Loading...
10/27/1983 - City Council SpecialSPECIAL CITY COUNCIL MEETING THURSDAY OCTOBER 27, 1983 7:00 P.M. AGENDA I. Call Meeting to Order II. Formation &,:Desigriation of HRA III. Adoption of HRA Bylaws IV. Appointment of HRA Executive Director V. Tax Increment Financing Workshop VI. Other VII. Adjournment MEMO TO: HONORABLE MAYOR & CITY COUNCILMEMBERS FROM: CITY ADMINISTRATOR HEDGES DATE: OCTOBER 26, 1983 SUBJECT: SPECIAL CITY COUNCIL MEETING, OCTOBER 27, 1983 Formation and Designation of HRA In order to consider tax increment financing applications, the City must declare and organize a housing and redevelopment authority. Action was taken at the October 6, 1983 City Council meeting to set a public hearing to consider the establishment of a housing and redevelopment authority (HRA). Attached is a copy of a resolu- tion declaring the organization of a housing and redevelopment authority in and for the City of Eagan. The resolution is referenced as Resolution #1. Adoption of HRA Bylaws Assuming a housing and redevelopment authority is formed, it will be necessary to adopt bylaws, which is standard procedure for the establishment of an HRA. Attached is a copy of a resolution that sets forth action to adopt the bylaws and also a copy of the pro- posed bylaws. This resolution is referenced as Resolution #2. Appointment of HRA Executive Director It will be a requirement of the HRA to appoint an executive director of the HRA. A resolution was prepared appointing the City Adminis- trator as the executive director. This action is referenced as Resolution #4 and attached for your information. Special Note: Resolution #3 was calling for the designation of an HRA seal, which according to the City Attorney and bond counsel is not necessary and therefore is not .presented for consideration. Tax Increment Financing Workshop The finance committee has held three (3) meetings with City consul- tants to gather as many facts and learn as much as possible about tax increment financing. The finance committee is prepared, with the assistance of the City Administrator and consultants, to present a report to the City Council for review in what is entitled as the agenda item, "Tax Increment Financing Workshop". This portion of the special City Council meeting is not scheduled as a public hearing but intended to be a workshop at which the City Council will be provided an exchange of information from the consultants, finance committee and City Administrator regarding tax increment financing. There are no decisions required for tax increment finan- cing. The public hearing would be scheduled for November 15, 1983. October 27 Meeting Memo Page Two This workshop should be regarded as an opportunity for the City Council to learn more about tax increment financing and become bet- ter prepared for a decision that will be forthcoming at the November 15 meeting. The workshop will be informal and information will be provided through a brief presentation and questions that may be directed by the City Council to the consultants. Dave Kennedy who is retained by the LeFevre, Lefler, Kennedy, O'Brien & Drawz firm has prepared a letter that outlines most of the committee's deliberations. A copy of that letter is enclosed for your review. Also enclosed is a report of the last finance committee meeting held on October 25. The City's special fiscal consultant, Evenson Dodge, will be present Thursday night, and they, too, have prepared several numbers that were reviewed by the finance committee. En- closed is a copy of .the table and assumptions as outlined in an attached letter that seemed to best work for this tax increment financing application. This information will all be reviewed at the workshop session on Thursday. s/Thomas L. Hedges City Administrator TLH/hnd Extract of Minutes of Meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota Pursuant to due call and notice thereof, a meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, was duly held at the City Hall in said City on , the day of 1983, at o'clock, _.M. The following Commissioners were present: and the following were absent: Commissioner introduced the following written resolution and moved its adoption: HRA RESOLUTION N1 A RESOLUTION DECLARING THE ORGANIZATION OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EAGAN, MINNESOTA WHEREAS, the Fagan City Council has held a public hearing October 27, 1.983, to allow all persons present the opportunity to comment on the establishment of a Housing and Redeveloping Authority; and WHEREAS, the Eagan City Council has adopted Resolution No. which establishes the Housing and Redevelopment AuthorTin and for the City of Eagan; and WHEREAS, the Housing and Redevelopment Authority has received copies of all the appropriate documents allowing the establishment of a Housing and Redevelopment Authority. -- Y NOW, THEREFORE, BE,IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, that the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, be and is hereby organized pursuant to the Municipal Housing and Redevelopment Law of Minnesota, and is now authorized to transact business and exer- cise its powers in its area of operation as defined in said law. 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. -2- Extract of Minutes of Meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota Pursuant to due call and notice thereof, a meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, was duly held at the City Hall in said City on , the day of , 1983, at o'clock, _.M. The following Commissioners were present: and the following were absent: Commissioner introduced the following written resolution and moved its adoption: HRA RESOLUTION #2 A RESOLUTION ADOPTING THE BY-LAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EACAN, MINNESOTA WHEREAS, the City Staff has prepared By -Laws for the operation of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota; and WHEREAS, the Commissioners have reviewed the By -Laws. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota that the attached By -Laws be and are hereby adopted and approved as and for the By -Laws of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota. 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. BYLAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EAGAN, MINNESOTA AR.TICI,E I - THE AUTHORITY Section 1. Name of Authority. The name of the Authority shall be the "Housing and Redevelopment Authority in and for the City of Eagan, Minnesota". Section 2. Seal of Authority. The seal of the Authority shall be in the form ofcircle and shall bear the name of the Authority and the year of its organization. Section 3. Office of Authority. The offices of the Authority shall be at the City Hall in the City of Eagan, State of Minnesota, but the Authority may hold its meetings at such other place or places as it may designate by Resolution. ARTICLE, II -OFFICERS Section 1. Officers. The officers of the Authority shall be a Ch— ai— r a , Vice -Chairman, and a Secretary. Section 2. Chairman. The Chairman shall preside at all meetings of the Authority. Except as otherwise authorized by Resolution of the Authority, the Chairman shall sign all con- tracts, deeds, and other instruments made by the Authority. At each meeting the Chairman shall submit such recommendations and information as he may consider proper concerning the business, affairs, and policies of the Authority. Section 3. Vice -Chairman. The Vice -Chairman shall perform the duties of the Chairman in the absence or incapacity of the Chairman; and in case of the resignation or death of the Chairman, the Vice -Chairman shall perform such duties as are imposed on the Chairman until such time as the Authority shall select 'a new Chairman. Section 4. Secretary. The Secretary shall perform the duties of a Secretary for the Authority. Section 5. Executive Director. The Authority shall employ an Execs Director who shall have general supervision over the administration of its business and affairs, subject to the direction of the Authority. He shall be charged with the management of the housing projects of Authority. As assistant to the Secretary, the Executive Director in his own name and title shall keep the records of the Authority, shall act as Secretary of the meetings of the Authority and record all votes, and shall keep a record of the proceedings of the Authority in a journal of proceedings to be kept for such purpose, and shall perform all duties incident to his office. He shall keep in safe custody the seal of the Authority and shall have power to affix such seal to all contracts and instruments authorized to be executed by the Authority. He shall have the care and custody of all funds of the Authority and shall deposit the same in the name of the Authority in such bank or banks as the Authority may select. The Secretary - Treasurer shall sign all orders and checks for the payment of money and shall pay out and disburse such moneys under the direction of the Authority. Except as otherwise authorized by resolution of the Authority, all such orders and checks shall be counter -signed by the Chairman. He shall keep regular books of accounts showing receipts and expenditures and shall render to the Authority, at each regular meeting (or oftener when requested), an account of his transactions and also of the financial condi- tion of the Authority. He shall give such bond for the faithful performance of his duties as the Authority may determine. The compensation of the Executive Director shall be determined by the Authority. Section 6. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the Bylaws or rules and regulations of the Authority. Section 7. Flection or Appointment. The First Chair- man shall, pursuant to his appointment, serve in the capacity of Chairman until the expiration of his term of office as Commis- sioner. The Vice -Chairman, Secretary, and except in the case of the First Chairman, the Chairman shall be elected at the annual meeting of the Authority from among the Commissioners of the Authority, and shall hold office for one year or until their successors are elected and qualified. The Executive Director shall be appointed by the Authority. Any person appointed to fill the office of Executive Director, or any vacancy therein, shall have such term as the Authority fixes, but no Commissioner of the Authority shall be eligible to this office. -2- Section 8. Vacancies. Should the office of Chairman, Vice -Chairman, or Secretary dome vacant, the Authority shall elect a successor from its membership at the next regular meet- ing, and such election shall be for the unexpired term of said office. When the office of ,Executive Director becomes vacant, the Authority shall appoint a successor, as aforesaid. Section 9. Additional Personnel. The Authority may, from time tome, employ such personnel as it deems necessary to exercise its powers, duties, and functions as prescribed by the Municipal Housing and Redevelopment Law of Minnesota applicable thereto. The selection and compensation of such personnel (including the Executive Director) shall be determined by the Authority subject to the laws of the State of Minnesota. ARTICLE III - MEETINGS Section 1. Annual Meetinq. The annual meeting of the Authority shall be held on the first Monday of January at 7:30 o'clock P.M. at the regular meeting place of the Authority. In the event such date shall fall on a legal holiday, the annual meeting shall be held on the next succeeding secular day. Section 2. Regular Meeting. There shall be two regular meetseti—`ngs of the Authority held without notice at the regular meeting place of the Authority on the first Monday of January and the first Monday of June at 7:30 o'clock P.M. unless the same shall be a legal holiday, in which event said meeting shall be held on the next succeeding secular day. All other meetings required shall be Special Meetings as established in accordance with Section 3. Section 3. Special Meetings. Special meetings of the Authority may be called by the Chairman, or two members of the Authority, for the purpose of transacting any business designated in the call. The call for a special meeting may be delivered at any time prior to the time of the proposed meeting to.each member of the Authoritv or may be mailed to the business or home address of each member of the Authority at least twenty-four (24) hours prior to the date of such special meeting. At such special meeting, no business shall be considered other than as designated in the call, but if all of the members of the Authority are present at a special meeting, any and all business may be trans- acted at such special meeting. Section 4. Quorum. The powers of the Authority shall be vested in the Commissioners thereof in office from time to time. Three Commissioners shall constitute a quorum for;the purpose of conducting its business and exercising its powers for all other purposes, but a smaller number may adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may be taken by the Authority upon a vote of a majority of the Commissioners present. -3- Section 5. Order of Business. At the regular meeting of the AuthorT the following shall be the order of business: 1. Roll Call 2. Reading and approval of the minutes of the previous meeting 3. Bills and communications 4. Report of the Executive Director 5. Unfinished business 6. New business 7. Adjournment. All resolutions shall be in writing and shall be copied in the iournal of the proceedings of the Authority. Section 6. Manner 2f'2 The voting on all questions coming�ieho fore -the Autrity ll be by roll call and the yeas and nays shall be entered upon the minutes of such meeting. ARTICLE IV - AMENDMENTS Amendments to Bylaws. The Bylaws of the Authority shall be amended only with the approval of at least three of the members of the Authority at a regular or special meeting. -4- Extract of Minutes of Meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota Pursuant to due call and notice thereof, a meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, was duly held at the City Hall in said City on , the day of _ , 1983, at o'clock, .M. The following Commissioners were present: and the following were absent: Commissioner introduced the following written resolution and moved its adoption: HRA RESOLUTION #9 A RESOLUTION APPOINTING THOMAS HEDGES, CITY ADMINISTRATOR, AS EXECUTIVE DIRECTOR OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EAGAN, MINNESOTA WHEREAS, the By -Laws of the Housing and Redevelopment Authority in and for the City of Eagan require the appointment of an Executive Director to have general supervision over the administration of its business and affairs; and WHEREAS, Thomas Hedges is currently employed as City Administrator for the City of Eagan; and WHEREAS, the duties of the City Administrator and the Executive Director are similar in nature. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of WHEREAS, the duties of the City Administrator and the Executive Director are similar in nature. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota hereby appoint Thomas Hedges to the position of Executive Director for the same period as he shall hold the office of City Administrator for the City of Eagan. 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. LeFevere Lcf Icr Kennedy O'Brien & Drawz A 1'rolr+,ionul A,,, ,;: dnn 2000 First Bank Place West Minneapolis October 24, 1983 Minnesota 55402 Telephone 612-333-0543 Clayton L. LeFevere Herbert P. Lefler Mr. Tom Hedges J. Dennis O'Brien John E.Drawz City Administrator David J. Kennedy City of Eagan John B, Dean 3795 Pilot Knob Road Glenn E, Purdue Richard J. Schieller Eagan, Minnesota 55122 Charles L. LeFevere Herbert P. Lefler III Re: Race Track Project - Finance Committee Decisions Jeflrey J. Strand Mary J. Bjorklund John G. Kressel Dear Tom: Dayle Nolan CindyYou've iforhCit Council the A. Nash Nash ouve asme to summarize Michaelel A. the y Luke R. Komarek discussion of and recommendations made by Mayor Blomquist Joan N. Ericksen and Councilmember Smith as the Finance Committee at its noon Elizabeth D. Moran Brian F. Rice meeting on Thursday, October 20th. The meeting was also Lorraine S. Clugg attended by you, myself, other legal financial consultants James J. Thomson, Jr, to the City, and Steve Pflaum representing the Jockey Club. The Committee's deliberations centered on two principal points: 1) The practical and legal considerations surrounding the choice of a redevelopment tax increment financing district (Redevelopment TIF) or an economic development tax increment financing district (Economic Development TIF) as the financing vehicle for the race track project; and 2) the inclusion of the remaining Laukka-Beck pro- perties in either a TIF District or in a larger development district or redevelopment Project area. (There was also considerable discussion about timing of various hearings and meetings, and scheduling of the project, but I assume you'll cover these matters with the Council.) Mr. Tom Hedges October 24, 1983 Page Two General Before summarizing the Committees actions on the two points above, I think a brief general description of the concepts and terms involved would be helpful to the Council both in their reading of Faegre & Benson's and my letters of October 19th, and in understanding what I'm about to say. Tax Increment Financing (TIF) is a method of financing public improvements aimed at redevelopment or development by the use of tax revenues (increments) resulting from increases in the taxable value of taxable property in a geographically defined area to retire principal and interest on City bonds issued for that purpose. The increments may be used in the area for other authorized purposes, too, but debt service on the bonds is the primary purpose. Tax Increment Financing (TIF)District is a specifically described geographic area (which may be a single tract of land or several non-contiguous tracts) which generates the tax increments. The law authorizes three types of TIF Districts. Redevelopment TIF District is a TIF District designed to eliminate or prevent blight, economic deterioration or under -utilization or uneconomic use of land. Economic Development TIF District is a TIF District designed to attract industry, increase employment, and enhance tax base. Housing TIF District is a TIF District designed to provide affordable housing for persons of low and moderate income as defined by certain federal and state rules. Project is an undertaking by the City of its Housing and Redevelopment Authority (HRA) to conduct a redevelopment housing or economic development activity under one of several state laws; for example, a redevelopment project under Minnesota Statutes, Chapter 462, a Municipal Development District, Chapter 472A, or an industrial development project under Chapter 474. The geographic area of the project may be (and often is) larger than that of the TIF District within it, and tax increments may be expended for project costs anywhere in the Project Area if a Tax Increment Financing Plan so provides. Mr. Tom Hedges October 24, 1983 Page Three Tax Increment Financing Plan (TIF Plan) is a formal state- ment of the project's objectives, activities, costs and method of financing, approved by the City Council after public hearing, which controls the expenditures of the tax increments, that is, tax increments may only be expended for authorized purposes set out in the TIF Plan. Tax Increment Bonds (TIF Bonds) are bonds issued and sold by the City in the normal fashion (like improvement bonds for example) the proceeds of which are used to pay the costs identified in the TIF Plan. The tax increments from the TIF District (and sometimes special assessments as well) necessary to pay the TIF Bonds are pledged to a debt service fund for the TIF Bonds. TIF Bonds are almost general obligations of the City backed by taxing power, but the bond issues are almost always structured in such a way that the increments are adequate to retire the TIF Bonds without a tax levy. If the forecast increments do not materialize, however, the City must make up the difference by a City-wide tax levy. TIF Bonds payable solely from tax increments may be, but seldom are, issued. The Finance Committee's discussion about the race track have revolved around (1) the establishment of a Redevelopment TIF District as part of a redevelopment project undertaken by the HRA with the TIF District and project area being co- terminous, and (2) the establishment of an Economic Development TIF District as part of an economic development project undertaken by the HRA with the boundaries of the TIF District and the project area being co -terminous. The following summarizes, I think, their thinking and discussions thus far. 1. Redevelopment vs. Economic Development. The basic objective of a TIF program is to retire the TIF Bonds as quickly as possible consistent with the tax increments available to pay them, thus getting the project real property back on the tax rolls, increasing the tax base, and relieving the City of the debt obligations. An Economic Development TIF District must effectively be terminated within eight years (ten years is possible, but not always achievable). The City Council findings legally necessary to establish it are quite general, easily made, and virtually unassailable from a legal point of view. A Redevelopment TIF District may last for 25 years. The required findings are quite specific, can be made only upon factual data available to the Council, and are more susceptible to legal attack. In summary, these findings are that the Mr. Tom Hedges October 24, 1983 Page Four market value of the land in the TIF District plus the cost of preparing it for the project must exceed the expected fair market value of the land after preparation for the project. The committee has been informed that the necessary data to support that finding will be supplied. The Committee was also informed that tax increment data showing the shortest possible time for the retirement of bonded debt for project costs will be supplied. The Committee was of the opinion that if it is possible to retire the bonds within an eight to ten year period, that it would recommend to the HRA and the City Council that an Economic Development TIF District rather than a Redevelopment TIF District, be established. The choice is basically a function of two variables: the exact costs to be financed (which will also be supplied), and the tax increments available to retire the debt incurred for the costs. Only when the cost figures, the tax increment data and the land preparation data are in hand, can the Council make a decision, and it is possible that the decision may not be finally made until November 15th, the scheduled date of the public hearing on the TIF Plan. 2. Remaining Laukka-Beck Property. The Jockey Club will be purchasing only a portion of the Laukka-Beck property for the race track project. It is possible for the City to designate the entire tract as a redevelopment project area or an economic development area and to establish the corres- ponding TIF District either on the race track parcels only or co -terminous with the project area. The larger project area with the small TIF District would enable the City to expend tax increments for public costs anywhere in the project area, and the co -terminous approach would enable the City to capture increments from increased valuation in the entire tract, provided the costs to be financed are properly identified in the TIF Plan either at the outset or in a duly adopted modification of it. (The TIF smaller district could not be enlarged to cover the entire tract, however, after five years.) The Committee felt that there was no compelling reason to include the remaining Laukka-Beck property in either the project area or the TIF District because: 1) there are no present plans for development or tax increment supported activities in the area; 2) including the property in the project area or the TIF District, or both, might stimulate requests for additional TIF projects that may not be needed; 3) the project area and the TIF District can be expanded to include the area if that becomes desirable in the next five years; and 4) a new TIF proposal in the area can be con- sidered on its own merits at any time. Mr. Tom Hedges October 24, 1983 Page Five I think this accurately summarizes the Finance Committee's deliberations thus far. Yo rs very truly, David J. Kennedy DJK:caw CC: Paul Hauge Steve Rosholt Beatta Blomquist James A. Smith SPECIAL CITY COUNCIL MEETING THURSDAY OCTOBER 27, 1983 7:00 P.M. AGENDA I. Call Meeting to Order II. Formation &,:Desigriation of HRA III. Adoption of HRA Bylaws IV. Appointment of HRA Executive Director V. Tax Increment Financing Workshop VI. Other VII. Adjournment MEMO TO: HONORABLE MAYOR & CITY COUNCILMEMBERS FROM: CITY ADMINISTRATOR HEDGES DATE: OCTOBER 26, 1983 SUBJECT: SPECIAL CITY COUNCIL MEETING, OCTOBER 27, 1983 Formation and Designation of HRA In order to consider tax increment financing applications, the City must declare and organize a housing and redevelopment authority. Action was taken at the October 6, 1983 City Council meeting to set a public hearing to consider the establishment of a housing and redevelopment authority (HRA). Attached is a copy of a resolu- tion declaring the organization of a housing and redevelopment authority in and for the City of Eagan. The resolution is referenced as Resolution #1. Adoption of HRA Bylaws Assuming a housing and redevelopment authority is formed, it will be necessary to adopt bylaws, which is standard procedure for the establishment of an HRA. Attached is a copy of a resolution that sets forth action to adopt the bylaws and also a copy of the pro- posed bylaws. This resolution is referenced as Resolution #2. Appointment of HRA Executive Director It will be a requirement of the HRA to appoint an executive director of the HRA. A resolution was prepared appointing the City Adminis- trator as the executive director. This action is referenced as Resolution #4 and attached for your information. Special Note: Resolution #3 was calling for the designation of an HRA seal, which according to the City Attorney and bond counsel is not necessary and therefore is not .presented for consideration. Tax Increment Financing Workshop The finance committee has held three (3) meetings with City consul- tants to gather as many facts and learn as much as possible about tax increment financing. The finance committee is prepared, with the assistance of the City Administrator and consultants, to present a report to the City Council for review in what is entitled as the agenda item, "Tax Increment Financing Workshop". This portion of the special City Council meeting is not scheduled as a public hearing but intended to be a workshop at which the City Council will be provided an exchange of information from the consultants, finance committee and City Administrator regarding tax increment financing. There are no decisions required for tax increment finan- cing. The public hearing would be scheduled for November 15, 1983. October 27 Meeting Memo Page Two This workshop should be regarded as an opportunity for the City Council to learn more about tax increment financing and become bet- ter prepared for a decision that will be forthcoming at the November 15 meeting. The workshop will be informal and information will be provided through a brief presentation and questions that may be directed by the City Council to the consultants. Dave Kennedy who is retained by the LeFevre, Lefler, Kennedy, O'Brien & Drawz firm has prepared a letter that outlines most of the committee's deliberations. A copy of that letter is enclosed for your review. Also enclosed is a report of the last finance committee meeting held on October 25. The City's special fiscal consultant, Evenson Dodge, will be present Thursday night, and they, too, have prepared several numbers that were reviewed by the finance committee. En- closed is a copy of .the table and assumptions as outlined in an attached letter that seemed to best work for this tax increment financing application. This information will all be reviewed at the workshop session on Thursday. s/Thomas L. Hedges City Administrator TLH/hnd Extract of Minutes of Meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota Pursuant to due call and notice thereof, a meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, was duly held at the City Hall in said City on , the day of 1983, at o'clock, _.M. The following Commissioners were present: and the following were absent: Commissioner introduced the following written resolution and moved its adoption: HRA RESOLUTION N1 A RESOLUTION DECLARING THE ORGANIZATION OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EAGAN, MINNESOTA WHEREAS, the Fagan City Council has held a public hearing October 27, 1.983, to allow all persons present the opportunity to comment on the establishment of a Housing and Redeveloping Authority; and WHEREAS, the Eagan City Council has adopted Resolution No. which establishes the Housing and Redevelopment AuthorTin and for the City of Eagan; and WHEREAS, the Housing and Redevelopment Authority has received copies of all the appropriate documents allowing the establishment of a Housing and Redevelopment Authority. -- Y NOW, THEREFORE, BE,IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, that the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, be and is hereby organized pursuant to the Municipal Housing and Redevelopment Law of Minnesota, and is now authorized to transact business and exer- cise its powers in its area of operation as defined in said law. 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. -2- Extract of Minutes of Meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota Pursuant to due call and notice thereof, a meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, was duly held at the City Hall in said City on , the day of , 1983, at o'clock, _.M. The following Commissioners were present: and the following were absent: Commissioner introduced the following written resolution and moved its adoption: HRA RESOLUTION #2 A RESOLUTION ADOPTING THE BY-LAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EACAN, MINNESOTA WHEREAS, the City Staff has prepared By -Laws for the operation of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota; and WHEREAS, the Commissioners have reviewed the By -Laws. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota that the attached By -Laws be and are hereby adopted and approved as and for the By -Laws of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota. 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. BYLAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EAGAN, MINNESOTA AR.TICI,E I - THE AUTHORITY Section 1. Name of Authority. The name of the Authority shall be the "Housing and Redevelopment Authority in and for the City of Eagan, Minnesota". Section 2. Seal of Authority. The seal of the Authority shall be in the form ofcircle and shall bear the name of the Authority and the year of its organization. Section 3. Office of Authority. The offices of the Authority shall be at the City Hall in the City of Eagan, State of Minnesota, but the Authority may hold its meetings at such other place or places as it may designate by Resolution. ARTICLE, II -OFFICERS Section 1. Officers. The officers of the Authority shall be a Ch— ai— r a , Vice -Chairman, and a Secretary. Section 2. Chairman. The Chairman shall preside at all meetings of the Authority. Except as otherwise authorized by Resolution of the Authority, the Chairman shall sign all con- tracts, deeds, and other instruments made by the Authority. At each meeting the Chairman shall submit such recommendations and information as he may consider proper concerning the business, affairs, and policies of the Authority. Section 3. Vice -Chairman. The Vice -Chairman shall perform the duties of the Chairman in the absence or incapacity of the Chairman; and in case of the resignation or death of the Chairman, the Vice -Chairman shall perform such duties as are imposed on the Chairman until such time as the Authority shall select 'a new Chairman. Section 4. Secretary. The Secretary shall perform the duties of a Secretary for the Authority. Section 5. Executive Director. The Authority shall employ an Execs Director who shall have general supervision over the administration of its business and affairs, subject to the direction of the Authority. He shall be charged with the management of the housing projects of Authority. As assistant to the Secretary, the Executive Director in his own name and title shall keep the records of the Authority, shall act as Secretary of the meetings of the Authority and record all votes, and shall keep a record of the proceedings of the Authority in a journal of proceedings to be kept for such purpose, and shall perform all duties incident to his office. He shall keep in safe custody the seal of the Authority and shall have power to affix such seal to all contracts and instruments authorized to be executed by the Authority. He shall have the care and custody of all funds of the Authority and shall deposit the same in the name of the Authority in such bank or banks as the Authority may select. The Secretary - Treasurer shall sign all orders and checks for the payment of money and shall pay out and disburse such moneys under the direction of the Authority. Except as otherwise authorized by resolution of the Authority, all such orders and checks shall be counter -signed by the Chairman. He shall keep regular books of accounts showing receipts and expenditures and shall render to the Authority, at each regular meeting (or oftener when requested), an account of his transactions and also of the financial condi- tion of the Authority. He shall give such bond for the faithful performance of his duties as the Authority may determine. The compensation of the Executive Director shall be determined by the Authority. Section 6. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the Bylaws or rules and regulations of the Authority. Section 7. Flection or Appointment. The First Chair- man shall, pursuant to his appointment, serve in the capacity of Chairman until the expiration of his term of office as Commis- sioner. The Vice -Chairman, Secretary, and except in the case of the First Chairman, the Chairman shall be elected at the annual meeting of the Authority from among the Commissioners of the Authority, and shall hold office for one year or until their successors are elected and qualified. The Executive Director shall be appointed by the Authority. Any person appointed to fill the office of Executive Director, or any vacancy therein, shall have such term as the Authority fixes, but no Commissioner of the Authority shall be eligible to this office. -2- Section 8. Vacancies. Should the office of Chairman, Vice -Chairman, or Secretary dome vacant, the Authority shall elect a successor from its membership at the next regular meet- ing, and such election shall be for the unexpired term of said office. When the office of ,Executive Director becomes vacant, the Authority shall appoint a successor, as aforesaid. Section 9. Additional Personnel. The Authority may, from time tome, employ such personnel as it deems necessary to exercise its powers, duties, and functions as prescribed by the Municipal Housing and Redevelopment Law of Minnesota applicable thereto. The selection and compensation of such personnel (including the Executive Director) shall be determined by the Authority subject to the laws of the State of Minnesota. ARTICLE III - MEETINGS Section 1. Annual Meetinq. The annual meeting of the Authority shall be held on the first Monday of January at 7:30 o'clock P.M. at the regular meeting place of the Authority. In the event such date shall fall on a legal holiday, the annual meeting shall be held on the next succeeding secular day. Section 2. Regular Meeting. There shall be two regular meetseti—`ngs of the Authority held without notice at the regular meeting place of the Authority on the first Monday of January and the first Monday of June at 7:30 o'clock P.M. unless the same shall be a legal holiday, in which event said meeting shall be held on the next succeeding secular day. All other meetings required shall be Special Meetings as established in accordance with Section 3. Section 3. Special Meetings. Special meetings of the Authority may be called by the Chairman, or two members of the Authority, for the purpose of transacting any business designated in the call. The call for a special meeting may be delivered at any time prior to the time of the proposed meeting to.each member of the Authoritv or may be mailed to the business or home address of each member of the Authority at least twenty-four (24) hours prior to the date of such special meeting. At such special meeting, no business shall be considered other than as designated in the call, but if all of the members of the Authority are present at a special meeting, any and all business may be trans- acted at such special meeting. Section 4. Quorum. The powers of the Authority shall be vested in the Commissioners thereof in office from time to time. Three Commissioners shall constitute a quorum for;the purpose of conducting its business and exercising its powers for all other purposes, but a smaller number may adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may be taken by the Authority upon a vote of a majority of the Commissioners present. -3- Section 5. Order of Business. At the regular meeting of the AuthorT the following shall be the order of business: 1. Roll Call 2. Reading and approval of the minutes of the previous meeting 3. Bills and communications 4. Report of the Executive Director 5. Unfinished business 6. New business 7. Adjournment. All resolutions shall be in writing and shall be copied in the iournal of the proceedings of the Authority. Section 6. Manner 2f'2 The voting on all questions coming�ieho fore -the Autrity ll be by roll call and the yeas and nays shall be entered upon the minutes of such meeting. ARTICLE IV - AMENDMENTS Amendments to Bylaws. The Bylaws of the Authority shall be amended only with the approval of at least three of the members of the Authority at a regular or special meeting. -4- Extract of Minutes of Meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota Pursuant to due call and notice thereof, a meeting of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota, was duly held at the City Hall in said City on , the day of _ , 1983, at o'clock, .M. The following Commissioners were present: and the following were absent: Commissioner introduced the following written resolution and moved its adoption: HRA RESOLUTION #9 A RESOLUTION APPOINTING THOMAS HEDGES, CITY ADMINISTRATOR, AS EXECUTIVE DIRECTOR OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EAGAN, MINNESOTA WHEREAS, the By -Laws of the Housing and Redevelopment Authority in and for the City of Eagan require the appointment of an Executive Director to have general supervision over the administration of its business and affairs; and WHEREAS, Thomas Hedges is currently employed as City Administrator for the City of Eagan; and WHEREAS, the duties of the City Administrator and the Executive Director are similar in nature. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of WHEREAS, the duties of the City Administrator and the Executive Director are similar in nature. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Housing and Redevelopment Authority in and for the City of Eagan, Minnesota hereby appoint Thomas Hedges to the position of Executive Director for the same period as he shall hold the office of City Administrator for the City of Eagan. 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. LeFevere Lcf Icr Kennedy O'Brien & Drawz A 1'rolr+,ionul A,,, ,;: dnn 2000 First Bank Place West Minneapolis October 24, 1983 Minnesota 55402 Telephone 612-333-0543 Clayton L. LeFevere Herbert P. Lefler Mr. Tom Hedges J. Dennis O'Brien John E.Drawz City Administrator David J. Kennedy City of Eagan John B, Dean 3795 Pilot Knob Road Glenn E, Purdue Richard J. Schieller Eagan, Minnesota 55122 Charles L. LeFevere Herbert P. Lefler III Re: Race Track Project - Finance Committee Decisions Jeflrey J. Strand Mary J. Bjorklund John G. Kressel Dear Tom: Dayle Nolan CindyYou've iforhCit Council the A. Nash Nash ouve asme to summarize Michaelel A. the y Luke R. Komarek discussion of and recommendations made by Mayor Blomquist Joan N. Ericksen and Councilmember Smith as the Finance Committee at its noon Elizabeth D. Moran Brian F. Rice meeting on Thursday, October 20th. The meeting was also Lorraine S. Clugg attended by you, myself, other legal financial consultants James J. Thomson, Jr, to the City, and Steve Pflaum representing the Jockey Club. The Committee's deliberations centered on two principal points: 1) The practical and legal considerations surrounding the choice of a redevelopment tax increment financing district (Redevelopment TIF) or an economic development tax increment financing district (Economic Development TIF) as the financing vehicle for the race track project; and 2) the inclusion of the remaining Laukka-Beck pro- perties in either a TIF District or in a larger development district or redevelopment Project area. (There was also considerable discussion about timing of various hearings and meetings, and scheduling of the project, but I assume you'll cover these matters with the Council.) Mr. Tom Hedges October 24, 1983 Page Two General Before summarizing the Committees actions on the two points above, I think a brief general description of the concepts and terms involved would be helpful to the Council both in their reading of Faegre & Benson's and my letters of October 19th, and in understanding what I'm about to say. Tax Increment Financing (TIF) is a method of financing public improvements aimed at redevelopment or development by the use of tax revenues (increments) resulting from increases in the taxable value of taxable property in a geographically defined area to retire principal and interest on City bonds issued for that purpose. The increments may be used in the area for other authorized purposes, too, but debt service on the bonds is the primary purpose. Tax Increment Financing (TIF)District is a specifically described geographic area (which may be a single tract of land or several non-contiguous tracts) which generates the tax increments. The law authorizes three types of TIF Districts. Redevelopment TIF District is a TIF District designed to eliminate or prevent blight, economic deterioration or under -utilization or uneconomic use of land. Economic Development TIF District is a TIF District designed to attract industry, increase employment, and enhance tax base. Housing TIF District is a TIF District designed to provide affordable housing for persons of low and moderate income as defined by certain federal and state rules. Project is an undertaking by the City of its Housing and Redevelopment Authority (HRA) to conduct a redevelopment housing or economic development activity under one of several state laws; for example, a redevelopment project under Minnesota Statutes, Chapter 462, a Municipal Development District, Chapter 472A, or an industrial development project under Chapter 474. The geographic area of the project may be (and often is) larger than that of the TIF District within it, and tax increments may be expended for project costs anywhere in the Project Area if a Tax Increment Financing Plan so provides. Mr. Tom Hedges October 24, 1983 Page Three Tax Increment Financing Plan (TIF Plan) is a formal state- ment of the project's objectives, activities, costs and method of financing, approved by the City Council after public hearing, which controls the expenditures of the tax increments, that is, tax increments may only be expended for authorized purposes set out in the TIF Plan. Tax Increment Bonds (TIF Bonds) are bonds issued and sold by the City in the normal fashion (like improvement bonds for example) the proceeds of which are used to pay the costs identified in the TIF Plan. The tax increments from the TIF District (and sometimes special assessments as well) necessary to pay the TIF Bonds are pledged to a debt service fund for the TIF Bonds. TIF Bonds are almost general obligations of the City backed by taxing power, but the bond issues are almost always structured in such a way that the increments are adequate to retire the TIF Bonds without a tax levy. If the forecast increments do not materialize, however, the City must make up the difference by a City-wide tax levy. TIF Bonds payable solely from tax increments may be, but seldom are, issued. The Finance Committee's discussion about the race track have revolved around (1) the establishment of a Redevelopment TIF District as part of a redevelopment project undertaken by the HRA with the TIF District and project area being co- terminous, and (2) the establishment of an Economic Development TIF District as part of an economic development project undertaken by the HRA with the boundaries of the TIF District and the project area being co -terminous. The following summarizes, I think, their thinking and discussions thus far. 1. Redevelopment vs. Economic Development. The basic objective of a TIF program is to retire the TIF Bonds as quickly as possible consistent with the tax increments available to pay them, thus getting the project real property back on the tax rolls, increasing the tax base, and relieving the City of the debt obligations. An Economic Development TIF District must effectively be terminated within eight years (ten years is possible, but not always achievable). The City Council findings legally necessary to establish it are quite general, easily made, and virtually unassailable from a legal point of view. A Redevelopment TIF District may last for 25 years. The required findings are quite specific, can be made only upon factual data available to the Council, and are more susceptible to legal attack. In summary, these findings are that the Mr. Tom Hedges October 24, 1983 Page Four market value of the land in the TIF District plus the cost of preparing it for the project must exceed the expected fair market value of the land after preparation for the project. The committee has been informed that the necessary data to support that finding will be supplied. The Committee was also informed that tax increment data showing the shortest possible time for the retirement of bonded debt for project costs will be supplied. The Committee was of the opinion that if it is possible to retire the bonds within an eight to ten year period, that it would recommend to the HRA and the City Council that an Economic Development TIF District rather than a Redevelopment TIF District, be established. The choice is basically a function of two variables: the exact costs to be financed (which will also be supplied), and the tax increments available to retire the debt incurred for the costs. Only when the cost figures, the tax increment data and the land preparation data are in hand, can the Council make a decision, and it is possible that the decision may not be finally made until November 15th, the scheduled date of the public hearing on the TIF Plan. 2. Remaining Laukka-Beck Property. The Jockey Club will be purchasing only a portion of the Laukka-Beck property for the race track project. It is possible for the City to designate the entire tract as a redevelopment project area or an economic development area and to establish the corres- ponding TIF District either on the race track parcels only or co -terminous with the project area. The larger project area with the small TIF District would enable the City to expend tax increments for public costs anywhere in the project area, and the co -terminous approach would enable the City to capture increments from increased valuation in the entire tract, provided the costs to be financed are properly identified in the TIF Plan either at the outset or in a duly adopted modification of it. (The TIF smaller district could not be enlarged to cover the entire tract, however, after five years.) The Committee felt that there was no compelling reason to include the remaining Laukka-Beck property in either the project area or the TIF District because: 1) there are no present plans for development or tax increment supported activities in the area; 2) including the property in the project area or the TIF District, or both, might stimulate requests for additional TIF projects that may not be needed; 3) the project area and the TIF District can be expanded to include the area if that becomes desirable in the next five years; and 4) a new TIF proposal in the area can be con- sidered on its own merits at any time. Mr. Tom Hedges October 24, 1983 Page Five I think this accurately summarizes the Finance Committee's deliberations thus far. Yo rs very truly, David J. Kennedy DJK:caw CC: Paul Hauge Steve Rosholt Beatta Blomquist James A. Smith