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HomeMy WebLinkAbout12/10/1985 TENTATIVE AGENDA Adj .Reg.Session SHAKOPEE, MINNESOTA December 10, 1985 Mayor Reinke presiding %� Roll Call at 7 :00 P.M. - Assembly Room at Scott County Courthouse GGroup Health and Life Insurance Bids Bond Sale for Tax Increment District No. 6 Res. No . 2488 - Determining the Necessity for and Authorizing the Acquisition of Certain Property by Proceeding in Eminent Domain for Purposes of Constructing Multi-Family Housing for the Senior Population 5 7 :30 P.M. PUBLIC MEETING - Holmes Street Storm Sewer Laterals Other Business: b] CP7 �7/r] Five Minute Recess 8] Convene in Executive Session: a] 1985 Local 320 Public Works Contract b] 1986 Local 320 Police Contract 91 Reconvene as City Council 10] Adjourn to Tuesday, December 17 , 1985 at 8 : 00 P .M. John K. Anderson City Administrator TENTATIVE AGENDA Housing Authority in and for the City of Shakopee, Minnesota Special Session December 10 , 1985 Chairperson Vierling Presiding 1. Roll Call at 7 : 00 P.M. 2 . Accept the Special Call. 3 . Resolution No. 85-27 A Resolution Determining the Necessity for and Authorizing the Acquisition of Certain Property by Proceeding in Eminent Domain for Purposes of Constructing Multi-Family Housing for the Senior Population. 4. Other Business a. b. 5 . Adjourn Jeanne Andre Executive Director Shakopee HRA SS �� d GG ��Giv► '�'' L` `'Cf"ow.. CowNa.` ����a i RESO:=-ION NO. 8-5-27 RESOLUTION DET EREINING T E NECESSI'T'Y 'FOR r.ND -U'_HO RING THE OF CLD=r.IN =ROP=� 7NEl' INENT ICV1 J1jVV •t -T- Pi RPOS�S OF CONSTRUCTING r'.u. SENIOR PO ,1,'.TIONHOUSING FOR T^E - L WHEREAS , the Housing and Redevelopment Authority in and for the City of Shakopee has heretofore determined that it should assist in the acquisition of property for development of multi-family housing for the senior population in the downtown redevelopment area; NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF SHAKOPEE (HRA) AS FOLLOWS: 1. Acquisition of the following described property is necessary for the purpose of assembling land for the construction of multi-family housing for the senior population in downtown Shakopee. Said property is described as Lots 4 , 5 , 6 , 7 , 8 and the East 38 feet of Lot 9 , Block 32 , Shakopee plat. 2 . The city attorney and HRA officials are hereby authorized and directed to take all steps necessary to acquire by eminent domain the above described property for the above described purpose. The city attorney and other HRA officials are further authorized to take all actions necessary and desirable to carry out the purposes of this resolution. Adopted in Special Session this day of 1985 . Chairperson -mmF-1m, City Clerk- Approved lerkApproved as to form this day of 1985 . City Attorney TO: John K. Anderson, City Admininstrator FROM: Jeanne Andre, Community Development Director RE: Bond Sale for Tax Increment District No. 6 DATE: December 5 , 1985 Introduction• A bond sale for tax increment district No. 6 was tentatively set for December 23 , 1985 , at the Council ' s December 3 , 1985 , meeting. All details of the sale have now been set and Council confirmation of the arrangements is needed. Background• The amount of the sale has been set for $660 , 000 . Bob Pulcher of Springsted will be sending a new schedule and explanation of this sale. The sale/award was unable to be set for 6 : 30 a.m. on December 23 , 1985 , because Mr. Pulcher needs to get the bids the morning of the 23rd. Mr. Pulcher indicates that he would like to have the award at noon in order to allow the successful bidder the opportunity to resell the bonds later that day. This schedule should provide for better interest rates than a sale at the end of the day. Mr. Pulcher has suggested that many cities give the administration the authority to award the bid with the Council meeting later to confirm the award. The Assistant City Attorney has determined that this procedure is not precluded by law and is acceptable because the selection of the lowest bid is administrative in scope. Requested Action: 1. Move to ratify the sale of $660, 000 G.O. Tax Increment Bonds, Series 1985A for Tax Increment District No. 6 and authorize and direct the City Clerk to insert into Resolution No. 2485 the amount of $660 , 000 and be authorized to certify the same. 2 . Authorize the City Administrator to conduct the sale and award the bid for the $660 , 000 G.O. Tax Increment Bonds , Series 1985A at 12 noon on December 23 , 1985, with the City Council to meet at 6 : 00 p.m. the same day to confirm the sale. tw LAW OFFICES CHARTERED Marschall Road Business Center Phillip R. Krass 327 Marschall Road Dennis L. Monroe P.O. Box 216 Barry K. Meyer Shakopee, Minnesota 55379 Trevor R. Walsten Telephone 445.5080 Peter L. Cooper Live Building Elizabeth B. McLaughlin MEMORANDUM 218 Pine Street Wm. Huber t Susan L. Estill P.O. Box 316 Chaska, Minnesota 55318 Telephone 448.7666 TO: Honorable Mayor and City Council City of Shakopee FROM: Phillip R. Brass DATED: December 5, 1985 RE: Pre-Authorization of Bond Sale Background I have been informed that on the 3rd of December the City Council has authorized the sale of bonds to be utilized for public purposes. It is my further understanding that Springsted and Associates is currently setting up the sale of said bonds by public bidding, and that those bids will be opened at noon on the 23rd day of December. I understand that it is impossible for the City Council to meet at noon on the 23rd of December but that it remains important that the bonds be awarded at that time and date so that they may be sold during the afternoon of the 23rd and not laid over for sale on the 24th of December, Christmas Eve. By law we must award the sale of these bonds to the lowest responsible bidder. My understanding is that the Council desires to know whether or not it may authorize John Anderson, Shakopee City Administrator, to award the sale of those bonds to the lowest responsible bidder immediately upon the 12 o'clock noon bid opening on the 23rd of December, with Mr. Anderson's actions to be ratified at a meeting of the City Council at 5:00 p.m. that same date. Issue May the City Council authorize its City Administrator to make such an award to the lowest responsible bidder and ratify that action at its 5:00 p.m. meeting on the 23rd, and would such actions be legal? Response It is my opinion that the Council may in fact authorize Mr. Anderson to take the action above-described. The action is in fact ministerial only since the City has no option but to make the award to the lowest responsible bidder. Moreover, the time between the award of the bid and the ratification thereof is exceedingly short. To conclude otherwise would put the City in a position of being unable to sell the bonds needed, or to sell them only at a higher interest rate, both such options costing tax dollars. Recommendations I recommend that the City Council by motion authorize and direct its City Administrator to award the sale of said bonds to the lowest responsible bidder at the December 23rd 12 o'clock noon bid opening. Said award by Mr. Anderson should be conditioned upon the recommendation of the City's Fiscal Consultant, Springsted and Associates. Action Required Motion to authorize and direct the City Administrator or his authorized representative to, on behalf of the City of Shakopee, authorize the sale of bonds at noon on December 23rd to the lowest responsible bidder, upon recommendation of Springsted and Associates. ~ ' TO: Joh: K. Anderson, City Administrator FROM: Bregg Vcxiart, Finan= Vrs001- RE: Grouo Haaltn 6 Life Insu~ance Bits DATE: Decmber G, 19B5 introduction and Backpround The City has opened bids for the employee health and life insurance. Dwight Tange attended the opening and has reviewed the bids. Pttached is a schedule with information on the bids. Included is some more detailed information on the three best bids received. The bid from Firemans Fund was only slightly 021000) less than Bankers Life but has. some irregularities in the bid and undesirable differences in the plan. A meeting was held Thursday with the employees and Mr. Tange to review the bids. There was no employee response in support of any plan other than the current Bankers Life plan. The average family cost is currently $220/mo. and the new rate would currently be $195/mo. The single rate goes from an average of $65/mo. to $81/mo. The total monthly bill from Bankers would show a small decrease based on the employment and wages in the specifications. The employees requested that Council provide dental coverage, The Police Union has the clause in the contract for 1985 that the City will provide dental if the union unanimously requests the coverage. Staff will gather some information on dental for council to consider in the near future. The various bid material is available for Council to consider if they desire' Mr. Tange's recommendation is to stay with the current Bankers Life plan. Alternatives l. Accept Bankers Life bid for current plan 2. Rebid 3. Accept another bid Recommendation Alternative 1. Actj2n Requested, Move to award the bid for Employee Group Health and Life Insurance to Bankers Life. - 'All -1-1ye ;v-2' t� ,' I�Grn�fi die - s COME a��_ Bankers Lr fe , �znPHP�l DC7 µm 4�. :,. Gurrer?f fPlara 14!i5r- ?o el- Aar-) ware Minire, Madi me F�1-7 j 177,5'-0 33 3 ba,aq �9�, iS !oDo.J�D 6,40 Dip. 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' ro lard:«. - .c3>>,aq Fi rid c erg e - �,m Ps, 79 -15a3y�. S5a3,ygX I2monfhS - 66a81, 76 foal claims break euen. .w� c v a , 41 13 r LL _¢p }q Q - W vci75 sz N U V O' J ✓1 QL zr- fz t C10 0) ract of Minutes of Meeting Council of the City of Shakopee , 3cott County, Minnesota e call and notice thereof a regular or the City Council of the City of Shakopee, �sota, was held at the Shakopee City Hall on the 3rd day of December, 1985, commencing at 7 : 30 o 'clock P.M. , C.T. The following Councilmembers were present: and the following were absent: The following resolution was presented by who moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR THE ISSIJANCE AND SALE OF $660,000 GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1985A BE IT RESOLVED by the City Council of the City of Shakopee, Minnesota, as follows: 1. It is hereby determined: (a) That the Housing and Redevelopment Authority in and for the City of Shakopee, Minnesota ( the "Authority" ) , has undertaken or will undertake the following public improvements ( the "Improvements" ) within or for the benefit of the Authority ' s Minnesota River Valley Housing and Redevelopment Project No. 1 , pursuant to and in full conformity with Minnesota Statutes, Chapter 462 and Sections 273 .71 to 273 .78, inclusive: TOTAL BOND ISSUE $660, 000 (b) That the Authority has requested that the City issue its bonds to provide financing for the Improvements and that the Authority and the City enter into the tax increment pledge agreement respecting such bonds required by Minnesota Statutes, Section 273 .77 (a) . (c) That it is necessary and expedient to the sound financial management of the affairs of the City and the Authority that the City issue its bonds pursuant to Minnesota Statutes, Chapters 273 and 475, to provide financing for the Improvements . 2 . The City shall therefore issue and sell its $660 , 000 General Obligation Tax Increment Bonds, Series 1985A (the "Bonds" ) , to provide financing of the Improve- ments, and $9 ,900 of such amount shall represent additional bonds issued pursuant to Minnesota Statutes, Section 475 . 56, as additional interest required to market the Bonds at this time. The Bonds shall be issued and sold in accordance with the following Official Terms of Offering: 1 OFFICIAL TERMS OF OFFERING $660,000 CITY O: SH:AKOPEE, MINNESOTA GEt,Z---RAL OBLIGATION TAX II4CREMENT BONDS, SERIES 1985A Sealed bids for the Bonds will be opened by the City Administrator or his designee on Monday, December 23, 1985, at 12:00 Noon, Central Time, at the offices of SPRINGSTEO Incorporated, 800 Osborn Building, Saint Paul, Minnesota 55102. The City Administrator will be empowered to award the Bonds following the opening of bids, subject to confirmation by the City Council on Monday, December 23, 1985, at 6:00 P.M., Central Time. DETAILS OF THE OBLIGATIONS The Bonds will be dated December 1, 1985 as the date of original issue, and will bear interest payable on August I and February- I of each year, commencing August I, 1986. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. The Bonds will be issued in integral multiples of $5,000 of a single maturity, as requested by the Purchaser, and fully registered as to principal and interest. Principal will be payable at the main corporate office of the Registrar and interest on each Bond will be payable by check or draft of the Registrar mailed to the registered holder thereof at his address as it appears on the books of the Registrar as of the 15th of the calendar month next preceding the interest payment. The Bonds will mature February I in the amounts and years as follows: 10,000 1989 30,000 1995-1996 $45,000 2001 20,000 1990-1992 35,000 1997-1998 $50,000 2002 25,000 1993-1994 40,000 1999-2000 $55,000 2003 $60,000 2004-2006 The City may elect on February 1, 11/195, and on any interest payment date thereafter, to prepay Bonds due on or after February I, 1996. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid which have the latest maturity date will be prepaid first. If only part of the Bonds having a common maturity date are called for prepayment the specific Bonds to be prepaid will be chosen by lot by the Registrar. All prepayments shat I be at a price of par and accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition the City will pledge tax increment income from its Tax Increment Financing District No. 6. The proceeds will be used to finance various eligible project costs of the District. TYPE OF BID A sealed bid for not less than $650,100 and accrued interest on the total principal amount of the Bonds shall be filed with the undersigned prior to the time set for the opening of bids. Also prior to the time set for bid opening, a certified or cashier's check in the amount of $6,600 payable to the order of the City, shall have been filed with the undersigned or SPRINGSTED Incorporated, the City's Financial Advisor. No bid will be considered for which said check has not been filed. The check of the Purchaser will be retained by the City as liquidated damages in the event the Purchaser fails to comply with the accepted bid. No bid shall be withdrawn after the time set for opening bids, unless the meeting of the City scheduled for consideration of the bids is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates offered by Bidders shall be in integral multiples of 5/100 or 1/8 of 1%. No rate for any maturity shall be more than 1% lower than any prior rate. No rate nor the net effective rate for the entire Issue of the Bonds shall exceed the maximum rate permitted by law. AWARD The Bonds will be awarded to the Bidder offering the lowest dollar interest cost to be determined by the deduction of the premium, if any, from, or the addition of any amount less than par, to, the total dollar interest on the Bonds from their date to their final scheduled maturity. The City's computation of the total net dollar interest cost of each bid, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii) reject all bids without cause, and, (iii) reject any bid which the City determines to have failed to comply with the terms herein. REGISTRAR The City will name the Registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the Registrar. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the Purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SETTLEMENT Settlement will be on or before December 31, 1985 at a place mutually satisfactory to the City and the Purchaser. A single typewritten Bond for each maturity will be provided at settlement, which Bonds will be exchanged for printed Bonds on or about January 20, 1986. Delivery will be subject to receipt by the Purchaser of an approving legal opinion of O'Connor & Hannan of Minneapolis, Minnesota, which opinion will be printed on the definitive Bonds, and of customary closing papers, including a no-litigation certificate. On the date of settlement payment for the Bonds shall be made in federal, or equivalent, funds which shall be received at the offices of the City or its designee not later than 1 :00 P.M., Central Time of the day of settlement. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the City, or its agents, the Purchaser shall be liable to the City for any loss suffered by the City by reason of the Purchaser's non-compliance with said terms for payment. At settlement the Purchaser will be furnished with a certificate signed by appropriate officers of the City to the effect that the Official Statement did not as of the date of the Official Statement, and does not as of the date of settlement, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. OFFICIAL STATEMENT Upon request to the City's Financial Advisor prior to the bid opening underwriters may obtain a copy of the Official Statement. The Purchaser will be provided with 15 copies. Dated December 3, 1985 BY ORDER OF THE CITY COUNCIL /s/ Judith Cox City Clerk 3. The City Clerk is authorized and directed to adver- tise the Bonds for sale in accordance with the foregoing Oficial Terms of Offering and to cause the abbreviated notice of sale attached hereto as Exhibit "tall to be pub- lished in the manner required by law. The City Council shall meet on Monday, December 23, 1985, at 6 : 00 o ' clock p.m. , C.T. , for the purpose of considering sealed bids on the Bonds and taking any other appropriate action. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. J EXHIBIT A NOTICE OF SALE CITY OF SHAKOPEE, MINNESOTA $660,000 GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1985A Sealed bids for the purchase of these Bonds will be accepted by the City Administrator, or his designee, at the offices of Springsted Incorporated, 800 Osborn Building, St. Paul, Minnesota, until 12: 00 noon, Central Time, on Monday, December 23, 1985. The Bonds will be dated December 1, 1985, will bear interest payable semiannually commencing August 1, 1986, and will mature on February 1 in the following years and amounts Year Amount 1989 $10, 000 1990-1992 $20, 000 1993-1994 $25, 000 1995-1996 $30, 000 1997-1998 $35, 000 1999-2000 $40, 000 2001 $45, 000 2002 $50, 000 2003 $55,000 2004-2006 $60,000 Bonds maturing on or after February 1, 1996 will be subject to redemption prior to maturity on February 1, 1995 and any interest payment date thereafter at par plus accrued interest. Bidders must specify a price of not less than $650, 100 plus accrued interest, and interest rates for each maturity and a net average interest rate for the issue not exceeding the maximum permitted by law. A legal opinion will be furnished by O'Connor and Hannon of Minneapolis, Minnesota. The proceeds will be used to finance various eligible project costs in Tax Increment Financing District No. 6 . Dated: December 3, 1985 BY ORDER OF THE CITY COUNCIL Judith Cox City Clerk Further information may be obtained from the Issuer' s Financail Advisor, SPRINGSTED INCORPORATED, 800 Osborn Building, St. Paul, Minnesota 55102, 612/222-4241. Clerk ' s Certificate I , the undersigned, being the duly qualified and acting City Clerk of the City of Shakopee, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular or special meeting of the Shakopee City Council held on December 3, 1985, with the original thereof on file in my office and I further certify the same is a full, true, and correct copy thereof, insofar as the same relates to the issuance and sale of the City' s $660, 000 General Obligation Tax Increment Bonds, Series 1985A. WITNESS My hand as such City Clerk and the corporate seal of the City this day of 1985 . City Clerk City of Shakopee, Minnesota (SEAL) RESOLUTION NO. 2485 RESOLUTION PP,OVIDING FOR THE ISSUANCE AND SALE OF 5 GENERAL OBLIGATION TA :-IN=EMENT BONDS SERIES 1985-A IT RESOLVED by the Council of the City of Shakopee , P:innesota, as follows: 1. Bond Authorization. It is hereby found and determined that it is necessary and expedient for the City to issue and sell its General Obligation Tax-Increment Bonds , Series 1985-A, pursuant to Minnesota Statutes, Chapters 273 and 475 , and to obtain the best bid for said bonds at public sale, in the principal amount of $ as contained in Tax-Increment District #6. 2 . Terms of Sale; Notice. The City Administrator is authorized and directed to cause the Notice of Sale to be published once in the official newspaper of the City, and once in the Finance and Commerce, a financial periodical published in Minne- apolis, at least ten days before the date of sale. 3 . Sale Date. This Council shall meet on Monday, December 23 , 1985 , at P.M. ,sto receive, open and consider sealed bids for the purchase of the bonds , and to take such action thereon as is deemed in the best interests of the City. Mayor of the City of Shakopee ATTEST: City Clerk Approved as to form this day of 1985. City Attorney Sco- rF SPRINGSTED INCORPORATED PUBLIC FINANCE ADVISORS RECOMMENDATIONS FOR CITY OF SHAKOPEE, MINNESOTA $660,000 GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1985A STUDY NO. 3048 11 December 1985 SPRINGSTED Incorporated SPRINGSTED INCORPORATED PUBLIC FINANCE ADVISORS I I December 1985 Mayor Eldon Reinke Members, City Council Mr. John Anderson, Administrator Mr. Gregg Voxland, Finance Director Ms. Jeanne Andre, Community Development Director City Hall 129 East I st Avenue Shakopee, Minnesota 55379 RE: Recommendations for the Issuance of $660,000 General Obligation Tax Increment Bonds, Series 1985A These recommendations confirm the City Council's action of December 3, 1985 relating to the issuance of these bonds. The City now intends to finance eligible redevelopment costs associated with the Housing Alliance Corporation Project within Tax Increment Financing District No. 6. Based on information supplied by the City, we have prepared the following project budget: Land Acquisition $365,000 Relocation 15,000 Demolition 30,000 �- Public Improvements 97,625 Subtotal $507,625 Administration 5,000 Bond Issuance 15,925 _ Discount 9,900 Capitalized Interest 121 ,550 Total Project Cost $660,000 This issue contains an allowance for discount bidding in the amount of $9,900 or $15 per $1,000 of bonds issued. The allowance for discount bidding is a means of providing the underwriter with all or a portion of his working capital and/or profit for purchasing the issue. The discount thereby allows the underwriter to bid coupon rates at or near the reoffering scale. The underwriter may bid up to the maximum amount of the discount, in which case the City would receive not less than $650,100 in net bond proceeds. The bonds are expected to be repaid by the receipt of increment income generated from new development in the Tax Increment Financing District. The City anticipates the increase in the assessed valuation of the District to be $850,000 by December 31, 1987, the completion date of the project. It is 800 Osborn Building, Saint Paul, Minnesota 55102 (612) 222-4241 250 North Sunnyslope Road, Brookfield, Wisconsin 53005 (414) 782-8222 Recommendations - City of Shakopee, Minnesota I I December 1985 �3 Page 2 further expected the project will be 75% complete by December 31, 1986, ?enerating a "captured" assessed valuation of the District at that point of 637,500. The estimated increment income is calculated by multiplying these captured assessed values by the projected total City mill rate, currently 117 mills. Assuming no change in the assessed valuation of the District in the years following completion of the project, the increment income is estimated to be $74,588, collectible in 1988, and $99,450, collectible in 1989 through 2005, the final year of collection required for this issue. Springsted Incorporated has accepted the City's & HRA's projection of captured assessed value and we have made no independent evaluation of the validity of that projection. To the extent that the actual captured value does not meet the projection and assuming no change in tax rates, tax increment would fall below the anticipated level used herein, in which case the projected surplus might not develop, and/or the City might have to use other resources to pay debt service on these bonds. .. We have prepared Schedule A which provides an estimated debt service and cash flow projection of the issue. Columns I through 5 indicate the annual payments of principal and interest over the life of the issue. Column 6 represents the statutory 5% overlevy requirement, which protects both the City and the bondholder in the event revenues are not collected as anticipated. Column 7 lists the estimated annual increment income and the interest capitalized in the issue. Column 8 reflects the expected annual surplus or deficit resulting by subtracting the annual 105% levy amount from that year's increment income. Column 9 indicates the estimated cumulative surplus of the issue for each year over the term of the bonds. The first payments of interest only, due August I, 1986 and February 1, 1987, in the estimated combined amount of $64,450 will be paid by interest capitalized in the issue. Similarly, those interest payments due August I, 1987 and February I, 1988 will be met by the balance of the capitalized interest, $56,100. The August I, 1988 interest payment is to be funded by the first collection of increment income of the District. Thereafter, each remaining payment of principal and/or interest is expected to be fully paid by the increment income generated by the District. No property tax levies are anticipated for the debt service of these bonds. However, as the issue is a general obligation of the City, if at any point the actual revenues available are insufficient to meet scheduled debt service payments, the City will be required to utilize other resources, perhaps including a levy of property taxes for the amount of the deficiency. The City is provided the option on February I, 1995, and on any interest payment date thereafter, to prepay bonds in advance of their stated maturity, beginning with bonds due February 1, 1996. Should the City experience actual collection of increment income in amounts higher than now anticipated, the City has the opportunity to prepay bonds and terminate the District sooner than expected. This call provision is at a price of par and accrued interest. Those bonds subject to the call provision represent $510,000 or 77% of the issue. Recommendations - City of Shakopee, Minnesota 3 11 December 1985 Page 3 We recommend the City authorize SPRINGSTED Incorporated to make an application on your behalf for a rating of this issue by Moody's Investors Service, Inc. of New York. Moody's is presently faced with a tremendous number of rating requests, and it is unlikely this issue will receive a rating by the sale date. Moody's has established a policy of attempting to rate all issues prior to the settlement date but that may not be possible since this settlement must take place prior to January 1, 1986 if the issue is to escape the applicable adverse impact of the Tax Reform Bill which is to be voted on by the House this week. We anticipate the City's present rating of "A" will eventually be reaffirmed. Moody's will charge a fee for the rating which will be billed directly to the City and payable from bond proceeds. The City has set the sale date and place for receipt of sealed bids for Monday, December 23, 1985, at 12:00 Noon, at the offices of SPRINGSTED Incorporated. At that time, the City Administrator or Mr. Voxland will open the bids and Mr. Anderson will be empowered to award the sale of the Bonds subject to confirmation by the City Council at 6:00 P.M. that some day. December 23rd is the earliest date on which bids on these bonds could be taken due to the fact you did not decide to proceed with the issue until December 3rd. We have not, in my memory, offered bonds for sale this close to Christmas and we expect there will be less interest than normal in this issue from both prospective bidders and eventual purchasers. Therefore, it is critical that an award can be made by Mr. Anderson at 12:00 Noon so that the purchaser has at least the afternoon to attempt to sell the bonds to potential buyers. If the bonds could not be sold that day, they probably will have to be carried over into the next week which is not desirable from either the underwriter or the City's position. This uncertainty may cause bidders to bid a premium on this issue as a hedge. Respectfully submitted, SPRINGSTED Incorporated I I December 1985 Robert D. Pulscher /kat SCHEDULE A 0000 � 00000000 � 000000 0 _ J v> D �O z w•1 Z a -- w SCJ] coma No)' u) ONNlOMO r- -1rNNr O MNc V' c\ �cN 0 0) u) M N VW�O ul O)M E 6J .. '-t M M M r--1 M M N.-1 O d' N r V' M 0 lC a a rn •] a -� ul to r'yN u) V� rrO� to Mx)O OtCr 0 0 N -W r-0) Mtn r0N V' tO M.:M u)M .i .a NN N NNMMMm N O O O > N IP J J � W a N E , O \E OOMrNrNau)NO V' rrreF �ul O u) r H l? u U7 H MMN0 yr- ulMSM u) Ncr'-i NM V' 0) M 0. 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E E- W W E a m a4zz \\ c 43 Q U f' NN a ., rMM0 -gNMgwtnkorMQ) o '-qNMV'u),c v1 RCS _ m W 0 C MMMo o)ma+ a,o)rno�a rnc000000 aEc o a E0)o1x) 0� 0)O)a) a1a)a% a)alm0000000 4 z W O U "4-4'A -4 '1 -0 r1 'a'-t'4 '1'i-4 N N N N N N N •• w W z 0 0 ti •• W E V) >+ u �C C a �3 � O W O N 0 lO r M M 0'-t N M V• u)tO r CO x)0'-4NM V' 4 C a E �oXE E •J•1 MOO MMMT0) a)x)a) x)ON as a, ON0a000 E z W C7 �r )oc < < W ... a)a1x) a) x)x)a) a)a1 a)x)x)x)x)x)00000 O O U V).E C ,] ' r+-4 '-1 .-1'-t '-t .1 rt'i •- r 1'-4 r1 'i N N N 04 N E m 44 OFFICIAL TERMS OF OFFERING 000 CITY OF SFJKOOPEE, MINNESOTA GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1985A Sealed bids for the Bonds will be opened by the City Administrator or his designee on Monday, December 23, 1985, at 12:00 Noon, Central Time, at the offices of SPRINGSTED Incorporated, 800 Osborn Building, Saint Paul, Minnesota 55102. The City Administrator will be empowered to award the Bonds following the opening of bids, subject to confirmation by the City Council on Monday, December 23, 1985, at 6:00 P.M., Central Time. DETAILS OF THE OBLIGATIONS The Bonds will be dated December I, 1985 as the date of original issue, and will bear interest payable on August I and February I of each year, commencing August I, 1986. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. The Bonds will be issued in integral multiples of $5,000 of a single maturity, as requested by the Purchaser, and fully registered as to principal and interest. Principal will be payable at the main corporate office of the Registrar and interest on each Bond will be payable by check or draft of the Registrar mailed to the registered holder thereof at his address as it appears on the books of the Registrar as of the 15th of the calendar month next preceding the interest payment. The Bonds will mature February I in the amounts and years as follows: 10,000 1989 30,000 1995-1996 45,000 2001 20,000 1990-1992 35,000 1997-1998 50,000 2002 25,000 1993-1994 40,000 1999-2000 155,000 2003 $60,000 2004-2006 The City may elect on February I, 1995, and on any interest payment date thereafter, to prepay Bonds due on or after February I, 1996. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, those Bonds remaining unpaid which have the latest maturity date will be prepaid first. If only part of the Bonds having a common maturity date are called for prepayment the specific Bonds to be prepaid will be chosen by lot by the Registrar. All prepayments shall be at a price of par and accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition the City will pledge tax increment income from its Tax Increment Financing District No. 6. The proceeds will be used to finance various eligible project costs of the District. TYPE OF BID A sealed bid for not less than $650,100 and accrued interest on the total principal amount of the Bonds shall be filed with the undersigned prior to the time set for the opening of bids. Also prior to the time set for bid opening, a certified or cashier's check in the amount of $6,600 payable to the order of the City, shall have been filed with the undersigned or SPRINGSTED Incorporated, the City's Financial Advisor. No bid will be considered for which said check has not been filed. The check of the Purchaser will be retained by the City as liquidated damages in the event the Purchaser fails to comply with the accepted bid. No bid shall be withdrawn after the time set for opening bids, unless the meeting of the City scheduled for consideration of the bids is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates offered by Bidders shall be in integral multiples of 5/100 or 1/8 of 1%. No rate for any maturity.shall be more than 1% lower than any prior rate. No rate nor the net effective rate for the entire Issue of the Bonds shall exceed the maximum rate permitted by law. AWARD The Bonds will be awarded to the Bidder offering the lowest dollar interest cost to be determined by the deduction of the premium, if any, from, or the addition of any amount less than par, to, the total dollar interest on the Bonds from their date to their final scheduled maturity. The City's computation of the total net dollar interest cost of each bid, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii) reject all bids without cause, and, (iii) reject any bid which the City determines to have failed to comply with the terms herein. REGISTRAR The City will name the Registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the Registrar. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the Purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SETTLEMENT Settlement will be on or before December 31, 1985 at a place mutually satisfactory to the City and the Purchaser. A single typewritten Bond for each maturity will be provided at settlement, wF.;ch Bonds will be exchanged for printed Bonds on or about January 20, 1986. Delivery will be suF- ect to receipt by the Purchaser of an approving legal opinion of O'Connor & Hannan of W-meapolis, Minnesota, which opinion will be printed on the definitive Bonds, and of customary closing papers, including a no-litigation certificate. On the date of settlement payment for the Bonds shall be made in federal, or equivalent, funds which shall be received at the offices of the City or its designee not later than 1 :00 P.M., Central Time of the day of settlement. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the City, or its agents, the Purchaser shall be liable to the City for any loss suffered by the City by reason of the Purchaser's non-compliance with said terms for payment. At settlement the Purchaser will be furnished with a certificate signed by appropriate officers of the City to the effect that the Official Statement did not as of the date of the Official Statement, and does not as of the date of settlement, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. OFFICIAL STATEMENT Upon request to the City's Financial Advisor prior to the bid opening underwriters may obtain a copy of the Official Statement. The Purchaser will be provided with 15 copies. Dated December 3, 1985 BY ORDER OF THE CITY COUNCIL /s/ Judith Cox City Clerk MEMO TO: John K. Anderson, City Administrator FROM: Judi Simac , City Planner DATE: December 9 , 1985 Motion approved by Planning Commission regarding Housing Alliance project: "Motion to request City Council to take steps to indemnify the adjoining property owners within Block 32 from the tax impact of the sale of lots 4 , 5 , 6 , 7 , 8 and the last 38 feet of lot 9 only, within block 32 . " MEMO TO: Mayor and City Council FROM: John K. Anderson, City Administrator RE: Resolution No. 2488 - Determining the Necessity for and Authorizing the Acquisition of Certain Property by Proceeding in Eminent Domain DATE: December 6 , 1985 introduction The Shakopee City Council, at its regular December 3 , 1985 meeting, directed staff to draft the above mentioned resolution for the purposes of acquiring land for multi-family housing for the senior population. In addition, Council asked for additional clarification of the tax implication issues and legal issues regarding this particular acquisition. Findings The State Department of Revenue has provided the City with a letter dated December 5 , 1985 and signed by Lyle H. Ask, Director, Property Equalization Division. Mr. Ask has clearly addressed the two questions regarding equalization: ( 1 ) the definition of an arms-length sale and ( 2 ) the effect condemnation would have on the sale. The second letter attached is the memorandum from Rod Krass dated April 10 , 1984 addressing the legal questions surrounding this acquisition. Staff has been in contact with O' Conner Hannan regarding this subject and they will provide a updated legal opinion by the Council meeting on Tuesday night. Alternatives 1. Proceed with the passage of the condemnation resolution as drafted. The passage of the resolution would start the machinery for condemnation so that if we receive the legal opinion from O' Conner Hannan stating that condemnation is necessary we will be able to proceed in a timely fashion. 2 . Delay passage of the condemnation resolution pending further efforts at a negotiated settlement. This action would allow negotiations prior to initiating condemnation proceedings . 3 . Pass the condemnation resolution and authorize the appropriate City officials to meet with the property owner to determine if a negotiated settlement can be obtained. i Recommendation The recommendation that follows is given prior to the receipt of the legal opinion from O' Conner and Hannan. I recommend alternative No. 1 because it will allow us to proceed with con- demnation if necessary, but allows flexability to proceed under alternative No. 3 if that alternative is legally available. Council should also be aware that Planning Commission, at their December 5 , 1985 meeting, approved the Conditional Use Permit for the project and that we have received the formal written appeal from the Lebens for the project. This puts all appeals procedures in proper sequence for the upcoming Council appeals hearing on December 18 , 1985 . Planning Commission passed an additional motion requesting that City Council review the possibility of some sort of indemnification of property tax increases that might result from this project . for properties in Block 32 . Staff is investigating possible alternative ways to approach this suggestion and will have some suggestions for Council at the Tuesday night meeting on December 10 , 1985 . Action Requested Approve Resolution No. 2488 , Determining the Necessity for and Authorizing the Acquisition of Certain Property by Proceeding in Eminent Domain for Purposes of Constructing Multi-Family Housing for the Senior Population. JKA/jms RESOLUTION NO. 2488 RESOLUTION DETERMINING THE NECESSITY FOR AND AUTHORIZING THE ACQUISITION OF CERTAIN PROPERTY BY PROCEEDING IN EMINENT DOMAIN FOR PURPOSES OF CONSTRUCTING MULTI-FAMILY HOUSING FOR THE SENIOR POPULATION WHEREAS, the City Council has heretofore determined that the City of Shakopee should assist in the acquisition of property for development of multi-family housing for the senior population in its downtown redevelopment area; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SHAKOPEE AS FOLLOWS: 1. Acquisition of the following described property is necessary for the purpose of assembling land for the construction of multi-family housing for the senior population in downtown Shakopee. Said property is described as Lots 4 , 5 , 6 , 7 , 8 and the East 38 feet of Lot 9 , Block 32 , Shakopee plat. 2. The city attorney and officials are hereby authorized and directed to take all steps necessary to acquire by eminent domain the above described property for the above described purpose. The city attorney and other city officials are further authorized to take all actions necessary and desirable to carry out the purposes of this resolution. Adopted by the City Council this day of 1985 . Mayor of the City of Shakopee a ATTEST: City Clerk Approved as to form this day of 1985 . City Attorney CF THE ki NE' STATE OF MINNESOTA l DEPARTMENT OF REVENUE P. 0. Box 64446 St. Paul , MN 55164 December 5, 1985 Mr. John Anderson City Administrator City of Shakopee 129 East First Avenue Shakopee, MN 55379 Dear Mr. Anderson: In our telephone conversation of this morning you asked that we furnish you with a standard definition of market value for real property. A very common one would be: Real Property - Market value is the amount of money that probably would be arrived at through fair negotiations between a willing seller and a willing buyer, taking into consideration the uses to which the property may be put. The following important points regarding market value should be noted: It is the most probable price. It is not the highest, lowest, or average price. It is expressed in terms of money. It implies a reasonable time for exposure to the market. It implies that both buyer and seller are informed of the uses to which the property may be put. It requires an arm's-length transaction in the open market. It requires a willing buyer and willing seller, with no advantage being taken by either buyer or seller. It recognizes the present use as well as the potential use of the property. AN EQUAL OPPORTUNITY EMPLOYER Mr. John Anderson December 5, 1985 Page Two These points may be combined into the following definition of market value: Market value is the most probable price expressed in terms of money that a property would bring if exposed for sale in the open market in an arm's-length transaction between a willing seller and a willing buyer, both of whom are knowledgeable concerning all the uses to which it is adapted and for which it is capable of being used. You also asked if a sale to a governmental unit: would be included in our Sales Ratio Study. We are attaching a list of criteria that we use for accepting or rejecting sales. You will see that number 2, sales involving governmental agencies, would be rejected from our study. It would not make a difference if the sale was a result of condemnation or under the threat of condemnation.- We ondemnation:We trust this answers your inquiry. Very truly yours, LYLE H. ASK, Director Property Equalization Division (612) 296-5131 LHA:szc Attachments 1 1985 Sales Ratio Study Criteria The 1985 Study is the first study which will include adjustments for time and terms of sale. The final study will include both sales which are not adjusted and sales which are adjusted for financing. The criteria are similar to prior years with a few additional deletions. Sales of mobile home parks will not be used. Also, sale-lease backs will not be used. Item 26 is something to look out for. Many contracts are being rewritten and the certificate may appear to be reporting a new sale. These rewrites should not be used in the study. In addition, if the rewrite occurs within a year of the original contract, we plan on deleting both sales. The change of use criteria has been clarified so that the change from seasonal recreational residential to residential or vice versa will not eliminate a sale from the study. The terms of sale should be verified. The 1985 Study will use sales which occurred between January 1 , 1984 and September 30, 1985. Guidelines for Accepting or Rejecting Sales All open market arms-length sales should be accepted for the study. An "open market sale" is one in which the buyer and seller are acting prudently and the price is not affected by undue stimulus. Neither the buyer nor the seller must be under great pressure to complete a transaction within a short time. An "arms-length sale" is between two parties, each of whom is seeking to maximize his gain from the transfer. The sale price should reflect only the price paid for the real estate which was transferred. If part of the purchase price was for personal property or the business rights, the price should be adjusted. All adjustments must be documented. The following list spells out the general types of sales which do not meet the acceptance criteria and should be refected for the study. 1 . Old sales. (Sales before the study period or certificates filed to provide a deed after a contract is paid off) 2. Sales involving governmental agencies or public utilities (including railroad and pipeline companies) . 3. Sales involving charitable, religious or educational institutions. 4. Sales to avoid foreclosure. 5. Sales involving legal action such as foreclosures or divorces or bankruptcies, or where the assessor's value probably will be changed by board action or court action. 6. Sales of non-assessed property such as cemetery lots. Sales between related individuals or corporations. 8. Trades of properties or transfers in which non-monetary items are used as the medium of exchange . Non-monetary items include stocks, bonds, or personal property. 9. Split sales should be refected. 10. Partial-interest sales . 11 . Sales of incomplete or partially assessed structures. Sales should be refected if the property was improved between assessment date and sale. Improvements made after the sale should not invalidate a sale. 12. Change of use from one legal property class to another should be refected . An example of this type of use change would be from residential to commercial . However, a change of use class would not be involved if a grocery store became a pizza parlor--both would be classified as commercial property. One exception to this is change of class from seasonal-recreation residential to residential or vice versa. These sales will be used. 13. Sales in which the property is located in more than one county. 14. Sales of convenience to correct defects of title or change the character of the title. 15. Sales by representatives of estates to members of the immediate family:. 16. Sales to a trustee for the benefit of some beneficiary. 17. Sales for nominal consideration. 18. Sales of doubtful title or other non-arms-length or non- open market transactions. 19. Sales in which over half of the total price is personal property. tk 20. Sales of real estate for less than 3,500. 21 . Agricultural land sales less than 40 acres. 22. Sales of nursing homes. 23. Sales involving employee transfer or relocation. 24. Sales of mobile home parks. 25. Sale - Leasebacks. 26. "Sales" which actually are rewrites of the terms of a contract for deed. If rewrite occurs within a year of the original contract, both will be deleted. If it is more than a year, the original sale will be used. 27. Agricultural Preserves. 28. Sales with no down payment. Extreme ratios whether high or low are not a valid reason for refecting or accepting a sale. The extreme ratio may indicate a sale where extra verification work is required. (See: Sale Verification Procedure, Sales Ratio Unit, Property Equalization Division, Minnesota Department of Revenue, St. Paul , 55145, December 1982) . Agricultural property which includes buildings on less than forty acres of land is not included in the study. Information on these sales is collected and verified but it is placed in a separate area not used in the study. The information is needed to keep track of this type of property which could become significant. Split classification properties, that is, properties which the assessor lists in more than one legal class, will be included in the study in the class which contains the largest share of assessor's market value. Split sales, that is, sales where a portion of a larger parcel is sold, will be deleted. In the past, splits were included to increase sample size, but there have never been enough of these to be significant. Also, since different assessors treat splits differently, using splits has introduced an element of non-uniformity into the study. Law Offices of n KRASS, MEYER, KANNING & WALSTEN 1~ Chartered Suite 300 Marschall Roan Business Center Phillip R. Krass Paraleoals 327 South Marschall Road Barry K. Meyer Susan M.Brown P.O. Box 216 P Phili T. Kanning Barbara J.Heastrom Shakopee, Minnesota 55379 Trevor R. Walsten (612)445-5080 MEMOM DUM TO: Jeanne Andre, Executive Director FROM: Phillip R. Krass DATE: April 10, 1984 RE: Potential Conflict of Interest You have informed me that the Housing and Redevelopment Authority is consider- ing a project which may involve the consolidation in ownership by the IRA of an entire block for resale to a private developer. Among the property owners of the block in question are two members of the HRA (and therefore the City Council) . You have asked me whether or not it would be a conflict of interest for those HRA members to agree contractually to the sale of their land to the HEA. I have done a considerable amount of research as a result of your request and I have found the conflict of interest statutes and rules to be somewhat con- fusing and sometimes conflicting . I will attempt to set forth those statutes and rules as I believe they apply, and at the conclusion of this memorandum, I will recommend to you the course of action I believe to be the most proper under th_se circumstances . First of all, you should be aware that there is a separate statute governing conflict of interest for HKA members or employees . That statute is found in the general housing redevelopment statute which is 462.411 et. seq ., and is found specifically at Section 462.432, a copy of which I attach. This statute generally requires a disclosure of any potential conflict and sets forth rules governing the activities of the commissioner. This is a relatively new law repealing Section 462.431, which was much stricter and simply forbid any commissioner to have any interest, direct or indirect, with any property included or planned to be included in any project. This obviously is a sub- stantial change in the law and if this were the only statute in question, would minimize the difficulties faced by HRA commissioners . Unfortunately, statute 471.87 is a general statute precluding public officers from having a financial interest in any sale, lease or contract or benefit financially therefrom. Violation of that statute is a gross misdemeanor. I enclose a copy of 471.87 and you will note that it refers to a series of exceptions located in 471.88. The exceptions are narrowly drawn and involve such things as designation of banks and official newspapers and would not provide an exception to the circumstances you described to me. Page 2 Consequently, while it is apparent that the legislature intended by the adoption of Section 462 .432 and the repeal of Section 462 .431 to remove by the disclosure measures provided therein, any impediment to MA commissioners dealing with the HR.A on property sales, no comparable change in Section 471 .67 was made, and consequently, I would advise our HRA commissioners never to contractually agree to the sale of property in which they have an interest to the commission. I have received significant input on this serious problem from the League of Minnesota Cities and discussed it at length with the City's bond attorneys who helped establish our downtown redevelopment district. Our conclusion is that there does appear to be a solution to the problem and the solution is the acquisition of the property in question by ,eminent domain. If the HRA deter- mines that it desires to proceed with the project you outlined, it can recommend to the City Council the acquisition of the block in question by right of eminent domain. The Council is then authorized to proceed with that acqui- sition by condemnation. Our HRA commissioners will then receive for their property a value established by a three member condemnation panel, or if one party or the other appealed the condemnation panel's findings, then the valua- tion would be determined by a jury in Scott County District Court. Under those circumstances, no commissioner would be entering into any contract and there- fore will not have violated the law. I would like to emphasize that this method is not to be construed as an effort to circumvent the intent and purpose of the statute, but to the contrary, is considered not only a legitimate method of acquisition, but the only proper method of acquisition under the circum- stances you described. One final note of caution. The commissioners involved should not vote on recommendation of this acquisition and should abstain from any vote involving this acquisition or the project in question both as members of the HRA, and as members of the City Council. Under the law and those circumstances, the two individuals with conflicts would not be counted as a quorum and two of the remaining three HRA commissioners, and three of the remaining City Council members will constitute a majority with respect to any votes involving this project . I am hopeful this information will be of assistance to you and please feel free to contact me if you should have further questions . PRK:pk cc: Mark Nagel Enclosures ;rte P.IGKTS, POWERS, DUTIES 471-97 4-71.97 Public officers, interest in contract; penalty Except as authorized in section 471.88, a public officer who is authorized to take part in any manner in making any sale, lease, or contract in his official capacity shall not v �,.=.. oluntarily have a �• b- :.� ar _, personal financial interest in that sale, lease, or contract or per- " sonally benefit financially therefrom. Eve ry public officer who _ violates this provison is guilty of a gross misdemeanor. Laws 1951, c. 379, 1. Amended by Laws 1955, c. 41, § 1+ 5 ~ Historical Note -_ l v � y' As enacted this section provided: 412.311 and repealed St.1949, § 125.07, "Except as authorized in Section 2, a subd.4,find §020.04. ! , public officer who is authorized to take part in any manner in making Prior Laws: any sale, lease, or other contract in his official capacity shall not volun- Jlinn.St.1949,§620.04• tarily have a personal financial in- Laws 1941,c.228,§1, terest in such sale, lease, or contract Laws 1931,c.212. r or personally -benefit financially St.1927, § 10305. therefrom. Every public officer whoGen.St.190 §10305. r` N - violates this Gen.St.1913,§8817• +� • provision is guilty of a :-' gross misdemeanor." Rev.Laws 1905,§5032. t Laws 1951, c. 379 also amended St, Gen.Code,4,§66. * ' � Pen.Code, § 372. 1949, § 365.37 as amended and Cross References -; Area redevelopment agency officials and employees, see§ 472.06• " County commissioners,see§375.09. �•�►- �- County officials,see§382.18. rk a .j w Exceptions to prohibition,see§471.85. Highway department employees, see § 161.33. w - Merchandise not to be purchased from state agencies by public employees, see §15.055. E -- Statutory cities,council members,see§412.311. Town officers,see§365.37. " Uniform Municipal Contracting Law, see § 471.345. 7 Law Review Commentaries ~-� Constructive trusts. Edward G. tract, Feb. 1951, 35 Minn.Law Review y Jennings and Irving S. Shapiro, May 322• ` 1941, 25 Minn.Law• Review 667, 691. Sale of merchandise to city by Interest of public officer in munici- member of city council. April 1936, Pal contract. Jan. 1939, 23 Minn. 20 Minn.Law Review 564. 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(wA p (DO. �._ - K K_cry cD CS 1 K- 5 CD cD tDp=q ,' p CD �_ C w [°ro [n p O.,w•3-in _K CD -=..r w'c3 O - "-Z.;,.., `: n = .= K C•7 P+•...�.. • o_fv C O. ro o CD Z. < AS A ° w � -O3 C K °'En:5 "d o`- ,, -.e=rg o.� = C `< �._c a C.= -erro K r* ro tV" ro `w o a t'.an�s�--c.�... p• w .`"C �..^.e•r0 - ...� `r C �- n,�'O;p',.K.-�.m e.-� � ._. c.._.�£+� o�.0.� ^ro* *'_'O'.�---.� 'm� -°- .».�--.�n.c am_�°-.,w co o:o $ u --S n o� _S.� � _off? +- 7:-- c -� _-•- __ =mss- - :- -- - .: �a� LAW OFFICES KRASS & MONROE CHARTERED Phillip R. Krass Marschall Road Business Center Dennis L. Monroe 327 Marschall Road Barry K. Meyer P.O. Box 216 Trevor R. Walsten Shakopee, Minnesota 55379 Peter L. Cooper Telephone 445.5080 Elizabeth B. McLaughlin Livery Building Bryan Wm. Huber 218 Pine Street Susan L. Estill P.O. Box 316 Chaska, Minnesota 55318 Telephone 448.7666 MEMORANDUM TO: John Anderson City of Shakopee FROM: Phillip R. Krass DATED: December 5, 1985 RE: Housing Alliance Condemnation Authority of City of Negotiate Sale You have previously asked me how the Shakopee Housing and Redevelopment Authority and/or the City may obtain ownership of property needed for an elderly housing project from a member of the City Housing and Redevelopment Authority and be in conformance with state law. Over a year ago I sent you a memo after obtaining advise from O'Connor and Hannan, the City's bond counsel, indicating that the preferred method of handling such a situation was through condemnation. You now ask me whether or not the City, once having embarked on the condemnation of such property owned by an HRA commissioner, may complete said acquisition by negotiation. We are speaking in particular of the property owned by Jerry Wampach. I informed you and the Mayor some time ago that prior to any request by the City for information, Mr. Wampach had consulted with me relative to a direct sale to the Housing Alliance and in particular to the tax consequences to him of such a sale. Mr. Wampach is presently working with an attorney in our office on these various tax questions. I am there- fore unable to respond to your inquiry due to this potential conflict of interest. It is my recommendation that you do as I did a year ago and con- tact O'Connor and Hannan about this problem. Arlen Welte, formerly with that firm, informed me at the time that O'Connor and Hannan had significant experience dealing with this issue and I believe that law firm could assist you. Very truly yours, KRASS & MONROE CHARTERED 1 f �(llip R. Krass PRK:mj File No. 1-1373-_ cc: Jerry Wampach C I T' ' QF a;HAKC3Fa� _. INCQRPORM ED 1870 -rdGI14EE F'LNG DEFAR-r-71;T 125 E. 1st Avenue - 5hakopee. tinneson 55375-1376 (612) 445-3650 MEMO TO: Jahn K. Anderson, City Administrator FROM: Ken Ashfeld, City Engineers SUBJECT: Storm Sewer Utility Billiv,g 4 DATE: December 6, 1985 INTRODUCTION: Following a study establishing City of Shakopee storm sewer needs, City Council adopted an ordinance providing for a storm sewer utility to fund new construction and maintenance of storm sewer. The Holmes Street laterals project will be the first of the phased storm sewer program. BACKGROUND : The Holmes Street lateral construction cost was estimated to be $1, 152, 186. 00 in the feasibility report of February 1985. With 5% contingency, discount, issuance cost, etc. added to $1, 152, 186. 00 t he t of a 1 pr i nc i pa 1 becomes $1, 2 90, 000. 00. A report from Springstead Inc. indicated that the average annual dollar amount which needs to be generated is $213, 775. 00. Of this $213, 775. 00, 25% ($53, 444. 00) must come from the special benefit. The letters recently sent to property owners in the Holmes Street basin indicated a certain dollar amount they would be billed for special benefit. For a residential property that amount was $11. 73. This figure is subject to a reduction for the credit allowed because of the Holmes Street Trunk built in 1980. The credit on a residential property is $4. 84 leaving a bill of $6. 89. In addition there will be a bill City wide. The comparable residential bill will be $3. 44 quarterly. This plus $6. 89 quarterly for the Special Benefit results in a total bill of $10. 33. Attached are graphics that will be referred to at the Public Meeting. Y IN C7 �.. is J CO 00 y p CA 4-. Co N I '� -� P 0o W NN N j L -- Q to Z �� • � i 1 X ..i _._� D r < Ct) Z y D r - Z . m r r u Co m in I .. 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'� — � ► �ttl . �, ;, r rte a�► �r _tt�► rrrr �t�ir �, , ��► �__ _ . r ,qtr � r �rrir a tr ttti law =,t ► vp tt� •• iii � � t®t t�'�� tii� �ffiti � ► .. . iiitl � �,�i�► i i�ti� .. rtlt tib® i hitt iti ti�i� ttit! t� inti t t illi �ti Q t til , is it riot ri �r�o �t�► iii '�� r ��, �� rr'r �ittd tt�iit .• , ORi`tot ij � a ■tea ®is ! � sommommlKi OW r O' CONNOR & HANNAN MEMORANDUM DATE: December 10 , 1985 TO: Mayor Eldon Reinke and Members of the Shakopee City Council FROM: Daniel L. Wiles SUBJECT: POTENTIAL CONFLICT OF INTEREST The staff of the City has informed us that the proposed tax increment project to be undertaken by the Housing and Redevelopment Authority ("HRA" ) includes the purchase of land held by a sitting council member and HRA Commissioner. As the assistant city attorney feels that his relationship with such person would create the appearance of a legal conflict, the staff has requested our response to a scenario involving a negotiated sale of such land to the HRA. We direct your attention to a memorandum from Phillip R. Krass, Esq. , dated Apri1 "10, 1984 on the same subject. At the request of staff we have researched any changes in law occurring subsequent to that memorandum. As we have found no significant change in law, we agree with the conclusions drawn by Mr. Krass. In summary, the law is ambiguous and conflicting regarding transactions with members of a governing body such as an HRA Commissioner, as Mr. Krass correctly reported. Upon the analysis stated by Mr. Krass, we rest our concurrence that a procedure, such as a negotiated sale, in which a sitting council member and HRA Commissioner takes an active roll and gains a positive interest, presents a potential conflict of interest. Therefore, we must recommend that any action to obtain such property be taken through condemnation in a proceeding in which such council member and HRA Commissioner is an involuntary participant. I hope this information proves useful to you. Enclosure cc: Phillip R. Krass, Esq. I alert I[LI ILI 1 1111 IIIII Ell J1 league of minnesota cities November 26 , 1985 TO: MAYORS, MANAGERS, CLERKS FROM: Ann Higgins , Staff Associate SUBJECT: TAX REFORM THREAT TO TAX-EXEMPT STATUS OF MUNICIPAL BONDS AUTHORITY TO ISSUE TAX-EXEMPT BONDS UNDER IMMEDIATE THREAT Chances are growing that Congress may impose severe restrictions on traditional uses of municipal bonds. Action by the House Ways and Means Committee this past weekend signals that House action can be anticipated soon. Please contact members of the Minnesota Congressional Delegation (list attached) immediately . Indicate your opposition to the proposed sweeping limits and restrictions on cities' authority to issue municipal bonds. SECRECY SURROUNDS DETAILS OF HOUSE COMMITTEE ACTION Because Congress is not subject to open meeting requirements, the currently proposed proposed limits on local tax-exempt financings are the result of closed committee sessions . Actual legislative language for these proposals is not yet available. Therefore, the information in the media or provided informally by committee staff or members serves as the basis for much of what can now be reported. USE AND LOAN TESTS MAY ELIMINATE TAX-EXEMPT STATUS OF MANY PUBLIC IMPROVEMENT BONDS AND LEAD TO MORE COSTS FOR CITIES It must be clearly understood that proposed federal tax reform legislation now contains provisions that seriously threaten the continued use of tax-exempt bonds for public improvements . According to the actions of the House Ways and Means Committee, bonds issued by state and local government are governmental - and therefore tax exempt -only if less than 10 percent of the bond proceeds (or $10 million, whichever is less) is used by a trade or business and no more than 5 percent (or $5 million, whichever is less) of the proceeds is loaned to a trade or business. It means that cities (as well as other state and local units of government) will be able to issue tax-exempt bonds only as long as these use limits or "tests" are not exceeded . I 83 university avenue east, st. paul, minnesota 551 01 [31 21 227-5300 1 4 Y BOND ISSUES FAILING THESE TESTS ARE TAXABLE AND TERMED NONGOVERNMENTAL UNLESS AN EXEMPTION APPLIES. The following categories of municipal bonds fit within the exemption provided: small issue IDBS, exempt facility IDBS, owner occupied housing, and 501 (c) ( 3) organization bonds, BUT THE TAX EXEMPTION CURRENTLY ALLOWED FOR SOME TYPES OF FACILITIES, WHETHER PUBLICLY OR PRIVATELY OWNED, WOULD BE ENDED - SEE BELOW. THAT LIST INCLUDES INDUSTRIAL PARKS, GAS AND ELECTRIC UTILITIES, DISTRICT HEATING AND COOLING SYSTEMS, HYDROELECTRIC PLANTS, AIR AND WATER POLLUTION CONTROL FACILITIES, SPORTS, AND CONVENTION AND TRADE CENTERS. This means that municipal G.O. and revenue bonds for such improvements would be considered taxable. "429" improvement bonds for curb, gutter, or road extensions to subdivision developments might also be nongovernmental under such a restriction if private developers stand to gain by as little as 10 percent of the proceeds of that bond issue. MORE RESTRICTIONS See page 2 of the attached memo for a list of other bond uses which would automatically be placed under a new per capita volume limit in which cities would compete to obtain authority to issue tax-exempt bonds. Note that sewer, solid waste , and municipal water facilities are on the list. What that means is that after January 1 , cities must await the decision of the Governor or the state legislature to find out whether they will be able to issue bonds for these purposes as well as for any of the other public purpose listed above that fail the 10 and 5 percent use and loan tests . LIMITS ON TAX INCREMENT FINANCING Hundreds of Minnesota cities have made effective use of tax increment financing to assist needed development, to redevelop downtown commercial and industrial sections, and to provide financing necessary to aid in housing development. Only a limited number of projects would remain eligible under the strict limits set by the federal tax reform proposals. No acquisition, land write-downs, financing of development costs , etc. would be considered tax-exempt activity within provisions being considered by the House Ways and Means Committee. Efforts have been made to try to gain an exemption for such activities at the local level , but to date there is no certainty that such changes will be added. (All 8 House members of the Minnesota Congressional Delegation have 2 sent a letter to House Ways and Means Committee Chairman, Representative Rostenkowski , urging him to permit exceptions to the proposed "tests" to permit the use of tax increment financing. ) To the extent that tax increment bonds are used to finance improvements such as streets , sidewalks, lighting, etc. , their tax- exempt status appears to have been sustained by actions of the Ways and Means Committee. But , such bonds issued for redevelopment could be subject to the new unified volume limits (referred to on page 2 of the technical information) if proceeds are used for land acquisition or relocation costs . EFFECTIVE JANUARY 1 DATE POSES CRITICAL DEADLINE FOR CITY BONDING AUTHORITY When contacting your member of Congress and our U .S. Senators , urge immediate action to remove the January 1 , 1986 effective date now in the proposals under consideration by the House Ways and Means Committee. Without such action, the authority of all cities to issue tax-exempt bonds will be subject to major uncertainties and severe restrictions for the foreseeable future. 3 CIA—' Senator Rudy Boschwitz Senator Dave Durenberger 506 Hart Building 375 Russell Bldg. Washington, D.C. 20510 Washington, D.C. 20510 (202) 224-5641 (202) 224-3244 Local Office Local Office 210 Bremer Bldg. 1020 Plymouth Bldg. 419 N. Robert Street 12 South 6th Street St. Paul, MN 55101 Minneapolis, MN 55402 (612) 221-0904 (612) 349-5111 Toll Free 800/652-9771 Toll Free 800/752-4226 Rep. Timothy J. Penny Rep. Bill Frenzel 501 Cannon Bldg. 1026 Longworth Bldg. Washington, D.C. 20515 Washington, D.C. 20515 (202) 225-2472 (202) 225-2871 Local Office Local Office Blue Earth Government Center 8120 Penn Avenue S. Box 3148 Suite 445 Mankato, MN 56001 Bloomington, MN 55431 (507) 625-6921 (612) 881-4600 Park Towers 22 N. Broadway Rochester, MN 55904 Rep. Bruce Vento (507) 281-6053 2433 Rayburn Bldg. Washington, D.C. 20515 Rep. Vin Weber (202) 225-6631 318 Cannon Bldg. Washington, D.C. 20515 Local Office (202) 225-2331 Rm 150 Mears Park Place Local Office 405 Sibley Street St. Paul, MN 55101 P.O.Box 1214 (612) 725-7724 Marshall, MN 56258 (507) 532-9611 Rep. Martin Sabo 436 Cannon Bldg. P. 0. Box 279 Washington, D.C. 20515 New Ulm, MN 56073 (202) 22.5-4755 (507) 354-6400 Local Office 919 - 1st Street Willmar, MN 56201 462 Federal Courts Bldg. (612) 2.35-6820 Minneapolis, MN 55401 (612) 349-5110 OVER Rep. Gerry Sikorski 414 Cannon Bldg. Washignton, D.C. 20515 (202) 225-2271 Local Office 8535 Central Avenue Blaine, MN 55434 (612) 780-5801 Rep. Arlan Stangeland 1526 Longfellow Bldg. Washingtin, MN 20515 (202) 225-2165 Local Office 4th Fl. MF Center 403 Center Ave. Moorhead, MN 56560 (218) 233-8631 Toll Free 800/432-3770 Federal Bldg. 720 St. Germain St. Cloud, MN 56301 (612) 251-0740 Rep. James Oberstar 2351 Rayburn Office Bldg. Washington, D.C. 20515 (202) 225-6211 Local Office Brainerd City Hall Brainerd, MN 56401 (218) 828-4400 Chisholm City Hall Chisholm, MN 55719 (218) 254-5761 231 Federal Bldg. Duluth, MN 55802 (218) 727-7474 ~ r rT I III 111 4' HHII--[lull league of minnesota cities MEMORANDUM November 26 , 1985 TO: Mayors, Managers, Clerks FROM: Ann Higgins , Staff Associate SUBJECT: TECHNICAL INFORMATION ON FEDERAL TAX REFORM PROPOSAL RESTRICTIONS ON TAX-EXEMPT FINANCING Actions taken by the House Ways and Means Committee increase the potential for major new restrictions on the authority of cities to issue traditional public purpose bonds . It is estimated that the following provisions , if adopted by Congress , would reduce the types of municipal bonds eligible for tax-exempt status by at least 40 percent and subject so-called "nongovernmental" bonds to a new state- by-state per capita volume limit. It is vital that cities contact both House and Senate members of the Minnesota Congressional Delegation to make clear how serious an impact these intrusions on city authority to issue bonds will have on the ability of the city to manage public improvements , deliver public services, and support economic development . Unless members of Congress can be persuaded to reverse or modify proposed bond restrictions , it is expected that they will become key provisions of federal tax reform legislation to be sent to the floor of the U.S. House of Representatives during the first week of December. Restrictions on Traditional Public Purpose Bonds Traditional general obligation, revenue, and tax increment bonds would be restricted by a new generic definition, effective January 1 , 1986. Bonds would be non-governmental if the lesser of 10 percent or $10 million of the bond proceeds is used to benefit, directly or indirectly, any person (trade or business) including 501(c) (3) organizations other than a governmental entity, and if less than 5 percent (or $5 million) of the proceeds is loaned to a trade or business . What does this mean to cities? It means that cities planning to issue such bonds after January 1 , must check with bond counsel to determine if those bonds meet the use test described above . Bonds termed non-governmental under terms of these new limits will be subject to much higher risk re: their tax- exempt status and therefore be more costly to issue (because bond 1 83 university avenue east, st. paul, minnesota SS 1 01 C6123227-E3600 1 counsels are most likely to issue only qualified opionions as to their future tax-exempt status) . This follows from the reaction of bond counsel to the prospect of pending federal legislation (federal tax reform) that potentially will limit the definition of governmental bonds as noted above. Whether or not the Senate has acted on the measure by January 1 , bond counsel' s concern for liability on this issue will preclude the chances for "clean" opinions on bond issues where the benefits to trade or business appear to exceed the 10 percent test . An example offered by the National League of Cities: if your city is planning to make improvements to a municipal parking facility financed with G.O. bonds, you will want to take special care to be certain that no business receives more than a 10 percent benefit through either exclusive access or use of a number of reserved parking places. A New Per Capita Volume Limit on "Non-Governmental" Bonds Some municipal G.O. and revenue bonds that fail the 10 percent test would be termed "non-governmental purpose" bonds and would be included in a new state-by-state volume cap along with small issue industrial development bonds (for which the House Ways and Means Committee has voted to eliminate the sunset provisions of Dec . 31 , 1987 ) . In addition to those in the above category (public purpose bonds for publicly owned and operated facililties that fail the 10 percent test) , the following uses would also be permitted, limited by a volume cap. The cap would place all tax-exempt non-governmental bonds, with the exception of certain airport and port facilities (excluding warehouses) under a state limit of $175 per capita - $25 per capita of which would have to be set aside for non-profit hospitals and universities, further reducing the volume of tax-exempt financing authority to $150 per capita for 1986 and 1987 . (In 1988 , the cap would decrease to $125 , with the sunset of mortgage revenue bonds. ) Of the remaining $150 per capita, $75 would have to be set aside for housing bonds unless the legislature determines othewise. * multifamily rental housing * some airport and port facilities * sewage amd solid waste disposal facilities * municipal water facilities single family housing (until 1988) * veterans' mortgage bonds * small issue IDBs (with sunset date eliminated) student loan bonds non-profit university and hospital bonds Impact for Cities The proposed per capita volume cap would force cities, other units of local government including counties and school districts, as well as 2 i , state agencies to face the prospect of competing for limited bonding authority. Overall housing bond volume nationally would be expected to decline by at least 10 percent, compared with 1984 . Another very ominous prospect is the fact that certain uses of tax- exempt financing that fail the 10 percent test would not be eligible for tax-exempt financing, effective January 1 , 1986 . The following publicly owned and operated facilities would be ineligible for tax-exempt financing, under these provisions: sports facilities trade and convention centers parking facilities electric energy * gas furnishing facilities hydroelectric generating facilities district heating and cooling facilities industrial parks hazardous waste facilities pollution control facilities Even if municipally owned and operated , these facilities are considered sufficiently non-governmental in their purpose and operation that the House Ways and Means Committee has determined that they shall not retain eligibility for tax-exempt bond financing. Any non-governmental portion of a governmental issue in excess of $1 million would also be subject to the volume cap. (That would mean that in the instance where a governmental issue benefitted a trade or business by that amount , even though that is less than 10 percent of the bond proceeds (even as little as 1 percent or less) , the portion exceeds $1 million could not be issued under the sole authority of the city to determine but would have to be allocated under a statewide allocation system. FURTHER PROPOSED RESTRICTIONS ON REFINANCING Advance refunding of traditional public purpose bonds would continue to be allowed, but the cost of the new issue could not be recovered through arbitrage earned on the bond proceeds. Unless the present volume of interest savings was more than the cost of issuing the advance refunding bonds , the latter could not exceed 250 percent of the volume of the refunded bonds. Advance refunding bonds would also be subject to the same per capita volume limits of any new non-governmental bond issue (as noted above) . In addition, the call period for such issues would be limited to a period no earlier than the date they could be called at par or at a premium of 3 percent or less . No unlimited arbitrage could be earned as a result of a provision which would limit such a period for advance 3 refunding bonds to 30 days after issuance and. for refunded bonds no later than the date of issuance of the refunding bond issue. Finally, bonds for the following non-governmental activities would no longer be eligible for advance refunding: * multi-family , single family and veterans' housing * governmentally owned airports ( including land, noise abatement and freight-handling facilities) * port facilities (not including storage warehouses) mass commuting facilities * sewage and solid waste disposal facilities * facilities for furnishing water small issue IDBS (with all sunsets removed) * Section 501 (c) (3) organization bonds * student loan bonds (All the above , except housing, sewage and solid waste disposal facilities , would have to be publicly owned to qualify for tax-exempt financing . ) Private developments financed with tax-exempt bonds (except low-income housing) would have to be depreciated using 'the straight-line method. Provisions for multifamily housing more favorable Apparently , although such housing bonds would be covered by the per capita volume cap on non-governmental bond issues , tax-exempt eligibility would be retained for all such bond issues if either 25 percent (now 20%) or more of the units are rented to families whose income is 80 percent or less than the area median income or 20 percent or more of the units are rented to families whose income is 70 percent or less of area median income. The state volume cap , unless the legislature changed it , would be allocated ($75 per capita) one third to multifamily, one third to single family , and one third left to the discretion of the governor. CONCLUSIONS Minnesota cities would retain little authority available under any allocation system that would be designed to comply with the volume cap. The total allocation for all bonding authority under the proposal would be $725 million for the state . Of that , only $321 million would remain for both state and local government bonding authority in 1986. IDB authority in 1985 in Minnesota totaled $620 million, under the current volume cap . Add to that $600 million in multifamily housing bonds , at least $200 million in tax increment financing, and $200 million in owner-occupied housing bonds . An incomplete estimate of of the current level of bond activity would indicate that at least $1 .6 billion of tax-exempt bonds were issued last year . That figure does not include either the tax-exempt bonds issued by 501(c) ( 3) organizations or the portion of governmental purpose bonds that may 4 t,/ be subject to these new unified per capita volume limits Actions taken by the House Ways and Means Committee are far-reaching and intrude in major ways into the conduct of local improvement planning, service management , economic and redevelopment activities . The House Ways and Means Committee scheduled to report out tax reform legislation in early December. It is essential for cities to make their opposition to these sweeping restrictions known to members of Congress now. Illustrating the local impact of the proposed changes in tax-exempt status of bonds will underline the seriousness of the impact of these tax reform bond restrictions on city services, development, and capital improvement programs. 5 Ct THF V eA INNT.eO STATE OF MINNESOTA DEPARTMENT OF REVENUE Telephone: July 11, 1985 TO ALL COUNTY ASSESSORS You will find attached a listing of all the non-residential sales for your county which were used in the 1984 21-month study certified to the Minnesota Tax Court. A listing of column headings and a list of city/town codes is also included, along with a copy of the 1984 sales ratio study criteria. If you have any questions about the listing, please contact the Sales Ratio Unit at (612) 296-1989. A listing of all the sales in the study has been sent to each Property Equalization Division Regional Representative. Since ly, LEONARD F. PETERSON Senior Research Analyst LFP/tas Enclosures: Detailed listing of non-residential sales used in 1984 City/town code sheets Sales Ratio Study Criteria Explanation of codes used on printout AN EQUAL OPPORTUNITY EMPLOYER 1984 SALES RATIO STUDY CRITERIA The 1984 Study will be the last study conducted entirely using the old Certificate of Real Estate Value. The procedures will be similar to those used in 1983. There are two new types of sales to delete: splits and employee relocations. The 1984 Study will use sales which occurred between January 1, 1983 and September 30, 1984. Guidelines for Acting or Rejecting Sales All open market arms-length sales should be accepted for the study. An "open market sale" is one in which the buyer and seller are acting prud- ently and the price is not affected by undue stimulus. Neither the buyer nor the seller must be under great pressure to complete a transaction within a short time. An "arms-length sale" is between two parties, each of whom is seeking to maximize his gain from the transfer. The sale price should reflect only the price paid for the real estate which was transferred. If part of the purchase price was for personal property or the business rights, the price should be adjusted. . All adjust- ments must be documented. The following lists spells out the general types of sales which do not meet the acceptance criteria and should be rejected for the study. 1. Old sales. (Sales before the study period or certificates filed to provide a deed after a contract is paid off) 2. Sales involving governmental agencies or public utilities (including railroad and pipeline companies) . 3. Sales involving charitable, religious or educational institutions. 4. Sales to avoid foreclosure. 5. Sales involving legal action such as foreclosures or bankruptcies. 6. Sales of non-assessed property such as cemetery lots. 7. Sales between related individuals or corporations. 8. Trades of properties or transfers in which non-monetary items are used as the medium of exchange. Non-monetary items include stocks, bonds, or personal property. 9. Split sales should be rejected. 10. Partial-interest sales.