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Gordon Heitke January 28, 2008 Page 12 of 13 Subdivision 5. This subdivision describes the final council action on improvements, and imposes limitations on cost increases. The first sentence states that the Council "shall adopt a resolution approving the public improvements" when the proposed public improvements are "allowed under Subdivision 3." First, this language apparently requires the Council to approve the improvements, which is questionable given that the Council may have prudent reasons even at this step of the process to abandon the project. Second, Subdivision 3 simply describes the ballot, so that cross- reference is confusing. Further, the term "allowed" seems misplaced, as the question is whether a timely petition was filed, and if so whether the question was approved by voters. Confusion could be avoided by avoiding the introduction of a new undefined term. In addition, this entire subdivision seems to address only projects that are subject to reverse referendum (as it is included only in Section 8.09 dealing with that topic). There is no comparable final action on improvements financed with special assessments and other revenues that are not "general revenues." Arguably, in those cases Council's final action is the approval under Section 8.08, subdivision 1. However, Section 8.08 subdivision 2 seems to call for subsequent action (though as discussed above, that provision makes sense only in the case of improvements financed in part with general revenue). To maintain consistency within the Charter (and with state law), final council action should be required for all improvement projects, in the form of a resolution "ordering" the project. Such a resolution is required for bonds to be issued under Chapter 429, so ambiguity about whether such action has occurred must be avoided. Regarding cost increases, the major difficulty is one of practicality. Given the time frames necessary to move from feasibility study to bidding (nearly six months under the fastest track), cost increases may be reasonably expected. It is important to keep in mind that before assessments are levied, a second notice and hearing process must be followed, which gives owners another chance to provide input (and in fact to file legal objections challenging the amount of the assessment). A further observation is that this cost increase provision, like the final council resolution, apparently applies only to improvements that were subject to reverse referendum. This has the odd result of allowing cost increases where assessments are likely to be the largest source of funds (i.e., where costs are paid mostly from special assessments and the balance from non - general revenues), but putting limits on such increase where special assessments might finance only a fraction of the improvement cost (e.g., where only 20% of the cost is assessed and the balance paid by a tax levy). Section 8.10. Specified Commercial Area. Subdivision 1. This section is similar to the provision in the existing Charter that carves out special areas of the city where different rules apply. The existing Charter indicates that those special areas are entirely governed by Chapter 429 (with one exception). However, the proposed revision exempts the special area only from Sections 8.04 to 8.09. 327632v3 SJB LN140 -86 • • •