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HomeMy WebLinkAboutSP January 8, 1975 CITY of ANDOVER Minutes of a SPECIAL City Council Meeting, held January 8, 1975 at the Andover Community Center. Present were: Mayor Schneider, Councilpersons Rither, Holasek, VanderLaan, Windschitl, Engineer Dewey Kasma of Toltz, King. Duvall and Anderson, Seegar Swanson of Ehlers and Associates and Clerk Jaworski. Mayor Schneider called the meeting to order at 7:35 p.m., and turned the meeting over to Engineer Dewey Kasms. Mr. Kasma informed the Council of Andovers' ability to borrow money from Farmers' Home Administration, a branch of the United States Department of Agriculture. Mr. Kasma stated that only communities of 10,000 and under in population were eligible to borrow from this Branch of the Government. Mr. Kasma also stated that an interest rate of 5% was available for thirty (30) years. Mr. Kasma noted that he has received a verbal okay to Andovers' borrowing $4,000,000, plus and went, on to point out the twenty-five (25) steps that must be met, before the moeny would be available to the City of Andover, Mr. Kasms noted two items necesaary to get the Program started; 1) a letter from our Fiscal Agent on this matter, and 2) a letter from the Metro Sewer Board to FHA, atating they have no objections to the project. Engineer Kasma stated that he would handle correspondence to the Sewer Board. Mr. Kasma introduced Mr. Seegar Swanson of Ehlers and Associates to the Council. (Mr. Swanson had represented Grow Township in financial matters before the Municipal CODlDbsion on' Incorporation). Mr. Swanson explained his position was a Financial Consultant and not a Bonding Consultant. Mr. Swanson stated that he could hsndle all financial aspects of public works, not just sell bonds. Mr. Swanson pointed out the long range effect a good Financial Program would have on the cODlDunity and noted the direction that must be taken on a project of this type. Mr. Swanson stated that under Minneaota State Statute 429, the following must be done: 1. Hold a Public Hearing. 2. Make a decision on the project. 3. Sell temporary bonds to finance the project, (3 year bonds). 4, Close out the project. 5. Hold assessment Hearings, (required to put out financial statement). 1 Mr. Swanson noted the assessment Hearings would probably start a year to a year and a half after the start of the project. He also noted with the sale of the temporary bonds, the project could be financed up to thirty-three (33) years. I I Mr. Swanson presented copies of Ehlers and Associates Contract to the Clerk and Mayor. The Contract was in two parts, (a copy of Ehlers and Associates Contract is attached to this set of minutes). Mr. Swanson estimated his costs for one year to the City of Andover would be approximately $3,000. Special City ..ouncil MeeL.dg January 8, 1975 Page 2 Mr. Swanson stated that Ehlers and Associates is a nationally known Company, which has maintained growth through the present "slack" period, Mr. Swanson stated that Ehlers and Associates represents other communities in this area, including; Fridley, Moundsview and Cottage Grove. Mr. Swanson asked for questions from the Council; Mayor Schneider asked what the interest rate was on temporary bonds? Mr. Swanson stated, siz per cent. Mr. Swanson concluded his discussion on part two of Ehlers and Associates Contract and stated that Ehlers and Associates would collect a percentage on the bonds. Mr. Swanson moved onto part one of the Contract and noted that part one would be on an hourly basis of $45 per hour. Councilperson Windschitl asked Mr. Swanson if the temporary bonds must be sold publicly? Mr. Swanson stated yes, required by law. Mayor Schneider asked if the City would be able to sell bonds? Mr. Swanson stated, no problem. The FHA steps to be met was discussed. Engineer Kasma stated he would handle the twenty· five steps for the City. Engineer Kasma and the Council reviewed a letter which is to be sent to the affected property owners in the proposed assessmenb area. A final draft of this letter was made and will be attached to this set of minutes. Engineer Kasma noted that the city must be very careful to comply with the State Law in this Public Hearing process. Clerk Jaworski stated he would be attending the Sewer Hearing and it will be taped and taken in shorthand. I Engineer Kasma auggested that the Clerk and Engineer be on hand January 23, 1975, from 1:00 p.m. to 5:00 p.m., at the Community Center to answer questiona brought forth by affected residents. Councilperson Rither stated the Fiscal Agent should be on hand, because most questions would be of a financial nature. Engineer Kasma agreed and stated that any questiona answered would take a load off the Public Hearing. Council agreed. 1 Engineer Kasma handed out Toltz, King, Duvall and Anderson Commission 16226, regarding financing the¡proposed water and sewer systems. (A copy is attached to thia set of minutes.) Engineer Kasma also handed out copies of State Statute 273.111 and commented on, 1) the Green Acres Law, 2) the Senior Citizen Hardship Assessment and 3) the Deferral Law. I Mayor Schneider asked if the Council would act on a Fiscal Agent tonight? Councilperson Rither made a:motion that the Andover City Council enter into a contract with Ehlers and Associates for the City of Andover in accordance with the terms of Part I, Planning and Authorization and this contract to be dated January 8, 1975, second by Councilperson Windschitl; the Clerk polled the Council; Councilperson HOlasek, no, , (Councilperson Holasek'stated the contract was too open ended), Mayor Schneider, abstains, Councilperson ¡Vanderlaan, yes. Motion carried. ^., L' it' 'i^'.!,'~": ,r¡ - - . ", ~/'~ Special City Jncil Mee g Jsnuary 8. 1975 Page 3 Council discussed L H T Investment. Prairie Road and tapes for City Council Meetings. No decisions were made. Moved by Councilperson Holasek, second by Councilperson Rither that the meeting adjourn. Motion carried unanimously. Meeting was adjourned at 11:45 p.m. , ' / 4 J0{£0 . , (2UlR..':/0j Arthur Jaworski. Acti~ erk, City of Andover EHLERS 1\ ASSOCIATES, INC. FINANCIAL CONSULTANTS !=IRST ra~"i'J:\IAL-SOO-L1NE CONCOURSE 507 MARQUETTE AVE. MINNEAI'OLlS,MINNESOTA55402 339-8291 (AREA CODe 612) PROPOSAL AND AGREEMENT INDEPENDENT FINANCIAL CONSULTING SERVICE I I To: The City Counci 1 January G, 1975 I Andover, Minnesota I ! , i (The following is'a proposal to engage Ehlers and Associates as financial con- I sultants in two areas of work: (1) to suggest and analyze all financing options , available to the community, provide computer services, attend such meetings and I p"epc"e "Iritten material and reports necessary to properly explain the project ! fino:1cing and (2) to execute the financing by the sale of obl igations. \'Ie may be i employc:d under either or both parts. For example, if you are unsure whether o~l ¡gations would be sold we could be employed initially under Part I only. Or if the obl igations are already authorized we may be employed only under Part II. You should only employ and pay for fiscal services needed. ',ihen compa ring cos ts some ca re shou 1 d be exerc i sed tha t the type and qua 1 i ty of , services offered are comparable.) , I Pursuant to your request, we submit the follm'lÌng offer to provide independent ¡ finoncial consulting services relative to the financial planning, authorization, sale 2nd issuance of obI igations and/or assisting in securing state, federal or , other funds for your proposed project. ' , I D2f:~ition5 ! I CO~!1unity means the state, county, city, to'"m, school district or other govern- elent2: subdivision to ,,,hich this proposal is addressed. ¡ Gov~ rncnen t meal"s the adm i n i s t ra t ion, coun ty boa rd, city counc i 1, tm·m boa rd, i sc~co: board or other body or assembly charged with the management and control ' of the commun i ty'. lihere the words "you" or "your" appear, they shall refer to the sovernm~nt a~ defined above to which this may be addressed. CO:'lQany refer) to Ehlers and Assoc iates ~ Inc. or its successors. The \-Jords '\-Ia" Dr "us" or I"our" shall mean the company. ObI igations ~eans any bonds, notes, certificates of indebtedness, warrants or o:nar ¡ns:rument~ or indebtedness which may be issued by the government to obtain ~ucds for a capita] improvement project in or for the community. AL..I lf' bL ·d·· f' I ut:lor,zat,on means approva 0 a project y t!le require majority 0 voters or , approval by the ~over"¡ng body or other agencies rrom which approval for the ! ?"oject must be obtained follm.¡ing the required hearings and procedures ,', i \':h2ra no electio'n is required, so that no further perr:lission or Ðpprmial. ' procedurcs arc neeòed prior to issuance of obì igations for the project. ;/1 \\ PiJge 2 ?r0j~ct refers to the community capital improvement(s) on I.hich the government or-¡ts administration shall have directed us to perform financial consulting scrv!CCSa \1::: s hi) 11 : PART I SERVICES - Planning and Authorization 1. Serve as the government's Independent financial consultant. 2. Cooperate in every way with you, your architect or engineer, attorney and other authorized representatives. 3. Study existing and potential future finencial commitrænts of the munici- p31 ity, its economic resources and other pertinent sociiJl and economic date:!. 4. Study all available financing options for your project. 5. ',:ith the iJid of our c08puter services and exclusive computer programs, project the effect of any proposed financing options on local taxes iJnd other revenue biJses through the finiJncing period. G. Submit written reports, including printed computer projections, to the government outl ining the feasibi] ity of the projects, compiJring methods of financing, interest costs, tax rates, util ¡ty rates, speci~d assess- ments and other revenues demonstrating various options iJvai]able to the co~~unity and their effect on long-range finance planning. , 7. P.ccommend f,inancing designed to best fit th~ resources and requirements of the community. 8. Consult with attorneys of your choice relative to all mInutes, resolutions ~nd proceed,ings necessary to 2uthorize the financing. , , 3. r,ttend ell of your meetings and pub] ic hearings necessary to properly explain the: project financing. I 10. Assist in the preparation of pub] ic informatlbn materials including brochures, hews releases and visual aids bearing on the financing. , I The "",,va c"'p10yment shall continue for 12 calendar rronths from date of execution' ...y t-;....'=> ....ov~rn:"r'''''nt"' J _ ,_ ~ ~., I.......... .:" I In rc:~rn for th~ services provided in Part I, we shall be reimbursed in 2ccordancci with the attached fee schedule, which cost is estimated at $3,000, not to exceed $iO,DOD, piJyable lupon completion of the services enuccerated above. The first bii1ing ror services shall not occur until de1ivery of our final draft finiJncia1 fe2s¡~¡1!ty report to you. I I Page 3 '/IP,T , , - Execution of Project Financing 1. R~frain from any d~aler or investor interest in obligations of the cO~Munity 2nd receive no compensation in connection with the project financing, either directly or indirectly, from any source other than the compensation and reimbursement paid us by the community and its government under the terms of this proposal. 2. ,Consult with attorneys of your choice relative to minutes, res01utions and proseedings necessary for the issuance of obligations. 3. Print and distribute a synopsis sheet to banks, insurance companies "nd others potentially interested In purchasing tax exempt securities in the secondary market. [, Research, author, print and distribute" thorough, accurate and attractive ,. prospectlls for the sale of ob1igations. 5. Advertise the sale as required and in such other financial publications as ~'J i 11 assure most competitive bidding for your obligations. , \·ine:re required or desirable, and in lieu of services specified in Sec t i on s ' o. 4 and 5 above (prospectus, advertising), negotiate on behalf of the govern- ment with interested purchasers for the sale of obligations to obtain the best possible terms thereon for the community. 7. If required or advisable, prepare and forward financial material to rating services to seçure a satisfõctory rating for the community's obI igations. 8. As an indeJendent agent, receive and complete bids for delivery to the sale on behalf of any underwriters requesting such service. , , <> Attênc! the :sale of the obI igations, compute bids ~~d advise you as to their ~ . ûcceptab i 1 ity in the I ight of bond market conditions. ! 10. Supervise the printing and execution of the obligations. I 11. Coordinate ~ur efforts with those of l6cal counsel and recognized bond approving ~ttorneys of your choice to assure a valid approving opinion as to the legality of the obI igations. , , , 12. S~pervise delivery of the obI igations, closing the financial transaction 2nd delivery of the proceeds to the govern~ent. I 13· éÎs independent consultðnts having no fin8ncial interest in the transaction, assist in the investment of the sale proceeds consistent,with safety and the mon~y ~eeds of the com~unity. P"ge 11 11. Provide" record book and all necessary data fpr the use pf the government '. and its administrators through the maturity of the issuea 15. Maintain copies pf all proceedings until the final maturity of the obl ig2tions. i" return for' the services provided under Part II above in connection with the fina~cin9 of a project and for each issue or series of obligations we shall be entitled to a fee, due and payable only upon the successful sale of the obl iga- tiQ~5 0; com8jt~ent from the appropriate state or federal agency of a grant or 103., for the project, as follows: $9.00 per $1,000 for the first $300,000 bonds issued; $5.00 per $1,000 for the next $500,000 bonds issued; $2.50 per $1,000 for the next $1,200,000 bonds issued; $1.25 per $1,000 for any a~ount in excess of $2,000,000. (See table attached for approximate fee for project.) The gross fee for any offering processed under Part II shall be not 1 ess than $2,500. \:h~re ~ore than One bond issue, is sold In a single offering under Part II, the fC3 for th~ s~al ler issue(s) of the offering shall be reduced by ,twenty-five pe rcen t, provided, h01,..¡eve r , that the fee for any issue processed under Part II sn311 not be Jess than $2,000. , , From said fee we:are to pay the costs of computer services furnished or ordered by t:s in contlection 1dith is 5 ues processed under Part II, advertising the sale, pr~p~ration and distribution of the sale prospectus, printing of the obl ig2tions 2n(j nor~al t rave 1 and overhead expense. All legal fees and bond rating expenses s ~311 ' . db' , De pa! y: tne governM2.nt. i , It is further agreed that you reserve the right to reject all bids secured for tn" obI igations ':'¡thout obl igation 'to us for any fee under this Part II. If the obI ¡gatio~S or any part thereof are to be purchased by or issued to any sta:a or federal I agency, our fee under this Part II shall be 50% greater than the ð~ount derived from the above schedule. I 1 , I Page 5 . L ;:-:1 ¡ ~a t i O~ of L i ab i 1 i ty; Bond l1arket and Interest Rates The bond ~arket and interest rates can be volatile and rast changing, subject to factors beyond the control or kno~ledse or the consultant, and Ehlers and lissociat,,,s shall not be 1 iable for differential interest costs which might be ¿2tcr~inable only after the sale. For exa~ple, should \1e recommend a bond sale and . . later appears that, had the sale been advanced or' postponed, a 100'Ier , - interest rate might hðve been obtained, the company shall not be held 1 i ab 1 e for tn~ differential in te res t cos t. HO':lê ve i" , Ehlers and Associates sha 11 endeavor to inrorm the cl ient government or 211 those factors bearing on bond market conditions, so rar as such facts C3n b~ kno'.tln. ! n f ì a t i on ~ Delayed Project Th~ fees stated herein shall govern ror the t"le1ve calendar rronths fol1O\,¡ìng first execution of this agreement. Hm..¡ever, if the project is not completed \~ithin that period said fees shall be increased by a factor as determined from official cost of 1 iving indices. SC>8cial P rov i s ions , Page 6 This 3greement shal1 continue in effect subject to ter~ination by either p3rty upon 60 days written notice. R=spectful ly sub~ìtted, EHLE?,S i'.::O ASSOCIATES, I tiC. ',C r2 r 1/8/75 >lJ~-'¿""r~ ~, / Of the above proposal, Partes) ð'h.-t- is (are) hereby accepted by The City Council, Andover , Minnesota by its Ðutnorized officers this p d day of )v7r~- , 19J{':- ,tf' . , dt~b/v (¡ J! By: rffl;;:;'" /IJ~ ,~¿../r é,¿/! A':test: _ '{?ß¡¿(Y¿Z;V/ j' , ' ' ,\. i Add~nda: ~ For Services Not Enumerated rces For services enumerated under P~rt I and for such additional servi ces required but not listed in the foregoing, unless othen-dse agreed, Ehlers and Associates shðll be a 1) ol'led fees to be deterQined as fo 1 1 O"IS : i. Account executive time (actuð 1 time in office or' in consultation with you); per hour, per person $45.00 2. Para-professional timE: (actua 1 time in office or in consultation with you); per hour, pe r pe rson $30.00 3. ïravel time, account executive using fastest r.lé':ans; per hour, per person $25.00 4. Travel expense (to and from our office by most direct highway route) ; per mile'" 15¢ ""?J us lodging ~nd meals. If air travel is required, cost will be b ill ed in the a~ount of commercial fare or at a 1 iquidated rate of 20¢ per statute air Qile if company aircraft or rental aircraft is used. 5. COmputer; per hour of connect time (not including account executive time) $40.00 6. Secretarial and clerical 'dark; per hour, per pe rson . $10.00 ,-.- 7. Printing, photocopy for other reproduct ion of Cost plus 20; documents for hand1 ins 1 I 1 Fees shall be b i 11 ed on the first of each month following the rendering or such service and >1i1l be due within 30 days thereafter. A.2 CALCULAï ON OF FEE WIDER PART II EHLERS AND ASSOCIAïES PROPOSAL Secu ri ty Fee for Issue Part II Ninimum fee " $ 2,500 $ , 300,000 2,700 400,000 3,200 500,000 3,700 600,000 4,200 700,000 4,700 800,000, 5,200 900,000 5,450 1,000,000 5,700 1 , 100,000 5,950 1,200,000 6,200 1,300,000 6,1,50 1,400,000 6,700 , 1,500,000 6,950 1,750,000 7,575 2,000,000 8,200 2,500,000 8,825 3,000,000 9,450 4,000,000 ' 10,700 5,000,000 11,950 7,500,000 15,075 10,000,000 18,200 ~-'---= :--~ ': r-)ì ,£\, Tom, KING, DUVALL, ANDERSON AND ASSOCIATES INCORPORATED ~__.: ':__;:, _~~.L.:.~~::] ENGINEERS AND ARCHITECTS 140B PIONEER BUILDING SAINT PAUL, MINNESOTA S5101 224-7391 OWEN J. BEATTY DARR:::L H. DERKOWITZ ROBERT A. nOYE,H JAMES C. BROTEN ARNOT J. DUVALL HUGO G. ERICKSON WILLIAM J. FEYLJER January 8, 1975 ROYCE ß. HAN.sSN STEPHEN M. .,~^rnLEY CLIFFORD E. .JOHNSON DuWAYNE H. KA~M^ ,-Ionorable Mayor and City Council J. THOMAS KIRK DAVID W. KlnKWQ'_D A. DEAN LUNDt-;OL~" 1\.nQover, Minnesota ROBERT T. MALONEY RICHARD D. MENKE:N l.EONARD G. MILI_ER WAYNE A. OLSON DUANE I. PREW RUDOLPH P. R/\1TOR Re: Proposed Water and Sanitary l'ia8ERT R. RYDER WILLIAM T. SHErHDAN AGE J. SPERLING Sewer Systems Ar-iNOLD M. STEFFES WALTJ!R W. THORP!: Commission No. 6266 JAMES 1::. VOYEN NATHAN F. WEQER GEORGE; J. SCHROEPFER G<::n tlem.en: We are writing to provide the City Council with information on the :inancing of the proposed water and sanitary sewer systems to serve the Crooked Lak'e Area, Northwoods Addition Area, Red Oaks Manor Addition Arca and Green Acres Addition Area. I There are many different methods of assessing the costs of City Water a~d Sanitary Sewer Improvements. We will review several methods that the Cou';'cil can consider at this time. We recommend presenting one selected method to the property Owners in the mail out. However, we can rc:view several methods at the public hearing on January 23, 1975. I ' One <;f the most important considerations in establishing an assessment policy is to be consistent nOW and in the future. Vie have proposed assessment , methods whi::h will provide for equitable financing for either all or a part of the Total Trunk Sanitary Sewer and W2-ter System. I The following methods are presentee' for consideration: I TRUNK SANITARY SEWER ASSESSMENT METHODS I ?vlethod ~o. 1 - Trunk Connection Charge 1. Existing Dwellings 609@ 1,000 $ 609,000 2. Future Dwellings 1694 @ 1,000 1,694,000 3. Frontfootage 38,400 ft. @ 16.00 614,400 4. Total $ 2,917,400 -~- Method No.2 - Trunk Area Assessment l. Existing Area in Feasibility Study Area 362 acres @ $900 $ 325,800 2. Remaining Area in Urban Planning Area 2195 acres @ 900 1,975,500 3. Front footage 38,400 ft. @ 16.00 614,400 4. Tota 1 $ 2,915,700 Method No.3 Combination Trunk Connection Charge And Area Assessment l. Existing Dwellings 609 @ $500 $ 304,500 2. Future Dwellings 1694 @ $500 847,000 3. Existing Area in Feasibility Area 362 acres @ $450 162,900 4. Remaining Area in Urban Planning Area 2195 Acres @ $450 987,800 5. Front Footage 38,400 ft. @ $16.00 614,4JO 6. Tota 1 $ 2,916,600 I LATERAL SA:'lITARY SEWER ASSESSMENT METHODS Method No. 11- Front Footage Method l. Front Footage 87,400 ft. @ $17.90 $ 1,565,000 Method No.2, - Combination Front Footage & Lump Sum Sewer Stub Method l. I Front footage 87,400 ft. @ $16.00 1,398,000 2. Sewer Stub 750 @$300 $ 225,000 3. , Total $ 1,623,000 Method No. 31- Lump Sum Method l. I Assume 87,400 ft. @ 100 ft. Lots = 874 Lots 2. Lump Sum Assessment per lot = $ 1,565,000 = $1800.00 874 -2- TRUNK WATERMAIN ASSESSMENT METHODS Method No. 1 - Trunk Connection Charge 1. Existing Dwellings 609@ $1,000 $ 609,000 2. Future Dwellings 1884 @ $1,000 1,884,000 3. Front Footage 89,200 LF@9,00 802,800 4. Total $ 3,256,000 Method No.2 - Trunk Area Assessment 1. Existing Area in Feasibility Study Area 362 Acres @$960 $ 347,500 2. Remaining Area in Urban Planning Area 2195 Acres @ 960 2,107,200 3. Front Footage 89,200 @ 9.00 802,800 4. Total $ 3,257,500 Method No.3 - Combination Trunk Connection Charge And Area Assessment 1. Existing Dwellings 609 @ $500 $ 304,500 2. Future Dwellings 1884 @ 500 942,000 3. Existing Area in Feasibility Study Area 362 Acres @ $475 172,000 4. Remaining Area in Urban Planning Area 2195 Acres @ 475 1,042,600 5. Front Footage 89,200 @ 9.00 802,800 6. Total $ 3,263,900 I LATERAL WATERMAIN ASSESSMENT METHODS I ' Method No. 1 - Front Footage Method I 1. Front Footage 67,300 ft. @ $9.70 $ 654,000 I I -3- Method No. 2 - Combination Front Footage & Lump Sum Water Stub l. Front footage 67,300 ft. @ 9.00 $ 605,700 2. Water Stub 750 @ 250.00 187,000 3. Total $ 792, 700 Method No. 3 - Lump Sum Method l. Assume 874 lots to be served 2. Lump Sum Assessment Per Lot = $ 654,000 = $750 874 We will review the above financing plans with the City Council at the January 8, 1975 meeting. Yours very truly, TOLTZ, KL1\fG, DUVALL, ANDERSON AND ASSOCIATES, INCORPORATED dv\) (lJO-t¡,LC ecJ(~L(,-_ DuWayne R. kasma P. :¡;;. -4- _.