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HomeMy WebLinkAbout06-26-2017OFFICIAL PROCEEDINGS CITY OF COLUMBIA HEIGHTS CITY COUNCIL MEETING JUNE 26, 2017 The following are the minutes for the regular meeting of the City Council held at 7:00 PM on Monday June 26, 2017 in the City Council Chambers, City Hall, 590 40th Ave. N.E., Columbia Heights, Minnesota 1. CALL TO ORDER Mayor Schmitt called the meeting to order at 7:10 p.m. 2. ROLL CALL Present: Mayor Schmitt, Councilmember Williams, Councilmember Murzyn, Jr., Councilmember Buesgens and Councilmember Novitsky Also Present: Walt Fehst; City Manager, Jim Hoeft; City Attorney, Joe Kloiber; Finance Director, Kathy Young; Assistant City Engineer, Joe Hogeboom; Community Development Director, Keith Dahl; Economic Development Manager, John Larkin; Assistant Fire Chief, Jackie Zillmer; Assistant Finance Director and Katie Bruno; City Clerk /Council Secretary 3. INVOCATION Invocation provided by Bob Lyndes, Crest View Senior Communities 4. PLEDGE OF ALLEGIANCE S. ADDITIONS /DELETIONS TO MEETING AGENDA (The Council, upon majority vote of its members, may make additions and deletions to the agenda. These may be items brought to the attention of the Council under the Citizen Forum or items submitted after the agenda preparation deadline.) Motion by Councilmember Murzyn, Jr. seconded by Councilmember Williams to approve the agenda as presented. All Ayes, Motion Carried. 6. PROCLAMATIONS, PRESENTATIONS, RECOGNITION, ANNOUNCEMENTS, GUESTS 1. Introduction of Liquor Operations Manager, Jason Schulz Finance Director Joe Kloiber introduced Jason Schulz. 2. Acceptance of the report from Phil Kern, Goals and Objectives sessions Phil Kern gave an overview of the recent Goals & Objectives sessions held May 31St and June 5t". The Council thanked Mr. Kern for his assistance. Manager Fehst requested the Council consider item 8B as the next order of business. Motion by Councilmember Williams seconded by Councilmember Murzyn, Jr. to move item 88 to the next order of business. All Ayes, Motion Carried. City Council Minutes June 26, 2017 Page 2 of 14 7. CONSENT AGENDA (These items are considered to be routine by the City Council and will be enacted as part of the Consent Agenda by one motion. Items removed from consent agenda approval will be taken up as the next order of business.) Mayor Schmitt requested items B and C be removed for discussion. A. Approve Minutes of the City Council MOTION: Move to approve the minutes of the City Council meeting of June 12, 2017 MOTION: Move to approve the work session minutes of the City Council meeting of June 5, 2017 B. Submittal Consideration of a Grant Application to the Metropolitan Council. *Removed for Discussion C. Participation Consideration in the Anoka County Housing and Redevelopment Authority Levy. * Removed for Discussion D. Fees for Late Payment of Utility Bills and for Water Service Shut - off /Turn -on. MOTION: Move to waive the reading of Resolution 2017 -64, there being ample copies available to the public. MOTION: Move to adopt Resolution 2017 -64, being a resolution establishing fees for late payment of utility bills and for water service shut - off /turn -on. E. Resolution 2017 -67 Declaring the Intent to Bond for 39th Avenue Mill and Overlay, Project 1705 MOTION: Move to waive the reading of Resolution 2017 -67, there being ample copies available to the public. MOTION: Move to adopt Resolution 2017 -67, being a resolution approving the declaration for the official intent of the City of Columbia Heights to bond for the 39th Avenue Mill and Overlay, Central Avenue to Huset Parkway Roundabout, Project 1705. F. Final payment to Peoples Electric Company for Library Electrical Contract, Project No. 1410 MOTION: Move to accept the electrical work for the new Columbia Heights Public Library, Project No. 1410, and authorize final payment of $22,304 to People's Electric Company of St. Paul, Minnesota. G. Adopt Resolution 2017 -68 being a resolution accepting bids and awarding a contract for 2017 utility repairs and installations, Project 1711 MOTION: Move to waive the reading of Resolution 2017 -68, there being ample copies available to the public. MOTION: Move to adopt Resolution 2017 -68 being a resolution accepting bids and awarding the 2017 Utility Repairs and Installations, City Project No. 1711 to Northdale Construction Company, Inc. of Albertville, Minnesota, based upon their low, qualified, responsible bid in the amount of $353,512.10 from Fund 651 -51711 -4000; and, furthermore, to authorize the Mayor and City Manager to enter into a contract for the same. H. Consideration of approval of attached list of rental housing applications. City Council Minutes June 26, 2017 Page 3 of 14 MOTION: Move to approve the items listed for rental housing license applications for June 26, 2017, in that they have met the requirements of the Property Maintenance Code. 1. Approve Business License Applications MOTION: Move to approve the items as listed on the business license agenda for June 26, 2017. J. Payment of Bills MOTION: Move that in accordance with Minnesota Statute 412.271, subd. 8, the City Council has received the list of claims paid covering check number 166179 - 166348 in the amount of $858,381.22. Motion by Councilmember Murzyn, Jr., seconded by Councilmember Williams to approve the Consent Agenda items A, D, E, F, G, H, 1, and J. All Ayes, Motion Carried. The following items were removed for discussion: B. Submittal Consideration of a Grant Application to the Metropolitan Council Mayor Schmitt questioned if this grant is tied to the proposed Dominium project. Economic Development Manager Keith Dahl confirmed that it is. Motion by Councilmember Buesgens, seconded by Councilmember Williams to waive the reading of Resolution 2017 -69, there being ample copies available to the public. All Ayes, Motion Carried. Motion by Councilmember Murzyn, Jr., seconded by Councilmember Williams to adopt Resolution 2017 -69, a resolution identifying the need for the Livable Communities Demonstration Account funding & authorizing submittal of an application for grant funds. All Ayes, Motion Carried. C. Participation Consideration in the Anoka County Housing and Redevelopment Authority Levy Mayor Schmitt stated she is concerned about the 15% fee. Economic Development Manager Keith Dahl reported the 15% is an administrative fee. Dahl stated that the ACHRA may levy an additional property tax in cities or townships that adopt a resolution electing to participate in the economic development activities. The ACHRA levy has provided the City with essential gap financing assistance. Participating cities may elect to withdraw participation every fifth year following adoption of a resolution electing to participate. Previously, the City Council has elected to participate in the ACHRA's economic development activates from 2007 -2017. Mayor Schmitt indicated she is not in favor of an additional increase on top of the recently increased EDA levy. Councilmember Buesgens stated she is in support of continuing the program, because it provides financial assistance for land acquisition, site investigation, remediation and building demolition. Dahl reported that in the past 3 years the city has received more than $700,000. Mayor Schmitt asked what the estimated tax increase would be with both the EDA and ACHRA included. Dahl reported that for a home valued at $200,000, the increase would be $20 annually. Schmitt asked about the increase for just the EDA levy. Dahl reported it would be an approximate $8 -$15 decrease. City Council Minutes June 26, 2017 Page 4 of 14 Motion by Councilmember Williams, seconded by Councilmember Buesgens to waive the reading of Resolution 2017 -70, there being ample copies available to the public. All Ayes, Motion Carried. Motion by Councilmember Williams, seconded by Councilmember Buesgens to approve Resolution No. 2017 -70, a resolution authorizing the approval of participation in the Anoka County Housing and Redevelopment Authority's Economic Development Activates for fiscal years 2018 to 2022. 4 Ayes -1 Nay, Motion Carried. Ayes: Williams, Buesgens, Murzyn, Jr., Novitsky. Nay: Schmitt 8. PUBLIC HEARINGS A. Preliminary Issuance Consideration of Multifamily Housing Revenue Bonds Economic Development Manager Keith Dahl reported the EDA has received a financial application for the City to issue tax - exempt bonds on behalf of Dominium in connection with the proposed acquisition and construction of a multi - family housing development. Dominium has requested that the City finance the Subject Project with the issuance of tax - exempt conduit revenue bonds (in one or more series, in a principal amount not to exceed $45,000,000. Bonds of this type are not an obligation of the City or its taxpayers, rather an obligation of the developer. Only project revenues of the developer, typically rent collected after project completion would be pledged for repayment of the Tax - Exempt Bonds. The City has previously issued Tax - Exempt Bonds for other various developments. The City Council has required that the developer reimburse the City for all the costs associated to issuance of the bonds, as well as pay an issuance fee in the amount of 1% of the principal amount issued for the Tax - Exempt Bonds. In the case of the request by Dominium, the City would realize an issuance fee in the amount of $450,000. Dominium has requested that the City Council consider approval of the Resolution in order for application to be made for the August 2017 allocation of multi- family housing bonds from the State. Tonight also serves as the required public hearing for residents desiring to be heard regarding this matter. Councilmember Williams questioned why the item is being considered before the development has been approved. It was explained the process is similar to the pre - qualification process for a home mortgage. Mayor Schmitt questioned what fund the $450,000 issuance fee will go to. Finance Director Joe Kloiber indicated the money will go to the Special Projects Fund 226. Mayor Schmitt asked if there were comments from the public: Mike Novitsky -5252 5th St NE was not in favor of increased taxes. City Manager Fehst commented that in order to see development in a first ring suburb, developers will require assistance. Councilmember Buesgens reported projections show a substantial increase to the City in taxes when the project is complete. Motion by Councilmember Buesgens, seconded by Councilmember Murzyn, Jr. to waive the reading of Resolution 2017 -71, there being ample copies available to the public. All Ayes, Motion Carried. Motion by Councilmember Buesgens, seconded by Councilmember Murzyn, Jr. to approve Resolution No. 2017 -71, a resolution adopting a housing program with respect to a multi family housing project; granting preliminary approval for the issuance of multi family housing revenue bonds to finance the project under Minnesota Statutes, Chapter 462C, as amended, and authorizing the reimbursement of expenditures made in anticipation of the issuance of such bonds. All Ayes, Motion Carried. City Council Minutes June 26, 2017 Page 5 of 14 B. Consideration of revocation of the license to operate a rental unit within the City of Columbia Heights is requested against the rental property at 4254 2 "d Street NE for failure to meet the requirements of the Residential Maintenance Codes. John Larkin, Assistant Fire Chief reported the property owner has failed to file the application to renew their license. Motion by Mayor Schmitt, seconded by Councilmember Williams to close the public hearing and to waive the reading of Resolution Number 2017 -63, being ample copies available to the public. All Ayes, Motion Carried. Motion by Councilmember Williams, seconded by Councilmember Murzyn, Jr. to adopt Resolution Number 2017 -63, being Resolution of the City Council of the City of Columbia Heights approving revocation pursuant to City Code, Chapter 5A, Article IV, Section 5A.408(A) of the rental license listed. All Ayes, Motion Carried. 9. ITEMS FOR CONSIDERATION A. Other Ordinances and Resolutions B. Bid Considerations C. New Business and Reports 10. ADMINISTRATIVE REPORTS Report of the City Council Councilmember Novitsky reported the Jamboree implemented many changes, and the results were very positive. Manger Fehst stated he was very pleased with the event this year. Councilmember Murzyn, Jr. also worked with the Jamboree. The Lion's waffle breakfast served 217 plates. Councilmember Buesgens attended the ambassador coronation on Sunday, and thanked the Lions for organizing a fantastic event. Buesgens attended the All America City reunion and the League of MN Cities Annual Conference in Rochester June 13 -16tH Mayor Schmitt attended the Coronation on Sunday, and thanked the ambassadors for all their help through the year. She was invited to meet with the Dalai Lama on June 24th. Copies of the prayers posted at the Community Prayer Breakfast were compiled into a book and presented to the Dalai Lama as a gift from the City. Motion by Councilmember Buesgens, seconded by Councilmember Novitsky to recess for 2 minutes. All Ayes, Motion Carried. The council recessed at 8:20 PM. The meeting reconvened at 8:23 PM 11. CITIZENS FORUM Degha Shabbeleh -3827 Bakken Blvd. indicated members of the East African community feel the recent council decision regarding the charter school at 3989 Central was based on the fact that it is an East African school. Ms. Shabbeleh also indicated there has been a great deal of resources invested in the poperty thus far, and asked if there is a way the school can obtain approval. City Council Minutes June 26, 2017 Page 6 of 14 City Attorney James Hoeft indicated the decision was made strictly on zoning regulations and safety concerns. Hoeft indicated there can be no action on the item tonight, as it is not on the agenda. Mayor Schmitt indicated she was not aware of the demographics of the school, and the issues of concern were zoning and safety. Councilmember Buesgens agreed with the Mayor, she had no knowledge of the demographics of the students. Councilmember Murzyn, Jr. agreed. He heard the presentations at both the Planning & Zoning Commission meeting and the City Council meeting, the demographics were never mentioned. He voted against the item based on safety concerns. Councilmember Novitsky indicated he was concerned for student safety, and lack of adequate outdoor playground space. Ms. Shabbeleh asked if there are options available to the school. City Attorney Hoeft stated a substantially new application can be submitted for consideration. Abdirahman Abdulle -1305 University Ave; the Director of science and math at Skyline Academy asked the council to reconsider their decision. Mr. Aduele explained they are willing to work with the City. 12. ADJOURNMENT Motion by Councilmember Murzyn, Jr., seconded by Councilmember Buesgens to adjourn. All Ayes, Motion Carried. Meeting adjourned at 8:37 p.m. Respectively Submitted, Katie Bruno, Council Secretary /City Clerk RESOLUTION 2017 -63 Resolution of the City Council for the City of Columbia Heights approving revocation pursuant to City Code, Chapter 5A, Article IV, Section 5A.408(A) of that certain property rental license held by Stephanie A. Carr (Hereinafter "License Holder "). Whereas, license holder is the legal owner of the real property located at 4254 2nd Street N.E., Columbia Heights, Minnesota, Whereas, pursuant to City Code, Chapter 5A, Article IV, Section 5A.408(B), written notice setting forth the causes and reasons for the proposed Council action contained herein was given to the License Holder on June 6, 2017 of a public hearing to be held on June 26, 2017. Now, therefore, in accordance with the foregoing, and all ordinances and regulations of the City of Columbia Heights, the City Council of the City of Columbia Heights makes the following: City Council Minutes June 26, 2017 Page 7 of 14 FINDINGS OF FACT 1. That on or about April 30, 2017, inspection office staff sent a letter requesting the owner of the property submit the rental license application for this property. The letter was mailed by regular mail to the owner at the address listed in the property records. 2. That on June 6, 2017, inspection office staff reviewed the property file and noted that the property remained unlicensed. A Statement of Cause was mailed by regular mail to the owner at the address listed in the property records. 3. That based upon said records of the Enforcement Office, the following conditions and violations of the City's Property Maintenance Code were found to exist, to -wit: a. Failure to submit renewal rental license application and fees. 4. That all parties, including the License Holder and any occupants or tenants, have been given the appropriate notice of this hearing according to the provisions of the City Code, Chapter 5A, Article III 5A.306 and 5A.303(A). ORDER OF COUNCIL The rental license belonging to the License Holder described herein and identified by license number F15400 is hereby revoked; 2. The City will post for the purpose of preventing occupancy a copy of this order on the buildings covered by the license held by License Holder; All tenants shall remove themselves from the premises within 45 days from the first day of posting of this Order revoking the license as held by License Holder. RESOLUTION NO. 2017 -64 A RESOLUTION OF THE CITY COUNCIL FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA, ESTABLISHING FEES FOR LATE PAYMENT OF UTILITY BILLS AND FOR WATER SERVICE SHUT -OFF /TURN -ON. Whereas, the rates for water, sewer, and refuse services provided and billed by the City of Columbia Heights are established by Resolution 2015 -98; and Whereas late payment of utility bills and other noncompliance by utility customers with regard to City ordinances regulating water, sewer, and refuse, add to the cost of the utility services provided by the City; and Whereas, certain fees must be imposed upon such delinquent or noncompliant customers, in order that these additional costs are not borne by the majority of the City's utility customers, who pay their utility bills on a timely basis and comply with the City ordinances regulating water, sewer, and refuse services; Now, therefore, in accordance with the foregoing, and all ordinances and regulations of the City of Columbia Heights, the City Council of the City of Columbia Heights makes the following: City Council Minutes June 26, 2017 Page 8 of 14 ORDER OF COUNCIL IT IS HEREBY RESOLVED, effective August 1, 2017: 1. A late fee of 7% is imposed on any utility charges not paid by the due date stated on the customer bill, including taxes and all fees other than prior late fees. 2. The late fee in item 1 above will be calculated and billed at each quarterly billing due date, and if applicable at the final billing date for terminated accounts, until the delinquent portion is paid in full. 3. A fee of $75 per occurrence is imposed for the shut - off /turn -on of water service, when initiated by the City due to late payment or other customer noncompliance with City ordinances regulating water, sewer, and refuse. 4. A fee of $25 per occurrence is imposed for the shut - off/turn -on of water service, when water service shut - off /turn -on is requested by the customer. BE IT FURTHER RESOLVED that the foregoing does not preclude the City from any other collection or enforcement procedures legally available. RESOLUTION NO. 2017 -67 A resolution of the City Council for the City of Columbia Heights, Minnesota, WHEREAS, the Internal Revenue Service has issued Tres. Reg. 1.140.2 providing that proceeds of tax exempt bond used to reimburse prior expenditures will be not be deemed spent unless certain requirements are met; and, WHEREAS, the City of Columbia Heights (the "City ") expects to incur certain expenditures which may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of a bond; Now, therefore, in accordance with the foregoing, and all ordinances and regulations of the City of Columbia Heights, the City Council of the City of Columbia Heights makes the following: FINDINGS OF FACT 1.The City reasonably intends to make expenditures for State Aid Street Rehabilitation, Project No. 1705,from Central Avenue to Huset Parkway Roundabout, and reasonably intends to reimburse itself for suchexpenditures from the proceeds of debt to be issued by the City in one or more series in the maximumprincipal amount of $325,000. 2.This resolution is intended to constitute a declaration of official intent for purposes of Tres. Reg. 1.150- land any successor law, regulating or ruling. RESOLUTION NO. 2017 -68 A resolution of the City Council for the City of Columbia Heights, Minnesota, WHEREAS, pursuant to an advertisement for bids for City Project No. 1711, 2017 Sanitary and Storm Sewer Repairs and Installations, bids were received, opened and tabulated according to law. Now therefore, in accordance with the foregoing, and all ordinances and regulations of the City of Columbia Heights, the City Council of Columbia Heights makes the following: FINDINGS OF FACT he following Base Bid Storm Sewer Alternate 1 Base Bid Plus Base Bid Plus bids were Realignment Storm Sewer Storm Sewer received Realignment Realignment complying with Plus Alternate 1 the advertisement. Bidder Northdale 311,842.98 37,972.13 Construction Dave Perkins 327,241.00 35,700.00 Contracting Geislinger and 388,675.00 47,966.00 Sons, Inc.* City Council Minutes June 26, 2017 Page 9 of 14 3,696.99 349,815.11 353,512.10 (3,665.00) 362,941.00 359,276.00 44,000.00 436,641.00 480,641.00 RESOLUTION NO. 2017-69 RESOLUTION IDENTIFYING THE NEED FOR LIVABLE COMMUNITIES DEMONSTRATION ACCOUNT FUNDING AND AUTHORIZING AN APPLICATION FOR GRANT FUNDS BE IT RESOLVED BY the City Council (the "Council ") for the City of Columbia Heights, Minnesota (the "City ") as follows: WHEREAS, the City is a participant in the Livable Communities Act's Housing Incentives Program for 2017 as determined by the Metropolitan Council (the "Met Council "), and is therefore eligible to apply for Livable Communities Demonstration Account (the "LCDA ") funds; and WHEREAS, the City has identified a proposed project within the City that meets the LCDA's purposes and criteria and is consistent with and promotes the purposes of the Metropolitan Livable Communities Act and the policies of the Met Council's adopted metropolitan development guide; and WHEREAS, the City has the institutional, managerial and financial capability to ensure adequate project administration; and WHEREAS, the City certifies that it will comply with all applicable laws and regulations as stated in the grant agreement; and WHEREAS, the City agrees to act as legal sponsor for the project contained in the grant application submitted on or before June 29, 2017; and WHEREAS, the City acknowledges LCDA grants are intended to fund projects or project components that can serve as models, examples or prototypes for development or redevelopment projects elsewhere in the region, and therefore represents that the proposed project or key components of the proposed project can be replicated in other metropolitan -area communities; and WHEREAS, only a limited amount of grant funding is available through the Met Council's LCDA during each funding cycle and the Met Council has determined it is appropriate to allocate those scarce grant funds only to eligible projects that would not occur without the availability of Demonstration Account grant funding. NOW, THEREFORE BE IT RESOLVED that after appropriate examination and due consideration, the governing body of the City: 1. Finds that it is in the best interests of the City's development goals and priorities for the proposed City Council Minutes June 26, 2017 Page 10 of 14 project to occur at this particular site and at this particular time; and 2. Finds that the project component(s) for which LCDA funding is sought would not occur solely through private or other public investment within the reasonably foreseeable future and will occur within three years after a grant award only if LCDA funding is made available for this project at this time. 3. Represents that the City has undertaken reasonable and good faith efforts to procure funding for the project component for which LCDA funding is sought but was not able to find or secure from other sources funding that is necessary for project component completion within three years and states that this representation is based on the following reasons and supporting facts: In a continued effort for the City to support the incorporation of quality demonstration design elements that encourage public interaction; create connections to local transit services; and increase pedestrian and cyclist safety, the LCDA development funds requested are a necessary source of funding for the transit oriented mixed -use development to achieve a strong sense of community. 4. Authorizes its City Manager to submit on behalf of the City an application for Met Council LCDA grant funds for the project component(s) identified in the application, and to execute such agreements as may be necessary to implement the project on behalf of the City. RESOLUTION NO. 2017 -70 RESOLUTION AUTHORIZING THE APPROVAL OF PARTICIPATION IN THE ANOKA COUNTY HOUSING AND REDEVELOPMENT AUTHORITY'S ECONOMIC DEVELOPMENT ACTIVITIES FOR THE FISCAL YEARS 2018 to 2022 BE IT RESOLVED BY the City Council (the "Council ") of the City of Columbia Heights, Minnesota (the "City ") as follows: WHEREAS, the City is part of Anoka County (the "County "), and such is a rapidly growing and important segment of the Twin Cities Metropolitan Region, made up of rich variety of vital, desirable communities; and WHEREAS, the Council has determined that the residents of the City would realize many benefits from expansion of the County tax base, including but not limited to; the creation of local job opportunities, redevelopment of property throughout the City, as well as maintaining and improving the housing stock, wider sharing of tax burden, and access to enhanced infrastructure, services, and retail and business activities; and WHEREAS, in order to expand the local tax base, the County Board of Commissioners has indicated an interest in fostering a regional approach to economic development in the County; and WHEREAS, in 2007 a statutorily formed citizens exploratory committee recommended to the Board of Commissioners that the County Housing and Redevelopment Authority (the "County HRA ") be granted the powers of an economic development authority; and WHEREAS, on June 12, 2007, the County Board of Commissioners, after fulfilling the statutory requirements, did authorize the County HRA to exercise said powers of an economic development authority; and City Council Minutes June 26, 2017 Page 11 of 14 WHEREAS, MN Stat. 469.1082 requires that a municipality shall, declare its willingness, by resolution, to join the county in its economic development activities; and NOW, THEREFORE BE IT RESOLVED, that the City does hereby declare its support of the County and its countywide economic development objectives and activities; and BE IT FURTHER RESOLVED, that the City does hereby elect to participate in the County HRA economic development activities for the fiscal years 2018 through 2022 RESOLUTION NO. 2017-71 ADOPTING A HOUSING PROGRAM WITH RESPECT TO A MULTIFAMILY HOUSING PROJECT; GRANTING PRELIMINARY APPROVAL FOR THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS TO FINANCE THE PROJECT UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED; AND AUTHORIZING THE REIMBURSEMENT OF EXPENDITURES MADE IN ANTICIPATION OF THE ISSUANCE OF SUCH BONDS BE IT RESOLVED by the City Council of the City of Columbia Heights, Minnesota (the "City "), as follows: Section 1. Recitals. 1.01. The City is a home rule charter city duly organized and existing under the Constitution and laws of the State of Minnesota. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Housing Act "), the City is authorized to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds or other obligations to finance or refinance multifamily housing developments located within the City. As a condition to the issuance of revenue bonds under the Housing Act, the City must adopt a housing program providing the information required by Section 462C.03, subdivision 1a of the Housing Act (the "Housing Program "). A public hearing must be held in accordance with the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code "), and regulations promulgated thereunder (the "Regulations "), and the requirements of the Housing Act, The City Council of the City (the "Council ") must also grant preliminary approval to the issuance of revenue bonds to finance the multifamily housing development referred to in the Housing Program, and authorize the submission of an application to Minnesota Management & Budget for an allocation of bonding authority with respect to the Bonds (as hereinafter defined) to finance the Project (as hereinafter defined). 1.03. Columbia Heights Leased Housing Associates III, LLLP, a Minnesota limited liability limited partnership (the "Borrower "), has proposed that the City, pursuant to the Housing Act, issue its revenue bonds in an aggregate principal amount not to exceed $45,000,000, in one or more series (the "Bonds "), the proceeds of which will be loaned by the City to the Borrower. The Borrower will apply the proceeds of such loan to: (i) the acquisition, construction, and equipping of a multifamily housing facility comprised of up to 190 affordable rental apartments to be located in two four -story buildings, together with related common amenity spaces, including a fitness facility, a club room, and 140 or more underground parking spaces and an additional 130 or more surface parking spaces, to be located at 1069 Grandview Court NE and 4729 Grand City Council Minutes June 26, 2017 Page 12 of 14 Avenue NE in the City (the "Project "); (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; (iii) the payment of interest on the Bonds during the construction of the Project; and (iv) the payment of the costs of issuing the Bonds. 1.04. Under Section 147(f) of the Code, prior to the issuance of the Bonds a public hearing duly noticed must be held by the Council. Under Section 462C.04, subdivision 2 of the Act, a public hearing must be held on each housing program after one publication of notice in a newspaper circulating generally in the City, at least fifteen (15) days before the hearing. 1.05. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act "). Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the Council hereby makes the following preliminary findings, determinations, and declarations: (a) The Project consists of a housing development designed and intended to be used for rental occupancy. (b) The proceeds of the Bonds will be loaned to the Borrower and the proceeds of the loan will be applied to: (i) the acquisition, construction, and equipping of the Project; (ii) the funding of one or more reserve funds to secure the timely payment of the Bonds; (iii) the payment of interest on the Bonds during the construction of the Project; and (iv) the payment of the costs of issuing the Bonds. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to pay all costs of maintaining and insuring the Project, including taxes thereon. (c) In preliminarily authorizing the issuance of the Bonds and the financing of the acquisition, construction, and equipping of the Project and related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by retaining and improving multifamily housing developments and otherwise furthering the purposes and policies of the Housing Act. (d) The Bonds will be limited obligations of the City payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 4. Public Hearing. On the date hereof (June 26, 2017), the Council conducted a public hearing on the Housing Program, the Project, and the issuance of the Bonds, notice of which hearing (the "Public Notice ") was published as required by Minnesota Statutes, Section 462C.04, subdivision 2 of the Housing Act, and as required by Section 147(f) of the Code and applicable Regulations promulgated thereunder. The Public Notice provided a general, functional description of the Project, as well as the maximum aggregate face amount of the obligations to be issued for the purposes referenced above, the identity of the initial owner, operator, or manager of the Project, and the location of the Project. The Public Notice was published in the Sun Focus, the official newspaper and a newspaper circulating generally in the City, on June 2, 2017, a date at least fifteen (15) days before the meeting of the Council on June 26, 2017. At the public hearing a reasonable City Council Minutes June 26, 2017 Page 13 of 14 opportunity was provided for interested individuals to express their views, both orally and in writing, on the Project and the proposed issuance of the Bonds. Section 5. Housing Program. Bond counsel, as described below, prepared and submitted to the City a draft Housing Program to authorize the issuance by the City of the Bonds, in an aggregate principal amount not to exceed $45,000,000, to finance the acquisition, construction, and equipping of the Project by the Borrower. The Housing Program was prepared and submitted to the Metropolitan Council for its review on or before the date of publication of the Public Notice. Section 6. Preliminary Approval. The Council hereby provides preliminary approval to the issuance of the Bonds, in the aggregate principal amount not to exceed $45,000,000, to finance all or a portion of the costs of the Project pursuant to the Housing Program of the City, subject to: (i) review of the Housing Program by the Metropolitan Council; (ii) receipt of an allocation of the bonding authority from the State of Minnesota; (iii) final approval following the preparation of bond documents; and (iv) final determination by the Council that the financing of the Project and the issuance of the Bonds are in the best interests of the City. Section 7. Submission of an Application for an Allocation of Bonding Authority. Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of the State of Minnesota. An application for such an allocation must be made pursuant to the requirements of the Allocation Act. The Council hereby authorizes the submission of an application for allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act. The Mayor of the City, the City Manager, and Kennedy & Graven, Chartered, acting as bond counsel for the City with respect to the Project and the Bonds, are hereby authorized and directed to take all actions, in cooperation with the Borrower, as are necessary to submit an application for an allocation of bonding authority to Minnesota Management & Budget. Section 8. Reimbursement of Costs under the Code. 8.1. The United States Department of the Treasury promulgated by Section 1.150 -2 of the Regulations, which governs the use of the proceeds of tax - exempt bonds, all or a portion of which are to be used to reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of such bonds. Section 1.150 -2 of the Regulations requires that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty (60) days after payment of the original expenditure. Section 1.150 -2 of the Regulations also generally requires that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within eighteen (18) months after the later of: (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three (3) years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 8.2. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150- 2(d)(3) of the Regulations and also qualifying expenditures under the Housing Act. City Council Minutes June 26, 2017 Page 14 of 14 Based on representations by the Borrower, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.150- 2(j)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150- 2(f)(2) of the Regulations, or (iv) expenditures in a "de minimus" amount (as defined in Section 1.150- 2(f)(1) of the Regulations), no expenditures with respect to the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower more than sixty (60) days before the date of adoption of this resolution of the City. 8.3. Based on representations by the Borrower, as of the date hereof, there are no funds of the Borrower reserved, allocated on a long term -basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long -term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. Section 9. Costs. The Borrower will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project and the issuance of the Bonds, whether or not the Bonds are issued. Section 10. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Borrower. If, as a result of information made available to or obtained by the City during its review of the Project, it appears that the Project or the issuance of Bonds to finance or refinance the costs thereof is not in the public interest or is inconsistent with the purposes of the Housing Act, the City reserves the right to decline to give final approval to the issuance of the Bonds. The City also retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction.