6.3. SR 02-11-2002 Howard R. Green Company
February 7, 2002
File: 815360J-0240
Item#
6,3.
Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
P.O. Box 490
Elk River, MN 55330-0490
RE:
PARK POINTE ADDITION
PETITION FOR SERVICES
Dear Council Members:
Attached is a petition received from the Developers of the Park Pointe Addition for the extension
of sanitary sewer and water to be included in the 175th Avenue project and for the internal
improvements within the development. City staff has reviewed this petition and would
recommend rejection by the City Council. There are two reasons for the recommendation to
reject the petition. First, with regard to the improvements under 175th Avenue, these can be
simply added by a vote of the City Council. A recommended condition of the approval of the
final plat of Park Pointe is that the Developer pay any and all costs associated with the
extension of these utilities. If the City Council concurs with this recommendation, this can be
handled through the Developer's Agreement and a petition for assessment of these
improvements is not necessary.
Regarding the second portion of the petition for public improvements intemal to the plat, the
staff is recommending denial of this based on the City's recently adopted Financial Management
Plan. With the planned expansion of City Hall and improvements contemplated by the Elk River
Municipal Utilities, there is a concern that the addition of the Park Pointe improvements would
push the City's bonding in 2002 above the $10,000,000 cap. Attached is a memo from Finance
Director Lori Johnson which explains this situation in more detail.
If you have any questions regarding these two issues, I will be in attendance at your February
11, 2002, City Council meeting.
Sincerely,
Howard R. Green Company
TJM:tw
Attch.
Ltr 2-7-02 Council2
1326 Energy Park Drive · St. Paul, MN 55108 ° 651/644-4389 fax 651/644-9446 toll free 888/368-4389
C- 1~--01
05: S2
PM DYNAMICS DESIGN end LAND
6124418604
P.O1
DATK:
TO:
FROM:
D¢ccmber 3, 2001
Honorable Mayor Kl{nzing
Elk River City Council
Jim Brown, Dynamics Design & Land Company
"Petition for Services for the Proposed Plat "Park Pointe"
CC:
M ichelle M cPhcrson, Director of Planning
Terry Mauer, Engineer
On behalf of Cascade I Land Company, this petition is to request that the extension of
sewer and water services be included in the City of Elk River's construction
specifications for the street improvements planned for 175~ Avenue.
Cascade I Land Company is also petitioning that the extension of these same services
into the proposed plat "Park Pointe" be included as part of the 429 Bond Process.
Cascade I Land Company will agree to pay for the extension of these services as part of
a Developer's Agreement for the plat.
Thank you for consideration of this request.
DEC- 1----01~ 05:$3 PM DYNAMICS DESIGN clnd LAND 6124418684 P. 02
PETITION FOR LOCAL IMPROVEMENT
City of Elk River
State of Minnesota
, i9
To the City Council of Elk River, Minnesota'
WE, THE UNDERSIGNED OWNERS of (all) (not less than 35 percent in
frontage) of the real property described as:
hereby petition, pursuant to Minnesota Statutes, Chapter 429, for the
following public improvements'
EACH OWNER FURTHER AGREES, in consideration of the City action at our
request to cause construction of the above-described improvement, to pay
such sums as may be determined by the City to be a fair and reasonable
apportionment of the costs of said improvement.
OWNER EXPRESSLY WAIVES OBJECTION to any irregularity with regard to
the making of the improvement or assessment of the cost thereof; waives any
claim that the amount thereof levied against owner's property is excessive;
anU waives all rights of appeal in the courts.
Date
3.
4.
5.
6.
8.
9.
Signature Print N~e
of Owner of Owner Property
Description of
Examined, checked, and found to be in proper form and to be signed by
the owners of the above-state~ quantity of proper~y affected by ~he making
of the improvement petitioned for.
Ci ~y C1 err
A-5
DEC- 15--01 05:55 PM DYNAMICS DESIGN ~nd LAND 6124418684 P. 0~
Cascade I is the contract purchaser of the Mitchell property and is applying for approval
to extend urban services to thc property prior to 2007 and also for subdivision approval of
Pm'k Poime,
Cascade I
Marion Glines, Chief Manager
Scott & Annette Mitchell
O'wner
Owlrler
Date.
River
TO: Terry Maurer
FROM: Lori Johnson
DATE: February 7, 2002
SUBJECT:
MEMORANDUM
Park Pointe Bonding Request
Cascade I Land Company has requested that the City install the internal public
improvements necessary to service the Park Pointe plat and assess the property for the cost
of the improvements. I understand that your estimated cost for these improvements is
approximately $1,000,000. Before the Council approves financing these improvements,
there are several factors to consider.
The Financial Management Plan recently adopted by the Council addresses this issue in two
sections. The Plan states, "the City will plan debt to avoid issuing more than $10,000,000 in
tax exempt bonds during any calendar year and apply 'bank qualified' status to all issues."
The Plan also states, "in most cases, private developers will be responsible for the
construction of...systems needed to serve new development. The City may install
infrastructure and assess property owners when this approach provides the best alternative."
First, let's address the "bank qualified" issue. In 2002 the City plans to issue bonds for
several projects including the public safety and ERMU buildings, Zane Street and 175m
Avenue improvements, and equipment certificates for the City and ERMU. The total to be
issued is estimated to be almost $10,000,000. Therefore, it is not possible to finance the
Park Pointe improvements in 2002 and retain the "bank qualified" status on the City's 2002
bond issues. In fact, it may be necessary to adjust the timing of some of the City's issues.
The City may, of course, issue bonds totaling more than $10,000,000 in a year, but they
won't be bank qualified. The ability to issue bank qualified bonds is important because the
interest rate on bank qualified bonds is slightly lower than the rate on bonds that are not
bank qualified.
A similar situation came up several years ago when Guardian Angels wanted the City to issue
conduit bonds for a project that put the City over the $10,000,000 limit. The Council agreed
to assist Guardian Angels under the condition that Guardian Angels pay the additional
interest costs incurred because the bonds were no longer bank qualified.
Second, the Council approved a policy that developers will be responsible for financing the
improvements for new plats unless it is in the Cit},'s best interest to finance the
improvements. From a financial point of view, it is usually not in the City's best interest to
finance developer improvements, mainly because it increases the City's outstanding debt.
The City has not financed any developer improvements for several years and has only
received one such request recently. In that case, the developer decided it would be more
cost effective to finance the improvements privately.
In summary, if the Council decides to finance the internal improvements for Park Pointe, I
would recommend that the developer pay for all additional interest costs incurred by the City
on all bonds issued that are not bank qualified due to financing Park Pointe improvements.