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HRA 11/01/2007 - 29539�, D CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY NOVEMBER 1, 2007 CALL TO ORDER: Chairperson Commers called the regular meeting of the Housing & Redevelopment Authority to order at 7:30 p.m. MEMBERS PRESENT: Larry Commers, William Holm, Pat Gabel, Steven Billings, John Meyers OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director William Burns, City Manager Mike Jeziorski, City Accountant Jim Casserly, Development Consultant Richard Pribyl, Finance Director ACTION ITEMS: 1. Approval of E�penditures None 2. Approval of Minutes — August 9, 2007 MOTION by Commissioner Gabel to approve the minutes as presented. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMIV�RS DECLARED THE MOTION CARRIED UNANIMOUSLY 3. Approval of Minutes — September 6, 2007 MOTION by Commissioner Billings to approve the minutes as presented. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CFIAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Approval of Proposed 2008 HRA Commission Meeting Dates Commissioner Gabel asked about the meeting scheduled for July 3rd, 2008 and if it should be rescheduled. "� Paul Bolin, HRA Assistant Executive Director, suggested to postpone the July 3rd meeting to July 10�' if a meeting is necessary. MOTION by Commissioner Holm to approve the proposed 2008 HRA Commission Meeting Dates. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL,VOTING AYE, CHAIRPERSON COMMERS DECLARED TFIE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEM• Karen Skepper, Community Development Manager for Anoka County and the Assistant HRA Director, presented information regarding Economic Development Powers. For several years County Commissioners have been wondering whether or not the County needs to be more involved in the economic development activities and what roll they should play. In 2006 the County Board appointed an Exploratory Committee to start looking at economic development activities. This was an 11-person committee appointed with more than half of the committee members being persons recommended by the City Council. The Committee also consisted of a Mayor, a County Board Member and several County Commissioners. Ms. Skepper said that the Committee had 90 days to go through a huge amount of information. During this time the Committee looked at what the economic development activities are currently throughout the community and analyzed and determined if the communities were delivering services. The Committee made recommendations to the County Board based on the statutory requirements. The Committee put together a local government inventory questionnaire that went out to a1121 communities in Anoka County and once the results came back, that became the basis for the Committee's work. After going through the survey's and conducting additional surveys with people from the WorkForce Center and Anoka Chambers, the Committee found some very interesting information. They learned that Anoka County was growing and was expected to continue to grow through 2030. Ms. Skepper said that there are three distinct development areas; fully developed areas that are developing and rural areas. Out of the 21 communities, there were 10 communities that did not have an Economic Development Authority. There is much interest in communities to grow their city, increase the tax base and create new jobs. Staffing and funding is the most common obstacle with economic development activities. After looking at all of the information, the Committee concluded that there are gaps in the economic development activities throughout Anoka County. Communities have many challenges such as: staffing and funding, eminent domain, limited financial resources and no staff dedicated to economic development. Ms. Skepper said that there is a need for an organizational structure and coordination between all of the communities within Anoka County. Many communities are interested in improving the image of the County and perhaps a coordinated approach would be a good way to do this. There is a great need to study high speed Internet in all areas of Anoka County. Ms. Skepper said that the Committee determined that Anoka County's involvement in Economic Development was desirable. The Committee took a look at the organizational structure and presented to the County Board the need to create a brand new Anoka County Economic Development Authority. The County Boaxd voted and agreed that the need was there for an Anoka County Economic Development Authority and recommended that the powers be granted to the Anoka County HRA. The reason the County Board agreed to this is because a structure is already in place and it was working. There was a Boaxd, Trustees, experience and most important, if the powers were granted to the Anoka County HRA they could levy one tax, not an HRA tax and an EDA tax. Ms. Skepper asked what could be expected from the Anoka County HRA. Because of the interest in the high speed internet project, the committee is planning to spend $75,000 on a feasibility study and try to figure out the best way to bring high speed internet to all areas. Some other things the Committee can do for communities could be to provide technical assistance to communities with limited staffing, help provide investment for community rail service or help the community address foreclosures in the County. Ms. Skepper shared some benefits of those participating in the Anoka County HRA. Many communities access funds for comprehensive plan updates, senior housing projects, assist with community focused projects and help set up homebuyer programs or business programs. Commissioner Gabel asked if the Anoka County HRA placed the funds in the communities in which they were generated, was there any commitment made to the communities to get those funds back. � Ms. Skepper answered that a fund is created for each community and funds go back to the communities. This is a practice going forward but no promises are made. The City Council decides l�ow to use the funds. If the request for funds passes the resolution; it goes back to Council and is reviewed. If the request for funds meets the criteria for Minnesota Statues, assistance is provided and funded. To her knowledge there has never been a project that meets Minnesota Statues that was not funded. Chairperson Commers asked what communities are participating now. Ms. Skepper said the following communities are participating in both the HRA and EDA: Burns Township, Columbia Heights, Columbus, St. Francis, Hill Top, Lexington, Linwood and Spring Lake Park. The following communities are participating in the HRA only: Bethel, Centerville, East Bethel, Ham Lake, Oak Grove and Ramsey. Chairperson Commers asked what Columbia Heights has done with regards to the HRA. Ms. Skepper said that they participated in using the County funds to maximize their projects to help the projects get done in a timely manner. Commissioner Holm asked if the County and City HRA operate separately. Ms. Skepper answered that is correct. Commissioner Gabel asked for and example in which the community and county EDA worked together. Ms. Skepper said that the Ham Lake HRA�started a Senior Housing Project and after it started the project was a little out of their element. The County finished the project and it was very successful. They are ready to refinance the funds for a shorter term to lower the debt amount. The city will share the profit generated from the property. Commissioner Billings said that the feasibility study was needed on a countywide basis. It is up to each municipality to opt in or out. There are multiple funding prospects needed to get projects done in a timely manner, but the more tools you have, the easier it is to fix things when needed. The City of Fridley is an aging community and has a need for redevelopment. Whether it is to change the nature of areas or improve the current use, any tools are an advantage. He recommended that the HRA opt in to participate in this program. Chairperson Commers asked about the Senior Housing project and asked if the funding needed to complete the project was county wide funds, not just funding involving the community. Ms. Skepper said the County HRA enters a joint power with the city and uses their bonding capabilities to use future levies. A very thorough financial analysis is done to ensure there is a demand for that type of housing. After a few years of operations, they may need to dip into the levy for a small amount. Chairperson Commers asked for clarification that the County bonds were used for the senior housing project and were generated by the community HRA to fund a bonding debt. Ms. Skepper said that could happen but each project is different and it depends on what is negotiated. If research is done and there is a cash flow and a demand, funds should not be a problem. Chairperson Commers asked about the possibility of the EDA helping fund the rail station. Ms. Skepper said that this issue has been discussed and that there could be a HRA levy generated each year that could be as high as the EDA levy. Communities have the authority to use the higher of the two but not both. Commissioner Billings said that the City of Fridley levy will sti11 remain in place but the Anoka County HRA/EDA levy would be whatever the Anoka County levy is, but the city and county levy are both about the same value. Chairperson Commers said that the Fridley levy is .0014 and Anoka County EDA is .0018. He questioned what is available, are both available. Ms. Skepper said that both would be available. There is capability to go as high as the EDA levy. ACTION ITEMS: (CON'T) 5. Approval of Contract for Administrative Services for 2008 Home and Garden Show Paul Bolin, HRA Assistant Executive Director, said that this is the fourth year we have contracted with Marsha Wagner/Castle Visions to coordinate the Home and Garden Show. The revenues from booth rentals more than cover all the expenses associated with this show. Last year about $15,000 was collected in revenue and the expenses totaled about $12,000. Staff recommends that HRA approve the contract between the HRA and Marsha Wagner/Castle Visions to provide assistance with the 2008 Home and Garden Show. William Burns asked for details on how much per hour is being paid to Marsha Wagner/Castle Visions. Mr. Bolin said that Marsha Wagner is paid $50 per hour not to exceed 120 hours. Motion by Commissioner Gable to approve the contract for administrative services for the 2008 Home and Garden Show. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CI3AIItPERSON COMIV�RS DECLARED THE MOTION CARRIED UNANIMOUSLY 6. Approval of Preliminary 2008 Budget Mike Jeziorski, HRA Accountant, presented the 2008 HRA Budget, an overview of the budget and projected revenues and expenses. The budget is divided into three separate categories. The General Fund covers the bulk of the administrative and overhead costs of HRA. The Housing Loan Program Fund covers the housing related programs and services (CEE programs such as Operation Insulation) and the $1.SM loan with the City. The Capital Outlay Funds include all of the tax increment (TIF) districts. Cash balances as of 9/30/07 and detailed budget sheets for the categories mentioned above have been included for review. Mr. Jeziorski said at this time all the necessary numbers have not been received from Anoka County to finalize the budget. The Operating Revenues are projected at $4.7M, which is a $490,000 or 10% decrease from 2007. The Expenses are projected at $2.7M, which is $615,000, or about a 20% increase from 2007. The increase is primarily made up of additional budgeting for acquisitions built up on University Avenue. The General Fund Expenses include personnel services budgeted at $290,000, supplies at $100, purchase services at $100,000, capital outlay at $700,000 for a total of about $1.1M. Some of the significant outlays include Medtronic/Linn pay-as-you-go total about $620,000, also budgeted is around $700,000 in University property acquisitions. The total debt service is $1.9M and is paid from the following funds: housing loan program, Moore Lake TIFF district and North area TIFF #3. Commissioner Gabel asked what non-personnel insurance was. Richard Pribyl, Finance Director, said it was for insurance for the city and HRA in relations to liability and property insurance that is allocated to various operation departments with in the city. Commissioner Gabel asked about the 20% acquisition on University Avenue. Paul Bolin, HRA Assistant Executive Director, answered that when the 2007 budget was done in the fall of 2006, it was done before HRA looked at buying the properties on University Avenue. If the HRA decides to buy any more properties on University, they did budget for them in 2008. Chairperson Commers asked about the operating budget for 2008 and that it reflects a $453,000 loss. He also asked which funds on page 280 would be gone after 2008. Mr. Jeziorski said that the Moore Lake will expire in 2007 but it will keep open to pay off the remainder of the balance. In 2008 the North Area will expire and in 2009 Center City will expire. Chairperson Commers asked which ones they are trying to utilize with the legislature. Mr. Jeziorski said that the funds 462 University, 463 McGlynns and 463 Satellite. Jim Casserly, Development Consultant, said the theory was to allow each district to continue and we would use the future investment for our activities. Chairperson Commers asked how much is needed to finish off the obligations. Mr. Pribyl answered he did not know the number but that they exceeded the expenditures. All increments on these districts are access. Mr. Casserly said that District 11 and 12 are both in excess of $500,000 and will be collected in 2018 and 2019 respectively and District 13 there is $850,000 through 2020. Commissioner Billings asked if these numbers are part of the 2008 Budget. Mr. Pribyl answer.ed no; the numbers are looking at future tax increment numbers. Commissioner Billings said that these tax increments need to be used in the districts they were collected in, there are restrictions on these increments. Mr. Pribyl answered that is correct. Chairperson Commers questioned the cash balance of $1.4M and when it would expire. Mr. Pribyl said that the Center City could be used for related expenses within the project area. Chairperson Commers said the last payment looks like $1.4M excess, but it won't be received unti12012. That will give the HRA considerable extra money to use in some kind of manner. Mr. Pribyl said that those are restricted but Districts pre-79 is open and available. Chairperson Commers asked for staff to update the HRA at the next meeting. It is just a question of how much of those funds will be available. Dr. Burns, City Manager, said that about a year ago there was a joint HRA/Council meeting and they explored using the TIF funds for the rail project. The information on what funds are available for each district has been discussed and staff can find that information and mail to HRA members. � MOTION by Commissioner Billings to approve the Preliminary 2008 Budget. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIItPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 7. Approval of Memorandum of Understanding Between HRA and NCDA Paul Bolin, HRA Executive Director, presented a draft Memorandum of Understanding between the HRA and the Anoka County Regional Rail Authority. The Memorandum of Understanding (MOU) stated that the Anoka County Regional Rail Authority would make the commitment to fund the tunnel, take on the responsibility for getting the funding for the tunnel and get the tunnel constructed in a time frame that is acceptable to Burlington Northern. Last week there was a concern about Burlington Northern meeting the November l st deadline. A copy of an email was distributed from Burlington Northerri to the Anoka County Regional Rail Authority agreeing to extend the date from November lst to November 13�'. Under the MOU, it will be the responsibility of the Fridley HRA to make a commitment to acquire a construction easement necessary to get the tunnel put into place. This MOU doesn't necessarily tie us to anything if we are not able to get the work done. Staff will work with other entities to determine the appropriate entity authority to acquire the property on the east side of the tracks. There is a resolution that staff is recommending HRA approve. MOTION by Commissioner Billings to adopt the resolution of the Memorandum of Understanding between the HRA and the Anoka County Regional Rail Authority. Seconded by Commissioner Gabel. Commissioner Meyers asked for some clarification. The memorandum states that HRA will provide, if possible... what if it is not possible, then what happens? Mr. Casserly answered that we are not exactly sure who is most the appropriate party to be acquiring the property. All this document is saying is if the HRA is able to provide the construction easement, they will do so. What needs to be worked out here is who is to acquire the property on the east side of the tracks. We would like to avoid paying for a construction easement and then paying for the property. If there is a way to pull all this together over the next number of weeks and months, we will do so. It is very clear that the Regional Rail Authority has the power to acquire both the construction easement and the fee. There are a lot of reasons why it may be good for them to do that, but a number reasons why it would be good for the Authority to be the responsible party to try to acquire the property. This MOU leaves it open, and it clearly says that the cost of the construction will be Fridley's cost. Chairperson Commers said that the construction easement is the minor cost of the rail station. Mr. Casserly said that this is not an unusual situation. What this document generally expresses is the sincere intentions of both parties to continue to work together to pursue the common go�l. If there is some inability to do it, this avoids all kinds of litigation. Commissioner Meyers said if we are unable and unwilling to perform, would there be any legal obligation or put the HRA in jeopardy of anything. Commissioner Billings said it is his understanding that as it directly relates to Fridley, Anoka County has the authority to enter into the MOU with Fridley because they have a MOU with MnDot. MnDot, according to legislation, is the one that is charged with managing, operating and building commuter rail in the state of Minnesota. If in two weeks Fridley changes their mind and does not want to participate, other than the loss of the good will between the City of Fridley and Anoka County, there should be no damages that would take place. Mr. Casserly said that this is about the letter of intent and MOU. There are a lot of parties and contracts we are dealing with. Reducing the contract to this type of approach, there is no way to make it any simpler and there is an advantage to do it this way. Commissioner Gabel said that she works for the state and this is needed to get the ball rolling, basically a contract that everyone agrees on. Commissioner Meyer asked why not take out the "binding contract" language. Mr. Casserly said that the language is very straightforward and there are more complex agreements to come. This allows installation of a tunnel and solves the problem of the date; this is just the beginning, not the end. Commissioner Meyer said that Burlington Northern is going plan for a tunnel when they get this MOU. They are going to take steps forward based on this MOU. If for any good reason, if we can't or won't go forward with the project, where does that put us. Mr. Casserly said that there would be issues with the Anoka County Rail Authority but not with Burlington Northern because the contract is not with Burlington Northern. Commissioner Holm said he fully supported the MOU because it puts the commitment with the Anoka County Rail Authority and avoids any headaches with the construction of the tunnel and any liability issues that relate to that construction project. Chairperson Commers said that at this point we are not obligated to come up with any funds and the Rail Authority is obligated to go ahead with the construction of the tunnel. Dr. Burns, City Manager, asked about the possibility of creating a staging area along 61 S`, was this still in the works or has it been written off. Mr. Bolin said that the area would not provide enough space. Burlington Northern would want more space closer to where the rail tunnel would be. UPON A VOICE VOTE, CFIAIRPERSON COMMERS, CONIlVIISSIONER HOLM, CONIlVIISSIONER GABEL AND COMNIISSIONER BILLINGS VOTING AYE, COMMISSIONER MEYER VOTING NEY, CHAIltPERSON COMMERS DECLARED THE MOTION CARRIED ON A 4/1 VOTE INFORMATIONAL ITEMS• 1. Monthly Housing Report Paul Bolin, HRA Executive Director, said that in the month of October two loans were closed and two other loans were made. Year-to-date, 151oans have been closed. Operation Insulation has had only one visit year-to-date and the remodel visits have had three visits in October and 22 year-to-date. The Operation Insulation numbers are similar to other communities so it is not unique to Fridley. 2. Other Business Dr. Burns introduced Jim Kosluchar, the new Public Works Director. Commissioner Meyer asked to discuss the physical features of the tunnel. He didn't realize they were building a solitary tunnel. He questioned what the procedure would be if we got the funds to build the station, what would happen to portions of the tunnel. Mr. Bolin said that there would be a shaft in the center and the existing tunnel would be added on to. Commissioner Meyer said it looked like the tunnel would need to be taken apart to complete the station. Mr. Bolin said that he is removed from the details of the construction of the tunnel and if he were to answer it would be pure speculation. He believed all the details were in the plan that was provided. The engineer would be happy to meet with Commissioner Meyers to go over the plan and answer specific construction questions. Commissioner Meyer said he was not concerned with the actual construction, but with the station in the middle of the tunnel, there is no indication as to what would happen to the tunnel if this were to pass and he thought maybe two separate tunnel pieces would be a better answer. Scott Hickok, Community Development Director, said there was a plan with two tunnels and this is the design that has been contemplated since the beginning. It was anticipated that Fridley would have a park and ride on the east and west sides of the tracks. The engineer that is designing the box is closely working with the contractor that will be doing the work. Burlington Northern will put the box underground now so it will not disrupt their rail traffic in the future. When the attachments are to be added, they will add on to the box culvert. Mr. Bolin said the plans that were bid on; Anoka County is paying for the 160' long box. Eventually, the sides and middle will be cut out and drop in steps and an elevator shaft will be added. The bid does not include shafts and stairs. Commissioner Meyer said that is his point; that part of the tunnel will be taken apart to install the stairs and elevator. His other concern was the width of the tunnel. He did not think a 12' wide tunnel would handle both pedestrian and bicycle traffic. Mr. Hickok said that he did not recall not anticipating bicycles on the elevators. This is a way for people to commute, to ride their bikes to the rail station and take the rail to work. Commissioner Meyer said that he was not impressed by the dual purpose of the tunnel and did not think it would be wide enough. To construct a wider tunnel now would not take much more money that what is going to be spent. Chairperson Commers suggested that Commissioner Meyer speak with the engineer. ADJOURNMENT• MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Billings UPON A VOICE VOTE, ALL VOTING AYE, CFIAIRPERSON COMIV�RS DECLARED THE MOTION CARRIED UNANIlVIOUSLY AND THE MEETING ADJOURNED AT 9:10 P.M. Respectfully submitted, �������� � Krista Monsrud Recording Secretary e , CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING �l �r1� ]� �o� � Name and Address Agenda Item of interest