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HomeMy WebLinkAbout20180904_EDA_Minutes ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF SEPTEMBER 4, 2018 The meeting was called to order at 6:30 pm by President, Marlaine Szurek. Members Present: Murzyn, Schmitt, Buesgens, Novitsky, Herringer, and Szurek. Members Absent: Williams Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, and Shelley Hanson PLEDGE OF ALLEGIANCE- RECITED CONSENT AGENDA 1. Approve minutes of August 6, 2018. 2. Approve Financial Report & Payment of Bills for July, 2018–Resolution 2018-012 Questions from Members: Herringer questioned payment to Hoisington Koegler Group. He asked if this was a payment for the Comp Plan. Dahl stated it was the final payment as they have reached their maximum amount of $100,000. Motion by Schmitt, seconded by Novitsky to approve the minutes of August 6, 2018. All ayes. MOTION PASSED. Motion by Buesgens, seconded by Schmitt, to approve the Financial Report and Payment of Bills for July, 2018 as presented. All ayes. MOTION PASSED. RESOLUTIONNO.2018-12 AResolution of theEconomic Development Authorityof Columbia Heights, Minnesota, Approving the Financial Statements for the Month of July 2018 and the Payment of the Bills for the Month of July 2018. 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 resolutionand enter the resolution in its records; and WHEREAS,the financial statement for the month of July 2018 has been reviewed by the EDA Commission; and WHEREAS,the EDA has examined the financial statements and finds them to be acceptable as to both form and accuracy; and 20180904_EDA_Minutes EDA Minutes Page 2 September 4, 2018 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 RESOLVEDby 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 RESOLVEDthe financial statements are acknowledged and received and the check historyas presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVEDthis resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. ORDER OFECONOMIC DEVELOPMENT AUTHORITY Passed this __4th____ dayof ___September_____, 2018 Offered by: Buesgens Seconded by: Schmitt Roll Call: All ayes BUSINESS ITEMS 1/2. Economic Development Authority Budget and Tax Levy-Resolution 2018-13 and Housing and Redevelopment Authority Budget & Tax Levy-Resolution 2018-14 th Dahl told members that the proposed budget for the 2019 fiscal year was distributed on August 27 to the City Council (the “Council”) of the City of Columbia Heights (the “City”). Before the City Council completes their review of the proposed budget later this fall however, the Columbia Heights Economic Development Authority (the “EDA”) and the Housing and Redevelopment Authority in and for the City of Columbia Heights (the “HRA”) are required to adopt fund budgets for Fund 204: EDA Administration and Fund 408: EDA Redevelopment Projects; and to authorize their respective 2018 tax levies, payable in 2019. Therefore, this report presents the information and the necessary actions required for consideration by EDA. Dahl briefly reviewed the funds that fall under the direction of the Department. Fund 201 is primarily the Building Inspections-Licensing-Planning duties; Fund 204 is the EDA function; and Fund 408 covers Redevelopment Projects such as the Façade/security camera program and the Commercial Revitalization Project. Attached to this report are the proposed fund budgets for Fund 201, Fund 204, and Fund 408 for the 2019 fiscal year. These fund budgets are administered by the Community Development Department, and have therefore been incorporated into the departments overall budget for 2019. Previously, the EDA would annually transfer funds from Fund 204 into Fund 201; however, in 2019, it has been proposed for Fund 101, the General Fund, to transfer those funds into Fund 201. This would allow for the EDA to have more funds available for redevelopment purposes. Fund 408 was not previously detailed as a separate fund in this process, but staff felt it should be reviewed as such since there are on-going projects that will be funded and administered by the Community Development Dept. 20180904_EDA_Minutes EDA Minutes Page 3 September 4, 2018 Overall, the proposed fund budgets are balanced, with funds specifically dedicated to maintain existing projects and initiatives, as well as allocating and repurposing funds for new programs that reflect the priorities of the EDA, such as the Commercial Revitalization Project and the Façade Improvement Grant Program. The proposed EDA budget for 2019 incorporates an increase in both revenues and expenditures of 10.3%. This increase is due to a few factors, such as positional salary increases based on living wage adjustments, the incorporation of the Cola Allowance into the proposed budget, and the increased project costs and expenses for redevelopment purposes. The EDA effectively has two separate tax levies after the City Council granted the EDA certain HRA powers in 1996. One tax levy is administered by the City under Minnesota Statutes, Section 469.107 on behalf of the EDA (the “EDA Levy”) and the other is a special benefit tax levy administered by the EDA under Minnesota Statutes, Section 469.033 on behalf of the HRA (the “HRA Levy”). The proposed fund budgets reflect both levies at their respective statutory caps of 0.01813 and 0.0185 of the City’s estimated market value. The EDA Levy would capture $242,100 from the City’s estimated market land value; whereas the HRA Levy would net $247,000. And together, both levies would result in a total net revenue of $489,100 in 2019. Staff recommends approval of Resolution 2018-13 and Resolution 2018-14 as presented. Questions from members: Herringer asked about the large increase in personnel services from 2018 to 2019. Hogeboom explained that a large portion of this was due to the reinstatement of the Assistant Community Development Director position. This position was not filled for a few years until Dahl was promoted this year to re-fill it. Herringer asked if the City Manager agreed with the proposed Department budget figures. Fehst said he did. Motion by Buesgens, seconded by Schmitt, to waive the reading of Resolutions 2018-13, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Buesgens, seconded by Schmitt, to adopt Resolution 2018-13, a resolution of the Columbia Heights Economic Development Authority, adopting a budget for the fiscal year of 2019 and setting the 2018 tax levy, payable in 2019. All ayes. MOTION PASSED. Motion by Murzyn, seconded by Novitsky, to waive the reading of Resolutions 2018-14, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Buesgens, seconded by Schmitt, to adopt Resolution 2018-14, a resolution of the Columbia Heights Economic Development Authority, adopting a budget for the fiscal year of 2019 and authorizing a special benefit tax levy, payable in 2019. All ayes. MOTION PASSED. 20180904_EDA_Minutes EDA Minutes Page 4 September 4, 2018 RESOLUTION NO. 2018-13 A RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, ADOPTING A BUDGET FOR THE FISCAL YEAR OF 2019 AND SETTING THE 2018 TAX LEVY, PAYABLE IN 2019. BE IT RESOLVED, by the Columbia Heights Economic Development Authority (the “EDA”) as follows: WHEREAS, the City of Columbia Heights (the “City”) established the EDA by an enabling resolution adopted on January 8, 1996, pursuant to Minnesota Statutes 469.090 to 469.1081 (the “EDA Act”); and WHEREAS, the City Council of the City has given to the EDA the responsibility for all development and redevelopment projects and programs; and WHEREAS, under Section 469.107 of the EDA Act, the City is authorized to levy a tax for the benefit of the EDA on its area of operation for the purposes authorized under the EDA Act, subject to the approval of the City Council. NOW, THEREFORE BE IT RESOLVED, by the Board of Commissioners of the Columbia Heights Economic Development Authority, that the EDA adopts and requests the City Council’s approval of its budget in the amount of $494,600 for 2019; and BE IT FURTHER RESOLVED, that the EDA adopts and requests the City Council’s approval of its tax levy in the amount of $242,100 for taxes payable in 2019; and BE IT FURTHER RESOLVED, that the Executive Director is instructed to transmit a copy of this resolution to the City Manager, Finance Director, and City Clerk of the City of Columbia Heights, Minnesota. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 4th day of September, 2018 Offered by: Buesgens Seconded by: Schmitt Roll Call: All ayes President Attest: Secretary 20180904_EDA_Minutes EDA Minutes Page 5 September 4, 2018 RESOLUTION NO. 2018-14 A RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, ADOPTING A BUDGET FOR THE FISCAL YEAR OF 2019 AND AUTHORIZING A SPECIAL BENEFIT TAX LEVY, PAYABLE IN 2019. BE IT RESOLVED, by the Columbia Heights Economic Development Authority (the “EDA”) as follows: WHEREAS, the City of Columbia Heights (the “City”) established the EDA by an enabling resolution adopted on January 8, 1996, pursuant to Minnesota Statutes 469.090 to 469.1081 (the “EDA Act”); and WHEREAS, the City Council granted the EDA all powers and duties of a housing and redevelopment authority by an enabling resolution and ordinance adopted on October 22, 2001, pursuant to Minnesota Statutes 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, under Section 469.033 of the HRA Act, the EDA and HRA, are authorized to levy a special benefit tax, in an amount not to exceed .0185 percent of the City’s estimated market value (the “HRA Levy”); and WHEREAS, the EDA desires to maintain its HRA Levy at the amount of .0185 percent of the City’s estimated market value as authorized by the HRA Act; and WHEREAS, the EDA understands that the HRA does not expect to levy a special benefit tax for the fiscal year of 2019; and WHEREAS, the EDA has before it for consideration a copy of its budget for the fiscal year of 2019, and the amount of the HRA Levy, payable in 2019 shall be based on said budget. NOW, THEREFORE BE IT RESOLVED, by the Board of Commissioners of the Columbia Heights Economic Development Authority, that the EDA hereby adopts and requests the City Council approve its budget in the amount of $494,600 for 2019, and such budget includes the amount the EDA requests to be levied by the City under Section 469.107 of the EDA Act, and the EDA under Section 469.033, of the HRA Act; and BE IT FURTHER RESOLVED, that the EDA hereby directs staff to file its budget with the City in accordance to Section 469.033 of the HRA Act, and take such actions necessary to levy and certify the HRA Levy in the amount of $247,000 for taxes payable in 2019. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 4th day of September, 2018 Offered by: Buesgens Seconded by: Schmitt Roll Call: All ayes President Attest: Secretary 20180904_EDA_Minutes EDA Minutes Page 6 September 4, 2018 3. Ceasing Business Operations with Home Detail Inc and its Affiliates-Resolution 2018-15 Hogeboom explained that Home Detail, Inc. has previously purchased multiple residential properties through the Economic Development Authority via the Single Family Lot Sales Program. The Building Official, as well as Public Works officials have reported that Home Detail, Inc. has violated various City ordinances in the past, mostly pertaining to sediment erosion and runoff, as well as performing work without proper permits. Due to recent erosion control issues and a violation of a stop work order associated with the property at 4641 Polk St. NE., the City issued a citation to Home Detail Inc., and its principals Jeffrey and Luke Magdik, as well as an administrative fine for costs associated with mitigation of erosion control violations. Based upon these past actions, staff feels that it is in the best interest of the Economic Development Authority, and the City, to cease any further business transactions with Home Detail, Jeffrey and Luke Magdik, and any other entity associated with these parties, preventing these parties from participating in any future land purchase programs. Staff recommends approval of Resolution 2018-15 as presented to cease all business operations with Home Detail Inc., Jeffrey Magdik and Luke Magdik, and their associated parties and entities. Questions from members: It was asked if the EDA could back out of the contract. Hogeboom told members that the City Attorney didn’t recommend that since Home Detail currently has two homes under construction. Hogeboom explained that by passing this Resolution it gives staff the ability to reject his offers for future lots that may become available. He went on to say that another City has passed a similar Resolution as they also had issues with this particular contractor. Buesgens asked how we would collect the fines if he refuses to pay them. She asked if the Certificate of Occupancy can be withheld until the citation and fine are paid. Hogeboom said the citation regarding the storm water violations goes directly to Court, and if the administrative fine is not paid by September 18, 2018 then that would be turned over to the City Attorney and it would be taken to court also. Motion by Murzyn, seconded by Herringer, to waive the reading of Resolution 2018-15, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Murzyn, seconded by Novitsky, to adopt Resolution 2018-15, a resolution ceasing business operations with Home Detail, Inc., Jeffrey Magdik and Luke Magdik. All ayes. MOTION PASSED. RESOLUTION NO. 2018-15 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, REGARDING CEASING BUSINESS OPERATIONS WITH HOME DETAIL, INC., JEFFREY MAGDIK AND LUKE MAGDIK 20180904_EDA_Minutes EDA Minutes Page 7 September 4, 2018 BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority (the "Authority") as follows: WHEREAS, the Authority, exercised the powers of a housing and redevelopment authority pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"); and WHEREAS, within the Redevelopment Project, the Authority at various times, acquires, owns and sells certain property for the construction of single-family homes; and WHEREAS, the Authority adopted a program called the Single Family Home Lot Sales Program (the “Program”), and approved guidelines in connection with the Program; and WHEREAS, Home Detail, Inc., a Minnesota corporation, under the direction of Mr. Jeffrey Magdik and Mr. Luke Magdik, and having its principal office at 1009 118th Avenue NE, Blaine, MN 55434, purchased certain property from the Authority located at 4641 Polk Street NE in the City of Columbia Heights (the “City”), described as attached hereto as Exhibit A (the “Property”) for the construction of a single-family home; and WHEREAS, Home Detail, Inc., Jeffrey Magdik and Luke Magdik were issued a Stop Work Order by the City’s Building Official on July 23, 2018 due to erosion of sediment from the Property entering the municipal trunk storm sewer; and WHEREAS, on August 6, 2018, the Stop Work Order was violated as construction continued to occur on the Property without installation of proper erosion control mitigation material; and WHEREAS, pursuant to violation of a Stop Work Order, and to violation of City Code Section 8.705(f)3 (Surface Drainage Violation) and violation of City Code Section 9.106(Q)11(C)1 (Erosion Control), a criminal citation and an administrative fine was issued to My Home Detail, Jeffrey Magdik and Luke Magdik. NOW, THEREFORE BE IT RESOLVED that Home Detail, Inc., Jeffrey Magdik and Luke Magdik have willfully disobeyed ordinances and regulations of the City of Columbia Heights on multiple occasions. BE IT FURTHER RESOLVED, that the Authority shall cease all further business operations with My Home Detail, Inc., Jeffrey Magdik, Luke Magdik and all liaisons and affiliated businesses and entities of the offending parties. BE IT FURTHER RESOLVED, that Home Detail, Inc., Jeffrey Magdik and Luke Magdik shall be prevented from participating in any future land sale programs administered through the Authority. 20180904_EDA_Minutes EDA Minutes Page 8 September 4, 2018 ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 4th day of September, 2018 Offered by: Murzyn Seconded by: Novitsky Roll Call: All ayes President Attest: Assistant Secretary OTHER BUSINESS The next meeting is scheduled for October 1, 2018. Motion by Murzyn, seconded by Buesgens, to adjourn the meeting at 6:31 pm. Respectfully submitted, Shelley Hanson Secretary 20180904_EDA_Minutes