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11/25/1991 CONF MTG - 5117� � CIlYOF FRIDLEY CITY COUNCIL CONFERENCE MEETING NOVEMBER 25, 1991 - 7:30 P.M. CONFERENCE ROOM A 1. Tax Increment Financing Guidelines. 2. Surface Water Policy. r � _ _ J Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: November 20, 1991 �1� • TO: William Burns, City Manager�, . FROM: Barbara Dacy, Community Development Director SUBJECT: Proposed Tax Increment Financing Policies Discussion of TIF policies should be discussed by the City Council in the following order: � 1. Definition of terms 2. Discussion of General Guidelines 3. Chart entitled "Developer Assistance" and "HRA Redevelopment Costs I. Definitions. For the purposes of the Council's discussion, it is critical that all participants are using the same definition for key terms. These are as follows: A. Cost versus a subsidy � C. 1. 2. Cost is the amount of money needed to acquire land, prepare the site, or construct public improvements. A subsidy is the amount of assistance to a developer that allows the.developer to acquire the site below its fair market value. � ' Redevelopment versus Economic Development 1. 2. Redevelopment usually refers to improved and/or blighted properties. Economic development usually refers to unimproved properties. "But-For Test" l. Where does it come from? M.S. 469.175, Subd. 3(2) Proposed Tax Increment Financing Policies November 20, 1991 Page 2 2. The "But-For Test" is as follows: "That the proposed development or redevelopment in the opinion of the municipality would not reasonably be expected to occur solely through private investment within the reasonable foreseeable future and therefore the use of tax increment financing is deemed necessary." D. Eligible Expenses 1. Land acquisition 2. Site work including demolition/site clearance, grading/ back-filling/compaction of fill, erosion control, and paving; include costs of base construction up to laying of asphalt 3. Utility hook-up 4. Traffic control lightsjsigns 5. Relocation 6. Landscaping on public right-of-ways 7. Public right-of-way costs including lighting, signage, driveway aprons, curbs, sidewalks, and boulevards 8. Interest cost during construction period of eligible expenses 9. Administrative costs including supervision, contractors fees, inspection fees, and overhead 10. Consultant's fees including architectural/design, engineering, financial consulting, and legal/bond counsel 11. City assessments, including sanitary sewer, storm sewer, streets, and any costs listed above that are assessable 12. Contingency 13. Interest rate buy-down for housing only E. Project Costs are the cost of land, building, and equipment that are incurred within the first year from the start of project construction. Proposed Tax Increment Financing Policies November 20, 1991 Page 3 II. General Guidelines. To follow is a draft list of general guidelines which we believe address key points discussed by the City Council and the HRA. These guidelines, in conjunction with the chart in the following section, will help guide the community in achieving its redevelopment goals. A. TIF policies are not goals, but are guidelines only. B. The subsidy should be proportional to the size of the proj ect . C. Every district should be self-supporting; however, in certain areas the HRA's redevelopment costs may greatly exceed the value of tax increment revenues generated in projects that fulfill redevelopment goals (i.e. housing rehabilitation projects or redevelopment from commercial to residential). D. The City should not incur any losses as a result of the HRA assisting a project. E. Any developer/user must justify the requested assistance ("But-For Test"). F. Whenever possible, the HRA should recapture its subsidy from the project. G. The captured tax capacity shall not exceed 15% of the total tax capacity. H. Pooling of TIF revenues is desirable as a means of accomplishing difficult redevelopment goals (i.e. housing rehab). I. Wherever possible, the amount of TIF assistance for a project should be limited through the use of alternative financial incentives e.g. SBA 504 financing, industrial revenue bonds, or economic recovery fund grants. J. The amount of TIF given to any project must be related to the contribution of the project to the City's redevelopment goals including creation and retention of jobs, enhancing the tax base, preserving the decline of tax values, eliminating blight and deteriorated properties, or meeting affordable housing/other housing objectives. K. Developers and users should demonstrate the financial feasibility of the project. Proposed Tax Increment Financing Policies November 20, 1991 Page 4 III. Attached is a matrix identifying maximum percentages of project cost to be considered for economic development districts and redevelopment districts. The HR.A has adopted an application process for submission of sources and uses statements, proformas, and an application fee. If the project meets the goals of the redevelopment program, the HRA can utilize either a grant, loan, or pay-as-you-go grant to assist the project. IV. The Chart entitled "Redevelopment Costs" identifies a guideline for the City to use in determining the maximum amount of redevelopment costs to be incurred for industrial, commercial/office, or housing projects. Reference general guidelines C and H. There may be cases where districts will need to use increment from other districts. Where this happens, we suggest a maximum cap of 125% for industrial and commercial/office redevelopment projects and 150% for housing redevelopment projects. 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V } m Y m W m � W m • C E O ��,, �� c �c � U E J E � $ O� Y� Z � � $ g� 0 $ U' �v � ~ • � f., W$ w$ =m �5 =� �m W� �o �3> �o •.� U .YE E � W � O $ O $ p � < � Y � Z � y ° p � Z � � � ' � � � � $ o v� �Q z� �W a� g� 3� `�i Q o om�_ a C ,� � � � a c� v � cc �. ao a� � Z 1 Ci TO: FROM: DATE: SUBJECT: Engineering Sewer Water Parks Streets Maintenance MEMORANDUM r'�. William W. Burns, City Manager/�`�r PW91-356 John G. F1ora�Public Works Director November 19, 1991 Surface Water Policy Based upon the discussions we had with the City Council on October 28 regarding the City's involvement in storm water issues associated with lakes, ponds, and creeks within the City, I have prepared a Surface Water Policy Statement which identifies the degree of involvement of the City in the various storm water issues. As a means of funding storm water improvements, there needs to be specific legislation enabling special districts to be identified in the City in order to levy or carry any costs associated with the various storm water projects. I have reviewed a number of State Statutes and prepared a draft ordinance establishing Chapter 208 entitled "Public Waters Improvement Districts" which follows Chapter 103 of the State statutes. If you and the City the draft ordinance, review the items fo adoption. JGF:ch Council aqree with the policy statement and I would recommend that the City Attorney r appropriateness prior to final typing and / � CfiYOF FRIDLEY SURFACE WATER POLICY STATEMENT Draft 11/19/91 Purpose: The following procedures and policy are established for the purpose of protecting and promoting the public health, safety, comfort, convenience, prosperity, and general welfare of the City of Fridley in regards to surface water issues. Definitions: Algae: Accumulation of decomposing aquatic growth on the surface of retention ponds. City Creeks: Within Fridley, are defined as Stonybrook Creek, Springbrook Creek, Oak Glen Creek, and Norton Creek. Rice Creek within the City of Fridley is defined and treated separately. Creeks: Detention Ponds: Dredging: Pipes: Private Ponds: Public Ponds: Retention Ponds: Serve as a surface water conduit and are relatively wild and uncontrolled. Al1 depressions that hold surface water for short periods of time and normally are dry. Removal of aquatic growth and soils within retention ponds. Underground system for storm water conveyance. Receive surface water from one lot or from a single owner before exiting into the street storm water system. Receives water from streets. Depressions that hold surface water and are generally always wet Rice Creek: Represents the final leg of the Rice Creek Watershed District flowing through the City of Fridley to the Mississippi River. Rice Creek Responsible for the overall management and Watershed control of surface water within the Rice District: Creek Watershed. ! , �. Runoff: Storm Water System: Surface Water: Weed Harvesting: Retention Ponds: - 2 - The flow of surface water beyond the storm water system resulting in flooding or damage to property. Series of pipes and conduits to convey surface water accumulating on the streets and convey it to the ultimate disposal system, the Mississippi River. Results from rainfall events. Consists of cutting aquatic growth beneath the surface of retention ponds . Retention ponds within the City of Fridley include Moore Lake, Locke Lake, Farr Lake, Harris Pond, Secondary Pond, BASFU Pond, and Springbrook Nature Center Pond. It is understood that these retention ponds provide an overall benefit to the residents of the City, in regards to storm water control, ground water percolation, and water quality improvement, but at the same time, provide some specific amenities to the abutting properties in relation to aquatic use, wildlife, and general water aesthetics. In establishing a policy for maintaining the retention ponds as an amenity within the City, each pond requires special attention and maintenance to ensure they provide the desired service and benefits. It is understood that the detrimental effects for most retention ponds is the growth of weeds within the water area and the accumulation of algae on the water surface. It is the desire of the City to maintain these facilities as an aesthetic element and, therefore, support the City's involvement in contributing to periodic weed harvesting and the treatment of algae on the water surface. Accordingly, if a majority of the abutting property owners petition the City to remove the weeds and/or algae, the City will initiate a special service district and assess 50 percent of the improvement costs to the abutting property owners to cover the cost of the improvement. Dredging of retention ponds is deemed to be a significant improvement to the facility and will be treated on a case-by- case basis by petition of the abutting property owners. A special service district will be established and the cost sharing percentage to be charged against the abutting properties will be determined at that time. - 3 - Detention Ponds: Detention ponds serve as a water quality and quantity improvement for surface water from development. In certain areas of the City, private detention ponds are constructed and remain a private responsibility for operation, maintenance, and control. Public detention ponds provide an overall service to the City in regard to storm water control and, as such, the City is responsible for maintaining the control weirs, piping, and improved valley gutters. The surface maintenance of the ponds in regard to grass cutting, weed control, and bank repair remain with the property owner on which the pond is located. Pond Control: After adoption of this policy, any property, plat, or subdivision on which a storm water facility is to be constructed will have an "as built" survey prepared and submitted to the City indicating the size, location, and elevation of the facility, as well as related structures, to insure the construction was completed in accordance with the approved design and plans. The City will inspect the construction of these facilities as they are being constructed. The City will also annually inspect, both private and public retention and detention ponds, and inform the appropriate responsible party of whatever action is necessary to insure continued function and operation of the approved design. City Creeks: It is understood that the creeks located within the City of Fridley serve as a primary conduit for the conveyance of surface water to the Mississippi River. Any major system improvements, modifications, channel alignment, or reconstruction are deemed to be a City responsibility for planning, scheduling, and construction. Creek bank armor projects submitted by petition for a system wide improvement resulting in certain benefits to the involved properties would require 50 percent funding participation by the abutting properties. These associated improvements can be accomplished through a special assessment project, City improvement project, or a service district project. . ! - 4 - The Rice Creek Watershed District has established certain controls and procedures for maintaining the Rice Creek storm water system. Any improvements associated with the Rice Creek system within the City of Fridley are to be accomplished in accordance with the Rice Creek Watershed District Surface Water Management Plan, Policies and Procedures. Upon request by Rice Creek property owners, the City will petition the Rice Creek Watershed Managers for system improvements based upon a 50 percent project cost participation by abutting property owners. These associated improvements can be accomplished through a special assessment project, City improvement project, or a special service district. Runoff: Fees: Surface water runoff can result in damage and discomfort to residents of the City. Accordingly, any runoff problem will be reviewed by the City. Re-occurring problems will be reviewed to determine if the public storm water system is a contributing factor and that any private sources of runoff are in conformance with plat or construction requirements. When the runoff is from unaccountable private sources, resulting in re-occurring runoff problems to one or more properties, the City may contribute up to 50 percent of the costs to resolve the problem. Any runoff problems associated with improved streets which include concrete curb, gutter, and storm drainage system, remain a responsibility of the City to correct, within the design provisions of the storm water system. For unimproved streets, without concrete curb and gutter, the property owner retains full responsibility for resolving the problems and corrective action. A fee for surface water ponding inspection of construction is provided for in Chapter 11 of the City Code. RECEIVED AND APPROVED BY THE CITY COUNCIL ON m 11-19-91 One year storm water costs for a 10 year period assuming all projects proceed. Weed Growth: West Moore Lake Locke Lake Harris Pond Algae: West Moore Lake Locke Lake Harris Pond Secondary Pond BASFU Pond Farr Lake Pond Maintenance Creek Armoring: Stonybrook Springbrook Oak Glen Norton Rice $16,500 10,000 10,000 $ 7,400 1,700 1,700 1,700 1,700 1,700 $ 4,000 6,000 6,000 2,000 18,000 Sedimentation Removal - Al1 Ponds $ 36,500 $ 15,900 $ 4,000 $ 36,000 $ 92,400 $127,500 TO: FROM: DATE: SUBJECT: Engineering Sewer Wate� Parks Streets Maintenance MEMORANDUM William W. Burns, City Manager-,���PW91-336 � John G. Flora,�Public Works Director November 19, 1991 Public Waters Improvement Ordinance Upon reviewing State Statutes 86, 103, and 459, there is legislation specifically identified in Chapter 103, Lake Improvement Districts, that would allow the City to establish special service districts and set up levies or service charges for work within the designated district. This is consistent with the discussion we had on the various retention pond improvements and maintenance. The legislation and the draft ordinance also provides for inclusion of creek projects within the special district designation, as requests are received by the City. The legislation requires the establishment of a Board of Directors to manage the various special districts. This may be an issue the Council may want to discuss. The City of Minneapolis had special legislation passed for them which allowed special service districts to be established for snow removal and sidewalk maintenance within specific designated areas of the City. If the existing legislation is not agreeable, we always have the option of requesting some special legislation from our representatives to deal with the retention pond issues. JGF:Ch / � FWIX�1( . , " �� -�- . � A. B. ORDINANCE NO. Draft AN ORDINANCE ESTABLISHING A NEW CHAPTER 208 ENTITLED "PUBLIC WATERS IMPROVEMENT DISTRICTS" purpose: To preserve and protect the public waters of the City and to increase and enhance the use and enjoyment of the lakes and creeks, it is in the public interest that a City improvement program is established to: (1) preserve the natural character of the public waters and their shoreline environment where feasible and practical; (2)improve the quality of water in lakes and creeks; (3) provide for reasonable assurance of water quality in lakes and creeks, where feasible and practical; and (4) to assure protection of the lakes and creeks and detrimental affects of human activities and certain natural processes. - The City shall coordinate and supervise a program for the establishment of Public Waters Improvement Districts located within the City boundaries based on State guidelines and rules and compatible with State, regional, and local plans, where a plan exists. Initiation and Establishment by City Council: 1. Resolution of Intent: The City Council may initiate the establishment of a Public Waters Improvement District in a portion of the City under this ordinance. The Council must adopt a resolution declaring the intent of the Council to establish a Public Waters Improvement District. The resolution must: (a) specify the boundaries of the district which shall be encouraged to be as consistent and practical with natural hydrologic boundaries; (b) prescribe the water and related land resources management programs to be undertaken in the district; (c) state how the proqrams will be financed; (d) designate the City Officer or department responsible for supervisory programs; and (e) set a da�e for hearing on the resolution. , 0 0 - 2 - 2. Hearing: The City Council must hold a public hearinq on whether a Public Waters Improvement District should be established. Before the date set for the hearing, any interested person may file objections to the formation of the district.with the City Clerk. At the hearinq, any interested person may offer objections, criticism, or suggestions about the necessity of the proposed district and how the person's property will be benefitted or affected by the establishment of the district. 3. Establishment: The City Council may establish a Public Waters Improvement District by order, after making findings. If the Council determines that: (a) proposed district is necessary or that the public welfare will be promoted by the establishment of the district; (b) property to be included in the district will be benefitted by establishing the district; and (c) formation of the district will not cause or contribute long range environmental pollution. C. Initiation by Petition: l. Petition: A Public Waters Improvement District may be initiated by petition to the City Council. The petition must state: (a) the name of the proposed Public Waters Improvement District; (b) the necessity of the proposed district to promote public health or public welfare; (c) the benefits to property from the establishment of the district; (d) the boundaries of the proposed district which shall be encouraged to be as consistent as possible with natural and hydrologic boundaries; (e) a map of the proposed district; (f) a number from five to nine of directors proposed for the district; and - 3 - (g) a request for establishment of the district as proposed. � • The petition must be signed by 26 percent of the property owners within the proposed Public Waters Improvement District described in the petition. Government subdivisions other than the State or Federal governments who own lands within the district are eligible to sign the petition. The petition must be filed with the City Clerk and addressed to the City Council requesting the Council to establish a Public Waters Improvement District to provide and develop a program of water and related land resources management. 2. Hearing: After receiving the petition, the City Clerk must verify the signatures and notify the City Council. Within 30 days after being notified of the petition, the City Council must hold a public hearing on whether the requested Public Waters Improvement District should be established. 3. Establishment: Within 30 days after holding the public hearing, the City Council sh�ll, by order, establish or deny the establishment of the petitioned Public Waters Improvement District. D. Order Establishing the District: 1. An order by the City Council establishing a Public Waters Improvement District must: (a) state the name of the district; (b) boundaries of the district which are encouraged to be as consistent as practical with natural hydrologic boundaries; (c) water related land use resources management programs and services to be undertaken; (d) manner of financing programs and services; (e) number, qualifications, terms of offices, removal and filling the vacancies of the Board of Directors. E. F. - 4 - Publications and Effective Date: 1. 2. Publication of Establishment Order: If a Public Waters Improvement District is established, the City Council shall publish the order once in the official newspaper and file the order with the Secretary of State the Minnesota Pollution Control Agency, and the Commissioner of Natural Resources. Effective Date: Establishment is effective as specified of the Public Waters Improvement District 30 days after publication or a later date in the establishment order. Referendum on Establishment: 1. 2. 3. Petition: Twenty-six (26) percent of the property owners within the Public Waters Improvement District established by the City Council may petition for a referendum on establishing the district before the effective date of its establishment. After receiving the petition, the City Council must issue an order staying the establishment until a referendum vote is taken of all qualified voters and property owners within the proposed district. Election: The City Council shall conduct a Special Election in July or August, after receiving the referendum petition. A Special Election must be held within the Public Waters Improvement District. The City Clerk shall administer the Special Election. Questions Submitted to Voters: The questions to be submitted and voted upon by the qualified voters and property owners within the Public Waters Improvement District must be stated substantially as follows: "Should the Public Waters Improvement District be established to provide (description of intended water and related land resources) and financed by (description of revenue sources)?" - 5 - 4. Certification of Vote and Establishment: The City Clerk must certify the vote on the question submitted. If a majority of those voting on the question favor establishing the proposed Public Waters Improvement District, the stay on establishing the district is lifted. If a majority of those voting on the question do not favor establishing the proposed district, the establishment is denied. G. Board of Directors: 1. Membership: After a Public Waters Improvement District is established, the City Council shall appoint persons to serve as an initial Board of Directors for the district. The number, qualifications, terms of office, removal, and filling of vacancies of directors shall be as provided in the order creating the Board of Directors. The initial and all subsequent Board of Directors must include persons owning property within the district and a majority of the directors must be residents of the district. 2. Powers: The City Council may, by order, delegate the powers in this section to the Board of Directors of a Public Waters Improvement District to be exercised within the district. Programs and services undertaken must be consistent with the Statewide water and related land resources plan prepared by the Commissioner of Natural Resources and with regional water and related land resource plans. A body of water may not be improved by using authority granted under this section, unless the public has access to some portion of the shoreline. The City Council may delegate their authority to a district Board of Directors to: (a) acquire by gift or purchase an existing dam or control works that affect the local level of waters in the district; . (b) construct and operate water control structures that are approved by the Commissioner of Natural Resources; (c) undertake projects to change the course of current or cross-section of public waters that are approved by the Commissioner of Natural Resources; - 6 - (d) acquire property, equipment, or other facilities by qift or purchase to improve navigation; (e) contract with the Board af Managers of a Watershed District within a district or the Board of Supervisors, of a Soil and Water Conservation District within the district for improvements under State statute; (f) undertake research to determine the coordination and development of the body of water and the water entering it and to transmit the results of the study to the Minnesota Pollution Control Agency and other interested authorities; (g) develop and implement a comprehensive plan to eliminate water pollution; (h) conduct a program of water improvement and conservation; (i) construct a water and sewer system in a manner provided by applicable laws; (j) receive financial assistance from and participate in projects to enter into contracts with Federal and State agencies for the study and treatment of pollution problems and other related demonstration programs; (k) make cooperative agreements with the United States or State governments or other counties or cities that affect water and related land resource programs; (1) maintain public beaches, public docks, and other public facilities for access to the body of water; (m) provide and finance a qovernment service of the City that is not provided throughout the City or County. If the government service is provided, the service is to be an increased level within the district; and (n) regulate water surface. H. Financing: The City Council may undertake projects and improvements consistent with the purpose of the Public Waters Improvement District. To finance projects and services of the district, the City Council may: _ , � - 7 - (1) assess the cost of the projects upon benefitted property within the district in the manner provided under Chapter 429; (2) impose service charges on the users of district Bervices within the district; (3) issue obligation as provided in State statutes Section 429.091; (4) levy an ad valorem tax solely on property within the district to be appropriated solely on projects of special benefit to the district; or (5) impose or issue any combination of service charqes, special assessments, obligations, and taxes. , I. Annual Meeting of Public Waters Improvement District: 1. Time: A district must have an annual meeting. The first annual meeting shall be scheduled during the month of July or August and be held annually in that period unless changed by a vote at the previous annual meeting. 2. Notice: The annual meeting shall be proceeded by two weeks published notice and written notice mailed at least 10 days in advance of the meeting to the City Council, the Minnesota Pollution Control Agency, the Commissioner of Natural Resources and if there is a proposed project of the district having a cost in excess of $5,000, all property owners within the assessment area. 3. Agenda: At the annual meeting, the district property owners present shall: (a) elect one or more directors to fill vacancies on the Board of Directors; (b) approve budget for the fiscal year; (c) approve or disapprove proposed projects by the district having a cost to the district in excess of $5,000; and (d) take up and consider other business that comes before them. - 8 - 4. Annual Report: Each year the Board of Directors shall prepare and file a report on the financial condition of the district, the status of all projects in the district, the business transacted by the district, other matters affecting the interest of the� district, and discuss the directors' intention for the succeeding years. Copies of the report shall be transmitted to the City Council, the Commissioner of Natural Resources, and the i�iinnesota Pollution Control Agency within four months after the annual meeting. J. Expansion of the Boundaries of a Public Waters Improvement District: The boundary of a district may be enlarged by complying with the procedures to establish a district. K. Termination of a Public Waters Improvement District: 1. Petition: The termination of a district may be initiated by �petition requesting the termination of the district. The petition must be signed by 26 percent of the property owners in the district. Within 30 days after receiving a petition, the City Council must set a time and place for a hearing on terminating the district. 2. Findings and Order: If the City Council determines that the existence of the district is no longer in the public welfare or public interest and is not needed to accomplish the purpose of the Public Waters Improvement District Ordinance, the City Council shall make the findings and terminate the district by order. A certified copy of the findings and order shall be filed with the Secretary of State, Minnesota Pollution Control Agency, and the Commissioner of Natural Resources that the district is terminated and ceases to be a political subdivision of the State. 3. Termination of Financing: If a district is tenainated under the paragraph above, additional water and related land use management programs may not be undertaken with monies raised by a special tax within the district. An additional water and special land related resources management tax may not be levied - 9 - within the district. If money raised by past epecial levies within the district has been exhausted, further operation and maintenance of existing programs may be financed by appropriations from the General Revenue Fund.