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6.1. SR 11-21-1994 r I ~( ( ?I !Ii( River e e ITEM 6. 1. MEMORANDUM TO: MAYOR & CITY COUNCIL FROM: WILLIAM RUBIN, ECONOMIC DEVELOPMENTCOORDINATtrV~ NOVEMBER 7, 1994 DATE: SUBJECT: MODIFICATION TO EDA ENABLING RESOLUTION (PUBLIC HEARING) INTRODUCTION At its meeting on October 17, 1994, the Elk River City Council authorized a public hearing to consider a modification to the Resolution which created the Economic Development Authority for the City of Elk River (EDA). The public hearing is scheduled for 7:00 p.m., on November 7, 1994. The proposed modification relates to the initiative of adding at least one more at-large commissioner at the expense of reducing the number of City Councilmembers on the EDA. BACKGROUND In order to fully appreciate the initiative to add at least one more at-large Commissioner to the EDA Board, it may be appropriate for the City Council to review the EDA Statute for its historical perspective. Prior to 1986, the only economic development agencies available to municipalities were port authorities or housing and redevelopment authorities. The mission of a port authority is that of riverfront development and/or industrial development. For an HRA, its mission is more urban renewal/senior-low income housing, etc. The creation of an HRA required a public hearing; in order to create a port authority, special legislation was necessary. As a result, the 1980's saw witness to a number of communities obtaining special legislation to establish a port authority in order to become more active in economic development. For example, St. Cloud, Plymouth, White Bear Lake, Roseville, and Albert Lea all obtained special legislation in the 1980's to create a port authority. In 1986, the Legislature responded with the creation of a new Statute designed to allow cities to establish an economic development authority. Although patterned after the Port Authority Statute, the 1986 EDA Law corrected some of the weaknesses legislators observed in the existing Port P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 e Authority Statute. For example, a port authority has broad latitude to operate without the benefit of City Council direction or representation. To correct this lack of a checks-and-balance system, legislators required that an EDA have City Council representation on its Board. With that overview, perhaps the initiative to add at least one more at-large commissioner has greater perspective. According to a 1990 Minnesota Senate Research Report on Economic Development Authorities, only five of 110 responding cities (4.5%) indicated that its EDA Board composition was that of all Councilmembers and some at-large members. The most popular Board composition was that of part of the City Council and at-large members (69 of 110 responding cities; 62.7%). The Big Lake EDA is a seven-member Board with two City Councilmembers and five at-large commissioners. In Becker, its five-member EDA is comprised of two City Councilmembers and three at- large commissioners. Recently, Princeton established an EDA, and four of its seven commissioners are at-large representatives. ACTION REQUESTED e Following a public hearing on this matter, the Elk River City Council is asked to adopt Resolution 94-_. This Resolution modifies Resolution No. 87 -63, a Resolution establishing an Economic Development Authority for the City of Elk River, Minnesota. Previously, Resolution No. 90-5 modified the enabling resolution by expanding the EDA Board from five to seven commISSIoners. e 4-= s.F] .': ~ :T:i..i ~~ e Elk River Area Chamber of Commerce November 2, 1994 rc(fjf{?~ Mayor Hank Duitsman and City Council Members City of Elk River P.O. Box 490 Elk River MN 55330 Dear Mayor Duitsman and Council Members: I am writing to you on behalf of the Elk River Area Chamber of Commerce Board of Directors to express our strong support of the resolution to modify the Economic Development e Authority for the City of Elk River. The chamber board unanimously endorses the proposal to add at least one more non-elected resident of the City to serve in an at-large capacity. Thank you for providing the leadership and vision which will make Elk River an even better place to live and do business in the future. Sincerely, p;~~ Sharon L. Bromen President ( "'-ccc: Jeff Gongoll e 509 Highway 10 · Elk River, Minnesota 55330-1415 · (612) 441-3110 "Building a Better Community Together" " MINNESOTA SENATE :L 9 c:::. 7 . -/J.L."cdr. 10(r /70 - e " rn~~~illrn@oo rn~[p@rn1r Economic Development Authorities By Patrick J. McCormack Legislative Analyst And Beverly Cadotte Owen Senate Counsel October 1990 ~ ~_. Senate Counsel & Research . e e Measure Population-1988 Households-1988 Development Expenditures* Per Capita Housing Built Pre-1940 Housing Built 1940-70 Housing Built 1970-80 Percent Below Poverty TIP Expenditures Per Capita $17.15 $7.57 *Inc1udes BRA, EDA, and Port Authority Expenditures Mean-With EDAs 5,486 2,071 Mean-Without EDA 3,445 1,366 $6.43 38.3% 37.3% 24.3% 9.9% $4.91 44.1 % 32.9% 22.6% 11.9% These differences are statistically significant. The story they tell is of EDA cities which are somewhat larger, somewhat better off, and somewhat more aggressive in pursuing development expenditures than are cities without EDAs. It appears that EDAs have been established in cities that are more actively engaged in development. The cities that do not have As also tend to be less engaged in development. EDAs are required to have aboard consisting of three, five, or seven COmmISSIoners appointed by the mayor with the approval of the city council. A three member board must have one city council member, five and seven member boards must have two city council members. Alternatively, an EDA board may consist entirely of city council members. Cities also have the option of appointing private citizens to the board. In the survey, the 110 responding cities characterized their board as follows: Board Makeup The City Council Part of Council, Public Members All of Council, Public Members Number 36 69 5 Percent 32.7% 62.7% 4.5% Almost one-third of cities use their city council as the governing body of the EDA This arrangement provides for direct responsibility by elected, officials for the operation of the EDA Two-thirds of EDA boards have private citizen members. Private citizen members come from various sectors of the community. Cities were asked what interests their private citizen members represent. The following table tells you what percentage of EDAs have each type of citizen member as a commissioner. 5 Private atizen Makeup Of EDA Board e Interest Business Citizen Community Advocate Labor City Employee Developer County Representative Number of EDAs 78 55 30 21 13 13 2 Percent 70.9% 50.0% 27.3% 19.1% 11.8% 11.8% 1.8% , , As this table shows, business interests are amply represented on EDA boards in Minnesota. It is interesting to note that county representatives are almost entirely absent from EDA boards. The policy issue most often raised with respect to these boards is their makeup, and the exclusion of some city council members, often in favor of non-elected private citizen members. Some feel that an organization with such an impact on city finances should be entirely directed by elected officials. Others worry that the appointment system allows the mayor and a bare majority of council members to entirely control the EDA board, leaving no room for opposing factions. e may exercise tax increment financing (TIP) powers wi . economic development A number of EDAs have taken advantage of the portunity to use TIP. 39.1 % 60.9% Nearly two-fifths of the EDA ci' are using TIP through their EDA It is likely that many EDAs are too new to have en Ie to use TIP (several said as much in the survey). Future use of TIP will dep d on the c' 'es' reactions to the legislature's 1990 TIP reforms. As appendix one shows several cities ma comments unfavorable to the 1990 reforms. Because the 199 eforms were controversial, citi were asked if they had created new TIP districts in th ast six months. Many of these new di 'cts may have been created to avoid the 19901 , a substantial portion of which went into e ct on May 1, 1990. e 6 o~t'1 OIt1Ft e RESOLUTION 94 - RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION MODIFYING RESOLUTION NO. 87-63 ESTABLISHING AN ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER, MINNESOTA WHEREAS, Minnesota Statutes 469.090 et sea. (the Statute) authorizes the City of Elk River (the City) to establish an Economic Development Authority pursuant to the procedures and subject to the restrictions set forth therein; and, WHEREAS, on October 7,1987, the City Council for the City of Elk River (the City Council) adopted Resolution No. 87-63 creating the City of Elk River Economic Development Authority (the Authority); and, e WHEREAS, on February 12, 1990, the City Council adopted Resolution No. 90-5 to expand the Authority from five (5) to seven (7) Commissioners by including two (2) residents to serve the Authority at-large; and, WHEREAS, the City Council finds that it is in the best interest of the City and its residents to further broaden the representation on the Authority. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: 1. Commissioners a. Four of the five members of the City Council of Elk River shall serve as the Commissioners of the Authority together with three residents of the City of Elk River who shall be appointed by the Mayor, with the approval of the City Council, to serve "at- large" . b. The terms of the Commissioners shall coincide with their term of office as members of the City Council. All at-large Commissioners shall serve six (6) year terms. e e Passed and adopted by the City Council of the City of Elk River, Minnesota, this 7th day of November, 1994. Henry A. Duitsman, Mayor ATTEST: Sandra A. Thackeray, City Clerk e e The City Council for the City of Elk River, Minnesota ( Resolution No. 87- 63 ENABLING RESOLUTION ESTABLISHING AN ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER, MINNESOTA. WHEREAS, Minn. Stat. ~ 469.090 et seq. (the Statute) authorizes the City of Elk River (the City) to establish an Economic Development Authority pursuant to the procedures and subject to the restrictions set forth therein; and WHEREAS, the City Council for the City of Elk River (the City Council) finds that it is in the best interest of the City and its residents to establish an Economic Development Authority pursuant to the Statute. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: 1. Establishment of Economic Development Authority. There is hereby established in the City of Elk River an Economic Development Authority (hereinafter referred to as the "Authority"), effective upon passage by the City Council of this resolution. / I \. 2. Commissioners. a. The members of the City Council of Elk River shall serve as the Commissioners of the Authority. b. The terms of the Commissioners shall coincide with their term of office as members of the City Council. c. Commissioners shall be compensated at the rate of One Dollar ($1.00) for each regular or special meeting of the Authority attended. In addition, Commissioners shall be reimbursed for actual expenses incurred in doing official business of the Authority. 3. Officers: a. The Authority shall annually elect a president, a vice president, a treasurer, a secretary, and an assistant treasurer. A Commissioner must not serve as president and vice president at the same time. The offices of secretary and assistant treasurer need not be held by a Commissioner. b. The officers shall have the usual duties and powers of their offices, including those set forth in the Statute. 4. Bylaws and Rules: a. The Authority shall adopt bylaws and rules to govern its procedures and for the transaction of its business. The records of the Authority shall be a public records, as provided by law. b. The Authority shall adopt an official seal. 5. Employees: a. The Authority may employ an executive director and such other employees as it may require, and determine their duties, qualifications, and compensation.. b. The Authority may contract for the services of consultants as needed to perform its duties and exercise its powers. c. The Authority shall use the services of the City attorney as its chief legal advisor. d. The Authority may delegate to its agents or employees such powers or duties as it may deem proper. 6. Conflict of Interest: Except as otherwise provided by law, a Commissioner, officer, or employee of the Authority must not acquire any financial interest, direct or indirect, in any project or in any property included or planned to be included in any project, nor shall the person have any financial interest, direct or indirect, in any contract or proposed contract for materials or services to be furnished or used in connection with any project. 7. Powers: The Authority shall have all powers conferred upon Economic Development Authorities by the Statute, as amended from time to time, including: a. The powers of a housing and redevelopment authority under Minn. Stat. S 469.001 et seq.; b. The powers of a City under Minn. Stat. S 469.124 et seq.; 2 . c. The powers and duties of a redevelopment agency under Minn. Stat. SS 469.152 et sea.; d. The power to create and define the boundaries of economic development districts, as provided by law; e. The power to acquire by lease, purchase, gift, devise, or condemnation proceedings property required to create economic development districts; and to dispose of property acquired, as provided by the Statute; f. The power to sign options to purchase, sell, or lease property; g. The right of eminent domain, as provided by the Statute; h. The power to make contracts for the purpose of economic development, as provided by the Statute; l. The authority to bea limited partner in a partnership whose purposes are consistent with the Authority's purpose; J. The power to acquire rights or an easement for a term of years, or perpetually, for development of an economic development district; k. The power to buy the supplies and materials it needs to carry out the purposes of the Statute; 1. The right to receive public property, as provided by the Statute; m. The power to sell or lease land held by it for economic development in economic development districts; n. The power to operate and maintain a public parking facility or other public facility to promote development in an economic development district; o. The right to cooperate with or act as agent for the federal or state government or other public body to carry out the Statute; p. The power to study and analyze economic development needs in the City and ways to meet the needs; to study the desirable patterns for land use for economic development and community growth, and other factors effecting local 3 . economic development in the City; to make the result of the studies available to the public and to industry in general; to engage in research and to disseminate information on economic development within the City; q. The power to carry out public relations activities to promote the City and its economic development, as permitted by the Statute; r. The right to accept conveyances of land from all other public agencies, commissions, or other units of government, if the land can be properly used by the authority in an economic development district to carry out the purposes of the Statute; s. The power to develop and improve the lands in an economic development district ~o make it suitable and available for economic development uses and purposes; to fill, grade, and protect the property and do anything necessary and expedient, after acquiring the property, to make it suitable and attractive as a tract for economic development; and to lease some or all of its lands or property; and may set up local improvement districts in all or part of an economic development district; t. The power to borrow money in anticipation of bonds, after bonds have been authorized, as provided by the Statute; u. The power to issue general obligation bonds, pursuant to the procedures set forth in and as provided by the Statute, and when authorized by two-thirds (2/3) majority vote of the City Council, to: l. Secure funds needed by the Authority to pay for acquired property; or ll. For other purposes as provided In the statute. v. The power to issue revenue bonds pursuant to the procedures set forth in and as authorized by the Statute; w. The power to sell or convey property owned by it within the City or an economic development district pursuant to the procedure set forth in the Statute, if it determines that the sale or conveyance is in the best interest of the City or 4 . district and its people and that the transaction furthers the Authority's general plan of economic development; x. The power to advance its general fund money or its credit or both without interest for the objects and purposes of the Statute, as allowed by the Statute; y. The right to request that the City levy a tax for the benefit of the Authority, pursuant to the procedures and as provided for in the Statute. 8. Existinq Prolects: a. The Authority shall have no control nor authority over any existing economic development or redevelopment project in the City, unless specifically so provided by subsequent resolutiBn of the City Council. If the City Council adopts a resolution transferring control, authority, and operation of any existing project to the Authority, the Authority shall accept control, authority and operation of the project; b. When taking control of an existing project, the Authority may exercise all of the powers that the governmental unit establishing the project could exercise with respect to the project and shall covenant and pledge to perform the terms, conditions, and covenants of any bond indentures or other agreements executed with respect to the project. 9. Banks and Audits: a. Every two years the Authority shall name a national or state bank within the state as a depository, in the manner provided by the Statute. b. The financial statements of the Authority shall be prepared, audited, filed, and published in the manner required by the Statute. 10. Annual Reports: The Authority shall prepare and submit all annual reports required by the Statute, including: a. An annual report stating whether and how this enabling resolution should be modified; b. An annual budget; 5 . c. An annual report giving a detailed account of the Authority's activities and its receipts and expenditures during the preceding year. 11. Modification of Enablina Resolution: This enabling resolution, or any part thereof, may be modified at any time by the City Council, as provided by the Statute. The following Resolution was introduced by Councilmernber schuldt and duly seconded by Councilmernber Dobel. The following voted in favor of the Resolution: Mayor Gunkel Councilmember Schuldt Councilmernber Dobel The following voted against: The following were absent: Councilmember Holmgren Councilmember Tralle Whereupon the Resolution was adopted: ADOPTED: October 7, 1987 Chl}l /' ~j Estelle Gunkel, Mayor ATTEST: ~/ l? a-,~./ Pat Klaers, City Administrator PKB:A06 6 . (' WHEREAS, WHEREAS, WHEREAS, RESOLUTION 90 - 5 A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION MODIFYING RESOLUTION 87-63 ESTABLISHING AN ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER Minnesota Statute 469.090 et seq. (the Statute) authorizes the City of Elk River (the City) to establish an Economic Development Authority pursuant to the procedures and subject to the restrictions set forth therein; and, on October 7, 1987, the City Council for the City of Elk River adopted Resolution 87-63 creating the City of Elk River Economic Development Authority (the Authority); and, the City Council for the City of Elk River (the City Council) finds that it is in the best interest of the City and its residents to expand the Authority to broaden the representation on the Authority. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: 1. Commissioners a. The members of the City Council of Elk River shall serve as the Commissioners of the Authority together with two residents of the City of Elk River appointed by the Mayor with the approval of the City Council, to serve "at large". b. The terms of the Commissioners shall coincide with their term of office as members of the City Council. One of the at large Commissioner's initial term shall expire on 12/31/91 and the other Commissioner's initial term shall expire on 12/31/93. Thereafter, all at large Commissioners shall serve six (6) year terms. c. Commissioners shall be compensated at the rate of One Hundred Dollars ($100.00) for each full month of service. In addition, Commissioners shall be reimbursed for actual expenses incurred in doing official business of the Authority. The following Resolution was introduced by Councilmember Holmgren and duly seconded by Councilmember Kropnenske The following voted in favor of the Resolution: Mayor Tralle, Councilmembers Kropuenske, Dobel, Holmgren and Schuldt The fOllowing voted against: None The following were absent: None WHEREUPON the Resolution was adopted: ADOPTED: February 12., 199~ m::; . ~ fizZ. - James A. Tralle, Mayor ATTEST: ~': ~a~ City Clerk