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HomeMy WebLinkAbout06-12-2006 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA MOUNDS VIEW CITY HALL Monday, June 12, 2006 6:30 PM 1. CALL TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty, Commissioner Gunn, Commissioner Thomas 3. APPROVAL OF AGENDA 4. PUBLIC INPUT: Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES A. May 22, 2006 EDA Minutes. 6. CONSENT AGENDA 7. EDA BUSINESS A. Consider Resolution 06-EDA-219 Authorizing the Acquisition of the Premium Stop Property Located at 2390 County Road 10 Consistent with the Terms of the Approved Purchase Agreement (Ericson) 8. REPORTS 9. NEXT EDA MEETING: Monday, June 26, 2006 @ 630pm 10. ADJOURNMENT PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 May 22, 2006 6 Mounds View City Hall 7 2401 Highway 10, Mounds View, MN 55112 8 6:30 P.M. 9 10 11 1. CALL MEETING TO ORDER 12 13 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Gunn, 14 Commissioner Flaherty, and Commissioner Thomas. 15 16 NOT PRESENT: None. 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: THOMAS/FLAHERTY. To Approve the May 22, 2006 Agenda as 21 presented. 22 23 Ayes – 5 Nays – 0 Motion carried. 24 25 4. PUBLIC INPUT 26 27 Torri Johnson, 7730 Long Lake Road, Chairperson of the Economic Development Commission 28 (EDC), explained they advise the EDA about enhancing economic development and the City’s 29 tax base. She read a statement outlining the EDA’s actions to identify potential projects 30 considered to be priorities. During 2005, the EDA continued to prioritize that list and on 31 September 6, 2005, met in joint session with the EDA to discuss the projects. On September 23 32 the potential Tax Increment Financing (TIF) list with the top ten projects was distributed. These 33 projects represent a potential expenditure of $10.5 million out of $11 million projected to be 34 available according to Ehlers. This matter was again reviewed and discussed in October of 35 2005, and some revisions were made, but not to any of the infrastructure priorities. On 36 November 14, 2005, a joint meeting was held to review that priority list, evaluate the County 37 Road 10 project, and the EDA identified the highest priority projects as being pedestrian trails 38 along County Road 10, road reconstruction City-wide, County Road 10 corridor improvement, 39 Silver Lake Road trail, and a housing replacement program. Since that time, the projects and 40 funding priorities have been discussed at EDC meetings and the philosophy remains the same. 41 42 Mr. Johnson explained that during meetings in 2006, TIF options were presented to the EDC. 43 However, the Commission is hesitant to pick one since funding will change depending on the 44 project selected. She stated the EDC tends to lean towards the status quo option (Option 1) since 45 Mounds View EDA May 22, 2006 Regular Meeting Page 2 it provides more funding for the list of projects. Another option is to decertify one district, which 46 would lower taxes by $32 a year but that would reduce TIF increment by $2.2 million. Ms. 47 Johnson stated those are the two options the EDC was willing to consider. 48 49 Ms. Johnson stated over last nine months, the EDC has felt communication between the EDC 50 and EDA has improved and priorities are closer in alignment. She advised the EDC recommends 51 that action can commence and the EDA move forward with action items to complete the work 52 that needs to be done, which will provide the most benefit for the community and businesses. 53 54 Bill Warner, 2765 Shorewood Road, asked the purpose of the Highway 10 project. 55 56 Ms. Johnson explained the Highway 10 project includes improvement for the safety of residents 57 and businesses along the corridor, making it a place where people will want to come rather than a 58 pass through, and also to help promote the business community in that area. 59 60 Mr. Warner asked whether the EDC only has economic development priorities but no citizen 61 priorities. 62 63 President Marty asked that all questions be addressed to him. He explained the EDC functions as 64 oversight before things get to the EDA and together they look at some projects jointly. 65 66 Mr. Warner asked if they are only interested in the economic aspects of the Highway 10 67 development or also concerned with impact to the residents. 68 69 President Marty stated the EDC is charged with looking at the economic development 70 possibilities within the City and future possibilities. The EDA and Council are the bodies that 71 are supposed to look out for the residents. 72 73 Ms. Johnson stated she is a 15-year resident of Mounds View. She explained the EDC is 74 comprised of four resident and three business members. 75 76 5. APPROVAL OF MINUTES 77 78 A. EDA Minutes, March 27, 2006. 79 80 MOTION/SECOND: GUNN/STIGNEY. To Approve the March 27, 2006 Minutes as corrected. 81 82 Ayes – 5 Nays – 0 Motion carried. 83 84 6. CONSENT AGENDA 85 86 None. 87 Mounds View EDA May 22, 2006 Regular Meeting Page 3 88 7. EDA BUSINESS 89 90 A. Continue Review of City Economic Development Policy 91 92 Community Development Director Ericson stated Ms. Johnson’s comments have provided 93 background for this agenda item. He explained the EDA has reviewed all economic development 94 related policies and programs to formulate a philosophy about economic development into the 95 future. He noted there has been a number of discussions on this item and staff has looked at 96 scenarios about how the future of TIF should be structured. There are several scenarios the EDA 97 can look at to either maintain the status quo or take some action to scale back the collected 98 increment through 2015. Director Ericson presented the following options to consider: 99 1. Maximize the flow of Increment for articulated EDA purposes (status quo) 100 2. Reduce the amount of increment collected for EDA purposes 101 3. Reduce the percentage of tax capacity captured in TIF Districts 102 4. Reduce the geographic areas (acres) contained within TIF districts 103 5. Reduce the financial burden of TIF districts upon non-TIF properties 104 105 Director Ericson stated Ehlers & Associates reviewed potential scenarios and that information 106 was considered at the previous meeting. The EDA had asked how these scenarios impact the 107 owner of a median value home in regard to tax impacts. 108 109 Director Ericson drew the EDA’s attention to the financial analysis prepared by Finance Director 110 Beer. He noted that with Scenario 2, the amount of tax capacity captured would decrease from 111 22.32 percent to 19.51 percent. The amount of increment collected from the remaining two 112 districts would amount to a cumulative $12.2 million. The net effect to a property owner with a 113 median value home would be a reduction of $32 annually. Scenario 3 for Election B represents 114 the effect of a change to the fiscal disparities election for the original three districts. The amount 115 of increment collected from the three districts would be $9 million, a reduction in revenues by 116 more than $5 million. The net effect to a property owner with a median valued home would be a 117 reduction of $55 annually. Scenario 4 combines the effects of Scenario 2 and 3, decertification 118 and FD Election. With Scenario 4, the total increment generated after decertifying District 3 and 119 changing the FD Election on Districts 1 and 2 would be $7.3 million, nearly a fifty percent 120 reduction from the status quo scenario. The net effect to a property owner with a median value 121 home would be a reduction of $73 annually. 122 123 Director Ericson explained the options available to combine these scenarios and mentioned the 124 overriding issue is there are identified projects and priorities. One identified project is the street 125 reconstruction project that would cost about $50 million and could be funded by TIF. The City 126 will be collecting $14.2 million so the question is what are the priorities and would the EDA like 127 to reduce the amount of TIF collected. If so, another question is how to implement that direction 128 to fund the projects desired. 129 Mounds View EDA May 22, 2006 Regular Meeting Page 4 130 Director Ericson stated with an annual reduction of $16 for a median property owner, it would 131 result in a 10 percent reduction across the board and the City would give up $1.2 million of 132 increment. He stated he would like to get a sense whether the EDA supports maintaining TIF at 133 the present projection or taking action to possibly decrease it. 134 135 Commissioner Flaherty stated his preference is to maximize the value of the district, noting three 136 districts are in play that pre-date the 1992 TIF laws so the EDA has a lot of latitude with those 137 three districts when compared to District 5 for Medtronic. He noted with the first three districts, 138 the increment can be used City-wide. The EDA has identified $37 million in priority projects so 139 all increment will be needed. He stated he thinks that would be the most prudent route. 140 141 Vice President Stigney stated it is time to owe something to the residents to close out SYSCO 142 District #3, which would reduce TIF captured by $2.1 million and result in a net effect to reduce 143 taxes to each homeowner by $32 annually. He stated that is the least the EDA can do 144 considering the residents have shouldered the TIF districts all these years. He stated the EDA 145 needs to nail down the expenditures and stated the County Road 10 project needs to be reviewed 146 with a “fine toothed comb.” He stated Scenario 2 to decertify SYSCO is sensible and would 147 benefit taxpayers. 148 149 Commissioner Gunn asked what are the alternatives to pay for the County Road 10 project if the 150 EDA decertifies the Districts and lessens the amount of increment available. She noted that the 151 City would have to go for bonding and asked who bears the burden to pay for those bonds, noting 152 it is the citizens. She asked where does the balance comes in. 153 154 Commissioner Thomas stated the balance is that it is all the same funds and comes from the same 155 pocket, the taxpayer. She stated her support of the suggestion by Vice President Stigney for 156 Option 3 because she would be satisfied with decertifying to reduce some of it. She pointed out 157 that the EDA was always prepared for and understanding that a project the size of County Road 158 10 would require the City going out for a bond. She stated the shifting of tax dollars to “hide” 159 things does not change anything and by decertifying some of the Districts, the EDA can improve 160 the tax picture. She stated she understands the desire to maximize the increment but you also 161 have to understand that results in taking from something, such as from the school district. She 162 stated the EDA needs to keep in mind the overall tax picture, including the County and School 163 District taxes. She noted that Election B will help with the overall tax picture and she supports 164 putting the projects back onto the tax rolls. 165 166 Commissioner Flaherty stated Commissioner Gunn raised a good point about where is the 167 balancing act. He stated he would hate to put $32 in resident’s left pocket while taking $50 out 168 of their right pocket. He noted that if additional dollars are needed for a project, it will come 169 from the tax payers. Commissioner Flaherty stated he supports keeping the three early Districts 170 because the increment can be used City-wide. 171 Mounds View EDA May 22, 2006 Regular Meeting Page 5 172 President Marty stated Ehlers & Associates are the City’s TIF advisors and indicated the EDA 173 could get over $10 million immediately to start working on some of the projects right away. He 174 stated if the Districts went for 20-25 years he would look at it differently. The first District 175 expires in 2013, the next in 2014, and the last District in 2015. President Marty stated in the next 176 nine years the City can capture $14.3 million to be used in the City. 177 178 President Marty stated with Scenario 2 to decertify District #3, it will give back $32 annually to 179 taxpayers and give up $2.1 million of increment. With Election B it would change the fiscal 180 disparities and provide a reduction of $55 annually to taxpayers and the EDA would lose $6.3 181 million. He stated all in Mounds View realize the condition of the streets and infrastructure and 182 this increment can be used for the streets, which is a $50 million project. He referenced a portion 183 of the staff report, noting County Road 10 and the sound wall are not mentioned and he thinks 184 that will cost about $9 million. 185 186 President Marty stated it was mentioned by Commissioner Gunn that if the EDA decertifies, 187 $14.3 million is not enough to pay for many projects. If it is decertified, it means those projects, 188 dreams and plans will have to be taxed, bonded for, or they will not happen. He stated he would 189 like to maximize the increment and see how far the $14.3 million can be stretched. 190 191 President Marty stated until the Districts are decertified, the City gets all the TIF captured but if 192 the Districts are decertified then the funds go into the tax pool and the City of Mounds View 193 would only get about 33%. Out of this, the City would be saving the citizens $32 per year and 194 for that amount the City has to give up $2.1 million. President Marty stated he would like to use 195 as much of the increment on County Road 10 and road improvements to provide a direct benefit 196 instead of decertifying and then having to bond or tax for those projects. He stated his support 197 for Option 1. 198 199 Commissioner Thomas stated that is true to an extent but District 3 is done with its obligation in 200 three years and the EDA has to look beyond the City at the whole tax picture, including the 201 impact to Ramsey County who may have to increase taxes. She noted that the County and 202 School District will be raising the resident’s taxes so that $32 does mean something. 203 204 Vice President Stigney stated he agrees with Commissioner Thomas that whether paid directly or 205 decertified the funds come from residents. He noted the County and School District also tax for 206 the funds they need. He supported holding off on fiscal disparities until it is known how Option 207 2 will work out, which provides residents a tax deduction of $32 annually. He stated that with 208 bonding and the “balancing act” this only effects by $2.1 million and leaves $12.2 million for the 209 City to use. Before bonding, he stated he would suggest the expenditures be reviewed to see how 210 they line up. He noted there is a levy reduction fund so the City should be able to leave the taxes 211 with a zero increase. He stated again that residents should receive some benefit after handling 212 the burden of the tax increment districts for all these years. He stated the EDA does not need to 213 Mounds View EDA May 22, 2006 Regular Meeting Page 6 worry about whether bonding is needed and should first look at the project to see if all of the 214 things included are really needed. 215 216 President Marty summarized that Vice President Stigney and Commissioner Thomas support 217 Option 2. Commissioners Flaherty, Gun, and President Marty support Option 1. He stated that 218 for the present time this will stay as is (Option 1) and the projects will be reviewed to prioritize 219 what is actually needed. He stated his agreement with Vice President Stigney that the City needs 220 to scrutinize what is being spent, noting the cost for the monument signs are out of line and he 221 thinks a wooden sign can be erected so the money can be spent more wisely. 222 223 Vice President Stigney suggested a motion and vote occur on this action. He stated when TIF is 224 captured for a specific purpose to assist a project, once that occurs then the District should be 225 closed out instead of trying to capture more increment. 226 227 MOTION/SECOND: FLAHERTY/MARTY. To Accept Option 1 to maximize the flow of 228 increment for articulated EDA purposes (status quo). 229 230 Ayes – 3 Nays – 2 (Stigney, Thomas) Motion carried. 231 232 B. Resolution 06-EDA-219 Appointing Gary Meehlhause to the EDC 233 234 Assistant to the City Administrator Crane reviewed that Stan McDonald resigned as a member of 235 the EDC on April 24, 2006, which put a vacant seat on the EDC. Staff advertised in the local 236 newspaper and on the website for volunteers. The EDC is composed of seven voting members 237 and one nonvoting member (the EDA Liaison to the EDC). Assistant to the City Administrator 238 Crane explained that potential members are required to fill out an application from and staff 239 received one application from Gary Meehlhause. Mr. Meehlhause is a Mounds View resident 240 and is a current member of the Mounds View Planning Commission. If the City Council wishes 241 to appoint Mr. Meehlhause to the EDC, he would be serving a three-year term. 242 243 Commissioner Gunn stated she spoke with Mr. Meehlhause after the Planning Commission 244 meeting and learned he is very eager to serve on the EDA and be able to serve Mounds View in 245 another way. 246 247 MOTION/SECOND: GUNN/STIGNEY. To waive the reading and approve Resolution 06-248 EDA-219 Appointing Gary Meehlhause to the EDC. 249 250 President Marty stated he has received e-mails from Mr. Meehlhause, watched him serve on the 251 Planning Commission, found him to be very well spoken and written, and believes he will be an 252 addition to the EDC. 253 254 Ayes – 5 Nays – 0 Motion carried. 255 Mounds View EDA May 22, 2006 Regular Meeting Page 7 256 8. REPORTS 257 258 Economic Development Coordinator Backman presented an update on the Medtronic program by 259 distributing representative photographs of the project site. He advised of the construction 260 activity and that the structure is now up to the fourth floor. The central building will begin in 261 June. 262 263 Economic Development Director Backman provided a financial recap of the Medtronic project 264 including details on the payments made prior to closing, cash at closing, and payments made 265 following closing. He advised the City has received just under $13 million in the last nine 266 months. Payments made prior to closing equaled $396,438 and $625,000 will be coming in the 267 next several month. 268 269 Community Development Backman presented the obligations of the City to pay off the golf 270 course bonds, internal loans, and reimbursement for administrative expenses totaling $4.5 271 million. The net proceeds is about $9 million and if you take out restricted funds and uses, there 272 remains discretionary funds of $5.4 million. 273 274 Economic Development Backman referenced the footnotes and explained that discretionary 275 funds are the levy reduction fund previously discussed by Vice President Stigney. 276 277 9. NEXT EDA MEETING: Monday, June 12, 2006 at 6:30 p.m. 278 279 10. ADJOURNMENT 280 281 President Marty adjourned the meeting at 7:17 p.m. 282 283 Respectfully submitted, 284 285 286 Recorded and transcribed by: 287 Carla Wirth 288 TimeSaver Off Site Secretarial, Inc. 289 290