4.2. SR 07-28-1997u~ty of
iver
MEMORANDUM
Item # 4.2.
TO:
FROM:
DATE:
SUBJECT:
Mayor & City Council
Pat Klaers, City Admin~s~trator
July 28, 1997~'~
Outdoor Recreation Bond Issue
For a number of years, and especially since the beginning of 1997, the Park
and Recreation Commission has been working towards submitting to the
public an outdoor park and recreation bond referendum proposal. Recently a
Community Survey that concentrated on Park and Recreation issues was
conducted. Results of this survey has helped encourage the Commission to
pursue an outdoor park and recreation issue but also has helped create some
confusion by way of indicating that the public would also support an outdoor
pool and a community center. The Community Survey results also identified
some concerns and contradictions between what people wanted and what
people were willing to pay for regarding a community center. (Unfortunately
this same question was not asked regarding an outdoor pool.) The Park and
Recreation Commission believes that they have a proposal to recommend to
the City Council which is: identical to what is needed in the community; is
supported by the community; and is matched by what the community is
willing to finance. This proposal from the Commission excludes a pool in the
September 23, 1997, referendum. However, the Commission supports a pool
being pursued as an independent issue for a possible referendum in 1998.
The Park and Recreation Commission has been pursuing the outdoor
recreation issue from two different angles. These two angles are; what are
people willing to pay versus what is the minimum amount of money needed
in order to complete improvements of any significance. Question 31 of the
Survey (see attachment) indicates that a typical Elk River resident is willing
to increase their taxes by $22 yearly to fund park and recreation
improvements. We originally believed that this would generate about $2
million and the Commission believed that for this amount it could get many,
and a great variety of, improvements that would make an impact on the
community. However, this initial information was based on net tax capacity
and we now realize that bond issues must be based on market value. This
market value basis paints a completely different picture and indicates that it
will be about $31 per year per household ($100,000 value) over 20 years to
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 ° TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
raise $2 million (see attachment). Through the structuring of the bond, we
believe that this number can be reduced to $29 per year based on some
assumptions for future growth in the community.
Decision Resources has noted that the Survey implies that $29 is the upper
limit that the public will support for outdoor recreation issues. Everyone
originally thought that we could get both outdoor recreation and a modest
pool (for under $1 million) for about $29 per household. However, this was
based on the net tax capacity figures. Based on market value information, a
combined pool and an outdoor recreation issue approaches $50 per household
and this is far too much. The public simply is not willing to support an
outdoor recreation and pool issue that approaches $50 per year (please see
attached comments from Bill Morris, Decision Resources, Ltd., regarding the
new tax figures).
In the initial meeting between the Commission and Decision Resources,
discussion took place regarding the support for the outdoor pool. At that
meeting, it was suggested that the city could structure an "if..., then..." type
of ballot. By this, Bill Morris meant that "if' the outdoor recreation issue was
approved, "then" the vote on the second question regarding the pool would be
counted. However, "if' the outdoor recreation issue failed, "then" the vote on
the pool would not even be considered. Subsequent conversations with Bill
have indicated that this is a common approach for school referendums, but
we have yet to see a city pursue this type of questioning on a ballot.
Additionally, bond consultant, Jim O'Meara, of Briggs & Morgan, who must
structure and approve the bond question(s), has also not seen this type of
approach at a municipal level. If we could find a municipal example, we
would have a better chance of convincing Jim that this is an appropriate
approach, but to date we have yet to find one.
Assuming the "if..., then..." two question approach is not valid, then the city
has a very difficult situation if the pool is to be on the ballot. The difficulty
relates to:
1.)
2.)
Whether or not the proposal should have one question on
outdoor recreation and a second question combining outdoor
recreation and the pool; or
only one question simply dealing with both outdoor recreation
and the pool; or
whether or not there should be two separate questions, one
dealing only with the pool and another dealing only with
outdoor recreation.
The concern with either of these approaches is that yes votes will get split
and yet all of the no votes would still be coming to the polls and voting
against all questions.
Additionally the pool is getting more expensive as more discussion takes
place about the various components and design issues associated with a pool.
We have been using a working number of about $1.3 million for the pool and
even this is looking like a low estimate. The total cost of a combined outdoor
recreation and pool question leads everyone to believe that this would not be
successful. The Park and Recreation Commission is convinced that the best
chance for success this September is simply to ask just one question relating
to outdoor park and recreation. The Commission strongly supports the pool,
but believes that the issue is very complex and needs additional analysis and
study, and it should be a separate question to go forward sometime in 1998.
There are a lot of issues to deal with regarding a swimming pool/recreation
area. Questions relate to an outdoor pool versus an indoor pool or both being
pursued. The design of a pool and use of a pool is also open to discussion -
this relates to more of a traditional pool versus including a shallow wet area
for very young children. At this point, most everyone is convinced that we
need a combination traditional pool and recreation wet area for family use.
Location of a pool at City Hall needs further analysis as it relates to being
compatible with the future community center location. The actual cost for a
pool and operating expenses are additional issues that need analysis. It
should be noted that in addition to construction costs for a pool, there will
most likely be a membership fee or entrance fee required in order to cover
operating expenses. There is strong support indicated in the community
survey for an outdoor pool, but more time is required in order to go through
the process to assure that the right proposal at the right cost at the right
location is presented for the public to consider. The survey indicated that
59% of the public would support an outdoor pool, but also indicated that 69%
of the people would support a pool as part of a community center. There are
no comparable figures from the 1989 survey for the outdoor pool question, but
regarding the indoor pool question in 1989, the support was at 52% versus
the 69% today. One of the biggest concerns regarding the pool relates to
what the public is in favor of for a pool versus what they are in support of
financing through additional taxes.
The Park and Recreation Commission is recommending that the pool not be
pursued at this time and that a committee is formed in order to pursue this
option sometime next year. The Commission would like to see the public vote
on an outdoor pool issue in 1998. This recommendation is based on the cost
of a pool, its impact on the taxpayers, and its combined impact in one
referendum with the outdoor recreation issue. The recommendation is also
based on the need for additional study to fully develop the pool proposal. The
based on the need for additional study to fully develop the pool proposal. The
Commission believes that the best chance of success this September is to only
pursue a modest outdoor park and recreation referendum. The Commission
is prepared for the outdoor recreation issue as they have been working on
this indirectly for a number of years, while the po01 issue has only recently
surfaced and the Commission simply is not prepared to go forward in
September with this pool issue.
Attached for your information is the contents of the $2 million outdoor
recreation bond referendum proposal. I support the attached proposal and
Phil Hals and I have worked with the Commission subcommittee on this
proposal.
Recommendation
If the Council concurs, I would request an unanimous vote to adopt the
attached resolution from Jim O'Meara regarding the total cost of the bond
proposal, the question put forward to the public, and the September 23, 1997,
election date.
\\elkriver\sys\shrdoc\council\outdrrec.doc
Suppose the City of Elk River proposed park and recreational
facilities development which you considered to be a reasonable
approach. The proposal would be placed on a referendum ballot
for approval by the voters. In order to fund construction,
residents would be asked to approve a property tax increase for
fifteen year period.
a
31.
How much would you be willing to
see your property taxes increase
to fund this construction? Let's
say, would you be willing to see
your YEARLY property taxes in-
crease by $ o (CHOOSE RANDOM
STARTING POINT; MOVE UP OR DOWN
DEPENDING ON RESPONSE) How about
$__ per month? (REPEAT PROCESS)
NOTHING ............... 20%
$10.00 ................ 13%
$20.00 ................
$3O.OO ................
$4O.OO ................
$50.00 .................
$60.00 .................
DON'T KNOW ............ 10%
REFUSED ................ 3%
Predisposition toward a Bond Referendum:
While eighteen percent ,would "vote against almost any tax increase for park and recreational
facilities development," eleven percent would be inclined to "vote for a tax almost any tax
increase." Sixty-three percent were "persuadable," depending upon the "justification of the
need," "size of tax increase," "inclusion of trails," and "development of more parks." The typical
Elk River residents was willing to increase their property taxes by $22.00 yearly to fund park and
recreational facilities development.
PARK REFERENDUM TAX IMPACT
Estimates prepared by Spdngsted
A $25 per year tax on a $100,000 home provides $1,380,000 available for park projects if the bond is
paid over 15 years. A 20 year term increases the funds available to $1,613,000.
Based on the budget requests of $2,000,000 for parks and open space and $1,000,000 for the pool,
the following tax impacts are projected:
Property Tax Impact
Market Based on term of
Net Bond Proceeds Value 15 years ~'20 years
$11380,000/$1,613,000 50,000 $ 13 ~ 13
150,000 38 38
400,000 100 100
~__~~~000,000 250 250
~ ~ $2,000,000// 50,000 19 16
"... J 100,000 37
150,000 56 47
400,000 148 124
1,000,000 370 310
$3,000,000
50,000 28 23
100,000 55 47
150,000 83 70
400,000 220 188
1,000,000 550 469
Page 1
6129296166 DECISION RESOURSES 485 PO~ JUL 16 '99 14:52
MEMORANDUM
Subject:
Date:
Pat Klaers~ City o£~]k River
Bill Morris, Decision Resources, Ltd.
New Tax Impact Figures
Dear Pat:
Thanks for sending me the new t~x figures adjusted based on market v~t~. Oach,~! They
really do adjust our reasonable expectations about the electorate's behavior.
Let's begin Dy ruling out certain options: a three milliOn datl~ bond refer~ would
have little ehanoe of passage given this tax climate. Tha~ probably mear~ the swimming
pool should be dropped from consideration entirely. Even as a second ballot question, the
overall mount of the tax increase request could generate a backlash.
My advice is still to keep ~o the fig. ny dollar yearly impact or~ the typical Elk River
residence. While this may crimp the number of offerings feamrecl as part of the proposal,
it also keeps the tax request witkin a defendable range -- particularly with a 4.0 million
dollar levy referehdum request by the School District looming on the horizon.
Woodlands Trails Park
Orono Park
Country Crossing 3~a
Mississippi Oaks
Lafayette Woods
Ridgewood East
Deerfield IV
I-Y_dlside 5th
Meadowvale Heights
East of 169 Park
Warming House
2 - Open Shelters
1 - Rest Rooms
1 - Rest Room
Add Playground Equipment
Playground Equipment
½ Court Basketball
Playground Equipment
½ Court
Playground Equipment
2 ½ Courts
Add Playground Equipment
Lights
Add' Playground Equipment
Playground Equipment
'/~ Court
Playground Equipment
½ Court
Playground Equipment
½ Court
Open Shelter
Total This Section
$100,000
50,000
50,000
50,000
30,000
5,000
30,000
5,000
35,000
10,000
20,000
2,000
20,000
30,000
5,O00
30,000
5,000
30,000
5,000
25,000
$537,000
Orono Softball Complex
1 Rest Room
Oak Knoll
Combination Shelter/
Concessions/Restroom in center
Cass Fields
4 - Lighted Fields
1 - Combination Shelter/
Concessions/Restroom
1 - Open Shelter
Total This Section
Funds to Purchase Park Land
Trail Babcock Park to Downtown
Riverwalk
Phase II for Cass Fields
Lion's Teen Center
Total This Section
Trails
Rail Road Trail
169 to Proctor Link
Country Crossing I
Oak Knoll
Woodland Trails
Highway 10
4.5 miles
1.0 mile
sA mile
½ mile
2.0 miles
1.5 miles
Total This Section
Engineer & Design
GRAND TOTAL
$ 50,000
100,000
180,000
125,000
25,000
$480,000
100,000
50,000
100,000
150,000
$400,000
$200,000
70,000
15,000
25,000
125,000
75,000
$ 510,000
$ 73,000
$2,000,000
'-/RIGG$
2200 FIRST NATIONAL BANK BUILDING
332 MINNESOTA STREET
SAINT PAUL, MINNESOTA 55101
TELEPHONE (612) 223-6600
FACSIMILE (612) 223-6450
PROFESSIONAL ASSOCIATION
July 22, 1997
WRITER'S DIRECT DIAL
(612) 223-6420
WRITER'S E-MAIL
Uj'¸
Lori Johnson
City Finance Director
Elk River City Hall
13065 Orono Parkway
P.O. Box 490
Elk River, Minnesota 55330-0490
Re: $2,000,000 Park Bond Referendum
Dear Lori and Sandra:
Sandra Thackeray
City Clerk
Elk River City Hall
13065 Orono Parkway
P.O. Box 490
Elk River, Minnesota
55330-0490
I am enclosing a set of referendum proceedings for this proposed issue of park bonds.
These materials consist of the following:
A resolution for the July 28 City Council meeting calling for the election to be
held on September 23. This Resolution includes the form of the notice of
election and the official election ballot.
(2) Affidavit of posting notice of election and of posting sample ballot.
(3) Official returns of judges of election on question.
(4) September 24 City Council resolution canvassing the results of the election.
(5) Sample letter to the County Auditor indicating that the election will be held.
I would appreciate having in return completed and certified copies of the resolutions
and copies of the other documentation, as completed.
358740.1
MINNEAPOLIS OFFICE · IDS CENTER ,WW~.BRIGGS.COM
MEMBER -- LEX MUNDI, A GLOBAL ASSOCIATION OF INDEPENDENT LAW FIRMS
BRIGGS ~ MORGAN
Lo~ $ohnson
Sandra Thackeray
~uly 22, 1~97
Page 2
In the meantime, please let me know if you have any questions on these materials.
mes P. O'Meara
Jo/try
Enclosures
358740.1
EXTRACT OF MINUTES OF A MEETING OF
THE CITY COUNCIL OF THE
CITY OF ELK RIVER, MINNESOTA
Pursuant to due call and notice thereof, a regular or
special meeting of the City Council of the City of Elk River,
Minnesota, was duly held at the Elk River City Hall on July 28,
1997, commencing at 6:00 o'clock P.M.
The following Councilmembers were present:
and the following were absent:
and moved its adoption:
introduced the following resolution
RESOLUTION CALLING FOR AN ELECTION ON
THE ISSUANCE OF $2,000,000 OF GENERAL OBLIGATION BONDS
OF THE CITY FOR PUBLIC PARK AND RECREATIONAL FACILITIES
BE IT RESOLVED by the City Council of the City of Elk
River, Minnesota, as follows:
1. Project. This City Council has investigated the
facts and does hereby find, determine and declare that it is
desirable to acquire, build, equip and better public park and
recreational facilities for the City.
2. Election. The proposition of authorizing the
issuance of not to exceed $2,000,000 of general obligation bonds of
the City for said purpose shall be submitted to the qualified
electors of the City at an election to be held on Tuesday,
September 23, 1997. Said election shall be held between the hours
of 7:00 o'clock a.m. and 8:00 o'clock p.m. The polling place shall
be the same as the polling places for the general election.
3. Notice and Ballot. The City Clerk is hereby
authorized and directed to post and publish according to law a
Ballot and Notice of Election combining the information required as
to offices to be filled with the information set forth on the
following form, and to prepare ballots for the question (which
shall be blue in color) for use at said election, which information
relating to the question in the combined notice (as provided above)
and ballot shall be in substantially the following forms:
358744.1
NOTICE
OF ELECTION
NOTICE IS HEREBY GIVEN that an election on a question will be
held in and for the City of Elk River, Minnesota, on Tuesday,
September 23, 1997, between the hours of 7:00 o'clock a.m. and 8:00
o'clock p.m., at which time the following question will be
submitted:
"Shall the City of Elk River, Minnesota, be authorized to
issue its general obligation bonds in an amount not to
exceed $2,000,000 to defray the expense of the
acquisition, construction, equipping and betterment of
public park and recreational facilities for the City?"
The polling places for said election, at which place all of
the qualified electors of the City may cast their ballots, will be
the same as for the general election, as follows:
[fill in polling places here.]
Dated: July 28, 1997
BY ORDER OF THE CITY COUNCIL
/s/ Sandra Thackeray
City Clerk
358744.1 2
OFFICIAL
ELECTION BALLOT
CITY OF ELK RIVER
SHERBURNE COUNTY
MINNESOTA
* * YES
* * NO
"Shall the City of Elk River, Minnesota,
be authorized to issue its general
obligation bonds in an amount not to exceed
$2,000,000 to defray the expense of the
acquisition, construction, equipping and
betterment of public park and recreational
facilities for the City?"
NOTICE-
BY VOTING "YES" ON THIS BALLOT
QUESTION, YOU ARE VOTING FOR A
PROPERTY TAX INCREASE.
The maximum amount of increased levy as a
percentage of market value is %.
The amount that will be raised by the new
referendum tax rate in the first year it is to
be levied is $
INSTRUCTION TO VOTERS:
If you wish to vote in favor of the above proposition, mark a cross
(x) in the square before the word "YES" If you wish to vote
against the above proposition, mark a cross (X) in the square
before the word "NO".
(NOTE:
On the back of each ballot shall be printed the words
"Official Ballot", the date of the election and lines for
the initials of the judges.)
358744.1 3
4. Manner; Canvass. Said election shall be held and
conducted in accordance with the statutes of the State of Minnesota
applicable, and the City Council shall meet as required by law for
the purpose of canvassing said election and declaring the results
thereof.
Adopted on July 28, 1997, the Elk River City Council.
The motion for the adoption of the foregoing Resolution was
duly seconded by Councilmember and,
upon a vote being taken thereon, the following Councilmembers voted
in favor thereof:
and the following voted against the same:
Whereupon said Resolution was declared duly passed and
adopted.
358744.1 4
STATE OF MINNESOTA
COUNTY OF SHERBURNE
CITY OF ELK RIVER
I, the undersigned, being the duly qualified and acting City
Clerk of the City of Elk River, Minnesota, DO HEREBY CERTIFY that
I have carefully compared the attached and foregoing extract of
minutes with the original minutes of a meeting of the City Council
duly called and held on the date therein indicated, which are on
file and of record in my office, and the same is a full, true and
correct transcript therefrom insofar as the same relates to an
election on the question of authorizing bonds to defray the expense
of proposed public park and recreational facilities.
WITNESS my hand as such City Clerk and the official seal of
the City this day of , 1997.
(SEAL)
City Clerk
358744.1 5