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HomeMy WebLinkAboutEDA MIN 07-27-10ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE REGULAR MEETING JULY 27, 2010 The meeting was called to order at 7:00 pm by President -Gary Peterson. Members Present: Bruce Nawrocki, Gary Peterson, Gerry Herringer, Bruce Kelzenberg, and Bobby Williams Members Absent: Tammera Diehm and Marlaine Szurek Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson. 2. PLEDGE OF ALLEGIANCE - RECITED 3. CONSENT AGENDA Approve the Minutes of June 22, 2010. 2. Approve the Financial Report and Payment of Bills for June 2010 per Resolution 2010 -11 Nawrocki questioned the payment to Scott Clark on page 4 of Financial Report. Clark said it was his reimbursement check for six months of gas, meal, and parking expenses. Nawrocki then questioned the lunch expenses and whether the reimbursement from the Mayor (for one of the lunches) had been deducted from the amount paid to Mr. Clark. The Mayor stated he had checked on this and that amount was paid back to the City. Motion by Williams, seconded by Kelzenberg, to waive the Reading of Resolution 2010- 11, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Williams, seconded by Kelzenberg, to approve the minutes and to adopt Resolution 2010 -11, approving the Financial Report and payment of bills for June 2010. All ayes. MOTIONPASSED. EDA RESOLUTION 2010 -11 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JUNE 2010 AND PAYMENT OF BILLS FOR THE MONTH OF JUNE 2010. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of June 2010 has been reviewed by the EDA Commission; and EDA COMMISSION MINUTES PAGE 2 JULY 27, 2010 WHEREAS, the EDA has examined the financial statement and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS, financials statements are held by the City's Finance Department in a method outlined by the State of Minnesota's Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 27th day of July, 2010. MOTION BY: Williams SECONDED BY: Kelzenberg AYES: All ayes BUSINESS ITEMS 4/5. Resolution 2010 -12 HRA Levy Budget & Resolution 2010 -13 EDA Levy Budget The 2011 budget for the Community Development Department was enclosed in the agenda packets. The EDA reviews and acts on this budget as a significant portion of revenue funds are derived from an EDA levy. Resolutions 2010 -12 & 13 are approval documents for both the EDA and the HRA levy and the adoption of the budget. The levy amounts are ultimately approved through the City Council. Clark stated that this years' budget needs some explanation to be understood. The following premises are important to this understanding: 1) In 2010 the Community Development Department and the Finance Department worked together to reorganize the subject budget. The purpose was twofold- 1) Make the accounting process for the levy transfers simple and 2) More accurately report (meaning matching specific revenue sources to expenditures) the costs to the two funds, 201 is protective inspections and 204 is the EDA Administration. This fine - tuning started in 2010 and last year's budget letter was provided to give further explanation. EDA MINUTES PAGE 3 JULY 27, 2010 2) Both funds 201 and 204 are special revenue funds. As such, budget year gains or losses are retained within a designated fund balance. 3) Each fund has a fund balance that is carried forward from year to year. The most volatile fund is 201 (protective inspections) as expenditures are predictable and stable from year to year, but revenue is cyclical in nature, so in some years there are significant gains in the fund balance and in other years, the opposite. Adjustments are being made in the 2011 budget by transferring line item 39140 (Parkview Villa reimbursement) to the EDA 204 fund. This leaves fund 201 being supported solely through building and license permit revenue. The net effect is that the protective inspection budget is estimated to have a $43,000 loss in 2011. This loss will be made up by the existing 201 fund balance of $125,000. Note: A memo dated July 20, 2010 from William Elrite, Finance Director explained this same information. 4) Fund 204 is supported through the revenue sources of the HRA levy (being proposed to be increased by 1 %) and the EDA levy (no increase). 5) As discussed in the Finance Directors memo, the EDA and HRA levy are currently the only means of continuing to capitalize fund 420, which is a minor Capital Project Fund, and serves to help front -end redevelopment projects. 6) In budget year 2010 (when the city reverted back to the 2008 base) the Community Development Department elected not to refill the position of "Department Secretary ". This election then gave the ability to transfer $51,000 to fund 420 (line item 7413). 7) As further explained by the Finance Director's memo the fund 204 fund balance has grown, and at the end of 2011, is anticipated to be $212,000. As such, the anticipated budget reflects a $90,000 capital transfer to fund 420. 8) It is critical to note that the operation costs of both fund 201 and 204 remain flat and fall within the maximum 1% increase mandate. Clark went on to explain that the budget worksheets are being revised by the Finance Department and they are not able to make the actual changes to the worksheets until next week. As such, the worksheets have handwritten modifications that match the Finance department memo dated 7/19/10 "Budget Cuts and Add Backs ". Questions by members: Nawrocki stated he thought it was premature to act on this budget before seeing the City's budget in its entirety. He passed out information created by the Humphrey Institute that has been distributed by the League of Minnesota Cities. This informational sheet details what bad shape the State is in financially. Next year the State will be facing a 6 billion dollar deficit that will have to be dealt with. During the last couple of years the State has been postponing the debt, but the new leadership will have to deal with it in 2011. He said all the budget issues up till now have been solved with raising property taxes. He said the Council needs to look at how that affects the property owners in Columbia Heights, and reduce those taxes, if possible. Nawrocki went on to say he doesn't agree with transferring money into the 420 account (Redevelopment /capital fund account). He said Fund 201 (Protective Inspections) had a carry over from last year to this year, as did Fund 204. This creates an opportunity to reduce the levy for property taxes if the carry over funds are used. He also suggested further reducing personnel in this department. EDA Commission Minutes Page 4 July 27, 2010 Clark explained that if the HRA/EDA budgets are approved by this body, that the amounts proposed are not necessarily binding. The City Council actually makes the final decision at a later time. Nawrocki said once it is approved by the EDA, it is usually adopted as presented. Walt told the members that the total City budget would be delivered to the City Council by the second meeting in August. He went on to say that the figures presented tonight were done according to the 4- year plan previously approved by the City Council. He said all departments have come in with budgets under the 1% increase that was required. He told members that personnel expenses would be held constant. Walt reminded members that the City's Bond Rating went up 2 steps to the highest rating we could have due to the fact we had put a 4 -year plan into place that would eliminate our dependence on State aid funds. He agreed that the State is in trouble and we cannot rely on the State for revenue any longer. Walt then spoke about the overall goal of the City to improve its housing stock and at the same time, its tax base. This is being accomplished through the scattered site program where we are buying up deteriorated properties that are very sub - standard. As an inner ring suburb, we can't afford not to put money into redevelopment. He stated the Community Development Department is the backbone of the City and it is the department that spearheads the revitalization of the city. He reminded members that the staff has obtained 6 million dollars in grants over the last couple of years. Walt said Nawrocki continually states he wants more code enforcement. He said the only departments that do code enforcement are the Fire Dept. and the Community Development Dept. He feels they should be recognized for their accomplishments and not constantly berated as unnecessary personnel. Peterson asked if the EDA Board approves these budget Resolutions, does it still go through the City Council approval process? Clark said yes, the language of the Resolution constitutes a recommendation to the City Council. Nawrocki said the City Manager talked about a reduction in salaries for this department. He said the savings were actually being transferred to the 420 account, so it is not actually being reduced. He thinks it is time for the City to make cuts, just like the State will be doing. We cannot keep increasing property taxes to cover our budget. Clark reminded the members present that the Economic Development Authority is a Board set up to better the City through re- development. The role they have as an EDA Board member is sometimes different from that of a City Council member. Their role is to focus on improving the community and to constantly look for ways to revitalize it, and as such, they are required to find funding sources to keep the programs going. Nawrocki stated the budget doesn't show the County's HRA levy money that is used here. Clark told Nawrocki that information was provided to him a couple months ago. Herringer asked what the total City budget was. Walt gave him a general explanation and breakdown. EDA Commission Minutes Page 5 July 27, 2010 Williams asked how much it saved the City to have the mandatory furlough last year. Walt told him about $260,000. He also said the City is saving about $50,000 this year with employees who are taking voluntary furloughs. There was a discussion regarding whether the City should pursue mandatory furloughs again in 2011. Walt told the members that when he presented this to employees in 2009, he told them this would be a one time mandate. He had to obtain agreements from all the unions to alter the contracts. He said if the Council chooses to decrease personnel costs, he would recommend doing more layoffs. He doesn't think it is right to go with a 0% adjustment and a mandatory furlough besides. He said we have been through three layoffs since 2000, and services would be affected. Nawrocki then asked which figure is being approved in Resolution 2010 -12 (01825 percent of the taxable market value, or $262,556). Clark stated the lesser of the two figures. We don't have the final figure for the taxable market value yet, but the most the levy would be is $262,556. He told members the overall increase is 0.6% increase, which is less than the parameters allowed. Nawrocki said this levy is not needed, as we should use the reserves. Peterson said he intends to look at the reserves and carry -overs before he votes on it as a member of the City Council, but at this time he will consider his role as an EDA member to ensure funds are available to continue with redevelopment projects within our City. Motion by Kelzenberg seconded by Williams, to waive the readings of Resolution 2010 -12, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Nawrocki to cut the amount of the levy to $162, 556 from the $262,556 maximum figure stated in the proposed Resolution. The motion died from a lack of a second. Motion by Kelzenberg, seconded by Williams, to adopt Resolution 2010 -12, Authorizing the Levy of a Special Benefit Levy Pursuant to Minnesota State Statutes, Section 469.033, Subdivision 6 and Approval of a Budget for Fiscal year 2011. Roll Call: Ayes - Herringer, Williams, Kelzenberg, Peterson Nay- Nawrocki MOTIONPASSED. Motion by Williams, seconded by Kelzenberg, to waive the readings of Resolution 2010 -13, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Williams, seconded by Kelzenberg, to adopt Resolution 2010 -13, Resolution of Economic Development Authority in and for Columbia Heights EDA adopting the 2011 budget and setting the EDA Levy. Roll Call: Ayes - Herringer, Williams, Kelzenberg, Peterson Nay- Nawrocki MOTIONPASSED. EDA COMMISSION MINUTES PAGE 6 Ju.ly 27, 2010 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2010-12 AUTHORIZING THE LEVY OF A SPECIAL BENEFIT LEVY PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVAL OF A BUDGET FOR FISCAL YEAR 2011 WHEREAS, pursuant to Minnesota Statutes, Section 469.090 to 469.1081 ( "EDA Act ") the City of Columbia Heights ( "City ") created the Columbia Heights Economic Development Authority (the "EDA "); and WHEREAS, pursuant to City Resolution 2001 -62 and Ordinance No. 1442, the City Council granted to the EDA all powers and duties of a housing and redevelopment authority under the provisions of Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act "), except certain powers that are allocated to the Housing and Redevelopment Authority in and for the City of Columbia Heights (the "HRA "); and WHEREAS, Section 469.033, Subdivision 6, of the HRA Act permits the EDA and HRA, together, to levy and collect a special benefit levy of up to .0185 percent of taxable market value in the City upon all taxable real property within the City; and WHEREAS, the EDA desires to levy a special benefit levy in the amount of .0185 percent of taxable market value in the City; and WHEREAS, the EDA understands that the HRA does not expect to levy a special benefit tax for fiscal year 2011; and WHEREAS, the EDA has before it for its consideration a copy of a budget for its operations for the fiscal year 2011 and the amount of the levy for collection in fiscal year 2011 shall be based on this budget. NOW, THEREFORE, Be It Resolved by the Board of Commissioners of the Columbia Heights Economic Development Authority: 1. The budget of $347,367 for the operations of the EDA presented for consideration by the Board of Commissioners of the EDA is hereby in all respects approved. Such budget includes the amount the EDA requests (by separate resolution) to be levied by the City under Minnesota Statutes, Section 469.107, together with the amount to be levied hereunder by the EDA under Minnesota Statutes, Section 469.033, subdivision 6. 2. Staff of the EDA are hereby authorized and directed to file the budget with the City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6. 3. There is hereby levied, subject to the approval of the City Council of the City, a special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, in the amount equal to the lesser of a levy at a rate of .0185 percent of taxable market value in City, or $262,556 with respect to taxes payable in calendar year 2011. 4. Staff of the EDA are hereby authorized and directed to seek the approval by resolution of the City Council of the City of the levy of special benefit taxes in 2011 and to take such other actions as are necessary to levy and certify such levy. Motion by: Kelzenberg Second by: Williams Roll Call: Ayes - Herringer, Williams, Kelzenberg, Peterson Nay- Nawrocki Motion passed this 27th day of July 2010 EDA Commission Minutes Page 7 July 27, 2010 EDA RESOLUTION 2010 -13 RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR COLUMBIA HEIGHTS (EDA) ADOPTING THE 2011 BUDGET AND SETTING THE EDA LEVY. BE IT RESOLVED By the Columbia Heights Economic Development Authority (EDA) of Columbia Heights, Minnesota as follows: WHEREAS, the Columbia Heights City Council established the Columbia Heights Economic Development Authority January 8, 1996 pursuant to Minnesota Statutes 469.090 to 469.1081; and WHEREAS, the City Council has given to the EDA the responsibility for all development and redevelopment projects and programs; and WHEREAS, the EDA is authorized under State Statutes, Section 469.107 to levy a tax on its area of operation for the purposes authorized under State Statues 469.090 to 469.108 1, subject to consent by the City Council. NOW, THEREFORE BE IT RESOLVED BY THE EDA FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA THAT: 1. The EDA adopts and recommends to the City Council for approval a budget of $347,367 for year 2011. 2. The EDA adopts and recommends to the City Council for approval a levy of $ 84,811 for year 2011. The Executive Director is instructed to transmit a copy of this resolution to the City Manager and Finance Director /City Clerk of the City of Columbia Heights, Minnesota. Motion by: Williams Seconded by: Kelzenberg Roll Call: Ayes: Heringer, Willliams, Peterson, Kelzenberg Nays: Nawrocki APPROVED THIS 27 DAY OF JULY 2010 6. ADMINISTRATIVE REPORT None 7. OTHER BUSINESS Clark explained that a Goal Setting Session would be held at the next meeting scheduled for August 24 He suggested moving the meeting location to the Public Safety Building. Motion by Kelzenberg, seconded by Williams, to move the location of the next EDA meeting scheduled for August 24 ` to the Public Safety Building. All ayes. MOTIONPASSED. EDA Commission Minutes Page 8 July 27, 2010 Clark explained the Commission would be moving into an Executive Session. He explained the legal procedure that must be followed during this meeting to the members before adjourning to the session. Clark said Mr. Doug Foss was present to address the Board before they go into their Executive Session. He told the members that it is important not to get into any type of negotiations on the open floor. Mr. Foss asked the members if they had any questions of him as a co -owner of the property. No one had anything to ask at this time. Foss then said he hoped the City and the partnership could come to an agreement as he sees this as a win -win situation for both parties. Move to Executive Session at 8:00 pm- To discuss negotiations to acquire Mady /Foss property at 3919 -3927 Central Avenue with possible reference of 3901 Central Avenue. The Executive Session and Regular meeting were adjourned at 8:35 pm. Respectfully submitted, Shelley Hanson Secretary