Anoka City Council

July 15, 2019 (Regular) Page 1 of 15 REGULAR MEETING OF THE ANOKA CITY COUNCIL ANOKA CITY HALL CITY COUNCIL CHAMBERS JULY 15, 2019 1. CALL TO ORDER Mayor Rice called the meeting to order at 7:00 p.m., followed by the Pledge of Allegiance. 2. ROLL CALL Present at roll call: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist, and Wesp. Staff present: City Manager Greg Lee; Police Chief Eric Peterson; Community Development Director Doug Borglund; Housing Manager Darin Berger; Engineering Technician Ben Nelson; Electric Director Greg Geiger; Public Services Director Mark Anderson; Golf Manager Larry Norland; City Attorney Scott Baumgartner. Absent at roll call: None. 3. COUNCIL MINUTES 3.1 Minutes of the June 24, 2019, Worksession. Minutes of the June 24, 2019, Executive Session. July 1, 2019, Regular Meeting. Councilmember Barnett noted a blank needed completion on Page 5, Paragraph 7 of the June 24 Worksession minutes: “Councilmember Freeburg left the meeting at 7:00 p.m.” Councilmember Skogquist noted corrections were needed on Page 4, Paragraph 8: “…relocating Bob Ehlen Drive north south of to Harris Harrison Street and the signal north at the northwest corner of Bunker…” Councilmember Skogquist noted corrections were needed on Page 4, Paragraph 10: “…regarding replacing roads Cutters Grove Avenue and Church Street before too soon such as Fairoak...” Councilmember Skogquist noted corrections were needed on Page 5, Paragraph 5: “…boat slips at Aikin Akin Park expansion project, then reviewed the trail segment connections and Pamela Peninsula Point Park...” July 15, 2019 (Regular) Page 2 of 15 Councilmember Skogquist noted a correction was needed on Page 6, Paragraph 3 of the July 1 Regular meeting minutes: “…the Human Rights and Relations Commission.” Motion by Councilmember Skogquist, seconded by Councilmember Freeburg, to waive the reading and approve the June 24, 2019, Worksession, June 24, 2019, Executive Session and July 1, 2019, Regular Meeting minutes as corrected. Vote taken. All ayes. Motion carried. 4. OPEN FORUM 4.1 Police Activity Update. Police Chief Eric Peterson shared data for the first half of 2019 calls for service that showed activity was 11% busier than last year with 11,655 calls for service to date. He said June was the busiest month with 2,300 calls for service and while the amounts or types of crimes were not noteworthy and there was no evidence that Part I or II crimes are on the rise reasons for the increase include more willing complainants and proactive policing. He reviewed recent events that included Cops and Cones and thanked Two Scoops for their ice cream donation and the annual Riverfest event that resulted in no concerns then thanked the Fire Department for their misting cooling station and the Police Reserves and Explorers for their work. Chief Peterson said the annual Food Truck Festival will be held July 20 and said they were working with command staff and Allina on precautions due to the anticipated extreme heat. He commented on the August 3 Heroes Walk for Women which they anticipated would have large crowds and encouraged people to attend then shared about Night to Unite on August 6 with 24 registered parties to date and likely more. Chief Peterson said there was a slight increase in the number of people staying in parks and streets overnight and noted while security and patrol were reporting some encounters there were no camps in the City at this time and that the department was working to monitor during their 24-hour patrol. He shared about a patrol stop that occurred on July 12 that included a driver with a camper who had a cancelled driver’s license who refused to cooperate and left in pursuit. He stated Coon Rapids police became involved with stop sticks that resulted in the camper tipping and the suspect being arrested for felony fleeing and controlled substance possession. He noted incidents like this are evaluated by supervisors for safety measures as to when to call off a pursuit due to public safety and said he was pleased with how the sergeant handled the situation then shared a medical response that occurred on July 10 that resulted in a birth and was pleased to share that the mother and infant were doing well. Councilmember Skogquist spoke about his recent garage burglary call and how the suspect was confronted by neighbors and police responded and arrested the July 15, 2019 (Regular) Page 3 of 15 individual so quickly then thanked all involved. Chief Peterson said the basis of a neighborhood watch program is the neighbors who watch and report and thanked them for their great work. Councilmember Barnett asked for more information about the new hands-free law. Chief Peterson shared how this work will become part of the Towards Zero Death program and explained the warnings that have been occurring for using a cell phone while driving and the citations that will begin on August 1. Senator Jim Abeler thanked Anoka for working so well together and for stating the Pledge of Allegiance. He gave an update on Haven for Heroes that included that Bart Ward is currently serving as Director and that they have hired a staff member in charge of case management. He stated that no public funds were involved for this project, a project that has helped veterans while preserving a historic property. He referred to the polices written that focused on resident success and thanked the City for acting as their fiscal agent. Senator Abeler said they soon will be working on Cottage 3 originally intended for families and commented how it has been difficult finding women residents but there was a huge need for step-down transition housing. He said 30 beds will be available soon and was excited about this next step as veterans can be vulnerable to issues and suicide then thanked everyone for their work that included over 500 volunteers and staff, encouraged anyone who needed help to contact them. Councilmember Wesp shared about the grand opening celebration two years ago for this facility then commented how well the facility was maintained. He thanked the group for their focus on the sober requirements including outside the facility and asked if AA meetings were conducted onsite. Senator Abeler commented about the strict no-sue policy and the balance needed to enforce versus allowing for opportunities to address infractions. Bart Ward, Anoka, explained that Anoka Alanon programs were held onsite and thanked the many volunteers, adding the program was getting recognition across the country. He shared staffing and program details then highlighted the anonymous matching funds donation of $300,000 and $75,000 towards the auditorium as well as in-kind donations. Councilmember Freeburg thanked Senator Abeler and Mr. Ward for their unbelievable work and dedication. Mr. Ward said this has been a regional effort and thanked the Council for their support. NOTE: By motion from Councilmember Freeburg, which was seconded by Councilmember Barnett, and by a unanimous vote of the Council, agenda item 9.3 was moved up on the agenda and acted upon at this point. 5. PUBLIC HEARING(S) July 15, 2019 (Regular) Page 4 of 15 5.1 Modification to the Redevelopment Plan for the Anoka Redevelopment Project No. 1; Modifying the South Central Business Tax Increment Financing District and Adopting a Modification to the Tax Increment Financing Plan. RES/Modification to the Redevelopment Plan for the Anoka Redevelopment Project No. 1; Modifying the South Central Business Tax Increment Financing District and Adopting a Modification to the Tax Increment Financing Plan. RESOLUTION Housing Manager Darin Berger explained this item was included at the last Council meeting and how the hearing was recessed for consideration this evening. Mayor Rice re-opened the public hearing at 7:53 p.m. Being no comments Mayor Rice closed the public hearing at 7:54 p.m. Mr. Berger shared a staff report with background information to the Council stating the City of Anoka Housing and Redevelopment (HRA) is proposing to adopt a Modification to the Redevelopment Plan for Anoka Redevelopment Project No. 1 and a Modification to the Tax Increment Financing Plan for the South Central Business District Tax Increment Financing District. The TIF District is a redevelopment district with a maximum term of 26 years of tax increment (24 years remaining since original establishment). The HRA proposes to expand the District to include up to six additional properties at the southwest corner of Main Street and 7th Avenue. The HRA will purchase the properties, demolish the substandard structures, clear and prepare the site in anticipation of providing a site for building residential, commercial, or office space. It is anticipated that the land purchase, demolition and site preparation will be financed through bonds and repaid with tax increments generated by the expanded District. Councilmember Skogquist asked questions regarding process. Shelley Eldridge, Ehlers and Associates, explained TIF background for this project and how the City was looking to assemble land to make the site something a developer would wish to consider. She explained benefits of TIF and expanding the existing district instead of making a new one stating the proposed modification would add parcels to the old district but not increase the budget on the district as the action would just purchase, assemble and demolish the existing buildings to create a good site for a developer. She stated the estimated value of a new development would be $2.8 million and the increment coming in would repay the bond. Councilmember Barnett said she recognized the public improvement in some of the parcels but not necessarily in 639 or 640 East Main Street as these could be acquired privately and would prefer the City only acquire what is necessary to refresh the area. Mr. Berger said the property owner of Techtron at 640 East July 15, 2019 (Regular) Page 5 of 15 Main Street approached the HRA to purchase the site and that 639 East Main Street is currently rental property and while the 650 East Main Street parcel was as far west as the Council wanted to consider the Board felt this was a good purchase to make. He said the six parcels outlined are commercial and including all six parcels would be beneficial to the TIF district as a whole. Ms. Eldridge said the two parcels in question could be included but that does not mean they need to be purchased as the increment can be used to improve those parcels without limitation for items such as a retaining wall or screening between commercial and could include but pull from the list of purchase possibilities. Councilmember Freeburg said the Council would still have the final approval for purchase if they remained in the district. Mayor Rice asked if these two parcels were included in the TIF estimates and asked about the ability to pay for our investments as a City. Ms. Eldridge said the parcels were included however the project estimate’s new value was not based on needing the properties to do the new building but were included if those properties needed improvements. Mayor Rice noted commercial property is taxed more than residential and while the 640 parcel has been used as residential 639 likely has not and asked if the two properties changed increment estimates much. Ms. Eldridge said no because the increment estimates and modification compared to the entire district is not large, adding they are not even amending the budget. NOTE: By motion from Councilmember Skogquist, which was seconded by Councilmember Barnett, and by a unanimous vote of the Council, agenda item 9.1 was moved up on the agenda and acted upon at this point. Councilmember Skogquist said we should address the commercial parcels only and was not in favor of expanding TIF over the two residential parcels and should just address the blight on the corner and not create a larger project. Motion by Councilmember Skogquist, seconded by Councilmember Barnett, to adopt a resolution approving an amendment to the South Central Business Tax Increment Financing (Redevelopment) District and approving an amendment to the Tax Increment Financing Plan as amended excluding 639 East Main Street (07-31-24-21-0019) and 640 East Main Street (07-31-24-21-0014). Ms. Eldridge referred to Subsection 2-5 that describes the district and property to be acquired and suggested keeping the parcels in the district but excluding the two parcels from acquisition so they could not be acquired without another public hearing. Councilmember Skogquist withdrew his motion to allow for further discussion. July 15, 2019 (Regular) Page 6 of 15 Councilmember Barnett asked about the HRA’s authority to acquire parcels in the project area. Mayor Rice said by including the parcels if a developer comes and wants more land and wants to purchase these two parcels the increment is included so it is a benefit to include them. Councilmember Freeburg asked about the HRA’s purchase. Mr. Berger said the HRA approved the purchase of the 640 parcel earlier this evening from their general fund but that 639 could be purchased by a developer and benefit the district as a whole. Councilmember Wesp said the HRA has the authority to purchase parcels with general funds but not TIF funds and suggested restricting the purchase of 639 East Main Street. City Attorney Scott Baumgartner suggested language amendments in Subsection 2-5, Paragraph 2, that includes all parcels as proposed in the district but excludes the HRA or City from acquiring 639 East Main Street (07-31-24-21-0019) and 640 East Main Street (07-31-24-21-0014). Councilmember Wesp asked if we want to exclude the authority of the HRA to redevelop. Mayor Rice said the mission of the HRA is to improve neighborhoods and if these parcels are substandard and would be an improvement they should remain. Councilmember Freeburg noted the 640 parcel was single family but is now zoned commercial and likely will not be single family again. Motion by Councilmember Wesp, seconded by Councilmember Barnett, to adopt a resolution approving an amendment to the South Central Business Tax Increment Financing (Redevelopment) District and approving an amendment to the Tax Increment Financing Plan as amended excluding 639 East Main Street (07-31-24-21-0019) and 640 East Main Street (07-31-24-21-0014) from purchase. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 6. CONSENT AGENDA Motion by Councilmember Wesp, seconded by Councilmember Skogquist, to approve Consent Agenda 6.1 through 6.2. 6.1 Approve Verified Bills. 6.2 Revising and Setting Council Calendars. Vote taken. All ayes. Motion carried. July 15, 2019 (Regular) Page 7 of 15 7. REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 7.1. Planning Items: None. 8. PETITIONS, REQUESTS AND COMMUNICATION None. 9. ORDINANCES AND RESOLUTIONS 9.1 RES/Modification to the Redevelopment Plan for the Anoka Redevelopment Project No. 1; Modifying the South Central Business Tax Increment Financing District and Adopting a Modification to the Tax Increment Financing Plan. ACTED UPON AFTER PUBLIC HEARING 9.2 ORD/Approving Lease to Gramercy Development Companies of Classroom “D” at Green Haven Golf Course and Event Center. (2nd Reading) ORDINANCE Golf Manager Larry Norland shared a staff report with background information stating this first reading was held at the last meeting for the lease of Classroom "D" to Gramercy Development Companies to serve as their sales office for the 641 Jacob Lane Development. He said rent payments of $1,000 per month will start upon commencement of the lease and the lease will be for 1 year with a month-to-month option to follow and that this is the room that the Rotary uses for their weekly meetings and we have a negotiated agreement to accommodate their meeting while the room is used as a sales office. He outlined the plans for paint, carpet, and walls that will depict the proposed concept of the development interior. Mayor Rice said he was excited to see the potential for change in this area. Motion by Councilmember Skogquist, seconded by Councilmember Freeburg, to hold second reading and adopt an ordinance approving a lease agreement between Gramercy Development Companies and the City of Anoka relating to Classroom “D” and its use for their sales office. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 9.3 RES/Review and Approval of Resident Handbooks for Haven for Heroes. July 15, 2019 (Regular) Page 8 of 15 RESOLUTION City Manager Greg Lee shared a staff report with background information to the Council stating on December 17, 2018, the City Council adopted Ordinance ORD-2018-1703 approving a lease agreement with Haven for Heroes for real property and facilities located at the Rum River Human Services Center; 3300 4th Avenue. Specifically, this included Historic Cottages 2, 3, 4 and the Auditorium. As part of this lease agreement there were various responsibilities required of Haven for Heroes, including management of the facilities and the day-to-day operations of services and programs provided. Within ninety (90) days from the effective date Haven for Heroes was to provide for review and approval a copy of the resident contracts, policies and manuals. Haven for Heroes has submitted the required documents for the City’s review and approval that includes a Resident Application Form, Intake Protocol, Resident Contract, Resident Handbook, General Guidelines and Policies, Safe, Sober, & Substance-Free Protocol, and Peer Mentorship. Councilmember Wesp said he was encouraged to see the mentoring opportunities included in the documents that provides for control while acclimating residents and setting them up for success. He said sobriety is a very difficult disease and thanked the community and all involved for their donations and work, adding this site was headed towards demolition and preserving the historical significance for the community just adds to this project’s importance. Motion by Councilmember Wesp, seconded by Councilmember Freeburg, to adopt the resolution documenting the City Council’s review and approval of the Resident Contract, Policies and Manuals for Haven for Heroes. Councilmember Barnett said the available resources for residents will help provide opportunities for them to be successful and safe. Mayor Rice agreed about the difficulty of alcoholism and the importance of programs to support residents and while people will fail at times, he encouraged the board to look at how to be better while having rules in place to provide success for everyone. He spoke about his one concern in the documents that referred to potential for debt to Haven for Heroes by the residents for fees to stay and spoke about how some are reluctant to admit when working to avoid those fees. Senator Abeler explained the proposed $500 fee per resident provides for the housing and programs but there were no plans for collection efforts of residents and if not paid voluntarily they would like to see the action paid forward. He added many residents would not want to stay for free as it is a sense of pride to pay then shared about how Barb Abeler developed a remarkable policy that will provide structure and support for the residents. July 15, 2019 (Regular) Page 9 of 15 Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist, and Wesp voted in favor. Motion carried. 9.4 RES/Authorizing the Mayor and City Manager to Execute Amendment No. 1 of the Anoka County Community Block Grant and HOME Investment Partnership Program Cooperation Agreement. RESOLUTION Mr. Berger shared a staff report with background information to the Council stating Anoka County has been classified by the Department of Housing and Urban Development (HUD) as an Urban County due to the population of the County. That designation entitles the County to receive an allocation of Community Development Block Grant (CDBG) and HOME Investment Partnership Program funds. In order to continue to be recognized as an Urban County, Anoka County is required by HUD to complete the Urban Requalification process every three years. Part of that process is determining if cities in Anoka County would like to continue to participate in the program and have their population included in the overall count of the County population. The County must meet a minimum population of 200,000 in order to be considered an Urban County. Every three years, each city in Anoka County must make a decision whether they want to opt in or opt out of the County program. If the City opted out of the program, they would not be eligible to apply for CDBG funds through Anoka County and would have to apply through the State of Minnesota and compete with Greater Minnesota cities. The chances of receiving CDBG or HOME funds through the State would be slim because of the competition for those funds. If the City opted in to the program, they would be eligible to receive funds through Anoka County’s allocation. The City of Anoka would be much more likely to have access to CDBG and HOME funds at the County level. Since 1981, the City of Anoka has received approximately $1.4 million in CDBG funds. Councilmember Skogquist asked for examples and how often this funding would be used. Mr. Berger said the last one was not successful and there are stipulations on how the funds are used, adding we did return some of the funds for this reason but that in his previous position in another county they used these funds for rental and downtown rehabilitation to improve neighborhoods overall. He said the reason for the request was that this provides a financing option for the City that staff feels is necessary. Councilmember Freeburg asked if there was any reason not to participate. Mr. Berger said no and that this action would provide another tool for the City and would be applied only where appropriate. Mayor Rice said the outstate and more rural programs have the same sort of restrictions and asked if we were not comfortable with those restrictions. Mr. July 15, 2019 (Regular) Page 10 of 15 Berger said that was the case and noted this is now a larger pool that applies to the county. Motion by Councilmember Freeburg, seconded by Councilmember Barnett, to adopt a resolution authorizing the Mayor and City Manager to execute Amendment No. 1 to the Community Development Block Grant and Home Investment Partnership Program Cooperative Agreement for Anoka County. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 9.5 RES/2020 Combined Street Improvement Project (SIP) – Authorize Feasibility Report. RESOLUTION Engineering Technician Ben Nelson shared a staff report with background information to the Council that in 2000 the Anoka City Council began the Street Renewal Program (SRP) for the reconstruction of City streets and infrastructure at or reaching the life expectancy typically around 70 years. He shared highlights from the past 20 years of the Street Renewal Program then explained the Street Surface Improvement Program (SSIP) that began in 2009 for City streets that showed accelerated deterioration in order to create longer term benefits than just with roadway maintenance. Since this program began, over 1,800 properties have benefitted, and 16.1 miles of city streets have been resurfaced or 23% of the 69.1 miles of city streets. To date, the total investment in our roadway system with this program is approximately $8.5M. The proposed 2020 Combined Street Improvement Project is a consolidation of the Street Renewal Program and the Street Surface Improvement Program. By combining the program, this will make the project more economically complete and will provide contractors to bid on any, or all of the project areas which for the City, should result in more favorable bid results. Councilmember Barnett reiterated that streets are not always chosen based on aesthetics but also the infrastructure underneath and that neighborhood meetings will be held where residents can also share speed and stop sign concerns. Mr. Lee said staff is very proactive prior to neighborhood meetings and will conduct speed studies in advance to provide data on traffic patterns and volumes to share and answer resident questions. Councilmember Skogquist asked questions on the process before a neighborhood meeting such as the Bob Ehlen Drive neighborhood and street alignments. Mr. Nelson reviewed the neighborhood meeting would include sharing a draft assessment roll, proposed improvements including sidewalks, street widths, etc., adding topics such as street access occur at the staff level prior to any plan and would include items such as streetscaping, etc. July 15, 2019 (Regular) Page 11 of 15 Councilmember Skogquist asked about feeder roads and standards of construction. Mr. Nelson said street standards are based on geotechnical reports that recommends pavement sections, adding Anoka typically has thicker pavements than other communities already. Motion by Councilmember Barnett, seconded by Councilmember Wesp, to adopt a resolution for the 2020 combined street improvement project; authorize feasibility report. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 9.6 RES/Green Haven Parkway Phase II – Authorize Feasibility Report. RESOLUTION Mr. Nelson shared a staff report with background information to the Council that Green Haven Parkway Phase II is a portion of Green Haven Parkway, as identified in the Greens of Anoka Redevelopment Master Plan (2012) and the Highway 10 Access Planning Study (2014). In 2017, Green Haven Parkway Phase I was constructed between Thurston Avenue and West Garfield Street. The proposed Green Haven Parkway Phase II includes constructing a public roadway between Verndale Avenue and Fairoak Avenue with bike and pedestrian accommodations. The parkway section is proposed to be the same as phase I, 32 feet wide with a 12-foot bituminous trailway. This feasibility report is the first step in the public improvement process and will examine the scope of the proposed improvements; explore estimated project costs, determine an alignment, provide a project schedule, as well as the feasibility and general cost-effectiveness of the proposed project. The study will outline the critical path schedule for the construction of the parkway by a private developer and as a public improvement project lead by the city based on the Greens of Anoka TIF district expiring on June 29, 2020. TIF district funds could be utilized in property acquisition for the right-of-way. Staff is recommending having the parkway constructed prior to the improvements along US Highway 10/169 beginning in 2022. Motion by Councilmember Wesp, seconded by Councilmember Skogquist, to adopt a resolution for Green Haven Parkway Phase II; authorize feasibility report. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 9.7 RES/US Highway 10/169 Improvement Project; Select Design Team. RESOLUTION July 15, 2019 (Regular) Page 12 of 15 Mr. Nelson shared a staff report with background information to the Council stating at the June 26, 2016 work session, City Council provided unanimous consent for the City to lead the Highway 10/169 at Fairoak Avenue project and committed $2 million towards the project. He reviewed the various funding sources for the project that included MnDOT, Minnesota Highway Freight Program. Department of Employment and Economic Development and Transportation Economic Development (TED) Program. He explained the State Bonding Bill signed by the Governor for Local Road Improvement Program (LRIP) funding provided $15M for the engineering, design, and local construction of the combined improvements along US Highway 10/169 and with the City being successful in obtaining all the federal and state funding, there was new rules, conditions and approvals that applied if these funds were used for design and engineering professional services. Because of this, the City must use the competitive selection process to hire a design team so the City established a Qualifications-Based Selection (QBS) process to select engineering services for public improvement projects. A selection committee of city staff evaluated and selected the most qualified firm then negotiates the project scope of work, schedule, budget, and consultant fee. The RFP notice was published in the City’s legal newspaper on June 14, 2019 and the following firms requested the RFP: Kimley-Horn & Associates, Bolton & Menk, and Ayres Associates, with Bolton & Menk being the only firm to respond. Councilmember Wesp confirmed the $4.1 million fee was built into the total cost. Mr. Nelson confirmed the fee was included so we can be reimbursed if approved. Councilmember Barnett asked for any insights as to why the other firms did not submit a response. Mr. Nelson said it was likely because Bolton & Menk is so highly vested in the project already and noted staff was pleased with the proposal. Motion by Councilmember Freeburg, seconded by Councilmember Wesp, to adopt a resolution US Highway 10/169 Improvements Project; selecting the design team of Bolton & Menk. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 9.8 RES/Providing for the Sale of $1,690,000 General Obligation Taxable Tax Increment Bonds, Series 2019A. RESOLUTION Mr. Berger shared a staff report with background information to the Council that expanded 2019 South Central Business Tax Increment District boundaries. Staff intends to assemble land and resell those properties. Debt service will also be paid from the tax increment revenues. Because the City is paying for at least 20% of the project costs with TIF from the Anoka HRA South Central Business Tax July 15, 2019 (Regular) Page 13 of 15 Increment District, the Bonds can be a general obligation without a referendum and will not count against the City’s debt limit. The term for this expanded district will be 24 years. Principal on the Bonds will be due on February 1 in the years 2022 through 2043. Interest is payable every six months beginning August 1st, 2020. He reviewed recommendations for the issuance of general obligation bonds as a suitable financing option that included being the most overall cost- effective option that still maintains future flexibility for the repayment of debt. If the tax increment is not generated as expected or there is a high rate of property tax delinquencies in the TIF District, the City and/or HRA will be required to use other revenues, including property taxes, to pay the debt service on the bonds. Councilmember Wesp commented that the issuance of GO Bonds rate would be lower than revenue bonds and asked about the expected rate. Ms. Eldridge said these are not tax-exempt bonds and have a true interest rate of 3.84% which is actually a taxable rate not for public use but for private investment. She said the bonds could be paid off in 2027 and do not have to go the full length of the debt service. Mayor Rice asked if the original South Central district has increment now and is it enough to cover the debt in the original district. Mr. Berger said over the whole term there will be enough but that currently there is not but that is where the increment comes in and said when the bond comes due, we will have enough for the first payment. Ms. Eldridge said the bonds are structured around the anticipated build and construction coming in and is interest only for the first couple years moving then to full. She said any land sale proceeds could also be used to pay the bonds down which will be callable in 2027. Mayor Rice said worst case scenario would be the property takes longer than seven years to develop and the City would be responsible for the bonds rather than the TIF district. Councilmember Barnett said the intent is to extend the South Central Business District and asked if we would need to issue a bond for this full amount with the acquisition changes or could it be for less. Mr. Berger said the proposed $1.69 million includes purchases such as the 650 and 658 E. Main for $1.2 million and 1919 7th Avenue which will include demolition and site prep of $120,000 and underwriting. He said the amounts are above the appraised value and that they are still negotiating on 1919 7th Avenue which will likely be agreed upon at or below the asking price. Councilmember Skogquist commented about the risks of TIF and said he hopes the corner develops before the seven years but noted this is a useful tool that can result in projects we may not see otherwise. July 15, 2019 (Regular) Page 14 of 15 Motion by Councilmember Skogquist, seconded by Councilmember Freeburg, to adopt a resolution providing for the sale of $1,690,000 General Obligation Taxable Tax Increment Bonds, Series 2019A. Mayor Rice explained how they hoped the TIF district would pay when the parking ramp was constructed but the development was not sufficient and we had to find other sources but were still hoping for more development in this area. He said this proposal is for a very attractive site though and TIF financing should only enhance the area. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 9.9 ORD/Authorizing the Sale of $1,690,000 General Obligation Taxable Tax Increment Bonds, Series 2019A. (1st Reading) Mr. Berger shared a staff report with background information to the Council that the issuance of $1,690,000 in bonds will be used for purchasing properties for redevelopment within the expanded 2019 South Central Business Tax Increment District boundaries. Staff intends to assemble land, demolish existing structures and resell it as a buildable site. Debt service will also be paid from the tax increment revenues. Bonding will provide $1,690,000 to allow the City of Anoka Housing and Redevelopment Authority to purchase property and prepare the site for redevelopment. Motion by Councilmember Skogquist, seconded by Councilmember Freeburg, to hold first reading of an ordinance authorizing the sale of General Obligation Taxable Tax Increment Bonds, 2019A in an amount not to exceed $1,690,000. Councilmember Freeburg commented how TIF was a catalyst for the industrial park in the City and while there are risks there are rewards as this park was a huge asset to the City. Mayor Rice agreed, stating this project will be an asset as well. Upon a roll call vote: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist and Wesp voted in favor. Motion carried. 10. UNFINISHED BUSINESS None. 11. NEW BUSINESS None. 12. UPDATES AND REPORTS July 15, 2019 (Regular) Page 15 of 15 12.1 Tentative Agenda(s). The Council reviewed the tentative agendas of the upcoming Council meetings. 12.2 Staff and Council Input. Public Services Director Mark Anderson said the water levels on the Rum River was still six inches too high to open the tainter gate to install the dam boards and that rain is still bringing water higher so the boards will be installed as soon as possible when it is safe to do so. Councilmember Skogquist asked about the possibility for retrofitting to open the gate electronically instead of manually. Mr. Anderson said it is possible but would cost approximately $5.1 million but said if done the gate could be opened safely and quickly. 13. ADJOURNMENT Councilmember Freeburg, made a motion to adjourn the Regular Council meeting. Councilmember Skogquist seconded the motion. Vote taken. All ayes. Motion carried. Time of adjournment: 9:19 p.m. Submitted by: Cathy Sorensen, TimeSaver Off Site Secretarial, Inc. Approval Attestation: Amy T. Oehlers, City Clerk