HomeMy WebLinkAbout06-24-2019 Council Special Work Session MinutesCITY COUNCIL WORK SESSION
June 24, 2019
APPROVED
1 CITY OF LINO LAKES
2 MINUTES
3
4 DATE :June 24, 2019
s TIME STARTED 6:55 p.m.
6 TIME ENDED 7:40 p.m.
7 MEMBERS PRESENT :Council Member Rafferty, Maher,
8 Manthey, Stoesz and Mayor Reinert
9 MEMBERS ABSENT :None
10
1 ] Staff members present: Public Safety Director John Swenson; Community Development
12 Director Michael Grochala; Finance Director Sarah Cotton; Cite Clerk Julie Bartell
13
14 Lyngblomsten Financial Assistance Request —Attorney Julie Eddington, Kennedy and
15 Graven, and Mikeala Huot, BakerTilly Municipal Advisors, were present.
16
17 Community Development Director Grochala noted that the council has previously
18 discussed the figures involved in this tax increment financing proposal and he noted
19 where that discussion left off. Staff was directed to look at shortening the period of the
20 tax increment. He noted that Ms. Huot would walk through the proposed framework of
21 the plan and Ms. Eddington would review proposed contract details.
22
23 Ms. Huot reviewed a PowerPoint including information on:
24 - Financial Assistance requested for certain elements of the development (senior
25 care building and detached townhomes);
26 - Proposed Assistance (initial request has been reduced by 1.4 million and fee credit
27 of $300,000 —net assistance $3.6 million -over 8.5 year period);
28 - Reduction of assistance based on developer need, fee credit through city policy,
29 expanded boundaries, use of pooled tax increment funds;
30 - Ways to reduce terms of assistance further (increased taxable value, inflation,
3 ] construction savings, additional fee credits);
32 - Draft tax increment financing plan (highlighted public purpose, qualification,
33 term);
34
35 Ms. Huot and Ms. Eddington responded to Council Member Maher's question about how
36 areas are included and excluded. It is based on project elements and to be certain that
37 the proposed plan meets legal requirements, staff has received verification from. the
38 Office of State Auditor about the areas included in this nlan.
39
40 - Tenn of the district;
41 - Estimated budget of revenues and expenditures;
42 - Contract for private development;
43 - Next steps.
CITY COUNCIL WORK SESSION June 24, 2019
APPROVED
45 Council Member Stoesz asked about the timing for certifying the base value and Ms.
46 Huot explained that the value will be based on a date and assessed value.
47
48 Mayor Reinert commented that the amount of tax increment has been reduced from an
49 original proposal of $10.5 million; adding the townhomes made a reduction possible. He
50 noted concern about the valuation placed on elements besides the townhomes; that seems
51 low and future increases in value will not be recognized. Ms. Huot said the final amount
52 of that valuation is not clear yet and if the valuation is higher, that would provide for
53 additional reduction in tax increment. The mayor remarked that the calendar looks
54 accurate as far as what can be done. He asked if there will be another valuation from the
55 county before the City commits on the plan. Ms. Huot said that the goal is to have the
56 best estimate prior to the public hearing. Mayor Reinert also mentioned the council's
57 request for some type of audit on construction costs.
58
59 Julie Eddington reviewed the contract for private development. She explained the uses
60 of the skilled care building and the percentages of use that are allowed. She also
61 explained how reductions in tax increment could be accomplished under the contract
62 language, including through reduced construction costs or sale of parcels sold at a certain
63 profit level. Basically all of the things that the city wants is included in the contract. The
64 contract is still under review by the developer and they may have some minor continents.
65 She added, regarding construction costs, that the City can hire a review of costs to make
66 sure they are in line with industry standards or add language to the contract for reviews
67 during construction.
68
69 Mayor Reinert asked, what if the permits for the skilled nursing aren't approved and that
70 doesn't proceed. Ms. Huot explained that the estimated value (cost) will still be
71 reviewed.
72
73 Mayor Reinert expressed support for the project occurring in the City. But he wants due
74 diligence on the plan. His goal for the tax increment plan has been six years but he isn't
75 sure that's possible.
76
77 Council Member Stoesz remarked that the contract contains the term "unavoidable
78 delays" at least fifteen times. Does staff see that as a possibility? Ms. Eddington said
79 she has never seen that happen; there are other delays that could be expected.
80
81 Council Member Stoesz remarked that notifying the public on this matter is a challenge
82 because it's so complex. How can the City inform residents in a way that is
83 understandable? Ms. Huot said the official notice includes language directing people to
84 contact staff with questions. Mayor Reinert asked staff to put together some bullet points
85 that explain clearly the benefits to the city.
86
87 The meeting was adjourned at 7:40 p.m.
88
2
CITY COUNCIL WORK SESSION
June 241 2019
APPROVED
89 These minutes were considered, corrected and approved at the regular Council meeting held on
90 July 8, 20190
91
92
93
94
95 Juliar�ie Bartell, City�ler
96