HomeMy WebLinkAbout2009/09/14 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA
SEPTEMBER 14, 2009
6:30 p.m. CITY COUNCIL STUDY SESSION – Council Chambers
Discussion Items
1. 6:30 p.m. Future Study Session Agenda Planning --- September 21, 2009 & September 29,
2009
2. 6:35 p.m. Friends of the Arts Annual Report (with FoTA Board Representatives)
7:00 p.m. Audit Services for 2009
4. 7:15 p.m. 2010 Budget – Housing Rehabilitation Fund and Development Fund Budget
Review; Franchise Fees, and Use of Budget Feedback
5. 8:15 p.m. Policy Discussion Relative to EDA Redevelopment Contract Extensions
6. 8:45 p.m. Update on Proposed Sunset Ridge Condominium Housing Improvement Area
(HIA)
7. 9:15 p.m. Communications (Verbal)
Written Reports
8. Wind Energy Regulations
9. Urban Reforestation Program Policy
10. Recycling Program Update
11. Green Shade Initiative
9:25 p.m. Adjourn
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packet are available by noon on Friday on the city’s website.
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Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting.
Meeting Date: September 14, 2009
Agenda Item #: 1
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Future Study Session Agenda Planning – September 21, 2009 and September 29, 2009.
RECOMMENDED ACTION:
Council and the City Manager to set the agenda for special study sessions on September 21 and
September 29, 2009.
POLICY CONSIDERATION:
Does the Council agree with the agenda as proposed?
BACKGROUND:
Attached please find the tentative agenda and proposed discussion items for the special study session
on Monday, September 21, 2009 and Tuesday, September 29, 2009.
FINANCIAL OR BUDGET CONSIDERATION:
None.
VISION CONSIDERATION:
None.
Attachment: Future Study Session Agenda Planning for September 21 & 29, 2009
Prepared by: Marcia Honold, Management Assistant
Approved by: Tom Harmening, City Manager
Meeting of September 14, 2009 (Item No. 1) Page 2
Subject: Future Study Session Agenda Planning
Tentative Discussion Items
Study Session, Monday, September 21, 2009 - 6:30 p.m.
1. Snow Bird Enforcement – Police/Public Works (30 minutes)
Does the Council wish to increase the fines for snow bird parking violations and if so what
should the amount be?
Tuesday, September 29, 2009 – 5:00 p.m. check-in, 5:30 p.m. ceremony
TH 7 & Wooddale Avenue Interchange Project Groundbreaking Ceremony
Tentative Discussion Items
Study Session, Tuesday, September 29, 2009 - 6:30 p.m.
1. Future Study Session Agenda Planning – Administrative Services (5 minutes)
2. Street Project: Excelsior Boulevard (Louisiana Ave. to Dakota Ave.) Project 2004-0420 -
Public Works (25 minutes)
Staff to update the Council about the Excelsior Boulevard street project.
3. Possible Amendment to Recycling Contract – Public Works (45 minutes)
Staff will lead Council in a discussion about Eureka’s request to amend their recycling
contract with the city. Does the Council wish to amend Eureka’s recycling contract?
4. Convention & Visitor’s Bureau – Administrative Services/Community Development (60
minutes)
The City Attorney and an outside expert will present information and answer questions from
Council about creating a lodging tax and a Convention & Visitor’s Bureau. Is the Council
interested in moving forward on this?
6. Presentation of Energy Audit of City Facilities – Inspections (45minutes)
Staff will present the energy audit findings to the Council. Does the Council agree with the
findings? Does staff wish to direct staff to create a plan to implement projects identified in
the audit?
7. Communications – Administrative Services (10 minutes)
Time for communications between staff and Council will be set aside on every study session
for the purposes of information sharing.
Reports
August 2009 Monthly Financial Report
End of Meeting: 9:40 p.m.
Meeting Date: September 14, 2009
Agenda Item #: 2
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Friends of the Arts Annual Report.
RECOMMENDED ACTION:
No action required. Given the City has financially supported the efforts of Friends of the Arts
(FoTA), this annual report is being provided for information purposes. Representatives of FoTA will
be in attendance at the meeting
POLICY CONSIDERATION:
Does the City Council have questions or concerns regarding the activities of Friends of the Arts?
BACKGROUND:
The City of St. Louis Park has been providing financial assistance to the FoTA since 2006.
Representatives from their organization will be present to update the council on their recent
accomplishments as well as their 2010 initiatives.
FRIENDS OF THE ARTS ACCOMPLISHMENTS:
The Friends of the Arts organization has provided the following list of programs they have worked
on over the past year.
Arts for Life: launched new scholarship program in 2008 with oversight by diverse committee
meeting quarterly, awarding funds quarterly.
2008 – Granted eight scholarships totaling $3,918.00 as follows:
Two senior citizens (summer and fall), one teenager, four elementary age children (summer
and fall), and one individual in their 20’s.
2009 (to present) – granted 12 scholarships totaling $2,580.00 as follows:
Six high school students for choir trip, three elementary age children for music lessons, one
adult for writing class, and two young adults for music classes.
Next review deadlines are Sept. 5 and Dec. 5, 2009
2009 Goal - Strengthen public relations and outreach.
Result: 23 applications received prior to June 23 deadline
2010 Goals – Strengthen outreach to the communities most eligible and raise $10,000 to have
$8,000 available for scholarships in 2010.
Meeting of September 14, 2009 (Item No. 2) Page 2
Subject: Friends of the Arts Annual Report
Arts & Culture Grants: Build partnership with the city to continue strong and diverse programs by
funding creative activities in the community that do not have other funding channels.
Future Goals: Improve marketing of events individually and as series for the year.
2009 participant data: High school students: 50
Community members participating directly: 60 artists for Children First
Elementary age direct participants: 10 at Meadowbrook, 60 at Peter Hobart
Event attendees: over 2,000
The specific activities funded for 2009 area as follows:
36 Arts Magazine: Assist in the printing of an annual literary arts magazine. St. Louis Park High
School students.
Children First: Painting and reproduction of 40 original works of art representing the 40
developmental assets. Gallery opening at the Ice Cream Social.
Harmony Theater Company and School: Creation and production of a play about the Leningrad
Siege. Performances at Sabes JCC Theatre.
Meadowbrook Collaborative: The creation of ARTWORKS a structured weekly program that will
teach 10 motivated children in grades 3 to 6 the basic understanding of drawing.
Margaret Coleman: Collaboration w/senior citizens to record and share, through the paper making,
their memories, experiences and building of the St. Louis Park community. The project will begin in
August 2009 manifesting itself in two mixed media art openings which will be open the public.
Zenon Dance Company: One week outreach dance residence at Peter Hobart Primary Center. The
residency will conclude with a final student performance open to the community at Peter Hobart.
Denise Tennen: The creation of a series of ceramic relief panels to be permanently installed at
Aquila Primary Center, Lenox and other publicly accessible buildings in St. Louis Park. The panels
will be created by the youngest and oldest St. Louis Park resident. Background work already taking
place. The actual workshop will start fall 2009, during the school year. Specific dates to be
determined.
Theater in the Park launched by 2008 Arts & Culture grant; update on Maggie’s Farm Organic
Theater.
Board Development:
• Move to a working board with Executive Committee, transition in leadership.
• Assigning board members as liaisons.
Meeting of September 14, 2009 (Item No. 2) Page 3
Subject: Friends of the Arts Annual Report
Administrative:
• One Communications Director on contract – Tammy Hauser Sarto.
• Lynn Krause – office administrator being replaced.
• Office space agreement with the school district being reviewed. Search for new space in the
district being undertaken.
• New software for contact management installed and being put to use for 1st annual
membership campaign.
Marketing/ Communications:
• Use of online newsletter management software, Constant Contact, for monthly email
newsletter distributed to 400 community members with paper copies to be distributed
quarterly to City Hall, Lenox, Library, and The Rec Center.
• Regular press from local media and especially the Sun Sailor.
• Establishing screens/ads/programming with Park TV.
• Updating website to make more interactive for artists/community members.
Finance:
• Budgeting process being formalized for 2010.
• Tax return completed for 2008.
• New financial reports detailed and comprehensive (QuickBooks online).
• Development plan for membership sponsors and planned giving in progress.
What we need from the city:
• Continued financial commitment, marketing support/access to city resources, PR, Park TV,
city publications and staffing.
• Continued close working relationship with direct liaison through Parks and Recreation.
• Commitment to Our Town 2010 – Poet Laureat, poem project, potential calendar content.
Upcoming 2010 programs:
Since the “Our Town Faces and Places” photography project was such a huge success, the FoTA
board has discussed future projects that have the opportunity to become a community wide arts
event. They have come up with an idea that revolves around the Our Town theme with a different
twist. In 2010, they intent to implement Our Town 2010: Voices and Verses
The preliminary components will be as follows:
1. Poet Laureate for SLP. A Poet is chosen by the city and SLP FoTA to serve in ambassador
role for the year. Stipend is given. Duties include presence at Ice Cream Social and providing
assistance with the Favorite Poem Project and the Renga- community wide poem.
Meeting of September 14, 2009 (Item No. 2) Page 4
Subject: Friends of the Arts Annual Report
2. Favorite Poem Project. Community is asked to submit not only their favorite poem, but a
written description of why. People are photographed and shown on website and in a printed
piece, with their poem and reason for its important to them. Twelve are selected by the Poet
and panel of judges for inclusion in the 2011 city calendar.
3. Site based poetry workshops. Site-based one time poetry workshops are offered to generate
lines for the Renga. They are taught by artists and take place in diverse community partner
locations (school, nursing home, housing, cultural/religious institutions etc.) The purposes of
the workshops are to expose participants to the art and craft of poetry and to come away with
a line from each participant to be included in the community Renga.
4. A community jam in May at Harvest Moon Coffee shop for all poets to come together and
share their stuff in a public forum.
5. Renga – creation & youth performance and tour. Renga- a community poem. Lines from
the workshops are put together into a community poem by the Laureate. In addition, this
poem is developed by a spoken word artist into a performance piece. Youth are hired to
perform the piece as a spoken Word Performance that can travel to locations. It can also be
performed at the Ice Cream Social and will be videotaped to be played on cable TV and our
website.
Other add on’s if time and funding allow:
• Refrigerator Poetry –using Renga lines?
• Chap book/public installation of Renga
Timeline:
• June: Board approves concept
• August-November: funding sought/Poet laureate selection process
• October: Our Town project announced, workshop schedule set and recruitment for
participants begins
• November-December: planning
• January-March: Renga workshops underway/community Jam/Favorite Poems Project
• April-May: Renga poem completed, performance piece completed
• May: Renga poem completed unveiled at ice Cream Social?
• June-July: Favorite Poems completed and submitted to city for calendar and printed
• June-December: Regna tour piece travels
Preliminary Budget ($15,000):
• Project Management/planning committee- $5,000
• Teachers/artists- $2,500
• Marketing/Publicity- $2,500
• Printing of anthology or other programs- $2,500
• Space/equipment/other- $2,500
Meeting of September 14, 2009 (Item No. 2) Page 5
Subject: Friends of the Arts Annual Report
Possible Funders:
• MRAC- October deadline for Community Arts ( $7,500)
• Target- Jan deadline ($5000)
• COMPAS- Medtronic Grant for community arts-($2,500)
• McKnight Foundation($5,000)
• HRK Foundation ($2,500)
• General Mills ( $5,000)
• Gannett Foundation ($2,500)
• AmeriPrise Financial ($2,500)
• Kopp Family Foundation ($1,500)
Publicity/Media:
• City Newsletters - three issues a year and calendar
• City cable station to film jams and air - them- also use for our own site and you tube
• Sun Sailor as Media Sponsor?
• Website dedicated to project/FACEBOOK etc.
Community Partners:
• City
• Library
• School/hospital/senior homes
• Harvest Moon
• Loft
FINANCIAL OR BUDGET CONSIDERATION:
For the past several years the City has funded FoTA in the amount of $20,000 annually and the Arts
and Culture Grant program in the amount of $20,000 annually. The funding source is the Housing
Rehab Fund. As the 2010 budget is considered, discussion should occur as to whether the City
continues to fund these initiatives in 2010.
VISION CONSIDERATION:
Partnering with Friends of the Arts is enhancing the strategic direction that states, “St. Louis Park is
committed to promoting and integrating arts, culture, and community aesthetics in all City
initiatives, including implementation where appropriate.
Attachments: None
Prepared by: Cindy Walsh, Director of Parks and Recreation
Approved by: Tom Harmening, City Manager
Meeting Date: September 14, 2009
Agenda Item #: 3
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Audit Services for 2009.
RECOMMENDED ACTION:
No formal action required. Staff would like to know the Council’s wishes for selecting a firm to
provide audit services for fiscal year 2009.
POLICY CONSIDERATION:
There are two options available to the Council regarding audit services for 2009:
• Direct staff to negotiate an extension of the current audit services contract with Abdo, Eick
& Meyers; or
• Direct staff to obtain proposals for audit services. If the Council wishes to use this option,
staff would request feedback on how much direct involvement the City Council may wish to
have in the process.
BACKGROUND:
In 2004 the City Council approved a contract with Abdo, Eick & Meyers LLP to audit the years
2004-2007. Typically, engagements are for three year periods with three year extensions. The
auditors work directly for the City Council and are required to bring any instances of accounting
irregularity to the Council’s attention.
Abdo’s staff provided us with a quote for a three year extension last year and that was the basis of the
2008 audit. Staff has been satisfied with Abdo’s services and their personnel have a good
understanding of city operations and accounting procedures.
There are pro’s and con’s to changing auditors periodically. An advantage to changing auditors,
which may be more perception than reality, relates to the opportunity for a fresh look being given to
the City’s operations and accounting procedures. A disadvantage is that there is a significant amount
of education and clarification of specific city practices that is required to be transferred from the
accounting staff to the new audit team. With the loss of one accountant position via budget
reductions, the department is not in an ideal situation to have the time to make those practices clear
to new personnel.
Meeting of September 14, 2009 (Item No. 3) Page 2
Subject: Audit Services for 2009
When the audit proposals were evaluated in 2004, the interview team was comprised of the City
Manager, Finance Director, and two other finance staff members. Upon completion of the
interviews staff made a recommendation to the City Council to hire Abdo, Eick & Meyers. If the
City Council wishes staff to obtain proposals for audit services, there are several ways this process
could be carried out. Examples include:
• The entire City Council reviews proposals, interviews audit firms, and makes a selection.
• A subcommittee of the City Council reviews proposals, interviews audit firms and makes a
recommendation to the entire City Council.
• Utilize an interview team made up of one to three City Council members and staff that
reviews proposals, conducts interviews and makes a recommendation to the entire City
Council.
• Have staff review proposals and interview auditors with a recommendation provided to the
City Council.
Staff looks forward to making this process meet the needs of the City Council and show proper
stewardship over city funds.
FINANCIAL OR BUDGET CONSIDERATION:
Extending the audit contract or going out for proposals will have minimal impact on the city’s
budget.
VISION CONSIDERATION:
Not applicable.
Attachments: None
Prepared by: Bruce DeJong, Finance Director
Approved by: Tom Harmening, City Manager
Meeting Date: September 14, 2009
Agenda Item #: 4
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
2010 Budget – Housing Rehabilitation Fund and Development Fund Budget Review; Franchise
Fees, and Use of Budget Feedback.
RECOMMENDED ACTION:
No formal action required. Staff desires to continue budget discussion on topics the Council asked
to be brought back after the August 24th study session.
POLICY CONSIDERATION:
• Is the City Council comfortable with the preliminary budgets for the Housing Rehabilitation
Fund and the Development Fund?
• Is the City Council interested in pursuing adjustments to franchise fees from both Xcel and
CenterPoint?
• How would the City Council like to use the budget feedback generated from our web site
and other sources?
BACKGROUND:
Housing Rehabilitation Fund and Economic Development Fund Budgets
The Community Development Department has two funds that finance redevelopment programs –
Housing Rehabilitation for residential projects and Economic Development primarily for
commercial/industrial projects. The budgets for those funds vary widely as projects work their way
through the development cycle and become active.
The Housing Rehab expenditures varied by almost 100% from 2006 at $940,000 to 2008 at $1.8
million. The Wolf Lake Housing Improvement Area (HIA) contributed $1.1 million of the expense
in 2008, with smaller amounts for the Sungate HIA in 2006 and 2007. The ongoing funding for
the Housing Rehab fund is the 1/8th percent fee that is generated from private activity revenue
bonds. This should generate over $500,000 annually for the next several years with the addition of
the Park Nicollet bonds issued in 2008 and the Groves Academy bonds issued in 2009.
In the past HIA’s were funded through loans from the Development Fund to the Housing Rehab
Fund since the cash balance is fairly low in Housing Rehab. Housing Rehab then pays for
construction costs of the project and holds the special assessments generated against each unit that
are used to repay the debt. The Housing Rehab fund has assets from loan programs and HIAs of
over $4,000,000.
Meeting of September 14, 2009 (Item No. 4) Page 2
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback
The Housing Rehab Fund covers about $200,000 of salaries for Community Development staff. In
addition, a transfer of $185,000 is made to the general fund annually to cover the costs of
Community Outreach and other general fund services.
The Development Fund was accumulated from non-TIF proceeds generated by early activities in the
pre-79 TIF districts that were just decertified in August. Those proceeds included land sales and
interest earnings on investments. The primary funding sources at this point are interest earnings
($1.2 million) and parking lot rents ($158,500) including the Park Nicollet ramp by their main
clinic.
The Development Fund expenditures cover $500,000 in salaries, and about $260,000 in costs for
development related activities that are not reimbursable from TIF revenues.
Friends of the Arts and Arts & Culture Grants
The City of St. Louis Park has been providing $20,000 of annual funding to Friends of the Arts
(FoTA) via the Housing Rehab Fund since 2006. Staff desires direction as to whether this amount
should continue to be included in the budget.
The St. Louis Park Arts & Culture Grant Program is a collaborative program, now in its fourth year,
between the City of St. Louis Park, St. Louis Park Friends of the Arts and the St. Louis Park
Community Foundation. The City has budgeted $20,000 annually for this program via the Housing
Rehab Fund and has been supplemented with funding from the Community Foundation. The
program funds art projects and cultural activities that build bridges between artists and community,
engage people in creative learning and promote artistic production and cultural experiences in St.
Louis Park. Staff solicits grant proposals and reviews them with FoTA and a representative of the
Foundation prior to recommending awards to the City Council. Staff also desires direction as to
whether funding should continue for this program.
Franchise Fees
The City Council has asked about the ability to increase our franchise fees for capital purposes. Our
current franchise fees, which generate approximately $936,000 annually, are used to fund the
Pavement Management Program. The City also levies $415,000 annually in property taxes which
supplements the franchise fees. Based on our Long Range Financial Management Plan, if the
program is maintained at its current level a deficit is projected in the Pavement Management Fund
by about 2016. We have some ability to increase our franchise fees both automatically with Xcel
and CenterPoint, but they have expressed a willingness to open negotiations for a potential rate
increase above what could be raised through the automatic adjustment (staff is trying to determine
how much an automatic increase might generate).
As discussed previously with the City Council, the proposed strategy is to increase our fees, where
they are low, to the average of other communities. In reviewing franchise fees used in other
communities, from a comparative perspective it appears we could increase the fees to raise about
$156,000 via Xcel and $118,000 from CenterPoint for a total of approximately $274,000.
Meeting of September 14, 2009 (Item No. 4) Page 3
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback
Our projections show we could use the entire amount of new revenues noted above in order to
maintain a cash balance in the Pavement Management Fund. Staff does not see increases in these
fees providing any relief to the general property tax levy at this time.
The attached charts show how we compare to other communities. The additional funding will
remain dedicated to the Pavement Management Fund which covers street seal-coating, curb &
gutter repairs, and reconstruction.
Budget Communications Update
City staff continues to promote the budget website, which includes background information, reports
and timelines related to the budget process. The site also features the budget feedback tool. The
feedback tool is currently promoted on the city’s cable TV channels, website and through cards
distributed by staff, Council members and Council candidates. To date, more than 60 responses
have been received. The budget feedback tool will remain “live” until Oct. 1. Once turned off, all
responses will be collected into a report for the Council and will be available for a budget workshop
scheduled for October 12.
The question for this evening’s discussion is how to best use that data. Staff requests that a general
discussion of City Council expectations occur on how the data received could be used.
FINANCIAL OR BUDGET CONSIDERATION:
The Housing Rehab and Development Fund do not affect on operations of the city generally, but
provide an additional source of funding for worthy redevelopment projects and other initiatives of
both residential and commercial nature and from a neighborhood and community perspective.
VISION CONSIDERATION:
Activities funded by the Development Fund and Housing Rehab Fund have a direct connection to
the Strategic Directions adopted by the City Council most notably relating to Housing and the Arts.
Attachments: Housing Rehabilitation Fund Budget
Development Fund Budget
Housing Rehab Fund Policy
Development Fund Policy
Franchise Fee Analysis
Prepared by: Bruce DeJong, Finance Director
Reviewed by: Kevin Locke, Community Development Director
Michele Schnitker, Housing Supervisor
Greg Hunt, Economic Development Coordinator
Kathy Larsen, Housing Programs Coordinator
Brian Swanson, Assistant Finance Director
Approved by: Tom Harmening, City Manager
CITY OF ST LOUIS PARK
2010 Budget
Department: Housing Rehab Roll-up
Business Unit: 2006 2007 2008 2009 2010 2010 2010
Actual
Amount Actual Amount Actual Amount
Adopted
Budget
Requested
Budget
New
Programs
Adopted
Budget
REVENUES
GENERAL PROPERTY TAXES
4016 PENALTIES/INTEREST 0 (129)(347)0 0 0 0
4017 PAYMT IN LIEU OF TAXES (6,086)0 0 0 0 0 0
GENERAL PROPERTY TAXES (6,086)(129)(347)0 0 0 0
INTERGOVERNMENTAL
STATE
4368.421 Operating grants 0 0 (71,228)0 0 0 0
4369 OTHER STATE REVENUE (25,000)0 0 0 0 0 0
INTERGOVERNMENTAL (25,000)0 (71,228)0 0 0 0
CHARGES FOR SERVICES
GENERAL GOVERNMENT
4610 APPLICATION FEE (350)0 0 0 0 0 0
4618.519 HIA Prepayments 0 (212,174)10 0 0 0 0
4619 ADMINISTRATION FEES (19,607) (35,413) (15,162)0 0 0 0
CHARGES FOR SERVICES (19,957) (247,587) (15,152)0 0 0 0
SPECIAL ASSESSMENTS
5101 COLLECTED BY CITY (45,970) (35,671) (102,782)0 0 0 0
5102 CURRENT 0 (19,604) (117,365)0 0 0 0
REVENUE FROM OPERATIONS (97,013) (302,991) (306,874)0 0 0 0
OTHER INCOME
MISC OTHER INCOME
8062 PROCEEDS FROM SALE (119,852) (278,047) (267,017)0 0 0 0
8065 SALE OF SALVAGE 0 (615) (2,268)0 0 0 0
8101 INTEREST ON INVESTMENTS (62,507) (36,766)0 (30,000)0 0 0
8102 OTHER INTEREST (2,413)0 0 0 0 0 0
8130 CONTRIBUTIONS/DONATIONS 0 (17,000)0 0 0 0 0
8170 ADMINISTRATION FEES (5,000)0 0 0 0 0 0
8171 REVENUE BOND FEES (436,481) (492,123) (492,001) (615,000) (540,000)0 (540,000)
8200 MISC REVENUE 0 (66,818) (63,401)0 0 0 0
MISC OTHER INCOME (626,253) (891,369) (824,687) (645,000) (540,000)0 (540,000)
TOTAL OTHER INCOME (626,253) (891,369) (824,687) (645,000) (540,000)0 (540,000)
TOTAL REVENUES (723,266) (1,194,360) (1,131,561) (645,000) (540,000) 0 (540,000)
EXPENDITURES
PERSONAL SERVICES
SALARIES
6011 SALARIES - REGULAR EMPL 166,496 162,466 178,151 165,000 158,000 0 158,000
6012 OVERTIME 92 0 0 0 0 0 0
PERA
6063 PERA - COORDINATED 9,973 10,012 11,579 11,000 11,000 0 11,000
FICA
6076 SOCIAL SECURITY 10,350 9,914 11,072 10,500 10,000 0 10,000
6077 MEDICARE 2,459 2,358 2,592 2,500 2,500 0 2,500
INSURANCE
6084 LIFE INSURANCE 645 459 496 500 500 0 500
6085 LONG TERM DISABILITY 381 369 415 500 500 0 500
6088 EMPLOYERS CONTRIBUTION 18,259 16,838 18,574 17,000 16,100 0 16,100
OTHER
6102 WORKERS COMPENSATION IN 0 0 0 0 0 0 0
6102.240 League of MN Cities de 968 980 1,291 1,500 1,500 0 1,500
6105 VEHICLE ALLOWANCE 576 576 576 600 600 0 600
PERSONAL SERVICES 210,199 203,972 224,746 209,100 200,700 0 200,700
SUPPLIES
6211 OFFICE SUPPLIES 43 2,096 67 0 0 0 0
6212 GENERAL SUPPLIES 0 300 300 0 0 0 0
SUPPLIES 43 2,396 367 0 0 0 0
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 4
CITY OF ST LOUIS PARK
2010 Budget
Department: Housing Rehab Roll-up
Business Unit: 2006 2007 2008 2009 2010 2010 2010
Actual
Amount Actual Amount Actual Amount
Adopted
Budget
Requested
Budget
New
Programs
Adopted
Budget
SERVICES & OTHER CHARGES
6410 GENERAL PROFESSIONAL SE 1,682 1,190 1,250 0 1,250 0 1,250
LEGAL
6550.750 Civil 9,361 4,805 5,384 0 0 0 0
6630 OTHER CONTRACTUAL SERVI 456,143 421,206 1,329,348 892,400 879,500 0 879,500
6630.822 Rehab Advisor 26,980 24,580 24,291 30,000 0 0 0
6630.823 Design Services 17,325 11,375 15,675 15,000 0 0 0
6630.824 Workshops 0 0 0 3,000 0 0 0
6630.825 Remodel Tour 5,839 8,144 8,356 5,000 0 0 0
6630.826 Program Marketing 8,816 5,482 3,612 20,000 0 0 0
6630.827 Discount Loans & Rebates 0 0 1,000 0 0 0 0
POSTAGE
6700 POSTAGE 75 0 1,956 0 0 0 0
COMMUNICATIONS
6950 LEGAL NOTICES 161 715 365 0 0 0 0
7050 PRINTING & PUBLISHING 70 217 0 0 0 0 0
INSURANCE
7106 PUBLIC LIABILITY INSURA 2,168 2,693 3,548 3,000 3,500 0 3,500
RENTALS
7502 RENTAL EQUIPMENT 0 0 0 0 0 0 0
7502.873 MSC 15 0 0 0 0 0 0
EMPLOYEE DEVELOPMENT
7601 SUBSCRIPTIONS/MEMBERSHI 0 80 0 0 0 0 0
7602 TRAINING 25 641 753 0 0 0 0
7620 TRAVEL/MEETINGS 0 0 44 0 0 0 0
7621 MEETING EXPENSE 257 72 69 0 0 0 0
7622 MILEAGE-PERSONAL CAR 79 188 334 0 0 0 0
SERVICES & OTHER CHARGES 528,996 481,388 1,395,985 968,400 884,250 0 884,250
CAPITAL OUTLAY
7801 LAND 0 397,238 0 0 0 0 0
CAPITAL OUTLAY 0 397,238 0 0 0 0 0
EXPENDITURES 739,238 1,084,994 1,621,098 1,177,500 1,084,950 0 1,084,950
OTHER EXPENSE
TRANSFERS OUT
8511 GENERAL 100,211 93,797 83,983 86,055 86,055 0 86,055
8511.965 P.A. Revenue Bond 99,000 99,000 99,000 99,000 99,000 0 99,000
8518 TECHNOLOGY REPLACEMENT 1,993 1,016 0 0 0 0 0
TOTAL TRANSFERS OUT 201,204 193,813 182,983 185,055 185,055 0 185,055
MISC OTHER EXPENSE
8590 BANK CHARGES/CREDIT CD FE 153 307 0 0 0 0 0
MISC OTHER EXPENSE 153 307 0 0 0 0 0
TOTAL OTHER EXPENSE 201,357 194,120 182,983 185,055 185,055 0 185,055
TOTAL EXPENDITURES 940,595 1,279,114 1,804,081 1,362,555 1,270,005 0 1,270,005
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 5
CITY OF ST LOUIS PARK
2010 Budget
Department: Development Fund Roll-up
Business Unit:2006 2007 2008 2009 2010 2010 2010
Actual Amount Actual Amount Actual Amount
Adopted
Budget
Requested
Budget
New
Programs
Adopted
Budget
REVENUES
GENERAL PROPERTY TAXES
4011 CURRENT AD VALOREM (556,965) (657,823) (302,127) (1,028,045)0 0 0
4012 DELINQ AD VALOREM 1,468 (151,459)0 0 0 0 0
4013 FISCAL DISPARITY (48,342) (51,892)0 0 0 0 0
4016 PENALTIES/INTEREST (218)(270)(386)0 0 0 0
4017 PAYMT IN LIEU OF TAXES 0 (7,352) (5,090)0 0 0 0
GENERAL PROPERTY TAXES (604,057) (868,796) (307,603) (1,028,045)0 0 0
INTERGOVERNMENTAL
STATE
4368 GRANTS - STATE 0 0 0 0 0 0 0
4368.421 Operating grants (61,481) (7,974) (183,715)0 0 0 0
4370 MARKET VALUE HOMESTEAD (26,018) (24,727)0 0 0 0 0
OTHER
4402 HENNEPIN COUNTY 0 (32,700) (91,850)0 0 0 0
INTERGOVERNMENTAL (87,499) (65,401) (275,565)0 0 0 0
CHARGES FOR SERVICES
GENERAL GOVERNMENT
4610 APPLICATION FEE 0 (6,000) (4,000)0 0 0 0
CHARGES FOR SERVICES 0 (6,000) (4,000)0 0 0 0
SPECIAL ASSESSMENTS
5101 COLLECTED BY CITY (61,345) (51,588) (5,034)0 0 0 0
5102 CURRENT (94,753) (81,569) (67,769)0 0 0 0
5103 DELINQUENT (3,085) (7,039) (1,098)0 0 0 0
OTHER
5200 MISCELLANEOUS 2,000 0 (500)0 0 0 0
5300 RENT REVENUE 0 0 0 0 0 0 0
5300.533 Parking ramp (150,000) (150,000) (150,000) (150,000)0 0 0
5300.534 Parking lot (10,344) (34,849) (27,438) (8,500)0 0 0
5330 REFUNDS & REIMBURSEMENTS (26)0 (216)0 0 0 0
REVENUE FROM OPERATIONS (1,009,109) (1,265,242) (839,223) (1,186,545)0 0 0
OTHER INCOME
TRANSFERS IN
8028 ECONOMIC DEVELOP AUTHORI 0 0 0 0 0 0 0
8028.970 TIF admin fee (399,340)0 (85,209)0 0 0 0
TRANSFERS IN (399,340)0 (85,209)0 0 0 0
MISC OTHER INCOME
8062 PROCEEDS FROM SALE (33)0 (1,853,992)0 0 0 0
8070 OTHER RECOVERIES 0 0 (156,000)0 0 0 0
8101 INTEREST ON INVESTMENTS (918,784) (1,452,446) (748,540) (1,200,000)0 0 0
8102 OTHER INTEREST (91,257) (137,169) (132,598)0 0 0 0
8174 NSF FEES 0 0 (25)0 0 0 0
8200 MISC REVENUE 0 0 (1,001)0 0 0 0
MISC OTHER INCOME (1,015,074) (1,589,615) (2,892,156) (1,200,000)0 0 0
TOTAL OTHER INCOME (1,414,414) (1,589,615) (2,977,365) (1,200,000)0 0 0
TOTAL REVENUES (2,423,523) (2,854,857) (3,816,588) (2,386,545) 0 0 0
EXPENDITURES
PERSONAL SERVICES
SALARIES
6011 SALARIES - REGULAR EMPL 349,555 358,744 321,599 378,000 365,000 0 365,000
6012 OVERTIME 581 203 0 0 0 0 0
6013 SALARIES - TEMPORARY EM 9,408 230 0 0 0 0 0
6014 SALARIES - COUNCIL & CO 0 0 0 32,000 32,000 0 32,000
PERA
6063 PERA - COORDINATED 20,016 21,085 25,449 27,000 27,000 0 27,000
FICA
6076 SOCIAL SECURITY 19,978 19,621 0 25,000 24,000 0 24,000
6077 MEDICARE 5,184 5,117 5,922 6,000 6,000 0 6,000
INSURANCE
6084 LIFE INSURANCE 954 829 949 1,000 1,000 0 1,000
6085 LONG TERM DISABILITY 693 682 671 1,000 1,000 0 1,000
6088 EMPLOYERS CONTRIBUTION 32,718 31,455 38,790 37,000 37,000 0 37,000
OTHER
6102 WORKERS COMPENSATION IN 0 0 0 0 0 0 0
6102.240 League of MN Cities de 1,983 2,099 2,781 4,000 3,200 0 3,200
6105 VEHICLE ALLOWANCE 4,782 2,556 2,556 3,000 2,600 0 2,600
PERSONAL SERVICES 445,852 442,621 398,717 514,000 498,800 0 498,800
SUPPLIES
6211 OFFICE SUPPLIES 608 179 92 1,000 1,000 0 1,000
6211.606 Postage supplies 0 0 0 1,000 1,000 0 1,000
6212 GENERAL SUPPLIES 157 0 0 100 100 0 100
NON-CAPITAL EQUIPMENT
6301 OFFICE EQUIPMENT 0 0 0 500 500 0 500
6303 OTHER 1,750 0 0 0 0 0 0
SUPPLIES 2,515 179 92 2,600 2,600 0 2,600
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 6
CITY OF ST LOUIS PARK
2010 Budget
Department: Development Fund Roll-up
Business Unit:2006 2007 2008 2009 2010 2010 2010
Actual Amount Actual Amount Actual Amount
Adopted
Budget
Requested
Budget
New
Programs
Adopted
Budget
SERVICES & OTHER CHARGES
6410 GENERAL PROFESSIONAL SE 1,324 7,228 8,855 6,120 6,120 0 6,120
6520 AUDITING AND ACCOUNTING 5,467 0 0 5,500 5,500 0 5,500
LEGAL
6550.750 Civil 16,822 22,617 5,554 31,000 20,000 0 20,000
6550.752 Legislative/Lobbying 0 53,997 0 60,000 12,000 0 12,000
6630 OTHER CONTRACTUAL SERVI 102,589 83,408 213,538 22,500 10,000 0 10,000
6630.773 SSD Site Maintenance 0 0 0 553 553 0 553
6630.798 Project Reimbursement 29,980 400,000 0 0 0 0 0
6630.832 EDA Financial Analysis 8,403 17,819 16,937 12,000 0 0 0
POSTAGE
6700 POSTAGE 1,470 6,000 0 500 500 0 500
6720 DELIVERY 0 0 0 150 150 0 150
COMMUNICATIONS
6831 TELEPHONE 772 0 998 1,600 1,600 0 1,600
6831.800 Cellular 0 0 0 700 700 0 700
6950 LEGAL NOTICES 740 216 0 800 500 0 500
7000 ADVERTISING 495 545 7,081 2,000 2,000 0 2,000
INSURANCE
7106 PUBLIC LIABILITY INSURA 4,520 5,161 3,521 4,000 4,000 0 4,000
7109 NOTARY/SURETY BONDS 60 58 50 100 100 0 100
REPAIRS AND MAINTENANCE
7211 MSC SPECIAL WORK 2,375 0 0 2,000 0 0 0
7213 CLEANING/WASTE REMOVAL 55,566 32,700 0 0 0 0 0
7214 LAND MAINTENANCE 335 1,345 677 700 0 0 0
UTILITIES
7301 ELECTRIC SERVICE 72 0 0 0 0 0 0
7304 SEWER SERVICE 78 36 20 0 0 0 0
7305 WATER SERVICE 138 0 0 0 0 0 0
ECONOMIC DEVELOPMENT
7451 PLANNING 66,427 161,608 102,833 150,000 100,000 0 100,000
7452 ECONOMIC 12,306 (12,306)0 5,000 5,000 0 5,000
7453 FINANCIAL 10,189 10,977 0 12,000 10,000 0 10,000
7454 SURVEYING 10,027 2,027 0 10,000 10,000 0 10,000
7455 APPRAISALS 4,500 0 0 15,000 15,000 0 15,000
7457 ENVIRONMENT ANALYSIS 15,878 20,264 11,276 26,000 15,000 0 15,000
7459 OTHER TECHNICAL SERVICE 0 0 0 5,000 5,000 0 5,000
RENTALS
7504 RENTAL OTHER 25,000 25,000 25,000 25,000 25,000 0 25,000
EMPLOYEE DEVELOPMENT
7601 SUBSCRIPTIONS/MEMBERSHI 2,115 4,011 2,335 2,650 2,700 0 2,700
7601.904 Rotary 412 0 0 600 600 0 600
7602 TRAINING 1,184 1,281 2,388 2,200 2,400 0 2,400
7603 SEMINARS/CONFERENCES/PR 1,099 910 915 5,700 4,500 0 4,500
7620 TRAVEL/MEETINGS 0 0 120 1,000 1,000 0 1,000
7621 MEETING EXPENSE 6,434 9,752 259 1,000 1,000 0 1,000
7622 MILEAGE-PERSONAL CAR 154 49 364 2,500 2,000 0 2,000
TAXES
7681 PROPERTY TAXES 37,314 0 0 0 0 0 0
7682 PAYMENT IN LIEU OF TAXE 3,103 0 3,103 0 0 0 0
SERVICES & OTHER CHARGES 431,990 874,296 405,824 413,873 262,923 0 262,923
CAPITAL OUTLAY
7803 IMPROVEMENTS OTHER THAN 0 79,108 812 0 0 0 0
7803.960 Excavating & Grading 0 166,013 24,605 0 0 0 0
7902 IMMOVABLE FIXTURES 0 0 2,499 0 0 0 0
7908 SOIL REMEDIATION 0 0 275,565 0 0 0 0
7909 GROUND WATER CLEAN UP 5,290 8,599 0 0 0 0 0
CAPITAL OUTLAY 5,290 253,720 303,481 10,000 0 0 0
EXPENDITURES 885,647 1,570,816 1,108,114 940,473 764,323 0 764,323
OTHER EXPENSE
TRANSFERS OUT
8518 TECHNOLOGY REPLACEMENT 1,993 1,016 0 0 0 0 0
TOTAL TRANSFERS OUT 1,993 1,016 0 0 0 0 0
MISC OTHER EXPENSE
8580 MISC EXPENSE 0 0 0 0 0 0 0
8580.996 Uncollectable Debt 0 0 19,629 0 0 0 0
8590 BANK CHARGES/CREDIT CD FE 474,033 0 0 0 0 0 0
MISC OTHER EXPENSE 474,033 0 19,629 0 0 0 0
TOTAL OTHER EXPENSE 476,026 1,016 19,629 0 0 0 0
TOTAL EXPENDITURES 1,361,673 1,571,832 1,127,743 940,473 764,323 0 764,323
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 7
CITY OF ST. LOUIS PARK
HOUSING REHABILIATION FUND POLICY
DRAFT
September 9, 2009
I. Purpose
The City of St. Louis Park established a Housing Rehabilitation Fund to provide a source of
funds to facilitate housing habilitation, redevelopment/development and activities that promote
neighborhood development and community enhancing activities.
This policy is intended to set forth the general requirements and guidelines regarding the use of
the Housing Rehabilitation Fund, with the City Council reserving the right to modify the purpose
of the fund.
II. Funding or Potential Funding Sources
A. The primary, sustainable source of funding for the Housing Rehabilitation Fund is an
administration fee which is charged to all projects in which the City serves as issuer for
private activity bonds. The fee is one-eighth of one percent per annum of the principal
amount on all of the outstanding private activity bond issues, payable semi-annually.
B. A potential significant funding source for the fund could be an infusion of dollars of
available tax increment. These dollars would generally need to be restricted specifically
for rental or owner-occupied housing projects or programs which meet income
restrictions as outlined in current TIF law.
C. Repayment of loans from Housing Improvement Areas (HIA’s) funded originally from
the fund.
D. Federal or State grants as they become available.
E. Sale of real and personal property.
F. Interest revenue.
G. Transfer from the Development Fund or other funds, per City Council approval.
III. Objectives
The Housing Rehabilitation Fund is intended to fund or assist proposed projects or programs
which focus on housing rehabilitation and initiatives that further the city’s housing goals as
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 8
developed through the Housing Summit and VISION St. Louis Park. This fund is in congruence
with Vision St. Louis Park’s commitment to provide well-maintained and diverse housing along
with increasing affordable ownership opportunities.
The City’s approved housing goals to be supported by this fund include:
A. Housing Production: Promote and facilitate a balanced and sustainable housing stock to
meet present and future needs. Create opportunities for move up housing.
B. Housing Condition and Preservation: Ensure housing is safe and well maintained and
preserve and enhance housing quality through promotional, educational and technical
activities.
C. Promote the ratio of owner and rental housing at a ratio of approximately 60% owner
occupied and 40% rental.
D. Promote and facilitate a mix of housing which ensures a balance of affordable housing
for low and moderate income households and expands affordable ownership initiatives.
E. Promote and facilitate expansion of existing homes through remodeling and construction
of family sized homes.
F. Promote and facilitate more senior housing options.
G. Housing/planning goals: Use infill and redevelopment opportunities to help meet housing
goals, promote higher density housing near transit corridors and employment centers and
encourage housing density in commercial mixed-use districts.
In addition to supporting the City’s housing goals, the Fund can be used:
A. To encourage private residential development, rehabilitation or redevelopment.
B. To offset increased costs of residential development or redevelopment over and above
those costs that a developer would normally incur in suburban development.
C. To accelerate the residential development process and/or to achieve quality development
on sites where this would normally be difficult to develop in suburban areas.
D. To meet other public policy purposes, as adopted by the City Council from time to time,
including promotion of: quality urban design, quality architectural design, energy
conservation, decreasing traffic congestion and reliance on automobile use, decreasing
the capital operating costs of local government, and development that supports livable
communities principles.
E. To leverage other public and private monies for projects meeting the Fund objectives.
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 9
IV. Process
A. In establishing projects and programs to be financed using the Housing Rehabilitation
Fund; the City shall to the extent possible:
1. Establish guidelines and criteria for each project or program to be assisted unless
the project or program already exists.
2. Establish a timeframe for completing the project or program and the repayment
terms to the Housing Rehabilitation Fund, if applicable.
3. Prepare a financing plan for the project or program for review and approval by the
City Council and by other entities as may be required by state law.
V. Uses for the Housing Rehabilitation Fund
The following are general guidelines regarding the use of funds from the Housing Rehabilitation
Fund.
A. The types of uses of the Housing Rehabilitation Fund will include, but not be limited to,
the following: (i) the making of loans at interest rates below or at market rates in order to
strengthen the financial feasibility of proposed projects; (ii) the guaranteeing of loans;
(iii) the provision of gap financing for developments; (iv) the financing of acquisition,
demolition, and disposition; (v) the financing of the construction of public improvements
and utilities to aid proposed residential developments; (vi) the financing of rehabilitation,
remodeling, or new construction; and (vii) administrative costs associated with housing
and neighborhood programs.
B. The Housing Rehabilitation Fund may be used to provide matching grant funds to assist
with neighborhood projects and community enhancement activities.
C. To the extent possible, funds from the Housing Rehabilitation Fund will be allocated to a
number of developments and programs, thereby reducing the risk that funds to be repaid
will not be available for future use.
D. The Housing Rehabilitation Fund may be used to provide interim financing of public cost
for projects in anticipation of a permanent financing source (i.e. construction financing,
bond sale, etc.).
E. To the extent possible, funds from the Housing Rehabilitation Fund will be secured by
liens, letters of credit, ucc’s, tax increment, or other forms of reasonable security.
F. To the extent possible, loans from the Housing Rehabilitation Fund will be repaid with
interest at rates established from time to time by the City or which are established at the
time of approval of a specific project or program.
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 10
CITY OF ST. LOUIS PARK/ST. LOUIS PARK EDA
DEVELOPMENT FUND GUIDELINES
I. PURPOSE
The City of St. Louis Park and St. Louis Park Economic Development Authority have
established a development fund to provide a source of financing that can be used to foster and
promote a wide range of public and private development and redevelopment activities within the
City of St. Louis Park.
The development fund is intended primarily to be a revolving fund established by the City and
Authority, and administered by the Authority.
These guidelines are intended to set forth the general requirements regarding funding and use of
the development fund. The Authority may modify the terms of these guidelines at any time with
the consent of the City Council.
II. FUNDING OF DEVELOPMENT ACCOUNT
The source of funds used to create and to maintain the development fund consists generally of
the proceeds from the repayment of loans and other revenues, such as: the sale of real and
personal property, recycled federal and state grants, and other funds as designated from time to
time by the City Council and Economic Development Authority. In particular, the following
sources of funds will be used to fund and maintain the development fund:
A. Interest earnings on various projects and program accounts;
B. Proceeds from the sale or resale of real and personal property in connection with
development and redevelopment projects;
C. Income derived from the repayment of loans and grants under various county, state, and
federal loan and grant programs, including the Federal Economic Development Grant
Program and the Federal Community Development Block Grant Program;
D. Loan repayments and other income from programs which may be developed in the future
including but not limited to the following: Commercial Rehab Loan Program, Sign
Rehabilitation Program, and income derived from properties owned by the Authority.
E. Administrative fee transfers from other program or project funding sources.
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 11
Other funds may from time to time be directed to be placed in the development fund by action of
the City Council and Authority’s Board of Commissioners. The City Manager and City staff and
Executive Director and Authority staff are directed to take all actions necessary to capitalize and
maintain the fund balance in the development fund. To the extent that funds in the development
fund are subject to restrictions as to their use by virtue of the source of such funds, the
development fund will contain sub-accounts to ensure that such restrictions as to reuse of funds
are met.
III. OBJECTIVES
As a matter of policy, the development fund will only be used to assist proposed projects which
meet one or more of the following criteria.
A. To meet the following housing-related goals:
1. To provide a diversity of housing and ownership alternatives.
2. Maintain existing levels of affordable housing through the rehabilitation of
existing or construction of new housing units.
3. To promote neighborhood stabilization and revitalization by the removal of blight
and the upgrading in existing housing stock in residential areas.
4. To promote and/or support efforts to reduce dependency on assistance programs.
B. To remove blight and encourage redevelopment in the commercial and industrial areas of
the City in order to encourage high levels of property maintenance and private
reinvestment in those areas.
C. To increase the tax base of the City in order to ensure the long-term ability of the City to
provide adequate services for its residents while lessening the reliance on residential
property tax.
D. To retain, increase and provide diversity in a living wage job base.
E. To increase the local business and industrial market potential of the City of St. Louis
Park.
F. To provide adequate business and shopper parking and residential parking.
G. To encourage additional unsubsidized private development in the area either directly or
through secondary “spin-off” development.
H. To offset increased costs of redevelopment over and above those costs that a developer
would normally incur in urban and suburban development.
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 12
I. To accelerate the development process and/or to achieve quality development on sites
which would not be developed in accordance with City goals without this assistance.
J. To meet other uses of public policy, as adopted by the Authority from time to time,
including promotion of: quality urban design, quality architectural design, energy
conservation, decreasing traffic congestion and reliance on automobile use, decreasing
the capital and operating costs of local government, and development that supports the
concept of “Livable Communities”, etc.
IV. USE OF DEVELOPMENT FUND
The following general guidelines will be followed in connection with the use of funds from the
development fund.
A. The types of uses of the development fund will include, but not be limited to, the
following: (i) the making of loans at interest rates below or at market rates of interest in
order to strengthen the financial feasibility of proposed projects; (ii) the guaranteeing of
loans, (iii) the provision of secondary or gap refinancing for particular projects; (iv) the
financing of land acquisition and disposition, (v) the financing of the construction of
public improvements and utilities to aid proposed projects; (vi) the administration of
economic development programs; and (vii) any other uses as permitted by applicable law.
B. To the extent possible, funds from the development fund will be allocated to a number of
projects and programs, thereby reducing the risk that funds to be repaid will not be
available for future use.
C. The development fund may be used to provide interim financing of public cost of
particular projects in anticipation of a permanent financing source (i.e. a bond sale).
D. All funds from the development fund will be adequately secured by liens, tax increment,
letter of credit, or other forms of reasonable security.
E. Every attempt will be made to ensure that all loans from the development fund will be
repaid with interest at interest rates established from time to time by the Authority or
which are established at the time of approval of a specific project.
Development Fund Guidelines:N/EDA
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 13
Xcel Franchise Fees
Flat Rate and Percentage
Sm C/I Sm C/I Mun Pump Mun Pump
City Res Non-Demand Demand Lg C/I St Lights Non-Demand Demand
Afton 2.00 2.00 5.00 5.00 1.00 1.00 1.00
Baker (U) 3.25 3.25 0.00 0.00 0.00 0.00 0.00
Brooklyn Center 1.52 3.10 20.60 99.00 12.40 12.40 12.40
Champlin 2.50 8.00 35.00 125.00 15.00 15.00 15.00
Chisago City 1.30 5.00 15.00 55.00 5.00 5.00 15.00
Circle Pines 2.75 3.00 35.00 0.00 3.00 0.00 0.00
Cottage Grove 1.25 1.25 6.25 25.00 2.50 0.63 6.25
Deephaven 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Dilworth 1.75 4.00 14.00 91.00 0.00 4.00 14.00
Excelsior 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Faribault 1.35 1.60 32.00 280.00 0.00 0.00 0.00
Goodview 2.75 3.00 25.00 110.00 25.00 2.50 10.00
Grant 2.35 2.00 14.00 75.00 2.00 2.00 2.00
Hopkins 1.00 2.00 9.00 63.00 0.00 0.00 0.00
Lindstrom 1.30 5.00 15.00 55.00 5.00 5.00 15.00
Little Canada 1.75 4.00 24.00 15.00 1.00 7.00
Mahtomedi 1.30 1.38 14.40 110.28 12.71 0.63 14.84
Mankato 0.50 1.00 10.00 130.00 1.00 0.25 1.00
Maplewood 0.50 1.00 6.00 45.00 0.50 0.50 0.50
Minnetonka 2.50 4.50 4.50 4.50 0.00 4.50 4.50
Monticello 1.95 5.50 31.00 190.00 12.00 12.00 31.00
Mound 2.00 2.00 2.00 2.00 2.00 2.00 2.00
New Hope 1.50 4.50 9.00 36.00 4.50 4.50 4.50
Newport 0.50 1.00 6.00 50.00 4.00 1.00 5.00
North Mankato 0.75 1.10 9.25 125.00 13.25 1.10 9.25
Oakdale 1.00 2.00 9.00 7.50 6.00 1.50 7.50
Prior Lake 1.50 5.00 10.00 50.00 0.00 0.00 0.00
Richfield 1.65 5.10 11.33 73.65 0.00 0.00 0.00
Sartell f 2.75 2.75 2.75 2.75 2.75 2.75 2.75
St. Joseph 1.00 1.75 10.00 8.00 1.00 10.00
St. Michael 2.50 2.50 2.50 10.00 10.00 2.50 10.00
St. Paul Park 1.50 2.00 25.00 335.00 10.00 1.00 5.00
Stillwater 2.00 2.50 18.00 125.00 4.00 2.00 18.00
Watertown 2.00 3.50 15.00 50.00 0.00 12.50 20.00
Average 1.74$ 2.98$ 13.25$ 72.96$ 5.34$ 3.04$ 7.31$
St. Louis Park $1.25 $4.00 $10.00 $65.00 $0.00 $4.00 $10.00
Coon Rapids 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Minneapolis 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Mounds View 3.75% 3.75% 3.75% 3.75% 3.75% 3.75% 3.75%
New Brighton $0.0023/ kWh $0.0023/ kWh $0.0016/ kWh $0.0009/ kWh $0.0023/ kWh $0.0023/ kWh $0.0016/ kWh
Owatonna $0.0016/ kWh $0.0016/ kWh $0.0016/ kWh $0.0016/ kWh $0.0016/ kWh $0.0016/ kWh
Robbinsdale 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Sauk Rapids 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
South St. Paul 3.00% 3.00% 3.00% 3.00% — — —
St. Cloud h 3.00% 3.00% 3.00% 3.00% — — —
St. Paul See fee schedule in Franchise Fee Notes.
West St. Paul 5.26% 5.26% 5.26% 5.26% — — —
White Bear Lake 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
Winona 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 14
CenterPoint Franchise Fees
Flat Rate and Percentage
City Res Comm A Comm B Comm C SVDF A SVDF B LVDF
Afton 2.00 4.00 5.00 5.00 5.00 5.00 5.00
Anoka 2.75 2.75 8.00 35.00 75.00 300.00 900.00
Benson 2.00 3.33 4.00 10.00 13.33 10.00 50.00
Blue Earth 2.00 3.00 3.00 3.00 3.00 3.00 3.00
Brooklyn Center 1.52 1.58 5.15 20.60 51.50 98.88 98.88
Champlin 2.50 2.50 8.00 35.00 70.00 125.00 125.00
Cottage Grove 1.25 3.25 6.25 6.25 12.50 12.50 18.75
Deephaven 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Excelsior 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Hopkins 1.00 1.00 3.00 9.00 18.00 63.00 63.00
Little Falls 1.00 5.00 5.00 5.00 5.00 5.00 5.00
Long Prairie 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Mankato 0.95 2.50 5.25 12.00 15.00 20.00 25.00
Morris 2.00 5.00 9.00 27.00 35.00 35.00 750.00
Mound 2.00 2.00 2.00 2.00 2.00 2.00 2.00
New Hope 1.50 3.00 6.00 20.00 30.00 40.00 60.00
North Mankato 1.00 5.00 10.00 15.00 20.00 30.00 75.00
Oakdale 1.00 4.50 4.50 7.50 15.00 15.00 15.00
Prior Lake 1.50 1.50 5.00 5.00 10.00 10.00 50.00
Richfield 1.65 1.65 5.10 11.33 11.33 11.33 11.33
Waseca 1.40 1.80 5.00 16.00 100.00 150.00 300.00
Average 1.67$ 2.83$ 5.01$ 11.94$ 23.70$ 44.84$ 122.05$
St. Louis Park $1.25 $1.25 $4.00 $10.00 $10.00 $10.00 $65.00
Alexandria 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Coon Rapids 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Granite Falls 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Lake Crystal 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Minneapolis e 4.50% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Mounds View 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Owatonna 1.75% 1.75% 1.75% 1.00% 1.00% 1.00% 1.00%
Robbinsdale 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Sleepy Eye 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Average 3.92% 3.97% 3.97% 3.89% 3.89% 3.89% 3.89%
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 15
City of St Louis Park, Minnesota
Franchise Fee Estimate
Xcel - Electric
CUSTOMER CLASS
AVERAGE
MONTHLY
CUSTOMER
COUNT
ESTIMATED
ANNUAL
FRANCHISE
FEE
REVENUES
New Revenue
Estimate
MONTHLY
FLAT FEE
New Fee
Proposal
Residential*22,306 $334,585 $468,419 $1.25 $1.75
Small C&I – Non-Demand*1,355 $65,028 $65,028 $4.00 $4.00
Small C&I – Demand 627 $75,280 $99,746 $10.00 $13.25
Large C&I 146 $113,945 $127,969 $65.00 $73.00
Public Street Lighting 75 $0
not exempted
but fee not applied
Municipal Pumping – Non-Demand 21 $1,012 $1,012 $4.00 $4.00
Municipal Pumping – Demand 18 $2,160 $2,160 $10.00 $10.00
Total 24,548 $592,010 $764,334
Net Increase $172,324
CenterPoint - Heating Gas
CUSTOMER CLASS
AVERAGE
MONTHLY
CUSTOMER
COUNT
ESTIMATED
ANNUAL
FRANCHISE
FEE
REVENUES
New Revenue
Estimate
MONTHLY
FLAT FEE
New Fee
Proposal
Residential 15,666 $234,990 $328,986 $1.25 $1.75
Commercial A 584 $8,760 $12,264 $1.25 $1.75
Commercial B 398 $19,104 $19,104 $4.00 $4.00
Commercial C 550 $66,000 $87,450 $10.00 $13.25
SVDF A & B 79 $9,480 $12,561 $10.00 $13.25
LVDF 4 $3,120 $3,504 $65.00 $73.00
Total 17,281 $341,454 $463,869
Net Increase $122,415
09/10/2009
Meeting of September 14, 2009 (Item No. 4)
Subject: General Budget – Housing Rehabilitation, EDA, Franchise Fees, and Budget Feedback Page 16
Meeting Date: September 14, 2009
Agenda Item #: 5
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Policy Discussion Relative to EDA Redevelopment Contract Extensions.
RECOMMENDED ACTION:
Discuss the need to further formalize a policy or remedies related to required project commencement
and completion dates within the EDA’s redevelopment contracts.
POLICY CONSIDERATION:
Does the EDA wish to further formalize a policy or remedies related to required project
commencement and completion dates within its redevelopment contracts?
BACKGROUND:
At its August 17, 2009 meeting, the EDA approved an amendment to the Redevelopment Contract
with Union Land II LLC extending the commencement and completion dates for portions of the
Hoigaard Village project due to adverse economic conditions within the housing market. At that
same meeting the question was raised as to whether the EDA should have a policy for contract
extensions in the future.
According to the City’s current TIF Policy the EDA gives priority consideration to those projects
that request tax increment on a “pay-as-you-go” basis. This means the EDA does not pay for TIF–
eligible costs up-front but rather provides redevelopers with tax increment over time once they have
incurred the specified redevelopment costs. As a result, when a redeveloper experiences a
construction delay it means that the redeveloper’s reimbursement of TIF-eligible expenses is likewise
delayed or reduced. To date, this policy appears to be working adequately.
Failure by a redeveloper to perform any covenant, condition, or obligation under redevelopment
contracts with the EDA is considered an Event of Default. Every development contract contains a
separate article clearly outlining events of default and their remedies. Remedies available to the EDA
in an Event of Default include terminating the EDA’s obligations under the contract or withholding
tax increment attributable to the defaulting phase.
All contract extensions granted to date (as well as those likely forthcoming such as for The West End
and Wooddale Pointe) reflected prevailing economic conditions in general and local market realities
relating to the commercial, industrial and housing sectors in particular. Those and other factors are
outside a redeveloper’s control. While a construction delay may result in the extension of the TIF
payment term it is uncertain how (or whether) the EDA could legally require a project to proceed if
for example a redeveloper was unable to assemble financing or achieve the necessary level of pre-
leasing required to commence a project. Currently, the EDA addresses contract extensions on a case-
Meeting of September 14, 2009 (Item No. 5) Page 2
Subject: Policy Discussion Relative to EDA Redevelopment Contract Extensions
by-case basis consistent with the terms of individual redevelopment contracts. As a practice the EDA
has preferred to work with redevelopers to find solutions that would allow their projects to
eventually proceed rather than terminated. This practice appears to be in the best interest of both
parties and appropriate given the unique circumstances facing each project.
FINANCIAL OR BUDGET CONSIDERATION:
As outlined within the EDA’s existing redevelopment agreements, a redeveloper’s failure to construct
a project, or portion of a project, or failure to meet required commencement and completion dates
are typically an Event of Default which may result in termination of the contract, withholding tax
increment attributable to the defaulting phase or some other mutually agreed upon financial
solution.
VISION CONSIDERATION:
Not applicable.
Attachments: None
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
Meeting Date: September 14, 2009
Agenda Item #: 6
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Update on Proposed Sunset Ridge Condominium Housing Improvement Area (HIA).
RECOMMENDED ACTION:
No action is required at this time. This report and discussion is intended to update the City
Council on this project. The Sunset Ridge Association anticipates requesting that the City Council
hold a Public Hearing on October 5, 2009 to consider establishing a Sunset Ridge Condominium
HIA and imposing fees.
POLICY CONSIDERATION:
The City is authorized by the state to establish HIAs as a finance tool for private housing
improvements. The City adopted an HIA policy in 2001, and has established four HIA’s to date
(see attachments). In the 2009 session, the state legislature extended the HIA statute for another
three years.
Does the City Council wish to proceed with the steps necessary for establishing the proposed HIA?
BACKGROUND:
On February 9, 2009 staff sent a written report to the Council on the proposed HIA for Sunset
Ridge. At the February 23, 2009 Study Session, Council discussed the pending Sunset Ridge HIA
within the context of HIAs in general and within the context of the current housing and lending
markets (see attached reports). At the February meeting, City and homeowners’ risks and issues
were identified and discussed. Following this discussion, Council Members Finklestein and
Paprocki toured the complex with the Association Board members in March. Over the summer,
progress has been made to address issues of costs and risks and the housing and lending markets
appear to be stabilizing.
Current Status of the Project
Homeowner Risks and Issues
1. Project Cost.
To ensure the proposed scope and cost was the most responsible possible, the Board went out for
bid and hired an “Owners Representative”. Over the summer, Total Project Consultants, LLC,
reviewed the capital improvement plan, reviewed the proposed scope of improvements,
researched alternative products, and developed a revised scope of improvement.
Meeting of September 14, 2009 (Item No. 6) Page 2
Subject: Sunset Ridge Housing Improvement Area
• The revised scope of work has been reduced from $4,775,500 to $4,028,674; a reduction of
nearly $750,000.
• The proposed average fee per unit has been reduced from $22,000 to $18,500, a reduction
of $3,500 per unit.
The lower cost of the revised scope is due to:
a. Using vinyl windows rather than aluminum clad wood windows. The vinyl product has the
same energy saving attributes and the same warranty as the more expensive wood product.
b. Using a 7’ lap hardy-plank siding rather than the 4 or 6” lap siding.
c. A more thorough investigation of moisture related damage that better defines the estimate
for remediation work.
d. Competitive contractor estimates.
2. Financial Burden and Debt Load of Owners.
An HIA loan’s relatively low interest rate and long term provides modest income homeowners an
affordable means to pay for the improvements. The Association has taken measures to assist
owners that may be burdened by the proposed fee.
a. They have identified thirty owners that purchased their homes over the past six years, and
have provided referrals for no cost financial counseling through Community Action
Partnership of Suburban Hennepin County. There has been only one foreclosure at Sunset
Ridge during the past twelve month period.
b. The Board conducted a survey of owners to determine the number of low income seniors
and disabled persons that might be eligible for the hardship special assessment deferral. The
hardship deferral allows deferred payment until the sale or title transfer of their unit for
qualifying owner/residents. Staff will be recommending that our hardship deferment policy
be revised to assist only very low income owners. Twelve owners have been identified that
may be eligible for this deferred assessment.
3. Communication. Throughout the summer, the membership has been kept apprised of the
Association’s progress through mailings, emails, the Association website, and a full membership
meeting which was held on September 1, 2009. Twenty five percent of the owners (60)
attended the meeting, and were very supportive of the revised scope of work.
Meeting of September 14, 2009 (Item No. 6) Page 3
Subject: Sunset Ridge Housing Improvement Area
City Issues
1. How best to fund the Sunset Ridge HIA loan.
The HIA law anticipates cities using their bonding authority to fund HIA loans to homeowner
associations. After consideration, the City’s Finance Director recommends issuing bonds to
fund this project. This will alleviate the concerns previously expressed that city reserve funds be
tied up for a twenty year period and will ensure that city has sufficient dollars available for other
more immediate needs. The issuance of bonds and underwriters discount will add
approximately $100,000 to the total project cost
The Association desires that construction of this project begin in late 2009/early 2010. In order
to accommodate this construction schedule and allow residents ample time for prepayments,
bonds would be issued in April 2010. The City would provide a bridge construction loan for
draws made prior to the sale of bonds in April. The city would earn 5% interest on this short
term bridge loan.
2. Loan term.
The loan term for previous HIA loans ranged from 10-15 years. Due to the high cost of this
project a 20 year term will make the fee payments affordable to owners and residents that can
not afford to prepay the fee. Since bonds are the proposed method of funding the project,
prepayment would only be allowed prior to the issuance of bonds. The sale of bonds will be
timed to occur after prepayments are made, so the loan amount will be minimized.
3. The “firewalls” to reduce the city’s financial risk are significant and include:
a. Repayment of the loan is made through owner’s real estate tax payments.
b. In foreclosure events, tax liabilities including special assessments, must be paid by any party
that purchases the unit. In this arena, HIA fees have been treated the same as special
assessments.
c. There is 105% debt coverage.
d. The development agreement allows the city to obtain assignment of association’s assets. The
agreement also can require associations to pay on behalf of delinquent members if payments
are not made.
e. The delinquency rate of existing HIA fees is low and consistent with the citywide property
tax delinquency rate of less than 1%.
f. Finally, the association, as required by statute conducted a reserve study of capital needs and
long term financials. The financial plan has been reviewed by staff and the city’s financial
advisor, Ehlers and Associates to ensure long term feasibility of financing future
improvements.
g. The Development Agreement provides additional contractual conditions to ensure financial
stability of associations. The agreement will require that the association:
i. Use professional property management.
Meeting of September 14, 2009 (Item No. 6) Page 4
Subject: Sunset Ridge Housing Improvement Area
ii. Submit annual audits and update financial plans to demonstrate capability for ongoing
maintenance & operations.
iii. Demonstrate increases in monthly association dues to build reserves to a sustainable
level.
4. On-going maintenance of townhomes and condos a critical community need. There are roughly
2700 townhome and condo units in St. Louis Park. The majority of them are over 20 years old.
For the strength of our neighborhoods and the whole community, it is important that these
homes be well maintained. Deteriorating housing would be a huge risk for the community if
allowed to happen.
In spring of 2009, the Inspection Department conducted a visual review of all condominium
and townhome complexes in St. Louis Park to determine the extent of potential complexes in
need of exterior maintenance. Their conclusion was that Sunset Ridge is the complex with the
greatest need for exterior investment. Westmoreland Hills was also identified and they are
currently finishing an exterior building renovation funded through an HIA. The Inspections
Department’s visual assessment was that there are no other complexes currently requiring
corrective property maintenance. Therefore the potential pool of Associations that could be
seeking assistance through HIAs seems to be very small.
Analysis of Application
Sunset Ridge is located between 2010 and
2260 Ridge Drive.
• There are nine buildings with 240 total
units.
• Built between 1981 and 1987.
• 80% of the units are owner occupied.
• The 2009 median EMV of the units is
$118,500.
• Unit values range from $99,500 to
$142,800.
The following analysis describes how the
current proposal meets the HIA policy and
intentions of the State Statute. The Association’s preliminary application (submitted in April 2006)
and subsequent project revisions have been reviewed by staff and the City’s financial advisor, Ehlers
and Associates.
1. The City’s policy requires that only associations where the median unit value is less than or equal
to MN Housing’s 1st Time Home Buyer limit of $269,000 (in 2009) may apply. The 2009
median estimate market value of units in this association is $118,500.
Meeting of September 14, 2009 (Item No. 6) Page 5
Subject: Sunset Ridge Housing Improvement Area
2. The Association contracted with a third party to conduct a reserve study.
In April of 2006, the Association had a reserve study conducted by Reserve Advisors, Inc. The
study includes a physical needs assessment, thirty year capital improvement plan and a financial
analysis of the existing and projected financial situation. The reserve study takes into account a
loan to fund the exterior siding and window project. The funding plan indicates that projected
association fee increases will meet operational needs and the Association will be capable of
funding future improvements with their reserves.
3. Project Costs are reasonable and eligible for use of the HIA.
To ensure the proposed scope and cost was the most responsible possible, the Board went out for
bid and hired an “Owners Representative”. Over the summer of 2009, Total Project
Consultants, LLC, reviewed the capital improvement plan, reviewed the proposed scope of
improvements, researched alternative products, and developed a revised scope of work.
The original work was estimated to cost $4,775,500. The revised scope is estimated at
$4,028,674; a reduction of nearly $750,000 which results from:
a. Using vinyl windows rather than aluminum clad wood windows. The vinyl product has the
same energy saving attributes and the same warranty as the more expensive wood product.
b. Using a 7’ lap hardy-plank siding rather than a narrower more expensive lap siding.
c. A more thorough investigation of moisture related damage that better defines the estimate
for remediation work.
d. Competitive bidding in the slower construction market.
The costs shown in the following tables are the top range estimates. The Association anticipates
minor adjustments to reduce the final costs.
Meeting of September 14, 2009 (Item No. 6) Page 6
Subject: Sunset Ridge Housing Improvement Area
Table 1. Estimated Cost of Improvements
Sunset Ridge Construction Costs
Exterior Siding $1,224,992
Exterior Trim $164,995
Windows & Trim $379,445
Doors & Trim $893,535
Soffits & Fascia $174,076
Gutters & Downspouts Scope Included
/ Costs Excluded
Patios-Decks & Porches $438,175
Lighting (& Receptacles) $86,885
Misc. Scope Items $21,526
Performance & Payment Bond /
Permits
$100,314
Subtotal $3,456,941
Allowances
"Identified" Water Damage / Substrate
Repair
$354,256
Site Lighting $34,505
Fire Department Lock Boxes $8,000
Construction Contingency (5%) $174,972
TOTAL $4,028,674
8/21/2009 1 of 1 Total Project Consultants, LLC
Table 1. Project Costs
Sunset Ridge Condominium HIA Project Costs
Construction Costs $4,028,674
City Admin Fee $20,143
Underwriters Discount $52,140
Cost of Bond Issuance $48,000
Rounding $4,517
Capitalized Interest $137,343
City Loan Interest $65,000
Owners’ Rep Cost $60,000
Legal Fees $3,500
Inspecting Architect Fee $3,000
Industrial Hygienist ( Mold
Consultant)
$10,000
Total $4,432,317
Meeting of September 14, 2009 (Item No. 6) Page 7
Subject: Sunset Ridge Housing Improvement Area
4. The HIA meets City Goals
The proposed improvements meet the City goals in that they will upgrade the existing housing
stock in a neighborhood, stabilize the owner-occupancy level within the association, and preserve
existing affordable housing stock. The property improvements are consistent with VISION
direction.
5. The Association’s Process and Timeline meets statutory requirements.
The Association’s communication regarding the HIA has been ongoing since 2005. Staff met
with the Board and members to discuss the HIA tool and process during the preliminary process.
Through the summer of 2009, the Board has worked to refine the project.
• In November 2008, a majority of owners signed petitions requesting the council schedule a
public hearing to establish the HIA and impose fee. Petitions have been signed by 55% or
133 of the owners. According to city policy and statutory requirements, the only time in
which a city may implement an HIA is when Association members petition the city to do so.
State Statute requires that 25% of the owners sign petitions, while City policy requires
petitions from a majority of the owners.
• Kennedy & Graven, City’s counsel on HIAs, stated that the petitions collected in 2008 are
viable as long as the project has not increased in scope or cost.
• In January 2009, the Association elections resulted in new Board Members and a new
Property Management Company.
• In June 2009, the Board hired an Owner’s Representative to revise the scope of work.
• In June 2009, the Board conducted a survey to determine the number of low income seniors
and new owners that may have financial difficulties due to debt load.
• The Association has communicated with residents via monthly Board meetings, letters,
National Night Out and the website.
• A full membership meeting was held September 1, 2009 to provide an update of the
renovation project scope and tentative schedule. 25% of the owners attended this meeting
and demonstrated support of the revised project.
• Construction is proposed to begin in late 2009, and continue for 8-9 months.
6. The HIA financing is necessary for this project.
The Sunset Ridge Association applied for credit from Marshall & Ilsey Bank and Community
Bank. Their requests were denied based on insufficient cash flow and the nature of the structure
(ie. lack of collateral). The HIA is designed to be a last resort finance tool for associations.
It is also designed to address obstacles some associations confront when applying for financing.
• The City will lend the money to the association and be repaid by the owners, through their
real estate tax payments.
Meeting of September 14, 2009 (Item No. 6) Page 8
Subject: Sunset Ridge Housing Improvement Area
• The City’s risk is minimal compared to a private lender as property taxes are in the first
position over any other mortgage encumbrances on the property. The actual delinquency
rate for past HIA’s is very low, consistent with delinquency rating of single family homes.
• The HIA provides affordable payment options, averaging approximately $140 per month.
This payment will still allow association fees to increase gradually to ensure adequate funds
for operation and long term maintenance.
7. Fees and Loan Term.
The average fee per unit will be $18,500 with an annual cost per unit of $1,675 including
interest, payable over 20 years. The range of the unit fees is from $12,800 to $26,500
depending on the size of unit and number of windows and doors. The loan terms and fees are
outlined in the following table.
Owners may make payment beginning with the 2011 real estate tax payments or prepay the fee.
Because bonds would be issued to fund this project, owners may only prepay during a
prepayment period which would end March 31, 2010. Bonds would be issued after
prepayments are made, and the actual bond issue would reflect the project cost less the
prepayment amount.
The percentage of prepayments for the existing HIAs has been: forty percent for the Cedar
Trails HIA; twenty-five percent for the Sungate One; sixteen percent for the Wolfe Lake; and
seven percent for the Westmoreland Hills HIA.
Table 3. Loan Terms
Total Loan Amount $4,432,317
Term (years) 20
Interest Rate 5.89%
Average Annual Debt Service $382,955
Required Coverage (105%) $402,103
Total Units 240
Cost/Unit - Annual $1,675
Cost/Unit - Monthly (Average) $140
Average Assessment - Per/Unit if prepaid $18,468
Meeting of September 14, 2009 (Item No. 6) Page 9
Subject: Sunset Ridge Housing Improvement Area
8. Association's Desired Method of Fee Imposition
The newly enacted legislation amending the HIA State Statute requires that if the fee to be imposed
is “on a basis other than the tax capacity or square footage of the housing unit”, the Council must
make a finding that the alternative basis for the fee is more fair and reasonable.” Previous St. Louis
Park HIAs used the percentage of ownership which was based primarily on square footage.
The Sunset Ridge Association is seeking to base fees on a two-tiered system:
• All common area improvements, siding, garages, lighting, common area windows and doors,
etc., would be assessed to each unit based on the percentage of ownership which is based on
square feet of units.
• All windows and doors (limited common areas) would be assessed to each unit based on the
cost of improvements to that unit. If a unit has only one window, that would be the cost
associated with that unit. Units with more windows and doors would pay for the cost of
windows and doors in their unit.
The Association has provided the attached document outlining their rationale for allocation of fee.
This method provides the benefit that owners will be eligible to apply for tax credits for energy
efficient windows and doors because their costs would be specific to each unit. At the full
membership meeting in early September the members present expressed strong support for this
method of fee imposition.
Kennedy & Graven has assisted in preparing the attached memo from Kathy Larsen to the City
Council describing the proposed fee and providing a factual basis for the Council's use in making its
required findings that the proposed two tiered system is more fair and reasonable.
NEXT STEPS:
Pending Council discussion and direction the following schedule is being proposed:
September 24, 2009 Publish and mail Public Hearing notices
October 5, 2009 Public Hearing at Council Meeting
October 19, 2009 2nd Reading of HIA Ordinance
Dec 3, 2009 Veto Period Ends
Development Agreement Executed
Loan Agreement Executed
Construction can begin
March 31, 2010 Prepayment Period Ends
Hardship Deferment Application Deadline
April 2010 Sale of Bonds
2011 Fee will appear on property tax statements beginning 2011
Meeting of September 14, 2009 (Item No. 6) Page 10
Subject: Sunset Ridge Housing Improvement Area
FINANCIAL AND BUDGET CONSIDERATION:
City’s Financial Director recommends issuing bonds to fund this project. This will alleviate the
concern that large amounts of city reserve funds be tied up for a twenty year period and will ensure
that the city has sufficient dollars available for more immediate cash flow needs.
Basically all costs of the HIA are funded with the loan. The administrative costs incurred by the city
are covered by an administrative fee of one-half one percent of the project cost which equals
$20,143. The underwriting, bond issuance costs, all soft costs are all included in the project costs.
Finally, the city will realize interest earnings of up to $65,000 on the bridge construction loan.
VISION CONSIDERATION:
This project is consistent with the VISION’s commitment to ensure a diversity of well maintained
housing and affordable single-family home ownership.
Attachments: Sunset Ridge HIA Method of Fee Imposition Memorandum
February 23 and February 9 2009 Staff Reports
Sunset Ridge – Owner Cost Allocation Narrative
Prepared by: Kathy Larsen, Housing Programs Coordinator
Reviewed by: Bruce DeJong, Finance Director and
Kevin Locke, Community Development Director
Approved by: Tom Harmening, City Manager
Meeting of September 14, 2009 (Item No. 6) Page 11
Subject: Sunset Ridge Housing Improvement Area
MEMORANDUM
To: Members of the City Council, St. Louis Park, MN
From: Kathy Larsen, Housing Programs Coordinator
Re: Sunset Ridge Housing Improvement Area – Method of Fee Imposition
Date: September 9, 2009
Sunset Ridge Condominium (“Sunset Ridge”) has submitted a petition to the City of St.
Louis Park (the “City”) requesting the establishment a Housing Improvement Area (“HIA”)
pursuant to Minnesota Statutes, Chapter 428A (the “Act”) in order to finance several improvements
to its buildings. Sunset Ridge has submitted an Owner Cost Allocation Narrative (the “Narrative”)
containing its proposed method of imposing fees on owners of the Sunset Ridge units to pay for the
improvements. Pursuant to newly enacted legislation amending Section 428A.14, subdivision 1 of
the Act, the City Council must review the proposed method of imposing fees for HIA
improvements. If the fee is imposed “on a basis other than the tax capacity or square footage of the
housing unit, the council must make a finding that the alternative basis for the fee is more fair and
reasonable.” This memorandum describes Sunset Ridge’s reasoning behind the proposed fees, and
provides a factual basis for the City Council’s use in making its required findings.
A. Condominium Documents and Laws
Minnesota Statutes, Chapter 515B (the “Common Interest Ownership Act”) provides that
all physical portions of a common interest community shall be designated as “Common Elements”
(all portions of the common interest community other than the individual units) or “Limited
Common Elements” (a portion of the Common Elements allocated by the common interest
community’s declaration for the exclusive use of one unit), or “Units” (a portion of a common
interest community with designated boundaries and intended for separate ownership and
occupancy). Section 515B.2-102(f) of the Common Interest Ownership Act provides that
improvements such as perimeter doors and windows constructed to serve a single unit are limited
common elements allocated exclusively to that unit. Section 515B.3-107 of the Common Interest
Ownership Act provides that an association is responsible for maintenance and repair to any
Common Element, while each unit owner is responsible for maintenance and repair to his or her
unit.
The Declaration Establishing a Plan For Apartment Ownership Pursuant to the Minnesota
Uniform Condominium Act for Sunset Ridge Condominium (the “Declaration”) governs who is
responsible for maintenance and replacement of the various elements making up the Sunset Ridge
physical structure. According to the Declaration, all portions of Sunset Ridge common to all
residents (including foundations, exterior walls, corridors, roofs, and windows and doors accessing
Meeting of September 14, 2009 (Item No. 6) Page 12
Subject: Sunset Ridge Housing Improvement Area
common areas) are considered “Common Elements”, and the Sunset Ridge Association is
responsible for the maintenance, repair and replacement of these elements. The Declaration
separately defines “Limited Common Elements” as “those Common Elements which adjoin each
Apartment and which exclusively serve and are to be enjoyed and used by the Owner, family and
guests of each such apartment so adjoined”, including “all exterior doors and windows … designed
to serve a single Unit.” These provisions of the Declaration are consistent with the Common
Interest Ownership Act.
B. Proposed Sunset Ridge Fees
The improvements contemplated by Sunset Ridge include replacement of siding and exterior
trim, decks, garages, soffits and fascia, common entry doors, common windows, gutters, site lighting
and signage (the “Common Element Improvements”); and replacement of individual units’
windows, along with doors, storm doors and patio doors serving individual units (the “Limited
Common Element Improvements”).
Sunset Ridge proposes to set its fees based on two tiers. The first tier allocates a fee (referred
to in the Narrative as the “Common Cost Allocation”) to a given unit based on the total cost of all
Common Element Improvements multiplied by the percentage of ownership in Sunset Ridge
allocated to that unit. The second tier allocates an additional fee (referred to in the Narrative as the
“Limited Common Cost Allocation”) to a given unit based on the actual cost of all Limited
Common Element Improvements serving that unit.
The Narrative contains a twofold rationale for basing the fee for the Limited Common
Element Improvements on actual cost rather than ownership percentage. Sunset Ridge asserts that it
is more fair to assess individual units for the actual cost of improvements that benefit only their units
than to base this portion of the fee on ownership percentage. Some units having a relatively high
ownership percentage may have only a few windows requiring replacement, while other units with a
low ownership percentage have a large number of windows to be replaced. This creates a situation in
which the high ownership/low window owners subsidize the low ownership/high window owners.
Secondly, the windows and doors to be replaced will qualify for the Federal Energy Efficiency Tax
Credit. Owners applying for the credit must be able to document the cost of the windows and doors
replaced. The Sunset Ridge allocation method for the Limited Common Element Improvements
allows owners of each unit to identify and document this cost.
C. Comparison to Tax Capacity and Square Footage Basis
1. The Common Cost Allocation proposed by Sunset Ridge is based on each unit’s
percentage of ownership. The Sunset Ridge ownership percentages are, in turn, based on the square
footage of each housing unit. Therefore, the Common Cost Allocation is based on square footage
rather than an alternative basis, and the Council may make the finding that this fee is fair and
reasonable per se.
Meeting of September 14, 2009 (Item No. 6) Page 13
Subject: Sunset Ridge Housing Improvement Area
2. The Limited Common Cost Allocation is not based on tax capacity or square
footage, but rather on actual cost of Limited Common Element Improvements to each individual
unit. The Common Interest Ownership Act and the Declaration both provide that individual
owners may be charged for the repair and maintenance of Limited Common Elements, so this
allocation meets the relevant legal requirements. In addition, the Council could rationally make a
finding that basing the fee for Limited Common Elements on actual cost per unit is more fair and
reasonable than basing this fee on tax capacity or square footage. The Narrative provides evidence
that basing the fee for Limited Common Elements on percentage of ownership would financially
penalize the owners of some units while allowing others to pay less than the actual cost of their
improvements. Likewise, basing the fee on tax capacity fails to account for the actual number of
doors and windows in individual units, leading to the same potentially skewed result. Basing the
Limited Common Cost Allocation on actual cost of Limited Common Elements affecting each unit
is the most financially equitable method of ensuring that elements benefiting a single unit will not be
subsidized by other, non-benefiting units.
Meeting of September 14, 2009 (Item No. 6) Page 14
Subject: Sunset Ridge Housing Improvement Area
Meeting Date: February 9, 2009
Agenda Item #: 10
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Update on Pending Sunset Ridge Condominium Housing Improvement Area (HIA).
RECOMMENDED ACTION:
No action is required at this time. This report is intended to update the City Council on this large,
pending project. The Sunset Ridge Association anticipates petitioning the City Council to conduct a
Public Hearing to establish the HIA and impose fees this spring.
POLICY CONSIDERATION:
The City is authorized by the state to establish HIAs as a finance tool for private housing
improvements. The City adopted an HIA policy in 2001, and has established four HIA’s to date
(see attachments).
BACKGROUND:
Sunset Ridge is located between 2010
and 2260 Ridge Drive.
• There are nine buildings with 240
total units.
• Built in the early 80’s.
• 75% of the units are owner
occupied.
• The 2008 median EMV of the units
is $126,000.
• Unit values range from $104,500 to
$153,000.
The City’s policy requires that only
associations where the median unit value
is less than or equal to Minnesota
Housing Finance Agency’s 1st time Home Buyers limit of $298,000, can apply for the HIA.
Meeting of September 14, 2009 (Item No. 6) Page 15
Subject: Sunset Ridge Housing Improvement Area
History
Sunset Ridge Association has been working towards acquiring HIA designation since they contacted
staff in early 2006 for possible assistance to address significant deterioration of siding and windows
on the buildings. Based on this discussion the Board had a financial and physical needs plan
developed to determine what improvements would be needed and developed a plan to finance them
now and in the future. The Board then began the process of determining the scope of work;
identifying contractors and communication with membership.
1. In April 2008 they submitted a preliminary application to us with the scope of improvements
estimated at $4,700,000. This would result in an average fee per unit of almost $21,000. This
is a significant loan amount compared to the value of the units. The average annual fee would
be $2,111, with a monthly fee of $175.
2. Over the summer, the association put the HIA on hold while they negotiated with the insurance
company to cover damages caused by the hail storm last May. In the end the roof costs were
covered by the insurance, but siding and windows were not. So, the final scope of work for the
HIA loan remained the same. In early November 2008 the final costs (see attached Ehlers
allocation table) were made known to members and petitions were distributed to owners. The
board has received petitions from a majority of owners, to pursue establishing an HIA and have
fees imposed.
3. The economic conditions of the 3rd quarter of 2008 and the high project costs have caused the
Board to reconsider the project’s scope. A new board was elected in January 2009 and a new
property management company has been hired. The new board has been re-working the scope
of work, garnering additional input from members, and looking at options to reduce the cost of
the loan. The improvements are very basic: siding, soffits, gutters and windows, so there are “no
unnecessary cosmetic” improvements. The board is considering cutting costs by using lower
grade windows. The board is cognizant that in addition to the improvement costs, monthly
association fees are being increased to ensure future reserves will cover future needs as outlined in
the reserve study.
4. The Board has determined that the work needs to be done, and it costs a lot of money. Delaying
the work will only result in further deterioration of the buildings some of which are experiencing
mold and moisture problems due to poor siding and windows. They are prepared to request a
public hearing while continuing to work to reduce the loan amount to make it more affordable.
Issues
Taking on additional debt during uncertain economic conditions is a challenge to the association,
and the new board seems to be taking this very seriously, looking at all options to reduce the loan
amount. They have had several meetings to garner additional membership input; one of the Board
members is a project manager for a large metro construction firm and is bringing his expertise to the
board. The new management company has a solid reputation for stressing long term property
maintenance.
Meeting of September 14, 2009 (Item No. 6) Page 16
Subject: Sunset Ridge Housing Improvement Area
• There are 30 owners that have purchased units since 2003, when prices were high. These owners
could be in a situation where the additional debt load could result in a higher debt load than
unit value. The board is polling owners that purchased since 2003, to determine the impact of
the additional debt.
• There may be other owners burdened by the loan. The board is being directed to contact
Community Action Partnership of Hennepin County to provide home finance counseling to all
owners that could be significantly burdened by the loan.
• Low-income seniors, (over 65 years), could be eligible for the City’s hardship deferment of
special assessments.
.
City Financing of the Loan
A 20 year loan is being considered to lower the monthly payments to the most affordable level
feasible. The City Manager and Finance Director are considering the use of either internal financing
or bond issuance and will make a recommendation to the Council. The benefit to residents of
internal financing is that it lowers costs by approximately $100,000 by avoiding bond issuance and
underwriting costs. If the City were to internally finance this, the Development Fund would be a
likely source. From the City’s point of view, the level of risk is really no different in terms of internal
vs. external financing. The real question for the City regarding internal financing relates to whether
we will have sufficient dollars available for other needs. One upside to internally financing this is
that the rate of return on the investment would be greater than what we are able to derive from the
market right now (5 or 6% vs. 2%) Staff is recommending to the Association that the project
proceed later in the year rather than earlier to reduce capitalized interest costs.
FINANCIAL OR BUDGET CONSIDERATION:
This is the largest amount of money to be requested by an Association, with an average loan that
amounts to 17% of the median value of the units. The other HIA loans to unit value ranged from
4% to 14%. Our experience has been that the rate of HIA repayment delinquencies is the same as
the citywide property tax delinquency rate which is quite low. The risk to the city of non-payment is
low for three reasons, in the event of foreclosure, tax payments are first paid, the association assigns
its assets (reserve funds) to the city; finally there is 105% debt coverage.
As this project proceeds thru the City’s formal process staff will provide additional details on the
merits of this proposal.
VISION CONSIDERATION:
The preservation of modest valued owner occupied homes is consistent with the vision to ensure a
diversity of well maintained housing.
Meeting of September 14, 2009 (Item No. 6) Page 17
Subject: Sunset Ridge Housing Improvement Area
NEXT STEPS:
Upon completion of the final scope of work the association will be requesting the Council conduct a
Public Hearing to establish the Sunset Ridge HIA and impose fees. The association anticipates this
will occur in March.
Attachments: Ehlers’s draft Housing Improvement Area Project Costs
Photos of siding and windows
Prepared by: Kathy Larsen, Housing Programs Coordinator
Approved by: Tom Harmening, City Manager
Meeting of September 14, 2009 (Item No. 6) Page 18
Subject: Sunset Ridge Housing Improvement Area
Meeting Date: February 23, 2009
Agenda Item #: 3
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Housing Improvement Area (HIA) Considerations.
RECOMMENDED ACTION:
No action is required at this time. This report provides information for City Council discussion at
the study session.
POLICY CONSIDERATION:
The City is authorized by the state to establish HIAs as a finance tool for private housing
improvements. The City adopted an HIA policy in 2001, and has established four HIA’s to date
(see attachments). The Sunset Ridge Association anticipates requesting HIA designation early this
spring. Their request is the largest request the City has ever received both in terms of the total dollar
amount and the amount per unit. The request has raised a number of policy questions about how to
handle HIA requests and when they should be approved. The issues are outlined below.
BACKGROUND:
A written report for the February 9, 2009 Council meeting provided background information
related to the pending establishment of the Sunset Ridge Association HIA. The City Council asked
to have the topic of HIA’s and the Sunset Ridge request placed on a study session agenda.
In April 2008 Sunset Ridge submitted a preliminary application to us with the scope of
improvements estimated at $4,700,000. This would result in an average cost per unit of almost
$21,000. This is a significant loan amount compared to the value of the units. The average annual
fee would be $2,111, with a monthly fee of $175.
Basic information about Sunset Ridge is summarized below.
Sunset Ridge is located between 2010 and 2260 Ridge Drive.
• There are nine buildings with 240 total units.
• Built in the early 80’s.
• 75% of the units are owner occupied.
• The 2008 median EMV of the units is $126,000.
• Unit values range from $104,500 to $153,000.
Meeting of September 14, 2009 (Item No. 6) Page 19
Subject: Sunset Ridge Housing Improvement Area
The Sunset Ridge application meets City HIA requirements. However some key issues raised by this
proposed project are outlined below for discussion. They are issues that relate to HIAs in general not
just Sunset Ridge; and, they exist within the context of the current housing and lending markets for
both the Association and the City.
Homeowner Risks and Issues
Taking on additional homeowner debt during uncertain economic conditions is a challenge to many
association members. The Sunset Ridge Association has and continues to balance the need for
making improvements that address years of deferred maintenance, with the burden of taking on
additional debt. Homeowners have the following considerations:
1. Basic building maintenance needs to be done in a timely fashion. Deferring the improvements
will lead to further deterioration of the buildings. There comes a time when the buildings
simply need to be repaired. Stop-gap emergency repairs deplete reserves and lead to unplanned
assessments.
2. An HIA loan provides an affordable long term method of paying for improvements. In the case
of Sunset Ridge it is really the only viable financing option.
3. The cost of improvements may push the debt on some units above the current value of the units.
Owners that purchased units since 2003, when home values were high, could be in a situation
where the additional debt load could result in a higher debt load than unit value. At Sunset
Ridge the board is polling the 30 owners that purchased since 2003, to determine the impact of
the additional debt.
4. There are some resources for owners financially burdened by the loan. The board is being
directed to contact Community Action Partnership of Hennepin County to provide home
finance counseling to all owners that could be significantly burdened by the loan. Low-income
seniors, over 65 years, could be eligible for the city’s hardship deferment of special assessments as
well.
City Issues
4. How best to fund HIA loans. The City has alternative mechanisms to fund the HIA
improvements. The HIA law anticipates City’s using its bonding authority to fund HIA loans to
homeowner associations. However St. Louis Park has funded the four loans to date from city
reserves. The previous loans have been much smaller than the Sunset Ridge proposed loan. The
city has the internal funds available to fund the Sunset Ridge loan and it would be financially
beneficial to both the City and Sunset Ridge to do so; however, there are consequences to
funding from reserves that need to be considered.
5. Internal funding of HIA loans has both benefits and costs for the City and Associations.
a. Benefits of internal financing
i. Costs the associations less by providing a savings of approximately $100,000 over
the cost of bond issuance and underwriting
Meeting of September 14, 2009 (Item No. 6) Page 20
Subject: Sunset Ridge Housing Improvement Area
ii. The rate of return on the loan would be greater than what the city could derive
from other investments right now, approximately 6% versus 2%.
iii. Although future interest rates are unknown, it is unlikely the city could invest
and earn interest greater than the HIA rates of 5.85-6.3%.
b. The downside of internal financing is that city funds are tied up long term. The real
question for the City regarding internal financing is whether the city has sufficient
dollars available for other more immediate needs.
c. The financial risk for the city is about the same whether the city funds the HIA loan
from internal financing or issues bonds. In either case it is a general obligation of the
city and we are counting on the Association to repay use.
6. Loan term
a. The goal of determining the loan term is to encumber the city’s monies for the shortest
term feasible, while making the fee payments affordable to owners of modest valued
homes. Residents that can afford to pay the fee upfront, or find alternative financing to
prepay the fee, can and do.
b. Two of the existing HIA’s have 10 year loan terms and two have 15 years terms. The
loan term for Sunset Ridge is proposed to be 20 years.
c. The loan term should not outlive the life of the improvements.
7. The firewalls to reduce the city’s financial risk are significant and include:
a. Repayment of the loan is made through owner’s real estate tax payments.
b. In foreclosure events, tax liabilities including special assessments, must be paid by any
party that purchases the unit. In this arena, HIA fees have been treated the same as
special assessments.
c. There is 105% debt coverage.
d. The development agreements allow the city to obtain assignment of association’s assets.
The agreements also can require associations to pay on behalf of delinquent members if
payments are not made.
e. The delinquency rate of existing HIA fees is low and consistent with the citywide
property tax delinquency rate of less than 1%.
f. Finally, prior to application, associations are required to conduct a reserve study of
capital needs and long term financials before an application is submitted. The financial
plan is reviewed by staff and the city’s financial advisor, Ehlers and Associates to
determine long term feasibility of financing future improvements.
g. The Development Agreements with Associations provide additional contractual
conditions to ensure financial stability of associations. They require that associations
i. Use professional property management.
ii. Submit annual audits and update financial plans to demonstrate capability for
ongoing maintenance & operations.
iii. Demonstrate increases in monthly association dues to build reserves to a
sustainable level.
Meeting of September 14, 2009 (Item No. 6) Page 21
Subject: Sunset Ridge Housing Improvement Area
8. On-going maintenance of townhomes and condos a critical community need. There are roughly
2700 townhomes and condos in St. Louis Park. The majority of them are over 20 years old. For
the strength of our neighborhoods and the whole community, it is important that these homes
be well maintained. In some cases private financing is not available or affordable for these
homeowner associations. In those situations, participating in the city’s HIA program maybe the
only way to finance critical home improvements. Deteriorating housing would be a huge risk for
the community if allowed to happen.
FINANCIAL OR BUDGET CONSIDERATION:
The pending Sunset Ridge HIA is the largest amount of money to be requested by an Association at
approximately $5,000,000. Due to the large amount of money and current economic conditions,
this topic warrants discussion. Four associations with over 500 housing units have received loans
totaling over $2,500,000 to date. The city internally funded these loans and has experienced no
significant issues in loan repayments. This investment in owner occupied affordable housing is
notable.
VISION CONSIDERATION:
The preservation of modest valued owner occupied homes is consistent with the vision to ensure a
diversity of well maintained housing. HIAs are a means of accomplishing the city’s vision by
assisting associations with financing property maintenance of affordable owner occupied units. The
increase value of improved properties benefits the city and its residents.
NEXT STEPS:
Staff will keep Council apprised of the Sunset Ridge Condominiums desire to request a public
hearing to establish the Sunset Ridge HIA.
Attachments: City Housing Improvement Area Policy, adopted July 2001
HIA Summary Sheets
Sunset Ridge HIA Study Session Report February 9, 2009
Prepared by: Kathy Larsen, Housing Programs Coordinator
Approved by: Tom Harmening, City Manager
Meeting of September 14, 2009 (Item No. 6) Page 22
Subject: Sunset Ridge Housing Improvement Area
CITY OF ST. LOUIS PARK
HOUSING IMPROVEMENT AREA POLICY
1. PURPOSE
1.01 The purpose of this policy is to establish the City's position relating to the use of Housing
Improvement Area (HIA) financing for private housing improvements. This policy shall be
used as a guide in processing and reviewing applications requesting HIA financing.
1.02 The City shall have the option of amending or waiving sections of this policy when
determined necessary or appropriate.
2. AUTHORITY
2.01 The City of St. Louis Park has the authority to establish HIAs under 1994 Minnesota Laws,
Chapter 587, Article 9, Section 22 through 3 1, and extended in 2000, M.S. 428A.21
2.02 Within a HIA, the City has the authority to:
A. Make housing improvements
B. Levy fees and assessments
C. Issue bonds to pay for improvements
2.03 The City Council has the authority to review each HIA petition, which includes scope of
improvements, association’s finances, long term financial plan, and membership support.
3. ELIGIBLE USES OF HIA FINANCING
3.01 As a matter of adopted policy, the City of St. Louis Park will consider using HIA financing
to assist private property owners only in those circumstances in which the proposed private
projects address one or more of the following goals:
A. To promote neighborhood stabilization and revitalization by the removal of blight and/or
the upgrading of the existing housing stock in a neighborhood.
B. To correct housing or building code violations as identified by the City Building Official.
C. To maintain or obtain FHA mortgage eligibility for a particular condominium or
townhome association or single family home within the designated HIA.
D. To increase or prevent the loss of the tax base of the City in order to ensure the
long-term ability of the City to provide adequate services for its residents.
E. To stabilize or increase the owner-occupancy level within a neighborhood or association.
Meeting of September 14, 2009 (Item No. 6) Page 23
Subject: Sunset Ridge Housing Improvement Area
F. To meet other uses of public policy, as adopted by the City of St. Louis Park from time to
time, including promotion of quality urban design, quality architectural design, energy
conservation, decreasing the capital and operating costs of local government, etc.
4. HIA APPROVAL CRITERIA
4.01 All HIA financed through the City of St. Louis Park should meet the following minimum
approval criteria. However, it should not be presumed that a project meeting these criteria would
automatically be approved. Meeting these criteria creates no contractual rights on the part of any
association.
A. The project must be in accordance with the Comprehensive Plan and Zoning
Ordinances, or required changes to the Plan and Ordinances must be under active
consideration by the City at the time of approval.
B. The HIA financing shall be provided within applicable state legislative restrictions, debt
limit guidelines, and other appropriate financial requirements and policies.
C. The project should meet one or more of the above adopted HIA Goals of the City of St.
Louis Park.
D. The term of the HIA should be the shortest term possible while still making the annual
fee affordable to the association members. The term of any bonds or other debt incurred for
the area should mature in 20 years or less.
E. The association in a HIA should provide adequate financial guarantees to ensure the
repayment of the HIA financing and the performance of the administrative requirements of
the development agreement. Financial guarantees may include, but are not limited to the
pledge of the association's assets including reserves, operating funds and/or property.
F. The proposed project, including the use of HIA financing, should be supported by a
majority of the owners within the association. The association should include the results of a
membership vote along with the petitions to create the area.
G. The Association must have adopted a financial plan that provides for the Association to
finance maintenance and operation of the common elements within the Association and a
long-range plan to conduct and finance capital improvements therein, which does not rely
upon the subsequent use of the HIA tool.
Meeting of September 14, 2009 (Item No. 6) Page 24
Subject: Sunset Ridge Housing Improvement Area
H. HIA financial assistance is last resort financing and should not be provided to projects
that have the financial feasibility to proceed without the benefit of HIA financing. Evidence
that the association has sought other financing for the project should be provided and should
include an explanation and verification that an assessment by the association is not feasible
along with letters from private lenders or other evidence indicating a lack of financing
options.
I. The homeowner's association must be willing to enter into a development agreement,
which may include, but is not limited to, the following terms:
establishment of a reserve fund
staffing requirements
annual reporting requirements
conditions of disbursement
required dues increases
notification to new owners of levied fees
J. The improvements financed through the HIA should primarily be exterior improvements
and other improvements integral to the operation of the project, e.g. boilers. In the case of a
homeowner's association, the improvements should be restricted to common areas. The
improvements must be of a permanent nature.
The association must have a third party conduct a facility needs assessment to determine and
prioritize the scope of improvements.
K. HIA financing should not be provided to those projects that fail to meet good public
policy criteria as determined by the Council, including: poor project quality; projects that are
not in accord with the Comprehensive Plan, zoning, redevelopment plans, and the City
policies; projects that provide no significant improvement to the neighborhood and/or the
City; and projects that do not provide a significant increase in the tax base and/or prevent
the loss of tax base.
L. The financial structure of the project should receive a favorable review by the City's
Financial Advisor and Bond Counsel. The review will include a review of performance and
level of outstanding debt of previous HIAs.
M. The average market value of units in the association should not exceed the maximum
home purchase price for existing homes under the State’s first time homebuyer program. (In
2001, the metro amount is $175,591)
N. The association is to submit an application along with application fee as set from time to
time by resolution of the City Council.
Adopted by the City of St. Louis Park on the 16th day of July 2001.
Meeting Date: September 14, 2009
Agenda Item #: 7
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Communications (Verbal).
RECOMMENDED ACTION:
Not Applicable.
POLICY CONSIDERATION:
Not Applicable.
BACKGROUND:
At every Study Session, verbal communications will take place between staff and Council for the
purpose of information sharing.
FINANCIAL OR BUDGET CONSIDERATION:
Not Applicable.
VISION CONSIDERATION:
Not Applicable.
Attachments: None
Prepared and Approved by: Tom Harmening, City Manager
Meeting Date: September 14, 2009
Agenda Item #: 8
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Wind Energy Regulations.
RECOMMENDED ACTION:
This report is being provided as an update for the City Council. Please let staff know if you have
questions or concerns regarding the direction proposed to be taken or if this should be placed on a
study session for further discussion. Absent this, staff intends to prepare an ordinance amendment
relating to wind generators and process it through the Planning Commission and Council for formal
action.
POLICY CONSIDERATION:
Should the city adopt ordinances to regulate alternative wind energy sources?
BACKGROUND:
On March 23, 2009, the City Council received a report from staff outlining current regulations as
they pertain to wind turbines. The conclusion was that existing regulations do not specifically
address wind turbines, and that wind generators would not currently be allowed under the zoning
ordinance. It was determined that it would be best to be proactive and take a closer look at the issue
of wind generators and city regulations.
Since the March 23rd meeting, staff attended two separate seminars on wind energy. The city also
hired Brian Ross, Principal of CR Planning to provide a framework for wind energy regulations. His
firm specializes in energy planning, and has assisted numerous cities, counties and some states,
including Minnesota, in formulating energy policies and regulations.
Highlights of the report are:
▪ Two reasons for having regulations on wind energy installations:
i. To promote or encourage renewable energy; and
ii. To address actual or perceived nuisances associated with wind energy
installations.
▪ Wind energy installations are not the most cost effective means to reduce energy
bills, however they can be a step toward sustainability and energy self sufficiency.
▪ The Twin Cities Metropolitan Area is an area of poor wind resources. The urban
landscape creates a low-speed turbulent wind resource that is difficult to capture with
existing technology.
Meeting Date: September 14, 2009 (Item No. 8) Page 2
Subject: Wind Energy Regulations
▪ Wind generators can be categorized into three broad types, Utility-scale generators,
Small Wind generators (potentially powering a single site); and, Micro wind systems
(emerging technology – very low power generators)
▪ St. Louis Park does not have any large scale wind opportunities. Some property
owners may be interested in pursuing small or micro scale generators.
▪ While micro wind systems may be the most applicable type for St. Louis Park, most
of our residential areas are not appropriate for these systems because of:
Æ Visual impacts - the height needed is 50 feet above structures,
Æ Tower fall zone is needed at 100% or more of height,
Æ Noise is generated from wind energy installations and can be an issue.
Next Steps:
While no one is proposing a wind generator in the city today, it is not hard to imagine that we will
receive inquiries and proposal in the foreseeable future as alternative energy and sustainability
continue to be important issues to our residents. It seems appropriate to be proactive and
incorporate regulations specific to wind generators into our zoning ordinance now rather than
simply rejecting all future generator requests.
Unless staff hears that Council would like to discuss this further, staff will move forward with the
Planning Commission to craft specific regulations consistent with the technical information the CR
Planning report has provided. The focus would be on the possibility of “Small Wind Generators”
on larger commercial or industrial sites; and “micro wind generators” potentially on larger sites in
residential locations as well as non-residential parcels. Key ingredients of the regulations would
likely include:
1. 1 acre minimum lot size for installations;
2. Setbacks of 100% or more of the height of the installation;
3. Maximum heights consistent with the current tower height regulations (generally 70 ft.
maximum in residential districts by CUP, 110 ft to 199 ft maximum heights in non-residential
and non-neighborhood commercial districts);
4. Strong restrictions on generators in residential districts; more permissive controls in commercial
and industrial zoning districts;
5. Standards related to noise, lighting, maintenance, design and productivity requirements.
FINANCIAL OR BUDGET CONSIDERATION:
In the March 23rd staff report it was indicated that a zoning study for wind generators would not
exceed $10,000. Taking the next steps toward adopting wind generation regulations would still fall
with in that cost estimate. The analysis so far has cost approximately $1,000.
Meeting Date: September 14, 2009 (Item No. 8) Page 3
Subject: Wind Energy Regulations
VISION CONSIDERATION:
Research on wind turbine towers is consistent with the Council’s Vision Strategic Direction, “St.
Louis Park is committed to being a leader in environmental stewardship.”
Attachments: Wind Energy Background Report – Community Resources Planning
Prepared by: Gary Morrison, Assistant Zoning Administrator
Meg McMonigal, Planning & Zoning Supervisor
Reviewed by: Kevin Locke, Community Development Director
Approved by: Tom Harmening, City Manager
Meeting Date: September 14, 2009 (Item No. 8) Page 4
Subject: Wind Energy Regulations
Wind Energy Background Report
Wind Energy Background Report
Local Government Goals for Renewable Energy Regulation
Communities typically enact wind energy development regulations in order to meet two distinct
goals:
1. In order to promote or encourage renewable energy in their community;
2. In order to address the actual and perceived nuisances associated with wind energy
installations.
These two goals are not mutually exclusive; most
communities consider both goals as they
construct development regulations to address
wind energy installations. The most important
consideration as the community evaluates wind
energy ordinance provisions is to keep these two
goals in mind as each aspect of regulation is
debated. While the two goals are not mutually
exclusive, some regulatory provisions will serve
one of these goals at the expense of the other.
A typical element of wind energy regulation is
regulating tower height. Restricting tower
heights serves the goal of limiting visual
nuisances and addressing safety considerations,
serving goal #2. Restricting tower height also
has the effect of limiting renewable energy
production (goal #1). Electric production from a
wind turbine is greatly affected by tower height;
limiting tower heights has a dramatic diminishing
effect on the production of renewable energy.
Similarly, setting the tower height limit to 120
feet will allow most small wind turbines to
maximize the local wind energy, best serving
goal #1. In urban areas, however, a 120 foot
tower comes with visual impacts and safety risks.
In the event of a tower collapse, albeit a rare
event, a 120-foot tower in an urban area poses
safety risks to more than one neighbor.
Balancing Goals
The St. Louis Park Comprehensive Plan has a
number of goals that demonstrate the need to
consider both of the two general goals noted
above. The Comprehensive Plan calls both for
improving the sustainability of the City and for
protecting neighborhood character. Many
communities are struggling with the question of
whether wind energy is a reasonable use in
residential areas or if it should be considered
primarily as a non-residential use.
Why invest in wind energy?
Investments in wind energy systems are made for a variety of reasons. Every investment in wind
energy, furthermore, involves multiple levels of stakeholders, including adjacent property
owners, the electric utility, and the local government. Homeowners, businesses, utilities, and
local governments have distinct interests in wind energy, as noted below.
Homeowners are interested in wind energy to reduce their carbon footprint, become more self-
sufficient or independent, save money on the utility bill, and because of an interest in the
technology.
Businesses are interested in wind energy for the ‘green’ symbolism of renewable energy and
meeting climate protection or sustainability commitments. Businesses also may see wind energy
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installations as a way to reduce energy costs or limit risk of energy price volatility through
diversifying their energy supply.
Utilities have several interests in wind energy development. For instance, utilities have a
statutory interest in renewable energy in the form of the Renewable Portfolio Standard. Most of
the RPS capacity, however, will be met via contracts with large-scale wind developers and some
of their own investment in wind farms. Small scale wind is unlikely to play significantly in the
utility meeting its statutory obligations. In addition to meeting their RPS goals, utilities have an
interest in small wind energy projects because these projects fall under Minnesota’s “net
metering” law (the utility has to buy the power at the same rate as the home or business buys
from the utility), and distributed wind generation affects how energy is consumed, generated, and
distributed on the utility grid.
Local governments have several point of interest in renewable energy. Cities such as St. Louis
Park have made commitments to sustainability or climate protection and might see renewable
energy as being in the portfolio of solutions to meeting those commitments. Renewable energy
is also a local resource that displaces an ‘imported’ resource, meaning that renewable energy has
economic development benefits. Finally, renewable energy is a form of “distributed generation”,
which has proven to improve power quality and reliability on the local electric grid, a critical
component of local infrastructure that runs along City rights-of-way.
Balancing Sustainability Choices
Local governments need to consider the interaction of these various interests in evaluating local
renewable energy policy or regulation. In making informed choices about sustainability, the City
must also consider the multiple paths to sustainability. For instance, while wind energy
installations will reduce a homeowner’s or business’s energy bill, wind energy is not the most
cost effective means to achieve that particular goal. Energy efficiency is virtually always a better
investment than renewable energy systems from the standpoint of cost savings or total effect on
greenhouse gas reductions.
The cost-effectiveness perspective is not, however, always the primary interest in choosing a
sustainability strategy – energy efficiency rarely provides a visible symbol of sustainability as
does a renewable energy system. Renewable energy also offers the promise of self-sufficiency
(you need some kind of energy production to build a zero-energy building or to get to a zero net
carbon footprint). Within renewable energy choices, solar energy is sometimes the better
sustainability choice than wind energy. Solar is not as cost-effective as wind energy, except in
urban areas where the wind resource is sporadic and the nuisances of wind energy more limiting.
Both wind and solar energy are complementary to an energy efficiency strategy for moving
toward a zero-energy or zero-carbon building.
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Wind Energy Resources and Technology
Wind Resources in Minnesota, the Metropolitan Area and St. Louis Park.
Minnesota has a tremendous wind energy potential. The wind energy resource is, however, not
distributed evenly across the State; some areas have an excellent wind resource, while other
areas have a poor wind resource. A statewide representation of wind resources is shown in
Figure 1.
The factors that contribute to a good wind resource include:
¾ Topography: high ground has more wind resource than low ground. The Buffalo Ridge in
southwest Minnesota is higher than surrounding areas for miles, and thus provides a large area
of good wind resource.
The Minnesota River
Valley similarly stands
out as a lower resource
area than surrounding
land.
¾ Land Cover: Land
cover such as trees and
buildings reduce wind
resources, while land
cover such as crops and
prairie have little
effect. Prairies and
lakes show up as good
areas for wind energy,
forested areas are poor
(at least at the 30 meter
height).
¾ Obstructions Creating
Turbulence: A single
object sticking up will
create turbulence in the
wind. Buildings, trees,
even wind turbines
themselves will create
turbulence for
surrounding areas.
Turbulence will
dramatically reduce the
effectiveness of wind
energy conversion
systems.
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Wind Energy Background Report
Given these characteristics, one can understand why the metropolitan region appears to be an
area of poor wind resources. Figure 2 shows a blowup of the same map for the metropolitan
region. As can be noted, there are very few obvious opportunities to capture high-quality wind
energy. The urban landscape creates a low-speed turbulent wind resource that is difficult to
capture with existing technology.
SLP
When considering the wind resource maps, keep in mind that the maps present data at a 500-
meter resolution. This resolution accurately depicts the regional wind resource differences, but
does not provide resolution sufficient to identify specific sites that are good or bad for wind
energy. There are small sites that are quite good for wind energy in the white (poor resource)
areas, and poor sites in the high value areas (orange and brown) along Buffalo Ridge. Also, the
maps show wind resources at 30 meters (about 100 feet). We chose to present the 30 meter data
because that is the most relevant information for the type of wind turbine likely to be seen in St.
Louis Park (see the wind technology summary).
Wind Energy Conclusions
Based on these data, St. Louis Park certainly does not have any large scale wind energy
opportunities. St. Louis Park may, however, have some small sites that have the right
characteristics of topography, land cover, and lack of turbulence for the land owner to consider
wind energy as an option for sustainability. Even the best sites, however, are likely to be
marginal from the standpoint of cost effectiveness or productive energy output per dollar of
capital. Identifying good sites is likely to occur on an ad hoc basis, or on guesswork by the
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Wind Energ
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landowner. Some communities have evaluated wind resources at a more detailed community
level in order to assess where to put, for instance, a wind energy overlay district. The cost of
such a study (ranging from $3,000 to $7,000) must be balanced against the likelihood of
identifying meaningful wind resources. As noted later, if the City wishes to consider renewable
energy production as a regulatory threshold, it can require performance estimates in the
application for a land use or building permit.
Current Technology and Technology Trends
Wind energy technology has changed considerably over the last 20 years, and continues to
evolve. For the purposes of this background report, we have separated the technology into three
categories that help guide renewable energy regulation in St. Louis Park;
1) Utility-scale wind turbines
2) Small wind turbines
3) Micro- and alternative-design turbines
1) Utility-scale Wind Turbines. Utility-scale turbines are the largest type of turbine, typically
seen in rural areas as part of wind farms, as seen in western Minnesota and northern Iowa, but
occasionally on an individual basis, such as the Carleton Collage and Saint Olaf College turbines
on the edge of Northfield.
Size: These turbines are 300-600 feet in height and have a rated capacity measured in the
megawatt (MW) range.
Purpose: Utility-scale turbines are almost always designed to generate electricity for sale on
the electric grid, and can produce electricity that is cost competitive with more traditional
fuels.
Evolution of technology: As the industry evolves, these turbines are getting bigger and
bigger; 15 years ago a large turbine had less than one MW of generating capacity, turbines
now are multiple MWs in capacity and getting larger.
Applicability to St. Louis Park: The only cities that need to address such large turbines in
their development ordinances are cities outside metropolitan areas. The turbines need to be
clearly separated from homes and infrastructure by hundreds of feet and are placed only
where the wind resource is optimal. St. Louis Park does not have sites suitable for such a
large scale turbines.
y Background Report
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2) Small Wind Turbines. Small wind turbines include most all
non-utility scale turbines and have a wide range of heights and
capacity. They are substantially smaller than utility scale
turbines – there is a large gap in size and capacity between
utility-scale and small wind turbines.
Size: Small wind turbines usually have towers between 60
and 120 feet, although some will approach 200 at the top
end of the scale. Capacity is measured in kilowatts (KW)
rather than the MW range of the utility-scale turbines, but
rarely is more than 100 KW.
Purpose: Small wind turbines are usually deployed as
single units rather than as part of a wind farm, and
frequently sized to first meet on-site electric demand rather
than to generate electricity for sale on the grid. These
systems are not cost competitive as utility power sources,
but can be (with a good wind resource) cost competitive
from a retail perspective. Small wind is probably the most
cost effective on-site renewable energy technology.
Evolution of technology: While small wind technology is
evolving, the capacity and height are largely unchanged
over the last ten years. Changes have been in improved
efficiency, reduced noise, and increased reliability.
Applicability to St. Louis Park: Many cities need to address small wind in their development
ordinances. The cost of small wind turbines is within the reach of homeowners and small
businesses. As the interest in renewable energy grows, more individuals wish to put up small
wind turbines in order to make a relatively economic investment in renewable energy. Issues
will include visual impacts, safety considerations,
and concerns about noise, shadow flicker, and
property value impacts.
3) Micro systems and Alternative Technologies.
Micro systems and alternative technologies include
very small traditional turbines, and a variety of
vertical axis and building-mounted wind energy
systems. These systems are far less common than
traditional small wind and do not have the years of
demonstrated success of either small wind or utility
scale wind.
Size: Micro systems and alternative systems are
usually less than 80 feet tall and frequently are
advertised to be mounted in urban areas even on
buildings. The capacity is usually less than 10KW
and may even be measured in watts (less than one
kilowatt).
Purpose: Micro systems and alternative
technologies are intended to provide power for
WinThe Swift wind turbine from Cascade
Engineering (Credit: Cascade Engineering)
Meeting Date: September 14, 2009 (Item No. 8) Page 10
Subject: Wind Energy Regulations
Wind Energy Background Report
primarily on-site use in situations where traditional small wind cannot be deployed (such as
low-speed wind, turbulent wind, and in urban settings). The systems are intended to compete
with other forms of on-site energy production (solar energy, wood energy, biomass), and
offer a renewable alternative to retail electric prices.
Evolution of technology: Micro systems and alternative designs are rapidly changing. A
number of new companies are marketing new products for the specific purpose of tapping
into the urban and suburban market for wind energy. Nearly all these products, however, are
largely unproven as a meaningful source of renewable energy. Some recent real world tests
of these technologies have demonstrated a much lower than advertised performance. New
technologies are being rolled out but no technology has yet proven to be able to capture
urban or low-speed wind.
Applicability to St. Louis Park: Many cities need to address micro turbines and small wind
in their development ordinances. The target market for these systems is the homeowner and
small businesses, and the cost is generally lower than traditional small wind systems. Issues
to address include both nuisance considerations as noted for small wind systems and the
viability of the systems to actually generate renewable energy.
Technology Conclusions
St. Louis Park is most likely to see requests to install the latter two categories of wind energy
technologies; small wind, and micro/alternative technologies. St. Louis Park has a variety of lot
sizes and land uses, some of which could be appropriate for wind energy systems. Most
residential areas, however, have lot sizes and residential density that is not appropriate even for
small wind, leaving just the micro- and alternative systems as a potential option for these areas.
As noted above, the primary question then becomes whether such systems are even viable as
renewable energy systems in St. Louis Park’s low energy wind regime.
Some consideration may also need to be given to systems that exceed the small wind size
thresholds noted above that could conceivably be used on a few industrial or large commercial
sites. For instance, the wind turbine at the Great River Energy facility in Maple Grove, adjacent
to the large commercial shopping are, does not reach the threshold of a utility-scale system but is
bigger than what is considered a small wind system. Such a possibility can be addressed via a
conditional use permit process to assess the particular visual and safety impacts on the larger site.
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Regulatory Issues
Regulation associated with wind energy takes two forms, which mirror the two regulatory goals
noted at the beginning of this background report:
1. Regulation to encourage renewable energy
2. Regulation to address nuisances and land use conflicts
Nuisance Regulation
Wind energy systems can create a number of real or perceived nuisances or safety considerations
that are addressed in wind regulatory ordinances, including the following:
¾ Tower fall zone
¾ Visual impacts
¾ Bird and bat kills
¾ Noise performance standards
¾ Shadow flicker
¾ Harm to habitat
¾ Construction impacts
¾ Electro-magnetic interference
¾ Ice throw
¾ Impacts to property value
Most of these considerations, including construction impacts, electro-magnetic interference, bird
and bat kills, shadow flicker, and harm to habitat, are much more associated with utility scale
turbines and wind farms (multiple turbines operated to generate power for the wholesale market).
St. Louis Park does not need to consider wind farms or utility scale turbines, and thus can likely
disregard these considerations except as a perceived, rather than real, risk. Individual instances
may occur, such as a few birds killed by turbines, but the impact on bird populations from small
wind systems is negligible. Other considerations, particularly ice throw and related risks such as
blades breaking off and flying hundreds of feet, are exclusively perceived risks with little
evidence to support actual risk. Finally, the assertion that wind energy negatively affects
property values is frequently raised as a risk, but for which there is little evidence. Property
value impacts are not supported by evidence in market studies, with the exception of some
anecdotal evidence where utility-scale wind farms are located near residential properties or
where safety setbacks were ignored in areas of urban density.
Therefore, the primary regulatory issues for the type of wind development likely to be seen in St.
Louis Park include the following:
Tower fall zone – While extremely rare, towers of all types have been blown down or damaged
in severe weather. Small wind towers are no exception, and most communities address this issue
in development regulation.
Noise – Wind turbines do create noise, and early versions of small wind turbines created enough
noise to exceed nuisance thresholds. Most newer small turbines stay below nuisance noise
thresholds (below 50 decibels), but noise is still considered a nuisance risk in most communities
that regulate wind energy.
Visual impacts – Visual impacts are the most qualitative nuisance risk, but also the most
common. In many cases, opposition to wind turbines is rooted almost entirely in the anticipated
visual impact the tower has from nearby homes; other issues may be raised, but the visual impact
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Wind Energy Background Report
is the lynchpin to most concerns. Visual impacts are also extremely difficult to mitigate except
by reducing tower heights, which then reduces the renewable energy value of the installation.
Incentives in Regulation
Identifying regulatory incentives helps meet the first goal for renewable energy development
regulation (promoting or encouraging renewable energy in the community). Many cities,
including St. Louis Park, have set high-priority goals to improve sustainability, reduce climate-
changing emissions, or foster the use of local resources. Renewable energy development can
help a community meet all these goals, and is frequently described as an important
implementation element for meeting sustainability or climate protection goals. Regulatory
initiatives take two forms in land use and development regulation:
A. Removing regulatory barriers to renewable energy development, and
B. Creating incentives within development regulation.
A. Removing regulatory barriers is primarily a process of: 1) identifying where the city’s
traditional tools of land use regulation, such as setback requirements, dimensional standards,
height requirements, and design standards, conflict with the goal of encouraging renewable
energy, and; 2: identifying how regulations can be changed to better accommodate renewable
energy without subverting the original intent of the land use regulation.
Some forms of renewable energy, such as solar power, are fairly compatible with the urban
form of development typically found in St. Louis Park. Solar power does not, in most cases,
need to be higher than the primary structure, it makes no noise, and presents virtually no safety
risk to surrounding properties. The primary nuisance is one of aesthetics or conflicts with
design standards, and the primary resource concern is addressing solar access across property
lines. Mitigating tools are readily available for most of these issues.
Removing barriers to wind energy systems, however, presents a more difficult set of choices
for St. Louis Park. In order to be most effective, wind turbines must be where the wind is best;
50 feet above nearby structures or trees. In light of this need, removing regulatory barriers
requires that the City consider the following changes:
¾ Changing in height limitations to allow substantially higher structures (towers) in order to
allow capture of the wind resource.
¾ Finding setback compromises that address the tower fall zone, using either a setback standard
or a lot size limitation.
¾ Considering impacts on community character in regard to visual impact by identifying areas
where towers have significant impact on character or viewshed, and those areas where visual
impacts are less significant.
B. Creating incentives for renewable energy is a relatively new consideration for local
governments. Fortunately, local governments have significant experience with local incentives
for other goals, and many of those incentives can be adapted to encouraging renewable energy.
Appropriate incentives for wind energy, assuming wind energy can meet community standards
for safety, aesthetics, and performance, may include the following:
¾ Regulatory flexibility in new construction
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¾ An option for meeting sustainability requirements when the City is a financial partner in a
development
¾ An option with PUDs
¾ A preference within ‘green’ or high performance building standards, such as LEED.
Types of Wind Energy Regulations
A discussion of specific regulatory tools
and how communities sometimes use
these tools follows. Specific examples
of how these concepts have been applied
can be found in the model ordinance
referenced in the text box.
Tower Height – Allowing wind turbines
on a lot, but limiting tower height to
anything less than 80 feet in St. Louis
Park is likely to dramatically limit
energy productivity. The relationship
between tower height and energy
production is not linear, but geometric.
In urban areas, for instance, a 50%
increase in tower height, from 40-feet to
60-feet, may only result in a marginal
improvement in production. A 50%
increase, from 60-feet to 90-feet,
however, may dramatically improve
productive value.
From the standpoint of sustainability,
limiting tower height is a poor way to regulate wind turbines. Sustainability goals are not served
by allowing investment in renewable energy, then severely constricting the renewable energy
output.
Counties, cities, and townships are enabled to regulate land
use under Minnesota Statutes 394 and 462 for the purpose
of: “promoting the health, safety, morals, and general
welfare of the community.” How wind energy land use
issues affect each type of community will significantly
change the structure and focus of the WECS ordinance.
Some common elements to consider in all communities are
noted below.
A. Distinguish between Types of Wind Energy
Applications
B. Define Necessary Permits
C. Establish Setbacks
D. Establish Safety Standards
E. Establish Design Standards
F. Establish Other Applicable Standards
G. Minimize Infrastructure Impacts
Source: From Policy to Reality: Revised Model Ordinances for
Sustainable Development, Minnesota Pollution Control
Agency/CR Planning, Inc., 2009
Elements of a Wind Energy Conversion System
(WECS) Ordinance
Lot Size – Limiting installations of wind energy to lots of an acre or more can address several
nuisance issues. An acre or more ensures that installations might be able to meet safety setback
requirements, mitigates for noise considerations beyond the lot line, and mitigates some of the
visual impact. Community sustainability goals may be compromised if large lots are in poor
wind locations, meaning that wind energy installations can only happen through redevelopment
at lower density (which may conflict with other sustainability goals).
Setbacks – Setbacks are a necessary element of regulating wind energy, except perhaps for
building-mounted systems. Setbacks generally need to be at least the height of the tower from
either a lot line or a residence (other than the residence on site). Some communities will require
a larger setback - 110% or 125% of tower height. Some communities have extended the setback
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even farther, asking that turbines be 200% of tower height, although there is little quantifiable
justification for a 200% setback for small wind installations.
District limitations – Wind energy can be
restricted, or given preference, by zoning
district or overlay district. Communities
may, for instance, prohibit wind turbines
in higher density residential districts, but
make wind turbines a permitted use in
industrial and large commercial districts.
The overlay concept can be used to restrict
wind systems, such as in a scenic view
area. Overlays are also used to encourage
wind, such as a wind overlay district
where wind resources are known to be
valuable and wind turbines are given
precedence over visual considerations.
Performance standard – Performance
standards can address many real or
perceived nuisances associated with wind
turbines. Noise standards, measured at the
property line, protect both adjoining
landowners from excessive noise and the
wind turbine owner from unwarranted
complaints. Other standards that
communities sometimes set include:
00.05 Standards.
A small wind energy system shall be a permitted use in
all zoning districts subject to the following requirements:
(1) Setbacks. A wind tower for a small wind system
shall be set back a distance equal to its total height
from:
(a) any public road right of way, unless written
permission is granted by the governmental entity
with jurisdiction over the road;
(b) any overhead utility lines, unless written
permission is granted by the affected utility;
(c) all property lines, unless written permission is
granted from the affected land owner or neighbor.
(2) Access.
(a) All ground mounted electrical and control
equipment shall be labeled or secured to prevent
unauthorized access.
(b) The tower shall be designed and installed so as to
not provide step bolts or a ladder readily accessible
to the public for a minimum height of 8 feet above
the ground.
Source: Small Wind Energy System Ordinance, Focus on Energy
Wisconsin Small Wind Model Ordinance
¾ lighting,
¾ protection of natural resource areas,
D. Sound Pressure Level: On-site Use
wind energy systems shall not exceed
55 dB(A) at the property line closest to
the wind energy system. This sound
pressure level may be exceeded during
short term events such as utility
outages and/or severe wind storms. If
the ambient sound pressure level
exceeds 55 dB(A), the standard shall
be ambient dB(A) plus 5 dB(A).
Source: Sample Zoning Amendments
for Wind Energy Systems, Michigan
State University Extension, 2008
Noise Performance Standard ¾ electromagnetic interference,
¾ maintenance
Design standards – In order to mitigate specific visual
or safety considerations, some communities will
regulate the tower’s appearance or design. Regulated
items include:
¾ tower type (monopole, guyed, frame)
¾ tower finish (non-obtrusive color)
¾ prohibiting signage on tower
¾ attractive nuisance – no unsecured ladders on
towers or fencing around ladders
¾ design and location of ancillary structures and
facilities (power lines, battery storage, etc).
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Productivity standards – The performance of the wind turbine, in terms of how productive the
turbine is at producing electricity, would not normally be a regulatory issue. Productivity
generally affects only the owner. Given, however, that the City is considered two regulatory
goals (regulating nuisances and improving sustainability) productivity becomes an important
consideration. Sustainability is not improved by a wind turbine that does not produce any
electricity, or the produces at rate that the owner would have been better off putting in a solar
system, efficiency measure, or other sustainability investment. The productivity of micro
turbines, building mounted systems, and other alternative technologies are particularly prone to
dramatic underperformance.
If the City is considering incentives to encourage wind energy, productivity is very important.
The City is a partner in the installation and should get a reasonable ‘return’ on its partnership.
Installers should provide an estimate of annual production, and production should be monitored
to ensure that claimed benefits occur.
Regulatory Conclusions
St. Louis Park should consider the following regulatory issues:
¾ Wind locations. Where in St. Louis Park might full height (80 - 120 feet) towers for small
wind be located without having significant impact on surrounding land uses? Do such
locations exist, and if so should wind energy systems be given preference over visual impacts
on neighbors?
¾ Land use limitations. What limitations should be placed on wind energy as a land use outside
areas that can accommodate full size towers? A number of tools can be used to limit wind
energy installations, including designating wind systems as only allowed in specific districts,
limiting installations by lot size of the primary use, setback requirements, and limiting height.
¾ Performance standards. What performance standards should the City consider for small and
micro-wind systems? Performance standards can be used to both mitigate nuisances and
protect wind turbine owners by setting a clear standard against which they can be measured.
¾ Productivity. Should the City consider, in developing ordinances, the productivity of the
system? In other words, should the City discourage wind turbines that have questionable
productivity, including building-mounted micro-turbines or wind turbines on short (35- 60
foot) towers?
¾ Incentives. Is the City considering incentives or other encouragement for renewable energy
installations? If so, the City should consider performance standards that ensure that the City is
getting benefit for the incentive; is the renewable energy installation providing real renewable
energy benefit?
¾ Large turbines. What standards should be in place to evaluate a conditional use application
for a larger wind turbine on a large commercial or industrial site?
Meeting Date: September 14, 2009
Agenda Item #: 9
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Urban Reforestation Program Policy.
RECOMMENDED ACTION:
No action at this time. This report is being provided in advance of bringing the Urban
Reforestation Program Policy to the City Council for approval. Please let staff know of any
questions or concerns that you might have.
POLICY CONSIDERATION:
Is the proposed policy in keeping with the Councils intent and direction from the July 13 Study
Session relating to the use of excess land sale proceeds for a tree replacement program?
BACKGROUND:
At the March 23 study session three ideas for the use of the excess land sale proceeds were discussed.
The options were identified based on a desire to use the funds for something of lasting impact, to
address unmet needs, and to be consistent with the city’s Vision. From this discussion the City
Council asked that staff survey the community via the City’s web site for its ideas and reactions. On
July 13 staff presented the findings of the survey (see attached staff report) and recommended that
the City use the excess land sale proceeds for a boulevard tree replacement program. The Council
reacted favorably to this recommendation and staff was asked to bring back a more specific policy for
Council consideration.
Attached is a policy regarding the use of the excess land sale proceeds for an Urban Reforestation
Program.
FINANCIAL OR BUDGET CONSIDERATION:
Cost of Program Implementation
This program would use land sale proceeds primarily for boulevard trees, although trees in parks and
public areas would qualify. The average cost to remove a boulevard tree is $600 and the average cost
of planting a tree is $300 for a total of $900 per tree. There are approximately 20,000 boulevard
trees. The intent is that this program would supplement funds already budgeted for tree planting vs.
supplanting want we already spend.
As previously discussed, the city is faced with the imminent threat of the Emerald Ash Borer (EAB)
which could potentially kill all 4,000 of our boulevard ash trees. Our ash trees are scattered for the
most part, but there are several areas where it is strictly Green Ash planted one after the other so
there will be pockets completely void of trees when EAB comes through the city.
Meeting of September 14, 2009 (Item No. 9) Page 2
Subject: Urban Reforestation Program Policy
In addition to the boulevard trees, the City of St. Louis Park has an approximately 70,000 trees in
parks and open spaces. Ash trees represent 3,000 of those trees.
Staff is proposing that funds from the excess land sale proceeds be put into a separate fund that is
used to assist in covering the costs of maintaining our urban forest on public properties.
VISION CONSIDERATION:
This item falls in line with Vision: St. Louis Park as committed to being a leader in environmental
stewardship. We will increase environmental consciousness and responsibility in all areas of city
business.
Attachments: Urban Reforestation Program Policy
July 13 Staff Report
Prepared by: Cindy Walsh, Director of Parks and Recreation
Reviewed by: Kevin Locke, Community Development Director
Approved by: Tom Harmening, City Manager
Meeting of September 14, 2009 (Item No. 9) Page 3
Subject: Urban Reforestation Program Policy
St. Louis Park
Urban Reforestation Policy/Program
DRAFT
PURPOSE:
The purpose of the Urban Reforestation Policy is to provide healthy and diverse tree population and
support the City’s vision regarding environmental stewardship.
DEFINITION:
Urban Reforestation is the continuation of planting and maintaining trees in our city and provides
many benefits.
USE OF FUNDS:
The goals of the City’s Urban Reforestation Program will be to provide a healthy and diverse tree
population and support the City’s Vision regarding environmental stewardship. The funds will be
used as follows:
a) To the extent feasible and possible, a one for one replacement which means that a tree is
planted to replace every tree that is lost.
b) To fill the empty places along boulevards where trees were not planted in the past.
c) To maximize diversity of our urban forest by not planting more than 15% of one tree
species. The greater the diversity of tree species, sizes and conditions, the healthier the
community forest. This will also prevent future large-scale losses in trees due to infestation of
pests. Species are typically rotated as much as possible per block trying to mix species so the
same species are not adjacent to one another.
d) To plant native trees where possible. This minimizes the detrimental effects of exotic species.
e) To optimize natural aesthetic and wild life habitat.
f) Primarily used for boulevard trees although trees in parks and public areas would qualify.
g) Replace trees lost due to imminent diseases such as Emerald Ash Borer.
SOURCE OF FUNDS:
The money currently obtained from Land Sale proceeds and the money that is yet to come in as
future sites are sold, will be put in a tree reforestation fund. This fund will be located within the
Park Improvement Fund and will accrue interest on the amount not yet spent.
a) As trees are removed from boulevards, parks or other City owned properties, the City
Manager, or designee, may approve expending funds from this account for the purchase and
planting of new trees within the parameters of the budget set by the City Council.
b) If new programs aimed at providing funds for trees arise, the money from those programs
will also be put into this fund with the same guidelines attached.
Meeting of September 14, 2009 (Item No. 9) Page 4
Subject: Urban Reforestation Program Policy
c) The use of these funds will supplement and not replace funds previously budgeted for tree
planting on public property
A reforestation plan and budget will be established each year and approved by the City Council
through the annual budget approval process.
Meeting of September 14, 2009 (Item No. 9) Page 5
Subject: Urban Reforestation Program Policy
Meeting Date: July 13, 2009
Agenda Item #: 2
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Excess Land Sale Proceeds – Survey Results.
RECOMMENDED ACTION:
Staff requests direction from the City Council on the use of excess land sale proceeds.
POLICY CONSIDERATION:
How should the city use the proceeds from the sale of land for Move Up homes?
BACKGROUND:
Webpage Survey Results
The City Council directed staff to seek community input on the three ideas and solicit additional
suggestions. A community survey was placed on the city’s webpage during the month of May to
gather community input. Respondents to the survey were given the opportunity to select any of the
three options and make comments. It was a not a random sampling of residents. Participation in the
survey was “self selected”. Anyone that wanted to participate could do so. However each participant
was limited to only one vote.
Over the month the city received 90 responses (specific survey results attached). Of the three
options listed, Environmental Initiatives received the most votes, with 22. The other options of
establishing an Art Fund and Community Center master planning received 6 and 7 votes
respectively.
Specific Environmental Initiatives suggested included :
a) park improvements,
b) restoring/improving wetlands,
c) art in green space,
d) green thinking in public spaces,
e) tree & shrub plantings sometimes in specific locations like along Jordon Avenue,
f) green educational efforts,
g) general improvement of the appearance of the city and our properties,
h) reducing our carbon footprint,
i) measurable environmental initiatives,
j) MN Energy Challenge,
Meeting of September 14, 2009 (Item No. 9) Page 6
Subject: Urban Reforestation Program Policy
k) greening of existing and planned city facilities,
l) offset damage to our environment from selling city land,
m) new and improved playgrounds.
Two thirds of the respondents proposed spending the money on something other than the 3 options
proposed. Twenty-seven (27) participants proposed to use the funds for city services or other wise
keeping property taxes down; and, 28 proposed using the funds to help SLP schools – (specifically
Park Spanish Immersion) - particularly keeping class sizes small.
Specific ideas proposed by respondents included,
n) affordable housing,
o) city gardens,
p) fix specific streets (Utica),
q) save for future needs,
r) pedestrian/sidewalk improvements,
s) road maintenance,
t) warning lights at Hwy 7 & Louisiana,
u) police budget,
v) general public services (police, fire, streets, etc),
w) larger storm sewer at W26th Street,
x) replace lost MVHC aid,
y) park improvements specifically Northside ice rink and Cedar Knoll,
z) reserves,
aa) wait for more and better ideas,
bb) "necessary and compelling projects" like Hwy 100 over pass widening,
RECOMMENDATION:
While the survey results are not a scientific sampling of resident opinion, the results do show a clear
preference to use the excess land proceeds in a fiscally responsible way that benefits as much of the
community as possible. Of the three areas identified, the results also show a preference to use the
funds for an environmentally beneficial purpose.
For a variety of reasons, including the results from Vision SLP, the results of the survey, and a likely
imminent event that will affect the City environmentally, aesthetically, and economically, staff is
proposing that a sound use of the funds would be for the creation of a more formal boulevard tree
replacement fund or program. Specific details relating to this recommendation are as follows:
Boulevard Tree Replacement Fund/Program
The city is faced with an imminent threat for which it has no identified source of funds with which
to respond. In the coming years the city will be faced with the prospect of losing roughly 4000
boulevard ash trees alone to the Emerald Ash Borer (does not include parks or private property). The
current excess land sale proceeds could fund the replacement of 3000 to 4000 trees, making it
possible to virtually replace all the ash trees in our boulevards in the coming years.
Meeting of September 14, 2009 (Item No. 9) Page 7
Subject: Urban Reforestation Program Policy
Use of the funds for boulevard tree replacement would be an investment with lasting environmental
and aesthetic benefits to our community. Trees not only provide beauty and shade to our
neighborhoods, they absorb carbon, create oxygen, and provide homes for wildlife and birds.
Using the funds for the replacement of lost trees would be a fiscally prudent thing to do. It
proactively meets an unmet community need. It would provide much needed funds for actual tree
planting; and, also could serve as a valuable source for matching funds for any future tree
replacement grant programs that may be created at the federal or state level to address the emerald
ash-borer problem.
A tree replacement fund or program funded with the land sale proceeds is consistent with the City’s
Vision of being a leader in environment stewardship, promotion of community aesthetics, and
maintenance of the quality of our neighborhoods.
Investments in trees will make a visible difference in the community. It will have a lasting impact
that will grow in community benefit with each passing year as the trees themselves grow to maturity.
NEXT STEPS:
If the City Council is supportive of this idea, staff will prepare more specific program details and
bring them back for approval at a regular Council meeting.
FINANCIAL OR BUDGET CONSIDERATION:
The creation of a boulevard tree replacement fund would provide a vital source of funding for future
replacement of boulevard trees lost to the emerald ash-borer.
VISION CONSIDERATION:
The proposed boulevard tree replacement initiative is consistent with the City’s Vision Strategic
Directions - St. Louis Park’s commitment to being a leader in environmental stewardship,
promoting and integrating aesthetics into the City and maintaining our housing and neighborhoods.
Attachments: Survey Results
Prepared by: Cindy S. Walsh, Director of Parks and Recreation
Kevin Locke, Community Development Director
Approved by: Tom Harmening, City Manager
Meeting Date: September 14, 2009
Agenda Item #: 10
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Recycling Program Update.
RECOMMENDED ACTION:
None at this time. The purpose of this report is to provide Council with an update on issues related
to the economic change to the recycling markets and possible impact to the City’s recycling contract
with Eureka Recycling.
POLICY CONSIDERATION:
None at this specific point in time. City staff is currently evaluating Eureka Recycling’s request for
financial assistance via renegotiation of the current recycling collection contract. Should staff feel
renegotiation of our recycling contract is necessary, information describing Eureka’s problem and
request will be provided to Council at the Study Session of September 29th.
BACKGROUND:
History
Contract
On October 1, 2008 the City entered into a 5-year contract with Eureka Recycling (Eureka) for
collection and processing of recycling materials. The City chose Eureka for several reasons including
their mission to educate residents on reducing waste, their commitment to improving environmental
stewardship, additional materials to be collected, and their willingness to share revenue from the sale
of recyclable materials with the City.
Current Market Conditions
Recent unforeseen and dramatic economic events have affected the recycling markets in serious ways
and may require action in order to ensure the ongoing viability of Eureka Recycling. The value of
recycled commodities has dropped by approximately 60% and volumes of materials being collected
is also decreasing.
Impact to Eureka Recycling
Eureka has taken action to address recent challenges of the current economic conditions, including:
reducing staff, reducing employee wages and benefits, and restructuring current operating loans.
Even with these cuts, Eureka claims they are continuing to sustain significant losses and that they
can not sustain these losses long term and remain in business.
Meeting of September 14, 2009 (Item No. 10) Page 2
Subject: Recycling Program Update
Eureka’s Request to St. Louis Park
Eureka has approached St. Louis Park, as well as their other contract cities, and requested we
consider amending our contract. Requested changes involve modifying the “Revenue Sharing”
provisions of the contract so as to reduce their costs and increase their revenues. And for the City,
this would mean decreased “Revenue Sharing” proceeds and possibly even additional costs.
City Action Taken
Staff has met several times with Eureka over the past three months to discuss changes in the recycling
markets, to understand their situation and the magnitude of their financial problem, and to discuss
and understand possible contract changes.
Staff has also had numerous phone conversations and a group meeting with the other Eureka cities
(Roseville, Maplewood, St. Paul, Lauderdale, and Arden Hills) to understand their contractual
requirements, learn what Eureka is proposing to them, and determine what common ground we
may have for future contract negotiation with Eureka, should that be necessary.
Schedule
Listed below is a tentative schedule of possible next steps:
Written Report to update Council on recycling market issues September 14
Study Session to discuss Eureka’s problem and City options (if necessary) September 29
Study Session to discuss contract amendment options and cost implications (if
necessary)
October 12
Council Meeting to consider and approve contract amendment (if necessary) October 19
FINANCIAL OR BUDGET CONSIDERATION:
Financial implications will be discussed at a future Study Session meeting.
VISION CONSIDERATION:
The activities above support or complement the following Strategic Direction adopted by the City
Council: St. Louis Park is committed to being a leader in environmental stewardship. We will
increase environmental consciousness and responsibility in all areas of city business. Focus areas:
• Continue to maintain a viable and economically feasible recycling program.
• Working in areas such as…environmental innovations.
Attachments: None
Prepared by: Scott Merkley, Public Works Coordinator
Reviewed by: Mike Rardin, Public Works Director
Approved by: Tom Harmening, City Manager
Meeting Date: September 14, 2009
Agenda Item #: 11
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Green Shade Initiative.
RECOMMENDED ACTION:
No formal action required at this time. This report is being provided to the City Council for
information and input purposes.
POLICY CONSIDERATION:
Does the City Council have concerns regarding the City’s participation in the “Green Shade
Initiative” being proposed by a St. Louis Park resident?
BACKGROUND:
The Green Shade Initiative is a campaign originated and designed by Curt Peterson, a resident of St.
Louis Park. Attached is a copy of the Green Shade Initiative Plan as authored by Mr. Peterson. The
goal of the program being devised by Mr. Peterson is to engage the residents of St. Louis Park to
raise funds to preserve our diverse urban forest through tree planting. This campaign’s hope is to
raise funds to offset the cost of replacing city trees, particularly boulevard and park trees, lost due to
a variety of factors such as, Dutch Elm Disease (DED), drought, and the imminent assault of the
Emerald Ash Borer upon the city’s thousands of ash trees. The Green Shade Initiative is based upon
the successful model for supporting tree planting and maintenance in Chicago, “creating a city
within a park.”
CITY CONTRIBUTION AND PARTNERSHIP:
This program could provide additional funding for our Urban Reforestation Program.
Within this proposed campaign, individual citizens and civic groups would work with city staff to
advocate, fundraise, conduct community education and provide labor in support of trees. Curt
Peterson is proposing that the Green Shade Initiative would have a committee of residents that
oversees the program. City staff would serve as liaison and technical support to board. The city
would support and promote the campaign’s events and programs through various means such as the
Park Perspective, utility billing stuffers etc. The specifics of the City’s proposed role is noted on the
second to last page of the attached proposal.
FINANCIAL OR BUDGET CONSIDERATION:
Participating in this program would involve staff time serving as liaison to the group and to facilitate
campaign programs and tree planting. This initiative could have a positive financial implication if it
is successful. The money would be put into the City’s fund for Urban Reforestation along with the
land sale proceeds.
Meeting of September 14, 2009 (Item No. 11) Page 2
Subject: Green Shade Initiative
VISION CONSIDERATION:
This proposed initiative supports the City Vision of St. Louis Park being committed to being a
leader in environmental stewardship. The initiative will increase environmental consciousness and
responsibility.
Attachments: Green Shade Initiative Outline/proposal from Curt Peterson
Prepared by: Jim Vaughan, Environmental Coordinator
Reviewed by: Cindy Walsh, Director of Parks and Recreation
Approved by: Tom Harmening, City Manager
Meeting of September 14, 2009 (Item No. 11) Page 3
Subject: Green Shade Initiative
The Green Shade Initiative
City of St. Louis Park
Forestry Community Investment Plan – draft 3
August 17, 2009
Curt N. Peterson, CFRE, Consultant
History
St. Louis Park has historically been a community that cares about trees. It was the first of its
neighboring suburbs to create a strategic comprehensive forestry plan and remains a leader. The City
not only sets annual tree planting goals but also plants and maintains boulevard trees – a unique
commitment.
Since the City’s Forestry Program was established in 1980, the program has planted and maintained
over 12,000 trees, and works from the city’s 2009 Vision Statement that cites “St. Louis Park is
committed to being a leader in environmental stewardship. We will increase environmental
consciousness and responsibility in all areas of city business.” In contrast, Crystal, Hopkins, and
Robbinsdale have historically had smaller forestry programs, and the other western first-ring suburbs
of Richfield, Brooklyn Park, and Brooklyn Center have no forestry programs at all. It is the City’s
commitment to planting and caring for trees on its streets and public lands that has helped make St.
Louis Park a great place to live and worthy of the “park” in its name.
Today
Today, tree-planting and maintenance efforts to beautify and preserve St. Louis Park’s leafy
boulevards and public spaces are at grave risk. The first factor is steady and now severe cutbacks in
federal and state funds that previously helped support the Forestry Program. The current Forestry
Program budget City-wide totals $286,000, a 52% reduction from its peak of $600,000 in 2003.
The second major threat to St. Louis Park’s tress is the emerald ash borer, which is placing
unprecedented demands on Forestry Program resources. St. Louis Park estimates it has 4,000 ash
trees on its boulevards alone, with an additional 3,000 estimated ash trees on city-owned properties.
With an average replacement/replanting cost of $900 per tree, ($600 to remove the tree and $300
for the planting of a new tree), this represents a potential cost to the city of $6,300,000 for ash borer
control…just within the next three to four years! Without additional funding, many of these 7,000
ash trees will not be able to be removed on a timely basis or replaced!
In addition, the Forestry Program has already been forced to cut its proactive Dutch elm-injection
program in half for 2009 (reduction from $40,000 to $20,000) and is scheduled to eliminate this
program in 2010. ($0) This program provides partial reimbursement to homeowners to encourage
them to preserve their large elm trees (both on boulevards and on private property) and prevent the
further spread of Dutch elm disease. With the current recession in place and with homeowners not
being projected to underwrite the entire cost of elm-injections, the city now predicts that the
removal of roughly 500 elm trees a year will peak to 700-800 over the next 3-4 years, representing a
37% increase in elm tree loss.
Meeting of September 14, 2009 (Item No. 11) Page 4
Subject: Green Shade Initiative
The threat to St. Louis Park’s tree-lined boulevards and parks is very real, as is the potential loss of
much of the City’s investment in shade trees. Action is needed to prevent these losses and keep St.
Louis Park’s streets and parks shaded and green.
St. Louis Park’s past commitment to trees is sound public policy. Research clearly indicates that any
city’s investment in shade trees/landscaping dramatically increases property values and reduces
energy costs. Trees produce cleaner air both locally and globally (according to tree advocates, an acre
of mature trees absorb the carbon dioxide created by driving 26,000 miles). In addition, mature
shade trees simply make St. Louis Park a more beautiful and restorative place to live. The question is
how to preserve this legacy during the current crisis, when reduced funding and skyrocketing threats
from disease are converging to threaten our City’s trees. The time to act is now.
The Green Shade Initiative*
The attached proposal suggests an innovative approach to meeting these challenges: the creation of a
citizen- and civic-based forestry investment plan. This model follows the successful model
supporting tree planting and maintenance in Chicago, under the leadership of Mayor Daly and their
forestry program’s slogan, “creating a city within a park.” Under such a model, individual citizens
and civic groups work with City staff (helping carry out more of the forestry plan than can be City-
funded) to advocate, fundraise, conduct community education, and provide labor in support of
trees. A small group of concerned residents including first approached City Staff with this concept
and has worked in partnership with Staff to develop the following goals, objectives, and work plan.
The group presents the following for the Council’s review and input and seeks approval for Staff
involvement in the Initiative.
*proposed draft name
Financial Goals
2010 Goals - $50,000 (net) (additional 400-500 trees)
2011 Goals - $75,875 (net) (additional 600-750 trees)
2012 Goals - $108,750 (net) (additional 800-1,000 trees)
2013 Goals - $108,750 (net) (additional 800-1,000 trees)
Total Goal for 4 years: $343,375 (net) (excluding securing endowment gifts)
(an additional 2,600 – 3,250 trees)
Outcomes
1. Create a more invested community in support of our forestry program.
2. Launch a metro-wide media campaign that showcases that St. Louis Park IS the “park” of
our suburbs.
3. Plant 5,000 trees in 4 years.
Meeting of September 14, 2009 (Item No. 11) Page 5
Subject: Green Shade Initiative
Strategies
1. Create and operationalize the “Forestry Friends of St. Louis Park”, a new ongoing group of
individual and organizational donors who will provide contributions in support of the St.
Louis Park Forestry program.
2. Create and launch a new St. Louis Park garden/pond tour called the “The Park
Garden/Pond Tour” that will be held in mid June of each year. The tour will be established
with the expectation that it will be an annual event and will run for a minimum of 4 years
with new additions to the offerings each year. Criteria for inclusion in the tour will be set,
an electronic marketing and registration process/protocol will be established, a
review/selection team will be recruited, corporate sponsorships will be secured and media
coverage will be secured.
a. Goal: Showcase beautiful citizen investments in their landscaping, their gardens and
ponds.
b. Goal: Promote and assist homeowners to invest in their landscaping, gardens and
ponds.
c. Goal: Help promote donations to the Forestry Friends of SLP.
3. Create and launch “The Most Beautiful Tree in the Park” contest. Each year, a different
species will be selected, community awareness and education regarding the species will be
shared with the broader community, contest criteria will be set, a panel of community
volunteers will be selected and the announcement of such tree will be made in the
community press.
a. Goal: Make citizens aware of the sustainable needs for keeping large and beautiful
trees in our community.
b. Goal: Help citizens realize the beauty of what we have and showcase the need for the
various Forestry events for the year.
c. Goal: This is the one event that is tied completely to the new Forestry Friends
Endowment Fund.
4. Fold in the existing September-based “Evergreen Awards” as part of the Green Shade
Initiative. Started in 1990, this community activity can also help showcase community
efforts.
5. Secure matching dollars from the St. Louis Park Community Foundation in support of
individual donations in support of the Forestry Program.
6. Continue the existing Park Tree Sale program, but turn it into a fundraiser and not a drain
on the current Forestry budget.
7. Create the “Forestry Friends Endowment Fund,” a specific fund within the St. Louis Park
Community Foundation that allows for planned gifts to be made in support of the Forestry
Program.
Meeting of September 14, 2009 (Item No. 11) Page 6
Subject: Green Shade Initiative
Tactics
1. Create a volunteer community steering committee of 12 individuals, representing civic,
business, professional and citizens. It will be called the “Forestry Friends.” Their primary
role will be to fund raise for these programs.
2. Create a data base of “environmental stewards” that will start with the existing Environment
Vision Action Team Roster and extend to supporters of the Lilac Way Initiative, Friends of
the League of Women Voters Tree Project and supporters of Tree Trust of St. Paul.
3. Secure a pro bono marketing public relations firm to launch all creative collaterals for this
program (target Padilla Speer and Beardsley)
4. Create a professional logo and final (coordinated) names for the events and a T-shirt
(donation) that will market the entire Forestry Friends concept and events.
5. Identify and link to key media sources for maximum exposure.
6. Kick off the program at a January City Council meeting, with press release, and announcing
at the end-of-January Home Remodeling Fair.
Target Audiences for the Forestry Friends plan
1. Community citizens
2. Civic leaders
3. Corporate and small business sponsorships
4. Charitable family and institutional foundations
Possible Partners
1. Restore Lilac Way Initiative
2. Tree Trust
3. League of Women Voters
4. Rotary Clubs of St. Louis Park
5. Other to-be-identified businesses and business owners
Action steps to launch implementation
1. Get city and city council input and approval.
2. Search, secure and authorize a public relations firm (pro bono) to start work on design,
naming, and other collateral materials.
3. Create a link and webpage for the Forestry Friends various annual programs and donation
opportunities on the existing City of St. Louis Park website.
4. In the August “City Perspectives”, announce a community meeting for concerned
individuals to congregate and plan the creation of the Forestry Friends work plan to be
launched in early 2010. (see sample ad below)
5. Finalize the case statement and all performance metrics at all levels.
Meeting of September 14, 2009 (Item No. 11) Page 7
Subject: Green Shade Initiative
6. Create sponsorship packets, identify sponsor prospects and make face-to-face solicitations to
all prospects before end of 2009 (timing is crucial so we can help shape corporate marketing
donation budgets of these prospects when they create their 2010 budgets)
7. Set individual work plans and event chairs for all events. Establish timetable and
accountabilities at every level.
Financial Goals 2010 Breakdown
“The Park Garden/Pond Tour”
Sponsors:
5 @$1,000 = $5,000
3 @$2,500 = $7,500
2 @ $5,000 = $10,000
1@ $10,000 = $10,000
(with $32,500 proposed gross, we are looking at an estimated costs of $5,000 so a
profit goal of $27,500.)
Ticket sales: (by family)
250 @ $30 = $7,500 (this ideally will include up to $30 in coupons redeemable at
companies who are in the gardening, landscaping, pond business.)
“Forestry Friends of St. Louis Park” donor campaign
Donations:
100 donations @ $25 (avg) = $2,500
50 donations @ $100 (avg) = $5,000
10 donations @ $250 (avg) = $2,500
1 donation @ $1,000 = $1,000
“Forestry Friends Endowment Fund”
Identify 5-10 major prospects
Park Tree Sale
100 sales @$50 ($25 profit) = $2,500
Forestry Friends T-shirts (classic design that becomes a collectable vs a sponsorship tool)
100 sales @30 ($15 profit) = $1,500
Meeting of September 14, 2009 (Item No. 11) Page 8
Subject: Green Shade Initiative
Financial Goals 2011 Breakdown
“The Park Garden/Pond Tour”
Sponsors:
7 @$1,000 = $7,000
4 @$2,500 = $10,000
2 @ $5,000 = $10,000
1@ $10,000 = $10,000
(with $37,000 proposed gross, we are looking at an estimated costs of $3,000 so a
profit goal of $34,000.)
Ticket sales: (by family)
350 @ $30 = $10,500 (this ideally will include up to $30 in coupons redeemable at
companies who are in the gardening, landscaping, pond business.)
“Forestry Friends of St. Louis Park” donor campaign
Donations:
100 donations @ $25 (avg) = $2,500
100 donations @ $100 (avg) = $10,000
30 donations @ $250 (avg) = $7,500
2 donations @ $1,000 = $2,000
1 donation @ $2,500 = $2,500
“Forestry Friends Endowment Fund”
Work the 5-10 major prospects with 1 endowment gift secured
Identify 5 more prospects
Park Tree Sale
200 sales @$50 ($25 profit) = $5,000
Forestry Friends T-shirts (classic design that becomes a collectable vs a sponsorship tool)
125 sales @30 ($15 profit) = $1,875
Meeting of September 14, 2009 (Item No. 11) Page 9
Subject: Green Shade Initiative
Financial Goals 2012 Breakdown
“The Park Garden/Pond Tour”
Sponsors:
7 @$1,000 = $7,000
4 @$2,500 = $10,000
3 @ $5,000 = $15,000
@ $10,000 = $10,000
(with $42,000 proposed gross, we are looking at an estimated costs of $3,000 so a
profit goal of $39,000.)
Ticket sales: (by family)
400 @ $30 = $12,000 (this ideally will include up to $30 in coupons redeemable at
companies who are in the gardening, landscaping, pond business.)
“Forestry Friends of St. Louis Park” donor campaign
Donations:
200 donations @ $25 (avg) = $5,000
100 donations @ $100 (avg) = $10,000
30 donations @ $250 (avg) = $7,500
10 donations @ $1,000 = $10,000
4 donations @ $2,500 = $10,000
2 donations @$5,000 = $10,000
“Forestry Friends Endowment Fund”
Work the 10-15 major prospects with 1 new endowment gift secured
Identify 5 more prospects
Park Tree Sale
150 sales @$50 ($25 profit) = $3,750
Forestry Friends T-shirts (classic design that becomes a collectable vs a sponsorship tool)
100 sales @30 ($15 profit) = $1,500
Meeting of September 14, 2009 (Item No. 11) Page 10
Subject: Green Shade Initiative
Financial Goals 2013 Breakdown
“The Park Garden/Pond Tour”
Sponsors:
7 @$1,000 = $7,000
4 @$2,500 = $10,000
3 @ $5,000 = $15,000
@ $10,000 = $10,000
(with $42,000 proposed gross, we are looking at an estimated costs of $3,000 so a
profit goal of $39,000.)
Ticket sales: (by family)
400 @ $30 = $12,000 (this ideally will include up to $30 in coupons redeemable at
companies who are in the gardening, landscaping, pond business.)
“Forestry Friends of St. Louis Park” donor campaign
Donations:
200 donations @ $25 (avg) = $5,000
100 donations @ $100 (avg) = $10,000
30 donations @ $250 (avg) = $7,500
10 donations @ $1,000 = $10,000
4 donations @ $2,500 = $10,000
2 donations @$5,000 = $10,000
“Forestry Friends Endowment Fund”
Work the 15-20 major prospects with 1 new endowment gift secured
Identify 5 more prospects
Park Tree Sale
150 sales @$50 ($25 profit) = $3,750
Forestry Friends T-shirts (classic design that becomes a collectable vs a sponsorship tool)
100 sales @30 ($15 profit) = $1,500
Meeting of September 14, 2009 (Item No. 11) Page 11
Subject: Green Shade Initiative
Responsibilities and Expectations of Forestry Friends Steering Committee
1. Provide leadership with both mandatory financial support and personal time in either a
leadership or worker position.
2. Review, edit, and approve all plan components and protocols.
3. Assist in securing donations or ticket sales or sponsorships for the various events that support
the Forestry Program.
4. Attend monthly meetings once the Steering Committee is established and other meetings as
required when events are happening.
5. Help identify prospects, locations, trees, etc. – all in support of the goals and tactics of the
approved events.
6. Follow appropriate and established protocols on term services and leadership roles.
a. Committee terms are for 2 years, renewable, with full Steering Committee approval.
b. Leadership terms are for 1 year, renewable, with Executive Committee approval.
c. Bylaws that layout purpose, protocols, how work is to be accomplished will be
upheld upon final approval of Executive Committee.
City of St. Louis Park’s proposed role for implementation
1. Supports the creation of web link and web page for all new forestry events. Working with
pro bono design, will underwrite the cost of adding this page(s).
2. Will collect and process donations that come to the city in support of the forestry program.
Will send out acknowledgements to all donations on a timely basis.
3. Will provide financial reporting of all donations or expenditures as it relates to the proposed
forestry events.
4. City representative serves on Forestry Friends Steering Committee and Executive
Committee.
5. Will house and collect simple contact data on the ever-expanding list of supporters.
Curt Peterson’s proposed role for implementation
1. Finish the initial creation of this proposal.
2. Secure professional writer oversight for initial materials.
3. Write and place the ad for the first community organizing meeting. Lead and facilitate this
initial meeting along with city and county officials.
4. Help identify and recruit prospective members of the Steering Committee, the Executive
Committee, the event chairs, and the membership of the work groups.
5. Finish the case statement and all final work plans.
6. Create initial financial documents for approval.
7. Host and/or lead all subsequent planning meetings.
8. Assist with all prospect recruitment and solicitation.
Meeting of September 14, 2009 (Item No. 11) Page 12
Subject: Green Shade Initiative
Proposed ad for first meeting:
Do you have a garden, a well-landscaped yard, or a pond that you would be willing to share next
year at a newly created “Park Garden/Pond Tour?”
Are you interested in joining a group of citizens who are deeply concerned about the loss and needed
replacement of our city trees?
Do you want to continue to see our community invest in our forestry program so we can retain our
property values and keep our heating/cooling costs low?
Come to an important planning/organizing meeting on October 29, 2009 that will explore what can
be done to ensure that our Park’s Forestry Department outstanding legacy will not be eliminated due
to funding decreases or the ash borer!
Call 612-998-7466 or email curt@orgdev.org if you have any questions!