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6.1. & 6.2. SR 04-14-2003 Howard R. Green Oompany Item # 6.1. & 6.2. Apd17,2003 File: 818860J-0060 818980J-0060 The Honorable Mayor and City Council City of Elk River 13065 Orono Parkway Elk River, MN 55330 RE: BOSTON STREET/CONCORD STREET IMPROVEMENT 2003 PAVEMENT REHABILITATION IMPROVEMENT PLAN AND SPECIFICATION APPROVAL/ AUTHORIZATION TO ADVERTISE FOR BIDS Dear Council Members: Attached are two resolutions, one for the Boston/Concord Street Improvement project and one for the 2003 Pavement Rehabilitation Improvement project. These resolutions approve the plans and specifications and authorize the advertisement for bids. Both projects are tentatively scheduled to have bids opened on Wednesday, May 7, 2003. As we indicated in both public hearings, walk-throughs in the neighborhoods with the draft plans are scheduled for the weeks of Apdl 14 and Apdl 21. Then after the walk-throughs are complete and the bids have been opened, it will be necessary to schedule an assessment hearing for each project. It is at that point that a final decision will need to be made by the City Council whether or not these projects are to proceed at this time. Staff is still considering whether or not the two projects should be put together for bidding purposes or bid as two separate projects. We would recommend City Council adoption of both resolutions. If you have any questions, I will be in attendance at your Apd114, 2003 City Council meeting. Sincerely, Howard R. Green Company TJM:sw Enclosures Itr-040703-Council 1326 Energy Park Drive · St. Paul, MN 55108 · 651/644-4389 fax 651/644-9446 toll free 888/368-4389 RESOLUTION 03- A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE PLANS AND SPECIFICATIONS AND ORDERING THE ADVERTISEMENT FOR BIDS IN THE MATTER OF THE BOSTON STREET AND CONCORD STREET IMPROVEMENT OF 2003 WHEREAS pursuant to Resolution 03-10, the Project Engineer has prepared plans and specifications for the Boston Street and Concord Street improvement, which plans and specifications have been reviewed by the City; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota: Such plans and specifications, a copy of which is attached hereto and incorporated herein by this reference, are hereby approved. The City Administrator shall prepare and obtain the publication of an advertisement for bids for the making of the improvement pursuant to the attached plans and specifications. The advertisement shall be published once each week for three consecutive weeks, shall specify the work to be done, and shall state that the bids will be received by the City Administrator until 9:00 a.m. on Wednesday, May 7, 2003, at which time the bids will be publicly opened in the Council chambers of the City Hall by the City Administrator and the Project Engineer and will then be tabulated for consideration by the City Council at a meeting thereof at 6:30 o'clock p.m. on Monday, May 12, 2003, in the City Council chambers at City Hall. No bids will be considered unless sealed and filed with the City Administrator and accompanied by a cash deposit, cashier's check, bid bond, or certified check payable to the City Administrator in the amount of 5% of the amount of such bid. Passed and adopted this 14th day of April, 2003. ATTEST: Stephanie A. Klinzing, Mayor Sandra A. Peine, City Clerk O:\HRG\1020\102000.Admin\Clerical\Sa rah\resolution.a 11 --2.doc City ~ PAver TO: FROM: DATE: SUBJECT: MEMORANDUM Mayor and City Council Lori Johnson, Finance Director April 14, 2003 2003 Pavement Rehabilitation Improvement Project Item # 6.2. The House of Representatives has proposed in House File No. 751 a change to levy limits that severely impacts bonded indebtedness levies. In the past, bond levies have been considered "special levies" which are exempt from the levy limit. The proposal currently being considered by the Legislature would wrap bond levies into the city's limited levy. Attached is a memo from the Minnesota Institute of Public Finance to the Minnesota House of Representatives that provides a more in depth analysis of the proposed legislation. Until the Legislature acts on HF 751 or approves a levy limit bill, the city should not proceed with any bonding projects that require a tax levy. The 2003 pavement rehabilitation project is one such project. As you may recall, this project is only partially funded by special assessments and other non- tax funds and relies on a tax levy for the balance. At this time, staff is suggesting that the City Council proceed with requesting bids (with a 90 day award clause) and even holding a special assessment hearing, but not awarding bids or adopting the final assessment roll until the Legislature has adopted a levy limit bill. This should still leave enough time for the project to be completed this year. However, if HF 751 does become law, the city may need to identify alternative funding. S: ~COUN CIL~Lori\pavcmentlewlimits. doc Draft: 4/1/03 Minnesota Institute of Public Finance, Inc. MEMORANDUM To: CC: FROM: DATE: SUBJECT: Minnesota House of Representatives c/o Representative Ron Abrams Governor's Office Department of Revenue Minnesota League of Cities Minnesota Institute of Public Finance April __, 2003 Impact of House File No. 751 on Municipal Finance Introduction This Memorandum is submitted by the Minnesota Institute of Public Finance to describe how HF 751, if enacted in its present form, will radically alter the nature of debt obligations issued by Minnesota cities and counties and increase the cost of local government. Minnesota General Obligation Bonds General obligation bonds are the most common debt instrument issued by Minnesota cities and counties. Such bonds pledge the full faith, credit and taxing powers of the city or county. The promise by the city or county to levy property taxes without limit as to rate or amount, if necessary to pay principal and interest when due, is fundamental to the credit strength of these bonds. By virtue of Minnesota's special levy exemption for bonded indebtedness the taxes levied to pay debt service are exempt from levy limits. Based on this statutory framework, Minnesota general obligation bonds command the highest credit rating and the lowest interest rate that can be obtained in the marketplace. House File No. 751 HF 751 would eliminate the issuance of general obligation bonds by Minnesota counties and cities and, in contravention of the pledge to bondholders, convert outstanding bonds into limited tax bonds. First, Article 5, Section 3 of HF 751 would eliminate bonded indebtedness as a special levy for future bond issues. As a result, any levies for bonded indebtedness would have to be 2200 First National Bank Building · Saint Paul, MN 55101 · (651) 223-6404 · Fax (651) 223-6450 kganley~briggs.com website: mnipf, org made within the confines of the generally applicable levy limit. It also follows that bonds issued in the future by cities and counties will be limited tax bonds subject to a single overall levy limit along with operating levies. Second, Article 5, Section 1 of HF 751 would subject any increase in the amount of taxes levied in 2004 and thereafter, including a tax increase occasioned by the need to levy for bonds, to a reverse referendum procedure. This provision applies to both new and existing bonds. As to existing bonds, it has the effect of converting general obligation bonds to limited tax bonds and potentially abrogates the contractual obligations of the issuer. With respect to new bonds, the uncertainty of the reverse referendum process inhibits decision making because the city or county can never be sure whether the added burden of a bond issue will be sustained by the voters until such time as the new taxes are levied. Credit Concerns The basic credit concern with a limited tax bond is that the need to levy for debt service could put a squeeze on the issuer's ability to levy taxes for essential operating and other purposes. Particularly in a time of stress, there is a concern that the city will not be able to meet its debt obligations due to budgetary stress. Rating Agency Reaction In the words of Standard & Poor's, limited obligation bonds "lack the strong inherent protection of an unlimited-tax obligation". The rating agency consensus is that some limited obligations will be rated lower than general obligations of the same issuer, thereby increasing the borrowing costs of many issuers. In general, the rating agencies evaluating limited tax obligations focus on the stability of non-tax revenue sources and the size of available reserves. This focus is likely to encourage cities and counties to maintain reserves that otherwise would not be necessary and to increase fees for services. Policy Considerations If limits are to be placed on the amount of taxes which cities and counties can levy, we believe those limits should continue to exclude levies for general obligation bonds. Cities and counties cannot issue debt for operating purposes (except in anticipation of taxes which they can otherwise levy) and the debt service levy is only a part of the overall levy. Accordingly, preservation of the special levy concept will not significantly affect the overall amount of taxes which can be levied. I-IF 751 in its current form would discourage borrowing for capital purposes at a time when the economy is slow and interest rates are at historically, thereby impeding economic recovery and increasing future costs. Further, it will degrade the quality of bonds previously issued by Minnesota cities and counties and Minnesota's reputation in the marketplace. M1:979180.01 RESOLUTION 03- A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE PLANS AND SPECIFICATIONS AND ORDERING THE ADVERTISEMENT FOR BIDS IN THE MATTER OF THE PAVEMENT REHABILITATION IMPROVEMENT OF 2003 WHEREAS pursuant to Resolution 03-12, the Project Engineer has prepared plans and specifications for the 2003 Pavement Rehabilitation improvement, which plans and specifications have been reviewed by the City; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota: Such plans and specifications, a copy of which is attached hereto and incorporated herein by this reference, are hereby approved. The City Administrator shall prepare and obtain the publication of an advertisement for bids for the making of the improvement pursuant to the attached plans and specifications. The advertisement shall be published once each week for three consecutive weeks, shall specify the work to be done, and shall state that the bids will be received by the City Administrator until 9:00 a.m. on Wednesday, May 7, 2003, at which time the bids will be publicly opened in the Council chambers of the City Hall by the City Administrator and the Project Engineer and will then be tabulated for consideration by the City Council at a meeting thereof at 6:30 o'clock p.m. on Monday, May 12, 2003, in the City Council chambers at City Hall. No bids will be considered unless sealed and filed with the City Administrator and accompanied by a cash deposit, cashier's check, bid bond, or certified check payable to the City Administrator in the amount of 5% of the amount of such bid. Passed and adopted this 14th day of April, 2003. ATTEST: Stephanie A. Klinzing, Mayor Sandra A. Peine, City Clerk O:\PROJ\818980J\0060\Res-040703.doc i NFORMATiON MEMORANDUM TO: FROM: George Minrich, Elk River Sportsman's Club Ph ~ ~ Michele Mc erson, ~rector of Planning DATE: April 2, 2003 SUBJECT: Indoor Gun Range Development Standards After much thought, staff has the following comments regarding your proposed joint project with the Sherburne County Sheriff's Department to construct an indoor gun range at the Elk River Sportsman's Club site on County Road 32. First staff would prefer to see a joint project between Sherburne County and the City of Elk River to complete the City of Elk River's indoor gun range, however, it does not appear that this an option at this time. Given that fact, here are some minimum standards to consider: 1. This would be a text amendment to the Rla Zoning District and the use (a gun range with both indoor and outdoor facilities) would be a conditional use in that district. 2. The minimum size parcel under an organization's ownership must be 100 acres. 3. It must be a private organization versus a private individual that owns the range. 4. The building must be setback 100 feet from any adjacent platted residential lots. The front setback would be consistent with the current Rla standards. 5. Participants must be members of the Sportsman's Club, their guests, or representatives of local law enforcement. These are only staff's thoughts. There may be additional requirements that are generated through the review process by the Planning Commission and the City Council. I would suggest that the Sherburne County Sheriff's Department and the Elk River Sportsman's Club file a joint application for the text amendment. The text amendment should be reviewed and approved first prior to submission of a conditional use permit application under the approved guidelines. If I can be of further assistance, please do not hesitate to call me at 763/441-4902. CC: Jeff Beahen, Assistant Police Chief Peter Beck, City Attomey S:\PLANNINGkMichde McPherson'xMEMOS\IndoorRange.doc