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HomeMy WebLinkAbout07-19-1995 • MOUNDS VIEW PLANNING COMMISSION JULY 19, 1995 7:00 P.M. AGENDA SESSION 1. Review Minutes: July 5, 1995 (Enclosed) 2. Discussion of Variance Request of Larry Beach, 7305 Knollwood Drive, Planning Case No. 416-95 3. Discussion of Development Review Request of Wolf and Associates, 4860 Mustang Circle, Planning Case No. 421-95 • **************************************************************** APPLICANTS: YOUR AI I ENDANCE AT THIS MEETING IS REQUESTED. PLEASE NOTIFY CITY HALL AT 784-3055 IF YOU ARE UNABLE TO AITEND. THANK YOU. **************************************************************** • AP e PROCEEDINGS OF THE PLANNING COMMISSION 011 CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting July 5, 1995 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 The Mounds View Planning Commission was 1. Call To Order called to order by Chair Peterson at 7: 02 p.m. on July 5, 1995. MEMBERS PRESENT: Commissioners Miller, 2 . Roll Call Stevenson, Johnston and Chair Peterson. (Commissioners Colleen, Nelson and Ruggles had excused absences. ) ALSO PRESENT: Community Development Coordinator Harrington. Motion/Second: Stevenson/Johnston to 3 . Approval of • approve the minutes of June 7, 1995. Minutes: June 7, 1995. 4 ayes 0 nays Motion Carried There were no resident requests or 4 . Resident comments from the floor. Requests and Comments The applicant was not present. 5. Consideration of Resolution Planner Harrington reviewed the variance - No. 420-95 request by Bioclean Mobile Wash, 2151 Regarding Mustang Drive. Variance Request by Commissioner Stevenson informed the Bioclean Mobile Commission that he visited the site and Wash, 2151 reported that he sees no other Mustang. Drive, alternatives for the applicant. Planning Case Commissioner Johnston concurred with No. 419-95 Stevenson. Commissioner Peterson stated that the granting of the variance would not increase the variance granted in 1981 for the original building • construction. Motion/Second: Stevenson/Miller to approve Resolution No. 420-95 • Mounds View Planning Commission July 5, 1995 Regular Meeting Page 2 recommending approval of the variance request by Bioclean, 2151 Mustang Drive, Planning Case No. 414-95. 4 ayes 0 nays Motion Carried The applicant was not present. 6. Consideration of Resolution Planner Harrington reviewed the minor No. 421-95 subdivision request by Sue Powell, 7474 Regarding Minor Knollwood Drive. Staff review indicates Subdivision that the request meets all applicable Request of Sue Code requirements. Powell, 7474 Knollwood Motion/Second: Miller/Johnston to Drive, Planning approve Resolution No. 421-95 Case No. 420-95 recommending approval of the minor subdivision request of Sue Powell, 7474 Knollwood Drive, Planning Case No. 420-95. 4 ayes 0 nays Motion Carried• The applicant, Glen Harstad, was 7 . Consideration present. of Resolution No. 421-95 Planner Harrington reviewed the request Regarding for an amendment to the conditional use Conditional Use permit granted for Suds & Shine Car Permit Wash, 2340 Highway 10. Staff added that Amendment per Planning Commission direction, a Request by Glen public informational meeting notice was - Harstad, 2340 sent to property owners within 350 feet Highway 10, of the subject property. Planning Case No. 415-95 Chair Peterson opened the informational meeting. Mr. Lee Olson, 5289 O'Connell Drive, addressed the Commission. Mr. Olson stated that the major problem he experiences with the Suds & Shine property and the Brook's Fina gas station is excessive car stereo noise. He added that when vehicles are being vacuumed, the customers often leave their windows and trunks open creating the excessive noise. • Mounds View Planning Commission July 5, 1995 •egular Meeting Page 3 Chair Peterson asked Mr. Olson if he noticed a lot of business at the two car washes. Mr. Olson stated that primarily early mornings and Saturdays were busiest. Commissioner Johnston asked if noise from the mechanical equipment was audible. Mr. Olson stated that the noise from Suds & Shine was primarily music but mechanical noise could be heard from the Fina station. Commission Miller asked when the noise was most bothersome. Mr. Olson again replied, Saturday mornings. Chair Peterson asked if there were any problems with rowdiness at the site. Mr. Olson replied, no. • Commissioner Stevenson stated that he was willing to amend the conditional use permit to reduce the required hours that an attendant be present, however, he was less willing to allow the operation to be open 24 hours. Commissioner Miller asked how early the operation is currently open. The applicant, Glen Harstad, stated that the current hours of operation are 7: 00 a.m. to 9 : 00 p.m. He went on to add that 10 to 15 percent. of his business comes after 10: 00 p.m. and before 7 : 00 a.m. He encouraged any neighbors experiencing problem with noise to contact the local authorities. Dennis Richardson, representing the current owner of the property, stated that he wants the facility to be a quality-run operation. He added that a possible solution would be to put up signs making customers aware of noise considerations. He further added that 111 when the original conditional use permit was granted he did not feel staying open 24 hours a day was economically feasible Mounds View Planning Commission July 5, 1995 Regular Meeting Page 4 • because of the requirement for an on- duty attendant. Chair Peterson asked the applicant whether his clientele is local or transient. The applicant replied that his customers are primarily local. Commissioner Johnston stated that he is willing to amend the conditional use permit for a trial period of six months. Chair Peterson concurred with Commissioner Johnston's suggestion. Commissioners Miller and Stevenson also agreed to the amendment. Staff was directed by the Commission to prepare a resolution amending the conditional use permit for Suds & Shine car wash, 2340 Highway 10. Planner Harrington informed the 8 . Staff Report • Commission of a State law which took effect July 1, 1995, which requires government agencies to take action on written planning requests within sixty days of their receipt. He added that the Minnesota Chapter of the American Planning Association will be holding an informational seminar on the ramifications of this law. He stated that he will update the Commission Members present at the June 21, 1995, 9 . Chair Report agenda session included Commissioners Nelson, Miller, Johnston, Colleen, Ruggles, Stevenson and Chair Peterson. There being no further business before 10. Adjournment the Commission, Chair Peterson adjourned the meeting at 7: 55 p.m. Respectfully Submitted, Paul Harrington Community Development Coordinator • MEMORANDUM TO: PLANNING COMMISSION FROM: PAUL HARRINGTON, COMMUNITY DEVELOPMENT COORDINATOR DATE: July 12, 1995 SUBJECT: VARIANCE REQUEST - 7305 KNOLLWOOD DRIVE LARRY BEACH, PLANNING CASE NO. 416-95 Larry Beach has made application for a variance on the property located at 7305 Knollwood Drive. In May of this year, the applicant applied and received approval for a zero lot line subdivision of the subject property in order to build four (4) owner occupied townhomes. Within the past month, while submitting building plans for the townhomes, the applicant discovered that enclosed porches he wished to construct on the back of three (3) of the units encroached upon the City defined rear yard setback. Specifically, the porches encroached six (6) to seven (7) feet into the required rear yard setback. • Because of this, Mr. Beach has made application for a variance for the three (3) porches. The fourth unit will simply have a deck which the code defines as being exempted from setback requirements down to a minimum of two (2) feet. In speaking with the applicant, he has expressed a hardship in that the original platting of the property, that being prior to his ownership and subsequent further subdivision, laid out lot lines which were not square and therefore cause problems in locating structures on the parcel. The location of the proposed townhomes are as far forward on the lots as is allowed by Municipal Code, and the alternatives for the applicant seem to be somewhat limited. 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PROPERTY INVOLVED: Address/General Location N1 3 o S K>vo U moo ciI�R;v e__ oma - 3o �a-3 — ay - 0c53 .- Legal Description or Prroperty identification Number _)e ISS .` o 2.6 LdJ 5 I// - /� a s . Lw,L ri— - „J,o/�. Legal Owner: Name/Address La r r y 13eac� Present Use (check appropriate box): UndevelopedNacant •• ❑ Single Family Dwelling ❑ Duplex/Two Family Dwelling ❑ Multi-Family (No. of Units ) ❑ Business/Commercial Establishment ❑ Industrial Establishment • ❑ Other (explain) • Property Classification: 7 Abstract 0 Torrens REQUEST: A r7 �e� <�ez� � � r/'4 cd/o G 4" —5-e4 rc`i 40 he eo,v S/7' c7le 41 5 eFfa,., A.Dd ec 4 1S/" 7d-h e ,2 ,'-', „r• *Please note: Applicant may be responsible for additional fees associated with the review of this request I HEREBY DECLARE THAT THE ABOVE STATEMENT ARE TRUE �, ih. Signa e �•-_ $200/acre,minimum$200.maximum$1,000 Paris Fund Dedication Fee R-1 to R-2-$75,all others$200 Date Paid •'=:rbonal Use Permit R-1 to R-2-$75,all others$200 Receipt Number Code Appeal $75 Develop./Site Pian Review $100/acre,minimum 100,maximum$500 Tota/Feels Paid . ' Minor Subdivision $150 Date Paid Major Subdivision • $250 plus$250 deposit Receipt Number Comp. Plan Amendment $200 41) Wetland Alteration Permit $50 plus deposit determined by Staff Additional Fee Paid Wetland Buffer Permit $10 Date Paid Panning Sign $50 Receipt Number PUD X50 PUD Amendment $150 Data of 5nal action �y APPROVED ❑ DENIED CI TABLED - ❑ Date 6 '(i ^ 7 s Planning Case No. 4//- '� Admin.Account No. N '+1• MEMORANDUM 411 TO: PLANNING COMMISSION FROM: PAUL HARRINGTON, COMMUNITY DEVELOPMENT COORDINATOR DATE: July 12 , 1995 SUBJECT: DEVELOPMENT REVIEW REQUEST - 4860 MUSTANG CIRCLE WOLF AND ASSOCIATES, PLANNING CASE NO. 421-95 John Purves, representing Wolf and Associates, has made application for a development review for an addition to their facility at 4860 Mustang Circle. The proposal involves the purchase of vacant land immediately south of Wolf's current facility and an expansion of the existing building onto that site. The plan calls for a total facility expansion of approximately 33, 000 square. 15, 000 square feet of the expansion would be for fabrication, the remaining 18 , 000 square feet for a paint shop. The proposal is subject to all development regulations stipulated in the Mounds View Municipal code as they relate to commercial or industrial expansion. Staff has reviewed the plans and found that the use is consistent with those allowed in the zone district and all building setback requirements have been met. Parking and traffic circulation have also been addressed to meet the requirements of the Code. Staff is concerned with the amount of impervious surface on the property, however. The applicant has been made aware of the fact that this plan will be submitted to the City Consulting Engineer for his comment on the storm water management needs for the parcel. Also, Staff would like to see the applicant provide a landscape plan for the project to be reviewed by the City Forester. All materials received as a part of this application have been included for your review. If you have any questions, please do not hesitate to call. Job No. —4— me, INC, oRs sTON AVE. NO� 73m1�-a�=5 .o-5555, /fN�s, IbX 18e,-g,001 S 524• .5240;15?4• 524. 524' 5�24�0! ,y0? 5205 "' 5211 LI J X23' •.GCSE'= GECIE = \\�� U s 5229�FZEIM �l-yI M OE , d a 21''oCLLi� 5210 521• �• ,1,1.43 A4‘52• 5200 5201' 5200 5209 •• O o+ 0 0 t N N• N N N N N N N N NN N ��9 1 "EWOODIL HIGH ti,19 ?G II" ige - ?SOL 7 0 no P�Q `.2- ZA��� P 0 W0 ... - R«E CREEK�n m i. ,r,na m rn rn m N • �ryr/L.�N N N N NN CO RD I 3 - In Q Li hP17 H It W //,e7:: •Z ti ? K1NGSIWAY LANE --C 110111 e: tr .... -.....m....„=, ............ebt TOWNS EDGE — Aa MOBILE H• :r t, -94 0 G - difiadoti c, 4825IfidlIPPr x860 i 4821 4869 Z O 4830 t a 4822 4815 =20 :O9 .818 `ia �_ 48• N N N 4751 MUSTANG DRIVE o _]:: � n 4761 4759 Z Q F 4751 .. N M 4749 ..................................... 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Consideration of Resolution No. 423-95 Regarding Variance Request of Larry Beach, 7315, 7317, and 7327 Knollwood Drive, Planning Case No. 416-95 1111 6. Consideration of Resolution 424-95 Regarding Supporting Matching Funds For a Pedestrian Bridge Across Highway 10 7. Staff Report 8. Chairman's Report 9. Adjournment *************************************************** APPLICANTS: YOUR ATTENDANCE AT HIS MEETING IS REQUESTED. PLEASE NOTIFY CITY HALL AT 784-3055 IF YOU ARE UNABLE TO ATTEND. THANK YOU. **************************************************** • 4 • MEMORANDUM TO: PLANNING COMMISSION FROM: JOYCE PRUITT, PLANNING ASSOCIATE DATE: JULY 26, 1995 SUBJECT: VARIANCE REQUEST - 7325/7327 KNOLLWOOD DRIVE LARRY BEACH, PLANNING CASE NO. 416-95 Based on discussions held at the July 19, 1995 Planning Commission Meeting, Staff has drafted the attached resolutions, 422-95, for consideration by the Commission. If you have any questions, please do not hesitate to call myself or Paul Harrington. S • MOUNDS VIEW PLANNING COMMISSION RESOLUTION NO. 423-95 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING VARIANCE REQUEST BY LARRY BEACH, 7315/7317/7327 KNOLLWOOD DRIVE, PLANNING CASE NO. 416-95 WHEREAS, Mr. Beach has requested a variance for the property legally known as Spring Lake Park Knolls, west 125' of Lots 111 & 112, from the 30 foot rear yard setback requirement; and WHEREAS, Mr. Beach has presented a hardship statement to the Planning Commission in order to construct porches on three of the four townhome units (two buildings) located on Lots 111 and 112 , although the porches encroach six to seven feet into the required rear yard setback; and • WHEREAS, the Planning Commission has reviewed and taken into consideration of the applicant's hardship statement as required for a variance request; and WHEREAS, the applicant's hardship is due to the lot's unique and narrow width of 125' , and the construction of the homes will be relieving an existing hardship of blight for the area; and WHEREAS, the request is the minimum needed to alleviate the hardship; and WHEREAS, the granting does not confer a privilege to the owner which is not enjoyed by other residents. NOW THEREFORE, BE IT RESOLVED that the Mounds View Planning Commission grants a seven foot variance for the property legally known as Spring Lake Park Knolls, west 125' of Lots 111 & 112 from the 30 foot rear yard setback, for the purpose of constructing porches on the homes. Adopted this 2nd day of August, 1995. ATTEST: Chairman • (SEAL) City Planner 4 e • MOUNDS VIEW PLANNING COMMISSION RESOLUTION NO. 423-95 • CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION DENYING VARIANCE REQUEST BY LARRY BEACH, 7325/7317/7327 KNOLLWOOD DRIVE, PLANNING CASE NO. 416-95 WHEREAS, Mr. Beach has requested a variance for the property legally known as Spring Lake Park Knolls, west 125° of Lots 111 & 112 , from the 30 foot rear yard setback requirement; and WHEREAS, Mr. Beach has presented a hardship statement to the Planning Commission to construct porches on three of the four townhome units (two buildings) located on Lots 111 and 112, although the porches encroach six to seven feet into the required rear yard setback; and . WHEREAS, the Planning Commission has reviewed the criteria used to evaluate all variance request; and WHEREAS, Planning Commission has determined that the hardships that exist on the lot were self-created by the developer with the construction proposal of three porches; and WHEREAS, the variance requested is not the minimum necessary to alleviate the hardship. . NOW THEREFORE, BE IT RESOLVED that the Mounds View Planning Commission denies the variance request of Larry Beach for the porches to encroach six to seven feet back into the required rear yard setback. Adopted this 2nd day of August, 1995. ATTEST: Chairman (SEAL) City Planner - � • MEMORANDUM TO: PLANNING COMMISSION FROM: JOYCE PRUITT, PLANNING ASSOCIATE DATE: JULY 26, 1995 SUBJECT: RESOLUTION, NO. 424-95, SUPPORTING MATCHING FUNDS FOR A PEDESTRIAN BRIDGE ACROSS HIGHWAY 10 Based on discussions held at the July 19, 1995 Planning Commission Meeting, Staff has prepared the attached resolution for consideration by the Commission. If you have any questions, please do not hesitate to call myself or Paul Harrington. • • , MOUNDS VIEW PLANNING COMMISSION RESOLUTION NO. 424-95 • CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION SUPPORTING MATCHING FUNDS FOR A PEDESTRIAN BRIDGE ACROSS HIGHWAY 10 WHEREAS, The Planning Commission continues to support City Council Resolution #4531, supporting the pedestrian bridge which would encourage pedestrian and bicycling transportation =:nd visitation of City services and facilities and, therefore, 2. i to encourage mobility and ease of access to businesses, restaurants, library, churches, schools, parks and city center with the installation of a pedestrian bridge across Highway 1.Oo and WHEREAS, the Planning Commission urges the City Council to approve the matching funds required for the project; and WHEREAS, there have been extended discussions regarding the use of Tax Increment Financing funds. The Planning Commission requests the City Council review the attached Springstead publication which shows that Tax Increment Financing revenues reay be used for: (1) Public improvements, (2) Social, recreational • and cultural facilities, (3) Land acquisition and site preparation (private) , (4) Soils correction, (5) Administration (up to 10%) ; and WHEREAS, the City of Mounds View's Bond Attorney, Jim O'Meara, Briggs and Morgan, has provided his legal opinion in the Establishment of the Mounds View Economic Development Prosect, Adoption of it's Project Plan and Amendment of Tax Increment Financing Plan, Section 1. 4 "Amendment and Consolidation of the Development Programs; Designation as Project Plan" that permitted uses- include: (1) the attraction, retention, rehabilitation and preservation of commercial, industrial, retail, residential, recreational and public service facilities, including necessary or desirable park and recreational facilities, both active and passive; (2) new and rehabilitated public infrastructures; (3) community and other public service centers; (4) senior/mature adult and/or other housing development partnerships or other multi-use housing projects and facilities; (5) other public utilities (including telecommunications) ; (6) business incubator loan and other business programs; (7) transportation systems; (8) and all related activities or undertakings that may be desirable or necessary in connection with the completion and integration of such community development. NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the 411 City of Mounds View does hereby support the allocation of Tax Increment Financing funds for the construction of the pedestrian bridge. L , • RESOLUTION NO. 424-95 PAGE TWO OF TWO Adopted this 2nd day of August, 1995 ATTEST: Chairman Jerry Peterson Jean Miller Joann Colleen Marshall Johnston Dan Nelson Gary Stevenson Henry Ruggles • City Planner Harrington (SEAL) • • Tax Increment Financing ( 'VV) in Minnesota Concepts and Mechanics January 1995 • SPRINGSTED c;:411 PUBLIC FINANCE ADVISORS , • • 'I SPRINGSTED �;. • PI BUC FINANCE ADVISORS Clsvid N.MacGillivray,C,J.P.F.A. • Pnncipai Direcor of Project Management 85 East Seven 85 East Seventn Place,Suite 100 Sant Paw,MI Sault Paw.Minnesota 55101-2143 612.221•3068 FAX:612.221.1002 • • • • • 110 • Table of Contents S • INTRODUCTION 1.2 A. PARTICIPANTS 1 8. THE MECHANICS Project Area 1 Types of Tax Increment Financing Districts 2-3 Examples of Eligible Project Expenditures 3-4 Taxable Versus Tax-Exempt The Increment 5-6 Financing of Project Costs 7 Considerations of LGAJHACA 8 • C. THE DOCUMENTS Development District Program 1 Tax Increment Financing Plan 1 Development Agreement 1 D. PROCESS FOR ESTABLISHMENT 1 E. BENEFITS AND COSTS City's Perspective 1-2 Landowner(s) Perspective 2 F. POLICY QUESTIONS "But For Test LGA/HACA 1 Project Area 1 Level of Assistance 1-2 Fiscal Disparities 2 City Security Guarantees 3-5 City Administrative Costs 7 7 i SPRINGSTE� �� i ti odu�on Tax Increment Financing (TIF) uses the increased property taxes generated by new real estate development within tax increment financing districts to pay for certain eligible costs associated with the development The value that is "captured" (i.e., the increase in value over the year the TiF district was established) generates property taxes. These "incremental"taxes go to the development authority or the city authority rather than to the county, school, city, or other taxing districts that normally share in the total property tax bill. The captured taxes are used to subsidize eligible project costs such as land acquisition, demolition, public and site improvements, and related consulting and administrative costs. The value of the property prior to development (i.e., the "non-captured" portion) continues to generate property taxes which are distributed to all taxing jurisdictions. The justification for use of TIF rests solely on the "Hut For" test. A simple way to express this test is that the development or redevelopment would not occur without a tax increment subsidy. Critics of TIF often point to the "Hut For" test as the weakness in the actual use of TiF. Such critics often claim that the development . would have occurred anyway, and local officials are not rigorously applying this test The net result in such cases is an over use of tax increment financing at the expense of the tax base of the county, school district, and other taxing districts. While there have been limited abuses, as with any other financing program, this financing tool has helped to reshape and revitalize many communities. In addition to assisting core development and redevelopment, residual growth outside of the established TiF districts provides a direct benefit to all taxing jurisdictions. in response to the potential misuse of tax increment financing, each year the State Legislature further adjusts and limits the use of this financing tool. Each amendment to the statutes has, in recent years, resulted in a more complicated and:restrictive financing vehicle. The purpose of this document is to outline the basic concepts and mechanics of using tax increment financing within the statutory guidelines and parameters. This report outlines the participants involved in TiE, mechanics, documents, process, a discussion of benefits and costs, and policy questions associated with the use of TIF. • The material included in our report is intended to be used as informational guidelines for the use of TiF. The complete Tax Increment Financing Act can be fcund in Minnesota Statutes, Section 469.174 - 469.179. S?RINGSTED Tax Increment Financing in Minnesota 411) Scringsted Incorporated has a proven track record in working with communities in the use of tax increment financing as an economic development and redevelopment tool. Please feel free to contact us if you need further information or would like to discuss in more detail the concepts contained in the following materials. • S S Participants Section A • City Landowner/Developer EIected Officials Landowner or Developer Advisory Commissions Attorney City Staff Fiscal Consultant: Springsted Incorporated Bond Counsel • Other Governmental Jurisdictions TIF Project County Federal Government Sc-hoot District State Government Other Taxing Districts Metropolitan C. . County Other Municipalities Bordering Project Area • % SPRINGSTED The wled�anics Section B • (i.e.,ProjectArea Development I3ct) and Tax Increment Finnnring ('>I District A. Financial difference between the two • Project Area: Area in which TIF funds can be spent. • TIF District: Area from which TIF funds are generated. B. Geographical difference between the two • Can be the same • Project Area (Development District) T1F District • • Project Area greater than TIP district TIF Project Area District (Development District) TIF District Z • SPRINGS T`D D�r•a t }) • Tax Increment Financing in Minnesota 411 Types of Tax Increment Financing Districts A. Redevelopment District • Generally a blighted area containing substandard buildings, sometimes having inadequate streets and incompatible land uses. • Requires documentation to evaluate occupied land area and estimated costs of rehabilitation versus new construction. • Maximum duration of TiF district is 25 years from receipt of the first tax increment. 8. Renewal and Renovation District • Blight and obsolescence tests must be met. • Maximum duration of TiF district is 15 years from receipt of the first tax increment. • C. Housing District • Provides housing ocoortunities for persons and families • of low and moderate income. • Maximum duration of TiF district is 25 years from receipt of the first tax increment. D. Soils Condition District • Where 80% or more of the district requires substantial earth work to remedy unusual terrain or soils deficiencies or remove hazardous substances or contaminants. Such costs must exceed the fair market value of the land before completion of the earth work. • Maximum duration of the TiF district is 12 years from City approval of the TiF Plan. Page 9-2 r. c�n��.t� •—�� Tax Increment Financing in Minnesota E. Economic Development District • Does not meet the criteria far any of the other types of TIF districts. • May be used only for manufacturing, production, processing, warehousing, storage, distribution (excluding retail sales), research and development, telemarketing and tourism (outside the metropolitan area). • Prohibits establishment if more than 15% of the square footage of such facilities are used for other purposes. The allowable percentage of nonqualifying square footage can be increased when such uses are directly related to or in support of the qualifying activity. • Must demonstrate retention of local business, increased employment and enhancement of the state tax base, etc. • Maximum duration of TiF district is 11 years from the date of City approval of the TIF plan or 9 years from receipt of the first tax increment, whichever is less. • The 1991 Legislature added a new type of district for purposes of adjusting the LGA/HACA impact in certain economic development districts. A "qualifying manufacturing district' is an economic development TIF district which is certified after June 30, 1991, contains certain qualifying activities and is located in a city with a population under 10,000. Examples of Eligible Project Expenditures • Land acquisition • Soil corrections • Site preparation . • Relocation/demolition • Public improvements for street, sewer, water and parking • Planning & engineering studies in support of eligible activities SPRINGSTED „ ,. Tax Increment Financing it1,.►7e,--:e:ota • Administrative costs10% of the tax .5 • up to �t1� rrcren?er_ • Financing fees and capitalized interest Taxable Versus Tax-Exempt • Tax-Exempt Status Must Satisfy Two Federally Imposed Testa A: "Use Test" -Are more than 10% of the expendittr=zi for a private purpose? • Types of expenditures for improvements available to every resident • Streets, sewer, water, etc., versus • Types of expenditures benefiting crivate parties, such as landowners/developers: + Land acquisition, soil corrections, site preparation, etc. • • B. "Security Interest Test" -Are more than 10% (in some cases 5%) of the payments of taxes and/or debt service guaranteed by the landowner/developer? • A contract or guarantee requiring the landowner/developer to make tax payments and/or fund debt service shortfalls. • Assessment agreements trigger the security interest test. • Page 8-4 r SPRINGSTED Tax Increment Financing in Minnesota • The Increment • A. Prior to forming the T1F district • "Estimated Market Value' of properties in proposed T1F district Estimated • Market Value • Translated into 'Net Tax Capacity' through statutory classifications • Estimated Net Market Tax Value Capacity • "Net Tax Capacity' times "Tax Capacity Rate' yields property taxes - County Net Tax Property - School District Tax X Capacity Taxes - City Capacity = - Special Districts Rate E. When a TIF district is established • The "Net Tax Capacity' is given the term "Original Net Tax Capacity (ONTC)." • Property taxes generated by the ONTC of the TIF district continue to go to each individual taxing jurisdiction. Tax Increment Financing in Minnesota • C. New development occurs within the TIF district • New market value is added to the existing estimated market value. Total Total Estimated Net Total Market Tax Property Value Capacity Taxes • Increase in Increase in Estimated (Captured) Tax Market Net Tax Increment Value Capacity Revenue Tax X Capacity = Original Original Rate Taxes Estimated Net to Each Market Tax Taxing • Value Capacity Jurisdiction (OMV) (ONTC) • D. Increment received over term of the TIF district • New market value is added to the existing estimated market value Property Taxes Tax Increment Revenue Taxes to Each Taxing Jurisdiction I I i i � i i i 1 I i i i • Time (Years) ---� Tax Increment Financing in Minnesota • Financing of Project Costs • In many cases, the City is required to fund project expenditures prior to development occurring. • City issues general obligation tax increment bonds to finance the project costs. The possibility exists for non-general obligation revenue bonds to be issued. • City receives tax increment revenues over a period of years and uses them to pay debt service on the bonds. • Tax increment bonds are repaid by: a) Tax increment revenues. b) General obligations: potential City-wide property tax levy. This situation can be dealt with through security guarantees by the landowner. • Financial limits on the City's ability to fund project costs dictated by the amount and duration of the tax increment revenues available. • In some cases the developer will pay all costs upfront and be reimbursed for eligible project costs over a period of time. This is generally referred to as "pay-as-you-go.° a) Reimbursements are made from tax increment revenues. b) This process significantly reduces City liability and risk. c) If development does not occur or does not reach the levels forecasted, increment is reduced and less money is available for reimbursement. • . r. aequr Tax Increment Financing in 'Winne Considerations of LGAJB.ACA • Effective for TiF districts approved atter April 30, 1990, the City may experience. a reduction in its Local Governmental Aid (LGA) and/or Homestead Agricultural Credit Aid (HACA). • City must compute the hypothetical reduction in state aids to school districts if the new TiF value is included in the school district tax base. The difference between the actual aid and the hypothetical aid will result in a reduction of the City aid. This reduction is applied first to LGA and then, if necessary, to the City's HACA. • Depending on the type phased. This is an annual r dF uct on sand the Ststrictthe ate on may be Departments of Revenue and Education will make these calculations. PERCENT OF CAPTURED NET T..--a CAP CIT • Y Years from THAT IS «QL�,IFY VG„ Assessment E..onamic Development Qualified Year of or Soils Condition Renewal and ONTO Manufacturing Renovation Di tri Dia Other Di rice Dis_tric,s 1 100.00% 2 100.00 0.00% 0.00 3 20.00 0.00 100.00 40.00 0.00 0.00 4 100.00 0.00 0.00 100.00 60.00 0.00 80.00 0.00 6 100.00 100,00 0.00 . 0.00 7 100.00 12.50 6.25 8 100.00 100.00 25.00 9 100.00 12.50 100.00. � 100.00 37.50 18.75 10 100.00 50.00 25.00 100.00 62.50 12 100.00 75.00 31.25 11 100.00 132 100.00 - 37.75 - 87.50 43.75 - 100.00 50.00 - 14 - 100.00 56.25 15 16 -' 100.00 - 17 62.50 18 -" - 100.00 68.75 - 100.00 75.00 198 - - 100.00 81.25 • - 100.00 87.50 20 -21 and Over - - 100.00 Q 100.00 100.75 0.00 Page 8-8 The Documents Sermon C • Development District Proms This document (or equivalent document, i.e. Redevelopment Plan) establishes overall guidelines far the project area boundaries, and the type and level of improvements to be constructed or acquired. • This document does Lgt establish the TiF district. Tax Increment Financing Plan • This document establishes the boundaries of the TiF district, the expenditures and financing limitations, and starts the process for collection of tax increment revenue by tete a . • The Development District Program and the Tax lrcrament Financing Plan can be drafted either concurrently or the Development District Program can be drafted first and the T Plan later on. • Development Agreement A. This document is a contract between the City and the landowner, stipulating the obligations of each party. The Development Agreement usually requires the landowner to: • Construct a development within a certain time frame with a specified minimum size and market value. • Provide •uarantees ensuring the timely completion of the development, and may require prompt payment of property taxes and debt service shortfalls. The Development Agreement usually requires the City to construct public improvements and/or purchase land associated with the new development according to an agreed upon schedule using the expected tax increment revenue. B. Terms of this agreement may well dictate if bonds are tax- 1111 ax- • exempt or taxable. C. Many cities currently require a Development Agreement on all new developments. Commonly, a TIF Development Agreement exceeds SO paces before exhibits. • Process for Establishment Se on D • In order to establish a T1F district, a specific process must be followed induding the following. A. At the outset, a Development District Program (or equivalent document) must be prepared. This sets forth the general goals for development or redevelopment in the project area. B. A Tax Increment Financing Plan must be prepared. This sets forth the specific project(s) to be undertaken, costs involved, revenues projected and is the guiding document for the proposed project. C. A public hearing on the TT Plan and district must be conducted. Notification of the public hearing must be published 10-30 days prior to the hearing. D. A TIF district "fiscal and economic impact" letter must be received by the county and school district at least 30 days prior to the public hearing. E. The City planning commission must review the TiF Plan and Development Program prior to City approval. F. At the public hearing, ail interested parties are invited to express their opinion(s). G. Subsequent to the public hearing, the City must approve or reject the T1F Plan and district. H. Upon approval, the City must request county certification of the original value of the T1F district which will begin the tax increment collection process. I. Actual project expenditures may not be made until the TiF • Plan is adopted and the TF district is established. • s SPRINGSTED Benefits and Costs Section E • City's Perspective A. Benefits • TIF allows City to realize new development which would not otherwise occur(the 'But For" test) without the use of TIF. • City can realize broader economic gains of new development in terms of employment, tax base enhancement and secondary spin-off effects. • City can facilitate the construction of related public improvements it wishes to achieve by coordinating a TIF project with more general public improvement projects. • City may have better control over the nature of the development. • City may be able to fund administrative and/or . community development costs with revenue from the T1F district. • In same cases the quality of new development is enhanced by TIF financing. • B. Costs • The City may assume the risk that property taxes might not •- •-•i -. funding of local governments might cause tax increments to fall short of scheduled debt service payments. City may pledge to use other funds/or • general property tax levies to pay debt service. (Development Agreement guarantees.) • City and other overlapping taxing jurisdictions (county, school district, etc.) must wait until TIF district is terminated until the new development is translated into the general tax base. • • Depending on magnitude and strategy for addressing fiscal disparities contribution on commercial properties, there can be internal shift in property tax burdens (for communities in the Twin Cities Metropolitan Area only). SPRINGSTEQ Tax Increment Financing in Minnesota dimiseemmilmmEt • • City may lose a portion of its LGA/HACA f�F duration of the TIE district. This has a direct impact on the general fund of the City. Landowner(s) Perspective A. Benefits • Development can proceed because TIF providezi a funding source for public improvements where no other viable funding source exists. • • • Without TIF, landowner absorbs development costs of • either: • Special assessments for public improvements, and/or • Hard costs of!and acquisition and site preparation. • With TIF these costs are funded in whole or in part by TIF, and landowner pays only his property taxes, which are the same whether TIF applies or not. B. Costs • Usually a slightly extended development period required for the TIF process. ti Usually landowner provides financial guarantees to ity securing taxes and debt service on TIE bonds (if applicable). • Greater City monitoring of scope, quality and timing of new development. • 10 SPRIN(•:ST=fl Policy Questions WTT • "But For" Test • In order for the City to create a TIF district it must make a finding that the new development would not occur'Tut aQr the use of tax increment financing. • The critics of TIF state that the development would occur anyway and the City is simply giving money to a private party. • Counties and school districts are particularly interests Th ;hes finding because from their position they will not rsaiiz% enhancement to their general tax base until after the TIF district is terminated (up to 25 years). • LGA/HAGA • The City must determine if it is willing to invest a portion of its own funds in the project based on estimated loss of LGAJHACA. •. Project Area The project area, the parcels upon which TIF funds can be `pent, can be the same as or greater than the TIF district. • • Does the City intend to use TIF funds beyond the parcels from which TIF revenue will be generated? • • Does the City envision numerous TIF districts created over time within a single project area? • Does the City have other improvement projects in other adjoining areas for which funding can be augmented with • TIF? • • Does the scope of the improvement project benefit two or more TIF districts? As a general rule the smaller the TIF distri& the better. • Impact on county and school district is reduced. • The short duration of Economic Development TIF districts requires development to occur over a tight time frame. The SPRINGSTFr) • Tax Increment Financing in Minnesota inimismemommemiza • City cannot afford to have parcels in such TIF districts with_no development expected in the near future. Level of Assistance A. How much funding does the City wish to commit to the project? • Demonstration by private parties of need for'eve! of TIF assistance B. Mandatory imposed limitations • Statutory duration of the district • Tax capacity rate ceilings C. Discretionary imposed limitations • Term of TIF district shorter than maximum permitted • • Nature of expenditures • . Do they lead to taxability and therefore higher • interest rates yielding lower net bond proceeds? • Pace of development • How soon will development occur? • Fiscal disparities option on c:,mmercial=inuij rias developments in the Twin Cities Metropolitan Area. • • mummaisminimin Tax Increment Financing in Minnesota • Fiscal Disparities • State law requires new commercial-industrial properties it the • Twin Cities Metropolitan Area contribute up to 40% of their valuation to a metropolitan-wide pool far distribution back to all local jurisdictions. • For TIF district with new commercial-industrial development, the City must decide as to whether the fiscal disparities contribution will be made from valuation within the TIF district or the amount of such valuation must come from commercial- industrial properties located within the City but outside of the TIF district. • • • How does this affect the TIF district and related increment revenue? TIF District TiF District Net Tax Capacity Net Tax Capacity • Without Fiscal Wit Fiscal Disparities Disparities Contribution Contribution (Option A) (Option D) Captured Captured Net Tax Net Tax Capacitj Capacity (_' 60%) Fiscal Disparities Contribution (< 40%) (ONTC) (ONTO). • ►': SPRINGST`D Tax Increment Financing in Minnesota • • Over the life of the TiF district,. • Without Fiscal Disparities Contribution (Option A) Net Tax Capacity 1 dCaptured Net Tax Capacity 1 -1 Original Net Tax Capacity I t I i r I r 1 I I I i ime (Years) ---0 • With Fiscal Disparities Contribution (Option B) Net Tax Capacity j Captured Net Tax Capacity H _.] d Fiscal Disparities Contribution 1 JOriginal Net Tax Capacity 1 I 1 I I I I I I I I I Time (Years) —+ • Page F-4 a4tnincT1-_-r‘ Tax Increment Financing in Minnesota Primary Impacts If the fiscal disparities contribution comes from the TIF district, less • increment income results which restricts the level of funding for the project. • If the fiscal disparities contribution comes from outside the TIF district, the converse is true, that being an increase in the level of funding. Secondary Impacts With the fiscal disparities contribution being made from outside the TIF district, the amount of the contribution must come from other commercial-industrial properties within the City. • The potential exists for City tax rate increases dependent on the relative magnitude of the new development to the City's • total tax capacity. With the fiscal disparities contribution coming from outside of the TIF district, the City's total gross tax capacity is reduced by both the TIF captured tax capacity and the fiscal disparities contribution. The fiscal disparities contribution exists no matter which option is chosen. However, the compounding of both of these situations can lead to a potentially higher City tax rate. SPRINGSTED _ _ Tax Increment Financing in ;:if;resota • City Security Guarantee A. Usually when TIF bonds are sold they are general obligation bonds. General obligation TIF bonds require that if increment income is not sufficient to pay debt service at any th a over the life of the bonds, then the City is ultimately required to levy City-wide property taxes to repay the bonds. B. How can this occur? • New development is constructed over , frame and/or to a lesser market value than rot,reso ed to the City at the time of approval; • Property owners don't pay their taxes on time; • Property owners pay taxes on time, but with dear cases in tax capacity rates caused by changes in ;i^© ti.�4.1inq of local governments or tax structures chance-, actual property tax payments are less than scheduled debt service. • C. How does the City protect itself? • Assessment agreement stipulating market value of new • development and schedule of completion. • Withholding bond•proceeds or delaying construction of public improvement until ail or a portion of new development is ccmpieted. • Liquidity guarantees (letters of credit) provided by property owners ensuring timely payment of property . taxes (number of years?). • Liquidity guarantees (letters of credit) provided by property owners covering debt service shortfalls regardless if taxes are paid on time. • • • Pay-as-you-go: No debt is issued. The landowner finances his own improvements and is reimbursed over time by the City from the actual collection of increment • revenue. D. The type of guarantees depends on the level of risk the City perceives itself to be exposed to. • Page Tax increment Financing in Minnesota • City Administrative Costs The creation of a TIF district and the negotiation of thorough Development Agreement requires substantial time commitments by the City staff and its consultants. A large portion of that time is expended prior to the signing of the Developer Agreernert; and before actual construction of the new development Furthermore, additional City staff time is needed to monitor and report or, the performance of the TIF district over its entire duration. The legislature has anticipated these City costs by providing sir a reimbursement for administrative costs. This reimbursement is limited to the lesser of 10% of project costs or 10% of increment revenue, and is intended to cover all staff and consultant costs other than engineering. The City should consider two relevant policy questions. • Does the City wish to receive a guarantee of its costs from • the landowner for the period from inception of the TIF process until signing of the Development Agreement? This guarantee covers the situation whereby the project terminates during the negotiation phase. • What is the appropriate level cf administrative cost reimbursement? • • 0‘4P'' ASS0Ci 47 4.Thumnimi • Immu°%E... 2 Z sze ti 4140 40041 01? • • Financing Public T Provements : Traditional and Non-Traditional Approaches • A Presentation to the City Engineers Association of Minnesota January 19, 1995 SPRINGSTED EP.4 PUBLIC FINANCE ADVISORS . z • Presenters : David N. MacGillivray, CIP.FA Principal, Director of Project Management (612) 223-3068 Paul R. Donna, CIPFA Project Manager (612) 223-3066 • LI • Introduction None of the Traditional Ways Work! Does Not Fit/Not Enough Money A Downtown renovation A Storm sewers/street reconstruction • A Bridges , Pressure on Operations to no Longer Fund From General Levy (Truth-in-Taxation) A Storm water maintenance A Downtown renovation A Sealcoating and overlay A Street lighting A "Get out of the general fund to preserve • ro ra m s" P g • • Build a War Chest - Flexibility and Enhancements A "Cash is king" A Impact fees Equity or Fairness • A Those who pay are those who benefit A Movement Towards user fees A Enhance credit rating through diversification • • Tax Increment Financing (MSA 469) Objective: Define a funding source for improvement projects which does not have other adequate traditional sources and is linked to development • What Can You Spend TIF Revenues On? A Public improvements A Social, recreational and cultural facilities A -Land acquisition and site preparation (private) A Soils correction A Administration (up to 10%) • • Where Can You Spend TIF Revenues? • A TIF district - generation A TIF project area - expenditure A Careful to define project area • Whole city? Using TIF Revenues From Multiple Districts - • Pooling A What is pooling - cross availability of revenues A _Restrictions based on date of adoption of TIF district - 1990 A 25% limitation, including administration A Intergovernmental Cooperative Agreements • County road projects A Case studies • Community centers • • Major roadway/freeway projects • • • Special Service Districts (MSA 428A) Objective: Provide new revenue (taxing) source to fund predominately downtown or commercial-related expenditures What is a Special Service District? • A Defined geographic area upon which is levied a , special charge to finance capital and operational costs _ example: Decorative sidewalks, special sn-Ow_ ia * � . _ - � • e _ A Only affects commercial-industrial A Based on net tax capacity collected with property taxes • • Now do You Establish a Special Service District? A Dual track establishing district and setting- charges `�' A Local ordinance, upon receipt of a 25% p petition of of affected landowners A Public hearing required A Veto by petition of 35% of affected landowners • Positive Aspects A Matches beneficiaries with payers A Funds difficult capital projects-parking facilities A Can relieve pressure on general fund (must be for "additional" services) - special snowplowing A Ongoing revenue source • Negative Aspects A Authorization Process _ Petition to be taxed A Case Studies • White Bear Lake • Eagan • Minneapolis-Nicallet Mall • • Stormwater Utilities (MSA 412.331 & 444) Objective: Provide a new revenue (user fees) source to fund stormwater management programs • • What is a Stormwater Utility? tY A A vehicle used to fund core stormwater programs including operations, maintenance and capital improvements A Based on user charges calculated on property owners contributions of flow into local system A Allows for the phasing out of traditional general fund contributions used to pay for operation and maintenance S • Why are Stormwater Utilities Needed? A Expanded local government responsibilities resulted in increased costs A Traditional funding sources are strained (property taxes) and being deemed inequitable (special assessments) • Positive Aspects A Equitable allocation of costs/service A Stable source of revenue A Provides operation and maintenance funding A Provides capital improvement funding A No increase in property taxes A No negative impact on debt capacity S A Avoid special assessment hearings A Recovery of costs from tax-exempt property A - Minnesota Statutes 444 allows for a "double- barrel" security Negative Aspects A Implementing/determining the user charges • • Closed Bond Funds - Community Investment Fund Objective: Identifyoptions p do ns for use of one-time assets available to jurisdictions • What is it? A A fund created with cash balances from closed bond accounts - typically from special assessment bonds A Can use for any city purpose A Define this one-time opportunity y i • What are You Going to do With These Assets? A Tax relief A Refund to property owners A Build infrastructure A "Do not squander these assets" . What is Level of Funding? A Forecast balances and future receipts at end of bond issue 1 udy • Minnetonka Impact Fees (MSA ?) Objective: A revenue mechanism imposed p upon new development to fund related present and future costs What is an Impact Fee • � (Developer Extraction)? A A dollar/rate charge or land dedication imposed at time of development the proceeds of which are linked to specific capital infrastructure S • Legality? A Minnesota - no express statutory authority except park dedication Charter cities? Wisconsin - new law, Act 305 Generally - (a) Statutory authority (b) "Rational Nexus" (c) Fee reasonable with impact • • • What is Procedure for Establishment? A Established by ordinance A Public hearing requirement A Conduct a "public facilities needs assessment40 (a) Inventory of existing public facilities (b) Identification of new facilities (c) Detailed cost estimates • • • Follow Wisconsin System What are the Eligible Areas? A Transportation activities A Sewer, water and storm sewer A Parks, play grounds and recreation • A Solid waste and recycling A Public safety, emergency medical and libraries A _ Administration, up to 10% of capital costs A Not schools • What are the Standards for Impact Fees? A Rational relationship of new facility to new . development A May not exceed proportional share of costs to existing development's share A Based on actual costs or reasonable estimates A Reduced by other charges such as special • assessments A Reduced by other funding, grants A May not be used to correct deficiencies in public facilities A Paid in full or in installments prior permit or other approvals A Can have differentials within jurisdictions S What is the form of payment? A Lump-sum dollar charge A Rate per square foot (C-I) A Land dedication i 0►L ASsac • 0' 2P 2 immumm\ininior ov 4NCE A0°50 S