HomeMy WebLinkAboutContract 1678STATE OF MINNESOTA
F!LED
JUN 1 V 2B02 'DISTRICT COURT
COUNTY OF ANOKA
County, bin'
~ _ TENTH JUDICIAL DISTRICT
DEPUTY ":
County of Anoka, a political subdivision of the
State of Mihnesota, by and through Robert M.A.
Johnson, the Anoka County Attorney,
Case Type: Other Civil
Court File No: C9-02-33')1
Plaintiff,
The Columbia Heights Economic Development
Authority, a political subdivision of the State of
Minnesota,
Defendant.
STIPULATION FOR SETTLEMENT
STIPULATION FOR
SETTLEMENT AND
ORDER FOR DISMISSAL
WHEREAS, the County. of Anoka ("the County") is a political subdivision of the State of
Minnesota and Robert M.A. Johr[son is the duly elected County Attomey in and for the County of
Anoka; and
WHEREAS, the Columbia Heights Economic Development Authority ("the EDA") is a
public body corporate and politic and a political subdivision of the State of Minnesota; and
WHEREAS, the EDA has the power and authority to create economic development
districts and to establish and modify tax increment f'mancing plans for projects within economic
development districts pursuant to the provisions of Minn. Stat. 469.174 through 469.179 (the "TIF
Laws"); and
WHEREAS, pursuant to the TIF Laws, the EDA created an economic development district
called the Sullivan Lake District Tax Increment Financing District (hereinafter "Sullivan Lake
District"); and
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WHEREAS, pursuant to the TIF Laws, the EDA approved the tax increment financing plan
for the Sullivan Lake District on June 15, 1987; and
WHEREAS, pursuant to the TIF Laws, the EDA requested the Anoka County AUditor to
certify the. 6riginal tax capacity of the Sullivan Lake District on August 14,1987; and
WHEREAS, for property taxes payable in the Sullivan Lake District for the following the
years, the EDA received tax increment payments in the following amounts:
1990 $44,119.34
1991 58,377.11
1992 67,581.93
1993 73,500.15
1994 78,254.35
1995 89,265.08
1996 75,536.94
1997 97.663.45
$584,298.35
WHEREAS, the EDA received tax increment payments for the Sullivan Lake District for
property taxes payable in 1997 in the amounts of $48,120.66 on July 7, 1997; $47,864.33 on
December 2, 1997; and $1,678.46 on January 26, 1998; and
WHEREAS, the State Auditor for the State of Minnesota has conducted an examination
and audit of the tax increment payments made from the Sullivan Lake District pursuant to Minn.
Stat. § 469.1771, subd. 1 (b); and
WHEREAS, the State Auditor has issued a letter of non-compliance to the EDA dated
January 26, 2001, alleging that the EDA's receipt of $97,663.45 in tax increment payments from the
Sullivan Lake District after June 15, 1997, violated the statutory duration limits for an economic
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development district under Minn. Stat. § 469.176, subd. l(e) and are subject to repayment by the
EDA; and
WHEREAS, the EDA responded to the State Auditor's notice of non-compliance pursuant
to the provisions of Minn. Stat. § 469.1771, denying that the EDA improperly received $97,663.45
of tax increment from the Sullivan Lake District after the statutory maximum duration limit for the
district; and
WHEREAS, the State Auditor issued its final notice of non-compliance to the EDA in a
letter, dated June 21, 2001, and informed the County Attorney that the EDA's receipt of tax
increment payment of $97,663.45 after June 15, 1997, is in violation of the provisions of Minn. Stat.
§§ 469.176, subd. 1 (e), because said payment was made after the maximum statutory duration limit
for the Sullivan Lake District; and
WHEREAS, the County brought an action against the EDA in Anoka County District
Court (Court File No. C9-02-337_l)pursuant to Minn. Stat. § 469.1771, subd. l(b) citing the State
Auditor's findings of noncompliance by the EDA and seeking repayment of the tax increment
payments made to the EDA after the maximum statutory duration limit of the Sullivan Lake District
on June 15, 1997; and
WHEREAS, the EDA denies any violation of the TIF laws and specifically denies
receiving any tax increment payments for the Sullivan Lake District after the maximum statutory
duration limit established under Minn. Stat. § 469.176, subd. l(e) had expired; and
WHEREAS, under Minnesota Statutes, Section 469.1771, subd. 4(a), if increments are
pledged to repay bonds that were issued before the lawsuit was filed the damages may not exceed
the greater of (1) ten percent of the expenditures or revenues derived from increment, or (2) the
amount of available revenues after paying debt services due on the bonds; and
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WHEREAS, increments from the Sullivan Lake District were pledged to repay the
$1,100,000 General Obligation Tax Increment Bonds, Series 1987 issued by the City on September
14, 1987, and the increments received in 1997 were used to pay the f'mal principal and interest
payments.on those bonds; and
WHEREAS, no revenues from the Sullivan Lake District remained after the EDA made the
final payment of the bonds, and therefore the maximum possible damages (if they were imposed)
would be ten percent of the total tax increment from the Sullivan Lake District, or $5.8,430; and
WHEREAS, under Minnesota Statutes, Section 469.1771, subd. 4(b), a court may abate all
or part of any amount payable by the authority if the court determines that the action was taken in
good faith and the payment would work an undue hardship on the municipality; and
WHEREAS, the distribution of tax increments from the Sullivan Lake District related to
property taxes payable in 1997 was consistent with past County practices on distributions in the
final year of an economic development district, and was based upon interpretation of instructions
provided by the Minnesota Department of Revenue to the County regarding such distributions; and
WHEREAS, the parties recognize that the EDA relied in good faith on the County's
distribution of tax increments from the Sullivan Lake District, and that the EDA has expended such
distributions under the assumption that they were properly made; and
WHEREAS, the parties further recognize that the EDA does not have available revenues to
fund substantial repayments to the County, and that such repayments (which in any event could not
exceed the maximum described above) would work an undue hardship on the EDA and the City of
Columbia Heights; and
WHEREAS, the County and the EDA wish to resolve the dispute between the parties in
order to avoid the costs and delays associated with protracted litigation;
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NOW THEREFORE, it is hereby stipulated and agreed as follows:
1. That the EDA has paid $1,678.46 to the County. as a full, final and complete
settlement of the County's claims asserted against the EDA in Anoka County District Court File No.
C9-02-3371.
2. That the parties acknowledge that the EDA's payment to the County is made as a
compromise of a disputed claim and is not intended as an admission of wrongdoing by the EDA or
an adoption of the State Auditor's interpretation of applicable state law.
3. That the parties acknowledge that they have been represented by counsel in
connection with the execution of this Agreement. The parties further represent and declare that in
executing this stipulation they have relied solely upon their own judgment, belief and knowledge,
and the advice and recommendation of their own independently selected counsel, concerning the
nature, extent and duration of their fights and claims, and that they have not been influenced to any
extent whatsoever in executing this document by any representations or statements except those
expressly contained or referred to in this agreement.
4. That the District Court may dismiss the above captioned matter pursuant to the
proposed order attached herewith without further hearing or notice to any of the parties, each party
to pay its own costs and disbursements and no costs and disbursements shall be taxed.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
It.~ Pr~s~e~ - -
it~'~Exec~ige/D'ire~fo~
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Dated:
,2002
KENNEDY & GRAVEN, CHARTERED
470 Pillsbury Center
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
ATTORNEYS FOR DEFENDANT
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
COUNTY OF ANOKA, by and through Robert
M.A. Johnson, the Anoka County Attorn~
By: )-~)~'~/w/~'~'~'' ~''-~-~--
Assistant Anoka County Attorney
Attorney ID No. 0149810
Government Center
2100 3rd Avenue
Anoka ~MN 55303-2265
Telephone: (763)-323-5668
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ORDER
The Court, having reviewed the files, records and Stipulation for Settlement, hereby
dismisses-the above-captioned matter with prejudice with each party to pay its owns costs and
disbursements and no costs and disbursements shall be taxed.
Dated:
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