o r   1 0 %   o f   u n p a i d   ba l a n c e ”   t o   “ N o   a d d i t i o n a l   c h a r g e ” . • Ut i l i t y   c u s t o m e r s   w o u l d   n o   l o n g e r   b e   p e n a l i z e d   f o r   n o t   b e i n g   a b le   t o   a f f o r d   t h e i r   c u r r e n t   u t i l i t y   b i l l   o r   f o r   m i s s i n g   a   u t i l i t y payment  de a d l i n e .     T h e   C i t y   w o u l d   s e e   a   sm a l l   r e d u c t i o n   i n   c o s t s   a n d   a d mi n i s t r a t i v e   t i m e ,   a s   a   r e s u l t   o f   e l i m i n a t i n g   p e n a l t y   n o t i c e s   o n utility  co s t s .     H o w e v e r ,   t h i s   w o u l d   r e s u l t   i n   a   r e d u c t i o n   i n   C i t y   u t i l i ty   r e v e n u e s   a s   a   r e s u l t   o f   n o   l o n g e r   c o l l e c t i n g   d e l i n q u e n t   c h a r ges. 2. I n c r e a s e   c e r t i f i c a t i o n   f e e   f o r   t h e   c o l l e c t i o n   w i t h   p r o p e r t y   t ax e s   f r o m   “ $ 3 0 . 0 0 ”   t o   “ $ 5 0 . 0 0 ” . • Th e   c e r t i f i c a t i o n   p r o c e s s   r e q u i r e s  a d d i t i o n a l   n o t i c e s   b e   m a i l e d  t o   p r o p e r t y   o w n e r s ,   p u b l i c   h e a r i n g s ,   H e n n e p i n   C o u n t y   f e e s ,   a n d   ad d i t i o n a l   t i m e   t o   a d m i n i s t e r   a n d   t r a c k   c o l l e c t i o n s . 3. I n c r e a s e   t h e   t h r e s h o l d   f o r   a c c o u n t s   t o   b e   c e r t i f i e d ,   f r o m   t h e  o u t s t a n d i n g   a c c o u n t   b a l a n c e   o f   “ G r e a t e r   th a n   o r   e q u a l   t o   $ 3 0 . 0 0 ”   t o   “ G r e a t e r   t h a n   o r   e q u a l   t o   $ 3 0 . 0 0   f o r  f i n a l i z e d   a c c o u n t s   a n d   g r e a t e r   t h a n   o r   eq u a l   t o   $ 1 5 0 . 0 0   f o r   a c t i v e   a c c o u n t s . ” • Cu r r e n t l y   f o r   a c t i v e   a c c o u n t s   t o   be   c e r t i f i e d   t h e y   m u s t   o w e   a   b al a n c e   o f   a t   l e a s t   $ 3 0 . 0 0   t o   t h e   C i t y .     T h e   a m o u n t   i s   b e l o w   a   mi n i m u m   r e s i d e n t i a l   q u a r t e r l y   b i l l   o f   $ 1 3 0 . 3 6   a n d   w e l l   b e l o w   a   ty p i c a l   r e s i d e n t i a l   q u a r t e r l y   b i l l .     T h i s   c h a n g e   w o u l d   d e c r e a s e  the  am o u n t   o f   a c c o u n t s   t h a t   g o   t o   c e r t i f i c a t i o n   a n d   a l l o w   a c c o u n t s   th a t   m i g h t   h a v e   m i s s e d   o n e   q u a r t e r l y   p a y m e n t   a   c h a n c e   t o   c a t c h up . 7 MEMOR ANDUM - C OUNCIL WOR K SESSION DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:N/A F R O M:Meg Beekman, C ommunity Development Director S UBJ EC T:O pportunity S ite Update and Moratorium Dis cus s ion Background: As the C ity moves forward with the mas ter planning work on the O pportunity S ite properties, staff is recommending c onsideration of a moratorium on land us e applic ations on properties within the 81-ac re area. Moratoriums may be put in place for up to one year in order to provide time for a city to complete a planning s tudy or adopt new regulations . In the case of the O pportunity S ite, both outc omes are anticipated in the next 12 months . A moratorium would protec t a private property owner from investing in their property in a way whic h may not be in alignment with the planned vision for the area prior to the formal adoption of a mas ter plan and new regulations . it would provide the C ity time to fully s tudy the area and determine the bes t future cours e in terms of land us e and infras tructure inves tment. If the C ounc il supports this c ourse of ac tion, s taff will work with the C ity Attorney to prepare a resolution adopting an interim ordinanc e whic h would plac e a moratorium on the properties within the defined O pportunity S ite master planning s tudy area. Policy Issues: Does the C ouncil s upport adoption of an interim ordinance to place a moratorium over the O pportunity S ite mas ter plan s tudy area for a period up to one year? S trategic Priorities and Values: Targeted R edevelopment MEMOR ANDUM - C OUNCIL WOR K SESSION DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:N/A F R O M:Meg Beekman, C ommunity Development Director S UBJ EC T:F ormer S ears S ite Development S trategy Update and Dis cus s ion Background: In July 2018, the C ity C ouncil adopted an interim ordinanc e whic h authorized a study and plac ed a moratorium on the S ears property. S ince that time, the C ity has engaged a cons ultant team to, among other things , as s is t with s tudying the site and c ompleting a development strategy for the property. S inc e the adoption of the moratorium, the S ears store has c los ed, along with the related auto repair center. T he two buildings sit on 15 acres adjacent to S hingle C reek C ros s ing and Highway 100, and the s ite is one of the mos t visible in Brooklyn C enter. T he property is currently zoned P UD/C 2; a remnant of the former Brookdale Mall, and was excluded from the master planning activities that the C ity underwent when the former mall was redeveloped into S hingle C reek C rossing. As such, the property has not had the benefit of a broader visioning with regard to its future s inc e it was initially developed in the 1960s . T he 2040 C omprehens ive P lan identifies the future land use des ignation for the property as Trans it O riented Development (TO D). T his is due to its proximity to both the Brooklyn C enter Trans it C enter, as well as a BRT Trans it S top immediately adjac ent to the s ite at Xerxes Avenue and 56th Avenue N. T he TO D land use category allows a wide range of uses, and generally supports a higher intens ity of land use in order to promote walkability and to leverage the transit investment in the area. S taff has been in communic ation with representatives from S ears who are have indicated their interes t in working with the C ity on a land use s tudy and revisioning for the site, though they have also acknowledged their desire to s ell the property at the highest possible price. T he private owners hip of this s ite makes it unique from other planning efforts underway in the C ity. S ears , and whomever they may choos e to sell the property to, has inherent property rights under the exis ting zoning code, which would allow any us e in the underlying C -2 Dis tric t, and those uses which are allowed within the C entral C ommerce O verlay Dis tric t as well since this site is within that overlay area. P lanning P rocess S taff and the c onsultant team have put together a work plan for the former S ears site to ac complish the tasks related to the sc ope of work on the s ite. T he work plan is attached to this report and inc ludes details related to the proposed analys is of the site, community engagement process, and antic ipated deliverables from the work. O verlay D istrict Amendments T he moratorium is set to expire in August. W hile the planning work will not be completed by then, s taff has reviewed the existing zoning c ode and is s uggesting several amendments to the C entral C ommerc e O verlay Dis tric t which would remove the least desirable uses from being allowed on s ite. O ne concern related to the s ite is that S ears may decide to s ell a portion of the property, allowing a subdivision and reus e of the former automotive repair center, leaving the larger building vacant. T his would impede a future redevelopment whic h was more c omprehens ive and limit the reus e of the site signific antly. As part of the zoning c ode update work it is anticipated that the C entral C ommerc e O verlay District will be eliminated or s ignificantly altered from its current form; so any amendments to it to address concerns regarding this site would be inherently temporary while the C ity c ompletes the zoning c ode rewrite work and the res t of the master planning work on this s ite and nearby sites whic h may als o be affected by c hanges to the O verlay Dis tric t. If the C ity C ouncil is amendable to amendments to the C entral C ommerc e O verlay District, then s taff would bring those changes though the typical process which would inc lude review and a public hearing with the P lanning C ommission and then the C ity C ounc il. T hes e would likely c ome before the P lanning C ommis s ion and C ity C ounc il in August. Policy Issues: Does the C ity C ounc il have any c onc erns related to the amendments to the C entral C ommerc e O verlay Dis tric t? Is the C ity C ouncil comfortable with the work plan related to the land use planning for the site? S trategic Priorities and Values: Targeted R edevelopment AT TAC HME N T S: Desc ription Upload Date Type July 8, 2019 - Memo from Haila Maze, S enior P lanner, Bolton & Menk 7/2/2019 Bac kup Material 1 July 2, 2019 TO: Meg Beekman, Community Development Director, City of Brooklyn Center FROM: Haila Maze, Senior Planner, Bolton & Menk RE: Former Sears Property Master Plan: Draft Approach Project Overview The purpose of this memo is to summarize the City’s approach to creating a master plan with a site-specific development strategy for the former Sears site. The subject property is a 15.26-acre site located in the northeast quadrant of the Xerxes Avenue North/Brooklyn Boulevard and Highway 100 interchange, adjacent to the Shingle Creek Crossing Planned Unit Development (PUD). The property has been vacant since the store closure in September 2018. It also has been the subject of a development moratorium since July 2018, with the goal of creating a redevelopment approach for the site. As part of the larger Becoming Brooklyn Center contract, the City’s consultant team has been tasked with assisting with the master planning process. This memo describes the work to date and outlines next steps. Draft Development Guidelines The Sears site has been the subject of several Becoming Brooklyn Center TAC meetings and other internal conversations, and well as coordination with a number of individual stakeholders over the course of months. There has also been some initial work to review existing market conditions and site characteristics. From this initial work, some draft guidelines for the development strategy have emerged. They are listed below. • Development should support and complement the Shingle Creek Crossing PUD, including the ongoing plans for buildout of the existing development with additional commercial. • Non-subsidized private development of the site is preferred, though public financial subsidy could be considered if a development proposal was made that met other strategic priorities of the City. • The site plan should extend the trail corridor which currently terminates on the eastern edge of the site, to connect with alignments west of the site. • A use of the site that provides good jobs and significant tax base is preferred. 2 • As this is a high visibility location for Brooklyn Center, the site’s appearance should be attractive and represent the City well. • Due to the value and visibility of this site, lower intensity uses – including but not limited to storage, warehousing, and automotive sales and service – should be discouraged. • The development concept and timing should not compete directly with the City’s vision for the Opportunity Site, including positioning, timing, and uses. • The discussion on site access should be coordinated with potential roadway improvements in the vicinity, including the possibility of changes to Highway 100 access that may improve traffic safety and circulation patterns. Additional guidance for the site will be gathered through the community engagement process, as described later in this document. The purpose of identifying these guidelines will be to inform the City’s decision-making process regarding approvals related to the site, and to convey to stakeholders and potential developers the City’s position. This will also help to inform near-term actions on the site, as outlined in the section on next steps. Potential Development Alternatives For the Sears site, the team will develop series of viable development alternatives for the Sears site, based on an assessment of site conditions, market feasibility, and discussions with stakeholders. At this point, concepts being considered include: • Office/light industrial development. This would be a job-intensive use (as opposed to bulk storage or warehousing), possibly with a limited retail component. This option could provide jobs and tax base for the community, as well as potential customers for adjacent retail in Shingle Creek Crossing. • Shingle Creek Crossing extension. This would extend the footprint of the adjacent retail district, most likely in partnership with that development. Retail uses would be guided for ones that would be compatible with the current mix, and which would not overbuild the market. • Current building reuse. This option would involve a use or uses that could reuse one or both buildings on the site. This could include dividing or reconfiguring the space to better meet tenant needs. Reuse could be an interim strategy, with the possibility of redeveloping the site later, perhaps in response to changing market conditions. • Residential or mixed use. The current consensus seems to be that this is not currently the market to proceed with this, and that it may compete with Opportunity Site buildout. However, this will be explored conceptually, in terms of a longer-term possibility. Additional concepts and variations may be explored as identified through the subsequent engagement process. Concepts may represent preserving the site as a whole, or suggest subdividing it with the introduction of new roadways and connections, or realignment of existing ones. 3 Furthermore, the City acknowledges that with private ownership, there are limits on the level of control the City has of development outcomes. As such, the alternatives and options discussed will be designed to be flexible in response to potential development proposals brought to the city for review. Development Strategy The product from this planning process will be the creation of a development strategy. This will not be as extensive as the master planning work being done for the Opportunity Site, but will provide a framework to evaluate future development proposals. Elements of the development strategy will include: • An overview of existing policy and regulatory guidance impacting the site and its vicinity • Summary description of the public engagement process, and feedback received during that time • A summary of existing conditions on the site, including base mapping, drawing from information collected during the planning process • A brief assessment to the market context, in terms of feasible development alternatives and comparable sites • An updated version of development guidelines for the site, including any recommendations for site and building design • Discussion of the process of evaluating development alternatives, and the selection of the preferred scenario(s) • Analysis of systems framework in context of development site, including roads, trails, public spaces, and other connections • Visual master plan rendering of the preferred development scenario(s), and photos of precedent development types • Identification of public benefit from the selected development alternatives, such as additional jobs and tax base, improved public realm, business development opportunities, or other factors to be defined • Implementation strategy for the site, including: o Infrastructure and public realm improvements, including high level cost estimates, as well as potential funding and phasing strategies o Future land use and zoning classifications, including any needed amendments to City plans or codes o Potential City role in site redevelopment, potentially including public subsidy, site marketing and outreach, and development review o Any other actions needed on behalf of the City or its partners to implement the master plan 4 The results will be summarized in a presentation, to be given before the City Council, as well as in a report to be produced at the conclusion of this process. Public Engagement It is expected that public engagement around the master plan will be somewhat limited, due to the nature of the private ownership of the site and its context within the central commercial district. As such, the engagement will be focused on key stakeholders most impacted by the project, as well as leveraging other engagement efforts on broader issues. The proximity of this site to the Brooklyn Boulevard corridor suggests that this engagement could be coordinated with the engagement planned for that project later in 2019. At this time, the following engagement activities are proposed: • Stakeholder meeting. Engagement would kick off with a listening session for stakeholders that would be most immediately impacted by the redevelopment. This would include business and property owners, and/or property managers in the vicinity of the site. The meeting would present possible development concepts for review, and solicit feedback regarding their goals, concerns, and ideas related to the site’s redevelopment. • Targeted developer conversations. The process will be informed by feedback from developers – either solicited directly, or via their contact with the City. While this is less formal than the stakeholder outreach, it may provide useful information in terms of the perceptions of the site and potential development opportunities as well as the market feasibility of various concepts. • Open house . An open house will be held once the draft concepts have been developed, and input from immediate stakeholders has been incorporated. The purpose of the open house will be to present the draft concepts and receive feedback (like the stakeholder meeting) from the general public. • Brooklyn Boulevard outreach participation . As there will be additional meetings related to the Brooklyn Boulevard Development Framework, information from the Sears site master plan can be brought as a component to public meetings, to provide broader engagement. • Online engagement . Information on the Sears master plan, and opportunities to provide feedback, will be provided on the Becoming Brooklyn Center website. Additional information can be shared via the City’s main website and on social media. • On-site signage . Pending approval of the property owner, signage indicating the status of the master planning process – and where to find more information – may be posted on the site. The Becoming Brooklyn Center process is pursuing much broader engagement of the community on a range of sites. If additional feedback in other forums is relevant to the plans for the Sears site, it will be included in the analysis and in the summary of community feedback for the master plan. 5 Timeline and Next Steps As with the City’s Opportunity Site, this master plan is proceeding in the context of real-time decisions by property owners, developers, and others with a development interest in the site. As such, some City actions will not wait until the conclusion of the master planning process. These interim actions will include updates to the existing zoning, to address elements in the current zoning on the site that are inconsistent with the city’s overall development vision for the area – and the development guidelines identified earlier in this memo. These adjustments do not preclude additional zoning modifications later, as the City’s zoning ordinance is in the midst of a large-scale review to update it for consistency with the recently adopted citywide comprehensive plan. In terms of the timing of the master planning process, the following timeline is proposed. • July 2019 – stakeholder meeting and initial development alternatives • August 2019 – master plan development and refinement • September 2019 – public open house • October-November 2019 – plan finalized and approved MEMOR ANDUM - C OUNCIL WOR K SESSION DAT E:7/8/2019 TO :C urt Boganey, C ity Manager T HR O UG H:Dr. R eggie Edwards , Deputy C ity Manager F R O M:Barb S uciu, C ity C lerk S UBJ EC T:P ending Items Recommendation: Livable Wages Liquor O rdinanc e/Entertainment P ermit -7/22 Liquor O rdinanc e Updates -7/22 2020 Elec tions Update -8/26 Dis cus s ion on O rdinanc e proc es s - 7/22 P ublic S ubs idy P olicy - 8/12 Youth In G overnment - 7/22 C ommemoration of 400 years of S lavery Ac tivities P olice C ris is P revention O ptions R es idential Design S tandards S AC C redit P olic y Target P roperty Background: