HomeMy WebLinkAbout10/24/1995 TENTATIVE AGENDA
SHAKOPEE, MINNESOTA
COMMITTEE OF THE WHOLE OCTOBER 24, 1995
LOCATION: City Hall, 129 Holmes Street South
Mayor Gary Laurent presiding
1] Roll Call at 5:00 P.M.
2] Approval of Minutes of September 12. 1995
3] Livable Communities Act
4] Fire Station - 2nd site
5] Enterprise Funds -budget and fees
6] Other business
7] Adjourn at 7:00 P.M.
Dennis R. Kraft
City Administrator
OFFICIAL PROCEEDINGS OF THE CITY COUNCIL
SHAKOPEE, MINNESOTA
COMMITTEE OF THE WHOLE SEPTEMBER 12 , 1995
Mayor Laurent called the meeting to order at 6: 00 P.M. with
Councilmembers Beard and Sweeney present. Cncl.Lynch and
Brekke were absent. Also present: Barry Stock, Assistant
City Administrator; Gregg Voxiand, Finance Director; Judith
S. Cox, City Clerk and Mark Huge, Fire Chief.
Present from Jackson Township: Norbert Theis, Mark Luce,
Gerold Mareck, and Town Clerk Rose Menke.
Present from Louisville Township: Marion Schmidt, John
Weckman, Bill Tech, and Town Clerk James Theis.
Sweeney/Beard moved to approve the minutes of August 29,
1995. Motion carried unanimously.
Mr. Voxland stated that the major change to the fire
department budget from last year is the change in the
pension amount.
In a response to a question by Mr. N. Theis, Mayor Laurent
explained how the internal service fund works for capital
equipment. He said that the auditors had recommending
establishing it.
Mr. Voxiand explained that the townships are not paying rent
for vehicles purchased prior to 1995.
Mr. N. Theis asked if additional trucks will be needed for
the new fire station. Mr. Huge explained that two
additional pumpers will be purchased, one in 1997 and one in
1998 . He said that the fire department plans to get by with
the other equipment that they have.
Mr. N. Theis asked if it was felt that the townships should
pay for part of the new fire station. Mr. Huge stated that
the fire department looks at serving the townships as part
of their function and they function wherever needed. They
look at the townships as part of the Unit.
Mr. Voxland explained that the townships payment (for fire
service) is based on assessed value of property. Mr. N.
Theis stated that Sand Creek Township contracts with Jordan
and pays 5% of the AG land.
Mr. Stock stated that the townships don't directly
participate in the budget. He said that a three year
agreement for the townships ' participation in recreation
programs was recently negotiated.
Official Proceedings of the September 12 , 1995
Shakopee City Council (COW) Page -2-
Mr. Stock explained that the City has created an enterprise
fund for recreation projects with three separate programs:
general recreation, swimming pool, and ice arena. He said
that it is anticipated that there will be a $75, 000 deficit
for the ice arena portion only which will be made up by the
tax payers (for the operation of the civic center) . He said
that the Recreation Board is recommending no extra charge
for township participants. The City Council has yet to
discuss this.
Mr. N. Theis stated that he would like to see someone from
the townships on the Park and Recreation Advisory Board.
Councilmembers present concurred with the idea.
Mr. N. Theis noted that some of the payment that the City
receives from Shakopee Public Utilities comes from township
residents who are served by SPUC.
Mayor Laurent thanked the township officials for attending
the meeting on such short notice.
Discussion ensued on the $133,409 debt service levy for the
1990A project for 1996. Cncl.Sweeney said that Mr. Voxland
had recommended levying the full amount over six years
and putting the surplus into the capital improvement fund.
Cncl.Sweeney said that we could levy none of it for 1996,
1/2 of it, or all of it. He said that he supported option
two, levying only 1/2 of it for 1996 because it reduces
taxes to less than a 2% increase on the lowest value house.
Sweeney/Beard moved to direct staff to prepare the levy for
Council consideration on Friday based on levying 1/2 of the
$133 , 401 debt service payment for 1990A for 1996. Motion
carried unanimously.
Mayor Laurent adjourned the meeting at 7 : 20 P.M.
6
411 LAJA , 5 . (Ix-,
dith S. Cox
ty Clerk
Recording Secretary
*3
Metropolitan Council
Working for the Region, Planning for the Future
October 23, 1995
Dear Local Official:
Now that our Livable Communities implementation program is fully underway,I thought it would be important to
provide you with an update,and reaffirm the Metropolitan Council's commitment to the Metropolitan Livable
Communities Act.
Our first implementation step has been negotiating affordable and life-cycle housing goals. As the Council's staff
has indicated to you,we believe we have a framework for goal-setting that is market based,reflects funding realities,
and recognizes the abilities of local units of government to create an environment in which affordable and life cycle
housing can occur.
During our negotiations,however,we have heard local officials express great concern about their limited ability to
influence production of affordable and life cycle housing. We understand this concern. We also understand that the
marketplace will continue to play the primary role in determining how development occurs. In addition,we also
know that limited resources are available to help you meet your goals,therefore,you will not be penalized if
resources do not materialize.
As we move forward together in this process,it is important that you clearly understand our expectations. We
believe cities should be accountable for their zoning and approval processes,and for pursuing available affordable
housing resources. Therefore,we will expect you to examine zoning and approval processes to determine what,if
any,changes could be made to help create an environment for developing affordable and life cycle housing. Once
that is completed,we would expect you to develop an action plan that states your willingness to pursue available
funding opportunities.
We understand that it takes time to build trust between partners. We also appreciate the fact that the law requires a
rapid decision-making process. We value and need your cooperation and feedback.
In summary,we are entering into our discussions with high hopes and good faith intentions. We want you to know
that your community will be held accountable only for those things that you control. We understand that the market
and available resources will continue to determine whether your goals are actually accomplished.
We look forward to working together with you on this exciting and important effort.
Sincerely,
.._..) , _
Craig R. Rapp
Director,Community Development Division
CRR/kp
cc: Curt Johnson,Chair,Metropolitan Council
Jim Solem,Regional Administrator,Metropolitan Council
Metropolitan Council Members
230 East Fifth Street St.Paul,Minnesota 55101-1634 (612) 291-6359 Fax 291-6550 TDD/TTY 291-0904 Metro Info Line 229-3780
An Equal Opportunity Employer
10/18/95 13:44 FAX 612 447 4245 CITY PRIOR LAKE Z001
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RESOLUTION NO.95-108 OCT 2 0 1995
RESOLUTION AFFIRMING CITY POSITION REGARDING
THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM
UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT
CALENDAR YEAR 1996
..5-
WHEREAS,
WHEREAS, the Metroolitan Livable Communities Act(1995 Minnesota Laws
Chapter 5)establishes a Metropolitan Livable Communities Fund
which is intended to address housing and other development issues facing
the metropolitan area defined by Minnesota Statutes section 473.121; and
WHEREAS, the Metropolitan Livable Communities Fund,comprising the Tax Base
Revitalization:Account,the Livable Communities Demonstration
Account and the Local Housing Incentives Account, is intended to
provide certain funding and other assistance to metropolitan area
municipalities;and
WHEREAS, a metropolitan area municipality is not eligible to receive grants or loans
under the Metropolitan Livable Communities Fund or eligible to receive
certain polluted sites cleanup funding from the Minnesota Department of
Trade and Economic Development unless the municipality is
participating in the Local Housing Incentives Account Program under
Minnesota Statutes section 473.254; and
WHEREAS, the Metropolitan Livable Communities Act requires the Metropolitan
Council to negotiate with each municipality to establish affordable and
life-cycle housing goals for that municipality that are consistent with and
promote the policies of the Metropolitan Council as provided in the
adopted Metropolitan Development Guide;and
WHEREAS. by June 30, 1996, each municipality must identify to the Metropolitan
Council the actions the municipality plans to take to meet the established
housing goals; and
WHEREAS, the Metropolitan Council must adopt,by resolution after a public hearing,
the negotiated affordable and life-cycle housing goals for each
municipality by January 15, 1996;and
16200 BaCtttifek Ave. S.E.. Prior Lake. Minnesota 593r72-1714 / Ph. (612)447-4230 / Fax(612)447-4245
AN EQUAL OPPORTUNITY EMPLOYER
10'18'95 13:44 FAX 612 447 4245 CITY PRIOR LAKE RI 002
WHEREAS, a metropolitan area municipality which elects to participate in the Local
Housing Incentives Account Program must do so by November 15 of
each year; and
WHEREAS, for calendar year 1996, a metropolitan area municipality can participate
under Minnesota Statutes section 473.254 only if: (a)the municipality
elects to participate in the Local Housing Incentives Account Program by
November 15, 1995; (b)the Metropolitan Council and the municipality
successfully negotiate affordable and life-cycle housing goals for the
municipality; and(c)by January 15, 1996 the Metropolitan Council
adopts by resolution the negotiated affordable and life-cycle housing
goals for each municipality;
NOW,THEREFORE BE IT RESOLVED THAT the City Council of the City of Piier
Lake has no other choice than to participate in the Housing Incentives Program because:
1. Failure to participate disqualifies the City from any funding which might be available
for program assistance.
2. An election not to participate initially would require that the City repay each years
"A.L.H.O.A."contribution which would otherwise be due.
.rte.
3. Failure to participate results in a negative report card to the legislative and increases
the likelihood of future legislative action further undermining municipal zoning
authority.
4. Failure to participate will result in unfavorable Metropolitan Council consideration of
Major or Minor Comprehensive Plan amendments submitted by the City not on merit
but based upon failure to participate in this program or its equivalent.
FURTHER,that based upon the foregoing, the City Council has no effective option but
to participate in the Local Housing Incentives Program under the Metropolitan Livable
Communities Act during calendar year 1996.
•
, S95106 DOC PACE
#3
MEMO TO: Dennis R. Kraft, City Administrat•oar
FROM: V. Paul Bilotta, Planning Director f,
DATE: October 20, 1995
RE: Livable Communities Act
DISCUSSION:
The attached is background information on the Livable Communities Act to assist in the
discussion with Metropolitan Council staff.
The following are attached:
* Housing Goals Agreement (p. 1)
This document shows the goals that the Metropolitan Council has set for the sector.
Shakopee meets or exceeds all but the Life-cycle portion of the benchmarks. The areas of
non-conformance are minor in nature compared to many of the other communities in this
sector (see pp. 3--1).
* Affordable and Life-Cycle Housing Opportunities Amount (ALHOA) (p. 2)
• Model Resolution (p. 5)
* Metropolitan Livable Communities Act Action Plans (p. 6-8)
* How to Open Doors to Affordable Housing (pp. 9-12)
* Housing Guidelines for Comprehensive Plans (pp. 13-24)
* Funding Accounts (pp. 25-34)
ACTION REQUESTED:
This is for informational purposes only.
h:\admin\lea I020.doc
DRAFT
HOUSING GOALS AGREEMENT
METROPOLITAN LIVABLE COMMUNITIES ACT
PRINCIPLES
The city of Shakopee supports:
1. A balanced housing supply, with housing available for people at all income levels.
2. The accommodation of all racial and ethnic groups in the purchase, sale, rental and
location of housing within the community.
3. A variety of housing types for people in all stages of the life-cycle.
4. A community of well-maintained housing and neighborhoods, including ownership
and rental housing.
5. Housing development that respects the natural environment of the community while
striving to accommodate the need for a variety of housing types and costs.
6. The availability of a full range of services and facilities for its residents, and the
improvement of access to and linkage between housing and employment.
GOALS
To carry out the above housing principles, the City of Shakopee agrees to use benchmark
indicators for communities of similar location and stage of development as affordable and
life-cycle housing goals for the period 1996 to 2010, and to make its best efforts, given
market conditions and resource availability, to remain within or make progress toward
these benchmarks.
CITY INDEX BENCHMARK lI GOAL
Affordability
Ownership 90% 64-69%
Rental 53% 32-35%
Life-Cycle
Type(Non-single family 34% 35-38%
detached)
owner/ enter Mix 68/32% (70-75) /
(25-30)%
Density
Single-Family Detached 2.1/acre 1.9-2.3/acre
Multifamily 13/acre 10-11/acre
To achieve the above goals, the City of Shakopee elects to participate in the Metropolitan
Livable Communities Act Local Housing Incentives Program, and will prepare and submit
a plan to the Metropolitan Council by June 30, 1996, indicating the actions it will take to
carry out the above goals.
CERTIFICATION
Mayor Date
Affordable and Life-Cycle Housing Opportunities Amount
For Shakopee
Your ALHOA Amount for: Shakopee
1996 SO Not required
1997 (Estimate) $7,476
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RESOLUTION NO.
®O RESOLUTION ELECTING TO PARTICIPATE IN
THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM
UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT
CALENDAR YEAR 1996
WHEREAS,the Metropolitan Livable Communities Act(1995 Minnesota Laws Chapter 255)establishes a Metropolitan
Livable Communities Fund which is intended to address housing and other development issues facing the metropolitan area
defined by Minnesota Statutes section 473.121;and
WHEREAS,the Metropolitan Livable Communities Fund,comprising the Tax Base Revitalization Account,the Livable
Communities Demonstration Account and the Local Housing Incentives Account,is intended to provide certain funding and
other assistance to metropolitan area municipalities;and
WHEREAS,a metropolitan area municipality is not eligible to receive grants or loans under the Metropolitan Livable
Communities Fund or eligible to receive certain polluted sites cleanup finding from the Minnesota Department of Trade and
'.conomic Development unless the municipality is participating in the Local Housing Incentives Account Program under
Qinnesota Statutes section 473.254;and
WHEREAS,the Metropolitan Livable Communities Act requires the Metropolitan Council to negotiate with each munici-
pality to establish affordable and life-cycle housing goals for that municipality that are consistent with and promote the
policies of the Metropolitan Council as provided in the adopted Metropolitan Development Guide;and
WHEREAS,by June 30, 1996,each municipality must identify to the Metropolitan Council the actions the municipality
plans to take to meet the established housing goals;and
WHEREAS,the Metropolitan Council must adopt,by resolution after a public hearing,the negotiated affordable and life-
cycle housing goals for each municipality by January 15, 1996;and
WHEREAS,a metropolitan area municipality which elects to participate in the Local Housing Incentives Account Pro-
gram must do so by November 15 of each year;and
WHEREAS,for calendar year 1996,a metropolitan area municipality can participate under Minnesota Statutes section
473.254 only if:(a)the municipality elects to participate in the Local Housing Incentives Account Program by November
15, 1995;(b)the Metropolitan Council and the municipality successfully negotiate affordable and life-cycle housing goals
for the municipality; and(c)by January 15, 1996 the Metropolitan Council adopts by resolution the negotiated affordable
and life-cycle housing goals for each municipality;
NOW,THEREFORE,BE IT RESOLVED THAT the [specific municipality] hereby elects to participate in the Local
Housing Incentives Program under the Metropolitan Livable Communities Act during calendar year 1996.
By: By:
Mayor Clerk
•
METROPOLITAN LIVABLE COMMUNtWir,
'
ACTION PLANS
The Metropolitan Livable Communities Act (LCA) says that each municipality shall identify to the
Metropolitan Council the actions it plans to take to meet its established housing goals negotiated
with the Council.
As a model format or guide for describing these"actions" to meet housing goals, communities can
use a format that may also serve as the housing implementation section of the housing element of
their local comprehensive plan. The housing element content guidelines currently under
consideration by the Metropolitan Council are being rewritten in anticipation of a major effort by
urban service area communities to update and revise their local comprehensive plan housing
element during 1996.
By following the implementation program format suggested in the content guidelines as the
format for their action plan to implement LCA goals, communities can, in large measure,
accomplish two objectives with one document.
The implementation program portion of the housing element content guidelines that may also be
used to fulfill the action plan requirement of the LCA indicates that communities should do the
following:
• Identify the programs, initiatives and other efforts they plan to undertake to achieve their
goals; and
• Identify the time frame within which these activities will be undertaken.
Implementation programs will differ from city to city. Depending upon its level of urbanization
and development, current housing situation and future housing need, as suggested by the age and
household composition of its population and its household and employment forecasts, the age and
condition of housing stock and the amount of land available for residential development, the
actions suggested by one community may not be appropriate or effective for another community.
The housing action plan should address the implementaion tools and programs set forth below and
suggest, as best as possible,the number of households or housing units to be assisted, produced
`�`"
or rehabilitated and the time frame for carrying out these implementation activities.
A. Housing Assistance Programs
An action plan to implement the community's LCA goals should indicate the housing
assistance programs to be used by and in the community, and the best estimate of how
many households will be helped by such programs each year or over a certain period of
years.
A number of programs provide renter assistance and below-market-rate home mortgage
programs. Some involve little or no administration or oversight by the city, although most
require a city's consent. Categories of programs and examples are:
1
► Rent assistance programs such as HUD's Section 8 Certificate or voucher programs
administered by Metro HRA, or city or county HRAs.
► Homeless prevention and emergency assistance programs available through MHFA.
► Mortgage assistance and below-market-rate home mortgage loans through MHFA and
local lending institutions.
B. Housing Development Programs
The action plan may set forth specific new construction or housing rehabilitation efforts to
expand the community's stock of affordable rental housing.
A limited number of tools are available to support the construction or rehabilitation of
low- and moderate-income housing. These programs include the following:
• New construction, or acquisition and rehabilitation programs to produce or
preserve affordable rental housing. Examples are HUD's HOME funds and various
MHFA programs.
• Low-income tax credit and mortgage/bridge loan programs to create an investment
incentive and help finance new construction, or affordable rehabilitated rental
housing. Available through MHFA.
C. Housing Maintenance, Rehabilitation and Redevelopment Programs
A variety of programs are available to address maintenance, rehabilitation and
redevelopment. The action plan may identify any or all of a number of potential local
efforts including, but not limited to, the following:
• Adoption and enforcement of a local housing maintenance code.
► Rental rehabilitation, mortgage assistance and federal income tax credit programs
aimed at preserving and improving rental housing. Available through MHFA.
0. Home ownership rehabilitation, home improvement and energy-efficiency local
programs. Available through MHFA.
►- Initiatives for housing rehabilitation programs,funded locally or through CDBG
funds. Several local HRAs administer such programs.
D. Local Initiatives
Though considerably more restricted than in the past, state and federal laws permit local
governments to implement fiscal initiatives to generate capital to assist development or
redevelopment of low-cost housing. The action plan should include the communities
short- and long-term expectations and intentions regarding the use of these fiscal tools
including:
► Housing revenue bonds
► Tax-increment financing
• Federal Community Development Block Grants
2
► Local HRA tax levy
► Local government essential function bonds/regional credit enhancements
E. " Local Official Controls and Approvals
One of the most important and visible implementation efforts a community can engage in
to accomplish its LCA goals is to re-examine and revise its local official controls and
approvals as they impact residential development and redevelopment.
Local regulations and requirements can significantly affect the cost of housing and the
opportunity to increase life-cycle housing options. It may be appropriate for a community
to examine its local controls for their potential to reduce housing costs and diversify its
housing. These efforts can include:
► Land use and zoning regulations, including minimum and maximum densities,
amounts of land planned or zoned for multifamily housing; environmental
protection regulations; public dedication requirements.
► Cluster-design site planning, planned unit developments and zero-lot-line
approaches, for their potential to increase life-cycle options and affordability.
P. Public improvements and engineering/design requirements, including street width
and depth design, sidewalk requirements, storm sewer design, street lighting, tree
replacement.
P. Local approvals process, including time frame and complexity.
► "Accessory housing"ordinances to allow single-family homes to have apartment
units in basements or in a separate structure to help meet the housing needs of
different age groups with housing stock that is already in place.
F. Authority for Providing Housing Programs
One obvious and necessary ingredient for successful implementation of housing objectives
is the ability of the community to administer and manage the myriad assistance,
development and maintenance activities available to it and its residents. The action plan
should describe what authority the city has for operating housing programs and the
activities of the organizations or entities that administer the programs and/or also describe
arrangements the city may have with other public or nonprofit organizations that provide
housing-related services to the city.
H:Vibrary\commundev\gp082195.hsg
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iA . .
How to Open Doors to Affordable Housing
Many factors affect the production and cost of housing.Some ways local governments can provide more affordable
housing in their communities are:
Finding opportunities in land-use ordinances,fees or administrative processes to reduce the purchase price or
cost of new or rehabilitated housing. Authority for land-use regulation is provided to local governments in order
to protect the public health,safety and welfare. Land use regulations also protect against inappropriate land use
and safeguard the natural environment. Adhering to land-use objectives helps keep development costs down and
allows for housing opportunities for all residents. Local governments can impose fees and exactions to recoup the
costs of development. When used appropriately,this mechanism helps cities recover public costs associated with
development. Review and approval processes involving subdivisions,building permits,sewer and water facilities
and environmental impacts are necessary. However,short,succinct and uncomplicated procedures can help keep
the cost of development down.
Linking up with the financial resources to get affordable housing built. The funding environment for affordable
housing has changed dramatically over the last decade. During the 1970s and early 1980s,housing was easier to
produce because federal finds,such as those from the Section 8 New Construction program,were available. In
addition,a favorable tax climate provided incentives for developers to produce affordable housing. Today,with
most federal funding no longer available,affordable housing requires combining public and private finds in com-
plex housing deals. To plan and produce affordable units,local governments need to seek out and use the finan-
cial tools that are available today.
Using land-use ordinances or other means to locate affordable,life-cycle housing near employment concentra-
tions,or link people who live in a distant locale to jobs. Access to affordable housing in the community of their
choice is a shared value of many metro area residents. Many also prefer to work in or near the community in which
they live. Unfortunately,many residents are denied the option because affordable housing is not available near their
place of employment or they aren t qualified for the jobs near their homes. In addition,getting to and from job sites
is often a problem due to inadequate transportation services. Providing access to employment,whether through
location of affordable housing or transportation services,is a vital link to a healthy regional—and local—
economy.
Educating residents on housing issues to build community support for proposed housing developments.
Opposition to affordable housing by prospective neighbors and other city residents is often based on misinformation
and fears. Residents may express opposition to specific types of housing,to changes in the character of the com-
munity,to certain levels of growth,to any and all development,or to economic,racial or ethnic diversity. A
compelling case can be made that the development is,in fact,in the city s best interest. The community needs to
make the case. •
I
Suggested Actions for Local Governments
These actions will help create an environment more conducive to the production of affordable and life-
cycle housing,but producing the housing is recognized for what it is-- a difficult task. It requires politi-
cal will. It takes resources,which have dwindled,and include not only money but support services to
meet the needs of assisted families. It takes expertise.
The Council will work with local governments in a partnership to meet the goal of more affordable and
life-cycle housing in the region. Some of the factors discussed in this section are directly under the
control of local government,such as land-use ordinances. In other areas,linkages need to be made with
resources to get the housing built. The Council will provide assistance to local governments toward this
end.
Finding opportunities in land-use ordinances,fees or administrative processes to
reduce thepurchase price or cost of new or rehabilitated housing.
Examples¢Local Action: •
❑ Reduce required lot sizes.
❑ Encourage zero lot line development or other innovative site planning techniques.
❑ Offeedensity bonuses for developing at higher densities.
❑
All*planned unit developments or mixed-use development.
❑ - Allah some housing without two-car attached garages.
❑ Reduce surfacing width or depth requirements for residential streets.
❑ Implement flexible land-clearing ordinances that protect the environment and are cost effective.
❑ All+for a variety of housing types,including manufactured and accessory housing,through
local zoning rdinances.
4
❑ Est*lish criteria that ensure that fees are related and fairly proportioned to the need for facilities
and services generated by the proposed development.
❑ Exempt or provide reduced fee schedules for affordable housing.
❑ Impose linkage ordinances which require the developer to pay a fee in lieu of construction into a
housing trust fund,or make equity contributions to low-and moderate-income housing projects.
❑ Reduce or consolidate reviews by advisory bodies to the municipality s elected council or board.
❑ , Implement a simplified permit process. •
1/
•
Linking up with the financial resources to get affordable housing built.
Examples of Local Action:
❑ Work with the Metropolitan Council staff to make the best use of currently available programs.
Identify tools available through the Minnesota Housing Finance Agency and the Department of Housing
and urban Development,as well as identify local funds that may be available to develop housing opportu-
nities. For more information on these and other programs,call the following organizations:Department
of Housing and Urban Development(370-3000);Metropolitan Council housing staff(291-6456);and the
Minnesota Housing Finance Agency(296-7608).
Communities can make use of such local fiscal initiatives as:
• Housing Revenue Bonds*:Tax exempt bonds can be used to fund a multi-family development,
providing 20-percent of the units for families at 50-percent of the median regional income.
• Tax Increment Financing(TIF): TIF can be used to write down land costs. Restructions also
apply.
• HOME:This is a federal grant program to rehabilitate existing rental properties.
• Community Development Block Grant(CDBG):These funds facilitate the development of
affordable housing.
• Metropolitan Council Credit Enhancement Program: This program allows HRAs to back
their bonds with the Metropolitan Council s AAA credit rating.
• Employ Local HRA Levy.
❑ Become informed about available tools and how to use them, and look for ways to provide these
opportunities to residents. Seek advice and guidance from the Metropolitan Council,Minnesota Housing
Finance Agency,local banks or other experts to link complex programs in order to take full advantage of
opportunities. The Minnesota Housing Finance Agency alone offers 16 different home improvements
programs, 14 homeownership programs and 17 rental programs. Some of these are as follows:
• Low-Income Housing Tax Credits: Offers a 10-year reduction in tax liability to owners and
investors in these categories: eligible low income,new construction,rehab or existing rental
housing with rehab.
• Housing Trust Fund: Provides funds for development,construction,acquisition,preservation
and rehab of low-income rental housing and homeownership.
• Affordable Rental Investment Fund:Provides funds for acquiring,rehabilitating or construct
ing new affordable rental housing.
• Community Reinvestment Act Incentive Program(CRAIP): Provides set-aside of mortgage
revenue bond funds(below-market interest rate first mortgage financing)to assist local
Iz
lenders in meeting homeownership needs of their communities and their Community Reinvestment
Act(CRA).
• Minnesota Communities Program(MCP): Provides cities with spot loan set-asides of
mortgage revenue bond funds(below-market interest rate first mortgage financing)for specialized
homeownership projects undertaken to address locally identified housing needs.
• Low-and Moderate-Income Rental: Provides for acquisition and rehab or permanent and
construction financing for multifamily low-and moderate-income rental housing(minimum of 5
units).
Locating affordable housing near employment concentrations, or using reverse
commute programs to link people who live in a distant locale to jobs.
Examples of Local Action:
❑ Participate in or create a reverse commute program.
❑ Implement Land-use regulations that promote higher-density,affordable development close to
new employment sites or public transportation.
❑ Participate in programs that may target the provision of affordable housing near job sites.
❑ Partner with local businesses to offer training and re-training opportunities for lower-income
households.
Educating residents on housing issues to build community support for proposed
housing developments.
Examples of Local Action:
❑ Prepare materials and programs to educate residents about affordable and life-cycle housing and
its benefits to the community.
❑ Establish housing or human services commissions or task forces to work on affordable and
life-cycle housing issues.
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DRAFT
HOUSING GUIDELINES for COMPREHENSIVE PLANS
(FOR URBAN SERVICE AREA COMMUNITIES)
The purpose of this section of your comprehensive plan is to enable your city to be a "life-
cycle housing" community. A life-cycle community has:
► Enough affordable housing to meet needs of people at all income levels.
► A sufficiently diverse stock of housing to meet the needs and preferences of people at
all ages and stages of life — for example, single-family, townhouses, duplexes and
multifamily units, as well as a mix of owner and renter housing.
► Residential and commercial densities that allow for affordable housing that is
accessible to employment, services and recreation.
These guidelines outline the information that needs to be included in your community's
housing plan and implementation program to meet the requirements of the Metropolitan Land
Planning Act. Also included are examples of how three hypothetical communities developed
their plan and program.
EXISTING HOUSING
Knowing the number and type of housing units in your community is a first step toward
determining your community's current and future housing needs. The worksheet entitled
"Local Housing Information" asks for information about the number and type of housing units
and households in your community.
To complete the worksheet, you can use information from the Council's publication, Opening
Doors to Affordable/Life-cycle Housing: Baseline Data, and other 1990 census data. For the
Council's 1990 census data for your community see Appendix _, page_. If you have
more recent information, please include that data instead.
Items A through H on the worksheet should be completed by all communities. Items I through
K are optional, but may be important for older communities, communities in later stages of
urbanization or communities where large employment growth will significantly affect housing
needs. You can decide which optional items you need to cover.
To be included in your comprehensive plan
► Completed worksheet "Local Housing Information."
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Local Housing Information
A. Total number and percent of dwelling units and housing types. Include single-family
homes; mobile homes; townhouses; duplexes; multifamily units, including condominiums,
cooperatives, apartments. 1990 census or more recent data if available.
B. Number and percent of owners and renters. 1990 census or more recent data if available.
D. Cost of owner-occupied units and rent ranges of rental units. 1990 census data and data on
•
homestead valuations from the Minnesota Department of Revenue.
E. Number and type of publicly-assisted housing units. Council data on publicly-assisted units.
F. Households by age of householder — number and percent. 1990 census or more recent data if
available.
► Age 0-19 Generally students, living with parents
► Age 20-24 Generally renters
► Age 25-34 Typical first-time home-buyer group
► Age 35-49 Move-up home-buyer market
► Age 50-64 Empty-nesters, who may move to smaller housing
► Age 65-74 Young seniors, who use a variety of housing options
► Age 75+ Older seniors, who often need services and a variety of housing options
G. Current housing densities, number of acres developed as single-family and multifamily housing.
From worksheet "Existing Land Use Acreage, "page
H. Land potentially available for residential use in various densities. From worksheet "Projecting
Future Land Needs., "page
Optional Information:
I. Age of housing--number and percent. 1990 census or more recent data.
J. Number and percent of units in need of rehabilitation or improvement. Data needs to be
categorized by neighborhood, planning district or other geographic area to help identify areas
of greatest need. Please address different levels of condition, as in the following example used
by many cities in the region.
► Excellent or Very Good - A well-built structure with no observable maintenance
requirements.
► Average Plus - No observable defects in structure and only minor maintenance
requirements.
► Average - No observable major defects or maintenance requirements but considerable
minor items.
► Average Minus - Considerable deferred maintenance with permanent damage to
structure beginning to show.
► Poor - Considerable damage to major structural items.
► Bad - Condemned and uninhabitable.
K. Current and forecasted employment--in the community, and/or cluster that includes neighboring
communities. From forecasts, Appendix, page •
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CURRENT AND FUTURE HOUSING NEEDS
Once you have a picture of the existing housing situation in your community, the next step is
to determine how well your housing stock meets the needs of residents now and in the future.
Comparing your mix of housing with those of neighboring or similar communities, including
communities in your sector can help clarify your city's housing needs (see current assessment
and benchmarks in Appendix_, page ).
Please write a description of your community's housing needs under each of the topics listed
below:
A. Affordability of housing for current and future residents
Is there affordable housing that meets people's needs as their life circumstances change
— for example, for people who become divorced or retire?
B. Current mix of housing and potential land available for housing
Does the community have a wide enough range of housing options for people as their
life circumstances change? What types of housing should the community develop on
its remaining land, in order to broaden its life-cycle housing range or fill a missing
need?
C. Development densities and potential for development with mixed residential,
commercial and public land uses
Are there areas near transit lines where housing could be clustered, or a mixed-use
area that provides shopping and other services, with civic spaces that provide a
community center or focal point? -
•
D. Employment opportunities and housing affordable to the work force
Is there housing affordable to workers in local industries and businesses so employees
can live in the community if they choose? If not, how and where can it be provided?
E. Concentrations of lower-cost or substandard housing units
Do these concentrations require attention for maintenance or rehabilitation? Should
redevelopment or reinvestment districts be designated?
F. Comparison of your local housing situation to surrounding communities and similar
communities elsewhere in the region
Do these comparisons suggest needs your city should be addressing? What do the
comparisons show about the type of housing market in your city?
G. Regional plans and policies
How does your community's housing situation reflect the Metropolitan Council's
housing policies in its Regional Blueprint?
To be included in your comprehensive plan
► Description of your community's housing needs according to topics A
through G.
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HOUSING GOALS
Your community's housing goals are an important tool to help your city work toward, or
maintain, a life-cycle housing mix. The following factors should be considered as you set
housing goals:
1. Historical development patterns and market forces
2. Shifting of age groups and family patterns that result in a demand for different housing
options
3. Density and land use patterns that will enable people of all ages and lifestyles to live
and work in the community
4. Access to local employment opportunities, current and projected, through locating
housing in proximity to employment concentrations, and/or transportation linkages to
jobs
5. Local needs for affordable housing, and, if appropriate, help increase the distribution
of affordable housing in the region
6. Rehabilitation and reuse of housing, as needed
Although the market place will have the greatest influence on future housing activities in your
community, it is important that you evaluate your current housing situation and consider your
future housing needs in order to establish long-term, life-cycle housing goals. You will then
be able to use your land use plan, land use controls and local regulations to influence the
market to produce and preserve life-cycle housing options for your residents.
Appendix contains information about the affordability, diversity, density and age of your
community's housing, its anticipated growth to 2010 and the age composition of its heads of
households. All of these should be considered as you establish the housing goals that will be
included in the housing section of your local comprehensive plan.
Your community's information is presented along with comparable information for other
urban service area communities within your sector of the region. Benchmarks or targets,
expressed as ranges, are provided within which your community and neighboring communities
can establish long-term goals for housing affordability, density, diversity and owner/renter
mix.
Your community's benchmark ranges depend on the planning sector in which you are located,
and your stage of development. For example, communities within the fully developed parts
of the region will have different benchmark ranges than communities in the developing
suburbs.
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Setting long-term housing goals signals your community's intention to maintain or expand
life-cycle housing options for your residents. The ranges presented for each of the life-cycle
measures--affordability, density, diversity and owner/renter mix--give you an indication of the
direction your community needs to move over the next 15 years to maintain, expand and/or
diversify your housing stock to meet anticipated life-cycle needs. These goals will also
satisfy the housing goal requirement in the Metropolitan Livable Communities Act.
To be included in your comprehensive plan
► Your community's housing goals and a description of
how the goals will help move your community toward
life-cycle housing.
HOUSING POLICIES
Your housing plan needs to include housing policies that show how your community y hopes to
achieve its housing goals and meet its housing needs. These policies serve as guidelines for
your land use controls, housing implementation program and capital improvement program.
Diversifying Your Community's Housing
The housing policies need to show how your community will deal with future changes in your
population and households that will result in a demand for different housing options. These
changes include the aging of your population, the forming of new families, children leaving
home and divorces.
Please develop policies that address the following issues:
► Housing cost
Affordability for current and future residents.
► Types of housing for different needs
Communities are encouraged to consider a wide variety of structures and ownership
types, including duplexes, townhouses, condominiums, cooperatives and manufactured
housing (mobile homes).
► Ownership and rental housing
An adequate mix of owner and renter housing provide people with choices of cost and
lifestyle.
► Density of housing (units per acre)
Higher densities and clustered housing can make housing more affordable.
Communities are encouraged to plan for residential densities and land use patterns that
enable people of all ages and lifestyles to live and work in the community.
► Special housing needs —_—
Housing for older people and groups such as mentally.or physically impaired.
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► Access to current and projected local employment opportunities
Communities are encouraged to locate housing near employment concentrations and/or
transportation/transit service to job sites.
Maintaining Housing and Neighborhoods
The policies in your housing plan also need to show how your community intends to deal
with:
► Maintenance of owner-occupied and rental housing
► Redevelopment activities, small- or large-scale
► Rehabilitation and reuse of housing, as needed
If your community situation requires:
► Maintaining stable neighborhoods —
Policies need to call for strong housing maintenance code enforcement, maintaining
good public services and facilities, strong neighborhood associations, new construction
and reuse to support or enhance existing neighborhoods.
► Strengthening transitional neighborhoods --
Policies need to call for targeting rehabilitation and revitalization loans and grants to
such areas for maximum impact and strong support of neighborhood groups.
Deteriorated housing that is beyond repair would need to be promptly removed and
replaced with uses compatible with neighborhood improvement.
► Restoring deteriorated areas —
Policies need to call for both clearance and rehabilitation activities, with rehabilitation
and public improvements concentrated in the most stable parts of the area. Living
conditions of current residents would need to be improved by rehabilitating housing
and broadening opportunities to move to other locations. Removal of housing would be
undertaken in the areas beyond rehabilitation. Whenever possible, land should be
assembled on a scale sufficient to permit the development of a new residential
environment that includes a full range of services and facilities.
Other Neighborhood Policies
In their policies, many communities may need to address the issue of how to increase a sense
of community and confidence in neighborhoods. Examples of ideas include:
► promoting urban designs that help make neighborhoods safer, create amenities and
improve livability
► using land use planning to help create a community focus or center for your
community
► helping to form or supporting block clubs, neighborhood organizations and other
community-based ways for people to connect with residents and activities in-their
neighborhoods
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Official Controls for Housing Development and Land Use
Additional policies are needed to show the extent of your community's flexibility and
responsiveness in the areas of:
► zoning standards for housing
► subdivision regulations, including public service requirements
► local approvals in the development process
Housing Assistance Programs
Important to your housing plan are policies that describe how your community intends to use
housing assistance programs (see "Housing Implementation Program," below, for examples of
programs).
Housing, Employment and Transportation
Please state the community's intent to provide for housing near employment concentrations
and/or link employment areas with transportation — for example, by using reverse-commute or
local transit programs.
- To be included in your comprehensive plan
• ► Housing policies that indicate your community's
approach to the topics listed above.
HOUSING IMPLEMENTATION PROGRAM
This section should identify programs, initiatives and other efforts the city plans to undertake
to achieve the goals identified in the preceding section. It should also identify the time frame
and extent of the activities to be undertaken.
Implementation programs will differ among communities depending on their level of
urbanization and development, current housing situation and future housing needs, as
suggested by the age and household composition of its population and its household and
employment forecasts, the age and condition of housing stock and the amount of land
available for residential development.
A. Housing Assistance Programs
A number of programs provide renter assistance and below-market-rate home mortgage
programs. Some involve little or no administration or oversight by the city, although
most require a city's consent. Categories of programs and examples are:
► Rent assistance programs such as HUD's Section 8 Certificate or voucher programs
administered by Metro HRA, or city or county HRAs.
► Homeless prevention and emergency assistance programs available through MHFA.
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► Mortgage assistance and below-market-rate home mortgage loans through MHFA
and local lending institutions.
B. Housing Development Programs
A limited number of tools are available to support the construction or rehabilitation of
low- and moderate-income housing. These programs include the following:
► New construction, or acquisition and rehabilitation programs to produce or preserve
affordable rental housing. Examples are HUD's HOME funds and various MHFA
• programs.
► Low-income tax credit and mortgage/bridge loan programs to create an investment
incentive and help finance new construction, or affordable rehabilitated rental
housing. Available through MHFA.
C. Housing Maintenance, Rehabilitation and Redevelopment Programs
A variety of programs are available to address these issues, including:
► Adoption and enforcement of a local housing maintenance code.
► Rental rehabilitation, mortgage assistance and federal income tax credit programs
aimed at preserving and improving rental housing. Available through MHFA.
► Home ownership rehabilitation, home improvement and energy-efficiency local
programs. Available through MHFA.
► Initiatives for housing rehabilitation programs, funded locally or through CDBG
funds. Several local HRAs administer such programs.
D. Local Initiatives
Though considerably more restricted than in the past, state and federal laws permit
local governments to implement fiscal initiatives to generate capital to assist
development or redevelopment of low-cost housing. These include:
► Housing revenue bonds
► Tax-increment financing
► Federal Community Development Block Grants
► Local HRA tax levy
► Local government essential function bonds/regional credit enhancements
E. Local Official Controls and Approvals
Local regulations and requirements can significantly affect the cost of housing and the
opportunity to increase life-cycle housing options. It may be appropriate for a
community to examine its local controls for their potential to reduce housing costs and
diversify its housing. These include:
► Land use and zoning regulations, including minimum and maximum densities,
amounts of land planned or zoned for multifamily housing; environmental
protection regulations; public dedication requirements.
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► Cluster-design site planning, planned unit developments and zero-lot-line
approaches, for their potential to increase life-cycle options and affordability.
► Public improvements and engineering/design requirements, including street width
and depth design, sidewalk requirements, storm sewer design, street lighting, tree
replacement.
► Local approvals process, including time frame and complexity.
► "Accessory housing"ordinances to allow single-family homes to have apartment
units in basements or in a separate structure. Accessory housing can help meet the
housing needs of different age groups with housing stock that is already in place.
F. Authority for Providing Housing
Please describe what authority the city has for operating housing programs and the
activities of the organizations or entities that administer the programs. Also describe
arrangements the city may have with other public or nonprofit organizations that
provide housing-related services to the city.
EXAMPLES OF COMMUNITY RESPONSES TO LOCAL HOUSING ISSUES
The following three examples show how various communities could analyze their housing
situation and respond with policies and implementation activities.
Fully Developed Community--Example A
This community has 59 percent single-family detached housing and 41 percent other housing
types. Sixty-eight percent of the units are owner-occupied, 32 percent renter-occupied. Well
over one-third (41 percent) of the housing was constructed before 1960, and another 25
percent between 1960 and 1970. The median value of owner-occupied housing is $97,000.
Forty-one percent of the households in the community are headed by a person over age 55,
and another 38 percent headed by a person age 25-45. The median household income is about
$38,000.
The community has a solid employment base, with a variety of housing options, and good
transit service.
The community reviewed how its current housing issues could best be addressed locally, and
also how it compared to neighboring communities, other fully developed communities, and
the region as a whole. A comparison showed that the median value of its owner-occupied
housing stock was somewhat higher than that of other fully developed communities and the
region as a whole. It was consistent with the regional average in proportion of housing
providing life-cycle options--41 percent of its housing is not single-family detached, the same
as in the region as a whole.
•
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The community has a good mix of housing alternatives, but a large percentage of its housing
stock has reached the age where maintenance, upgrading and rehabilitation are a concern.
Therefore, the city believed it should consider policies and programs to encourage
redevelopment and participate in or initiate programs to encourage upkeep of its single-family
and multifamily housing.
A large proportion of the community's households are "empty-nesters," people over age 55.
That group often sells their larger home and moves to a housing option requiring less
maintenance and having more amenities. After determining that their community did not have
• such options available, they encouraged builders to develop units to meet that need on land
that was scheduled for redevelopment.
The community developed a policy to support maintenance of the existing housing stock and
provided a program of education and information to its residents on available resources
developed with the assistance of Metropolitan Council and Minnesota Housing Finance
Agency staff. In addition, the community adopted a policy promoting development of
additional housing options to meet the needs of its older population.
Fully Developed Community--Example B
This community is an older developing community with one-third of its housing built prior to
1970. More than half(55 percent) of the housing stock is single-family detached and 45
percent consists of other types. Nearly 30 percent of the units are apartment rental units.
Sixty-seven percent of the housing units are owner-occupied and 33 percent renter-occupied.
The median value of owner-occupied housing is $88,000.
Over half(60 percent) of the households are headed by someone between the ages of 25 and
45, and another 15 percent are over the age of 55. The median household income is $40,000.
The community has a strong employment base that is expected to grow substantially in the
next 10 years.
As of 1990,46 percent of the community's land was undeveloped.
The community reviewed how its current housing issues could best be addressed locally, and
also how it compared to neighboring communities, other older developing communities and
the region as a whole.
This community had a number of life-cycle options available, with 45 percent of its housing
in types other than single-family detached. That percentage was higher than both the region
(41 percent) and for the other developing communities (35 percent).
The community provided for diversity and affordability in its housing stock, with a higher
than average number of rental units. Many of the apartment units were constructed during the
1960s and 1970s. The city adopted policies and implementation programs to provide for
maintenance, rehabilitation and upgrading of those units.
10
With a large percentage of householders in the age range that typically fuels the move-up
housing market, and considerable land remaining for development, the city assessed the
housing stock to determine if units were available to meet those needs, or if additional units
needed to be provided.
With a growing employment base, the community looked at whether it had the necessary
transit service , jobs and housing linkages to meet the needs of current and future residents
and employers.
The community developed a policy to promote maintenance and rehabilitation of its aging
housing stock and provided information materials on funding programs available through the
Minnesota Housing Finance Agency. In addition, the city adopted a policy to develop a broad
range of housing options. The community created a housing committee to review the current
availability of housing options for people who live and work in the city, and additional
housing that may be needed to address the future needs of the move-up market.
A Newer Developing Community Example
This newer developing community has 96 percent owner-occupied detached single-family
housing, and 3 percent other housing, primarily manufactured housing (mobile homes). Nearly
90 percent of the housing has been constructed since 1970. There is a considerable amount of
land available for future development. The median housing value of owner-occupied units is
approximately $87,000.
Nearly 90 percent of the householders are between the ages of 25 and 55, with approximately
one-third in each in the age groups 25-34, 35-44, 45-54. Ten percent of the householders are
over age 55. The median household income is about $46,000.
The community has a relatively small employment base and few transit options.
The community reviewed how its current housing issues could be addressed locally, and also
how it compared to neighboring communities, other newer developing communities and the
region as a whole.
The community decided that a major issue was to broaden the mix of housing alternatives for
its residents. Other developing cities had 27 percent of their housing that was not single-
family detached, and the region had 41 percent. This community has only 3 percent.
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The community developed a policy to provide options for people choosing to rent as well as
those wanting to purchase a more affordable townhouse or condominium, rather than a single-
family detached home. It considered in particular the concerns of the 10 percent of its
households headed by a person over age 55, and the large numbers of its residents that would
reach that age in the next twenty years. Through its land use and zoning, it planned for a
range of housing types and densities in order to provide opportunities for housing that would
be affordable to households with a range of incomes.
This community decided to encourage development of additional employment opportunities
and discussed a partnering relationship to do this with a neighboring community.
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II ■ •.•
Funding Accounts
The Metropolitan Livable Communities Act(MN Stat. Ch.473.25)created the Livable Communities
Fund,consisting of three accounts:
■ The Tax Base Revitalization Account,which provides grants for polluted site cleanup;
• The Livable Communities Demonstration Account,designed to fund a variety of community
development projects through loans or grants; and
■ The Local Housing Incentives Account,which provides grants to help cities work toward
affordable and life cycle housing goals through a voluntary program.
Criteria,by law,for the fund(all three accounts)include:
■ Helping to change long-term market incentives that adversely impact creation and preservation
of living-wage jobs in the region's fully developed area.
• Creating incentives for developing communities to include a full range of housing
opportunities.
■ Creating incentives to preserve and rehabilitate affordable housing in the fully developed area;
and
• Creating incentives for all communities to implement compact and efficient development.
Each of the accounts is described on the following pages.
gideline.pm5 8-16-95
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** DRAFT **
TAX BASE REVITALIZATION PROGRAM
GUIDELINES AND CRITERIA
Program Summary and Purpose:The Metropolitan Livable Communities Act(MN Stat.Ch.473.25)created a
Tax Base Revitalization Account to make grants to clean up contaminated land for subsequent commercial/
industrial re-development,to make it available for economic redevelopment,job retention and job growth.
Amount of Funds Available: Approximately$6.5 million in funds will be available for grants annually;grants
will be awarded on a competitive basis. —
Eligible Applicants: Statutory or home rule charter cities that are participating in the Metropolitan Livable
Communities Housing Incentives Program are eligible to apply;as are metropolitan counties(Anoka,Carver,
Dakota,Hennepin,Ramsey,Scott Washington)for projects in eligible communities.
expenditures
Eligible Uses of Funds: EligibleP
enditures under this program include costs to implement an approved Re-
sponse Action Plan(RAP)developed in conjunction with the MPCA for hazardous waste,or an abatement program
meets requirements of the V-PIC program(for petroleum)or AHERA standards(for asbestos). Costs incurred in
the preparation of the plan(e.g.,investigating the extent and/or nature of contamination)are not eligible expendi-
tures under this program. These funds may be used to provide a portion of the local match required for a grant
from DTED's Contamination Cleanup Grant Program.
Project Selection Criteria: The Metropolitan Council is required to consider certain factors in order to ensure the
highest return in public benefits for the public costs incurred. In order to evaluate and rank applications,the
following criteria will be assigned point values in order to systematically and fairly compare the applications.
Applications will be ranked according to the extent that the address the following:
• preserve and/or increase living wage jobs in the fully developed area;
• promote compact and efficient development;
• increase the tax base of the recipient municipality;
• represent innovative partnerships among government,private for-profit and non-profit sectors;
• are not eligible for clean-up funding from other public sources;
• will not require extensive new infrastructure(beyond that which is already planned);
• make more efficient use of currently underutilized public service capacity(e.g.,roads and highways,transit,
wastewater,utilities,telecommunications infrastructure,etc.);
• result in a net gain in jobs/industry for the region;
• increase the number of living wage jobs in/near areas of concentrated poverty and demonstrate sensitivity to
linkages with local residents;
• reflect demonstrated market demand for commercial/industrial land in the proposed site area;and
• are consistent with the redevelopment component of the municipality's comprehensive plan(in re:Minn.Stat.
section 473.859, subd. 5).
Application Cycle:Beginning in 1996 there will be two grant cycles per year:a spring cycle(RFPs in February,
applications deadlines in May,and awards announced in July)and a fall cycle(RFP in September,application
deadline in November and awards announced in January).If applications for grants exceed the available funds for
an apply lion cycle,no more than one-half of the funds may be granted to projects in a single city,and no more
than thrc--quarters of the funds may be granted to projects located in cities of the first class. This program is being
coordinated with complementary programs at the MN Pollution Control Agency(MPCA)and MN Department of
Trade and Economic Development(DTED).
Next Steps:Information workshops for this program and DTED's grant program are scheduled for Thursday,
Sept.7(9:00 am- 12:00 noon),Maplewood City Hall, 1830 E.Co Road B in Maplewood;and Monday,Sept.11
(1:00 pm-4:00 pm),Golden Valley City Hall,7800 Golden Valley Rd.in Golden Valley.
For more information contact Hal Freshley,Metropolitan Council staff,at 291-6467.
5/.2/95 LCATOM.005
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EXAMPLES
SITE 1: City X is redeveloping a 6.9 acre parcel(formerly a trucking terminal)to create a new industrial park for
light manufacturing. The PCA determined that there is extensive petroleum contamination on the site.Since
petroleum does not qualify as a hazardous substance,the City applies to MC for$87,000 to pay for treatment of
the removed soil. .
SITE 2:The former owner of this 17.5 acre site went bankrupt,leaving the site in public hands through tax
forfeiture. The parcel is in a prime location,with good highway and rail access. An approved clean-up plan will
cost$370,000. City Y applies to DTED for 50%of the clean-up cost,pays for 12%out of local funds,and applies
to MC for the remaining 38%--$140,600.
SITE 3:Zymogen Laboratories in City Z has recently received a very large long-term contract,and will be increas-
ing their workforce by 50%,however the company will need additional space for shipping and receiving if they stay
at their current location.A parcel adjacent to their current site has a building on it that they could use as a ware-
house,but the building has deteriorating asbestos insulation. City Z applies to MC for$12,000 to match the
company's investment in removing the asbestos.
8/22/95 LCATOM.005
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LIVABLE COMMUNITIES DEMONSTRATION PROGRAM
GUIDELINES AND CRITERIA
August 1995
Program Summary: The Metropolitan Livable Communities Act(Minn.Stat. Ch.473.25)authorizes
the Metropolitan Council to establish the Livable Communities Demonstration Account,and make grants
or loans for community development activities to municipalities participating in the Local Housing Incen-
tives Program(Ch.473.254) or to metropolitan area counties on behalf of participating cities.
Purpose: The Act states that the Account may be used for projects that:
1) link development or redevelopment with transit,
2) link affordable housing with employment growth areas,
3) intensify land use that leads to more compact development or redevelopment,
4) involve development or redevelopment that mixes incomes of residents in housing,including
introducing higher value housing in lower income areas to achieve a mix of housing
opportunities, or
5) encourage public infrastructure investments which connect urban neighborhoods and suburban
communities,attract private sector redevelopment investment in commercial and
residential properties adjacent to the public improvement,and provide project area
residents with expanded opportunities for private sector employment.
Amount of Funds Available: Approximately$4.6 million will be available in 1996,and$4.1 million in
1997 and subsequent years.
Form of Award: Grants and loans.
Grant and loan amounts and terms: To be determined.
Eligible Applicants: Municipalities participating in the local housing incentives program.
Location of Eligible Projects: Projects must be located in municipalities participating in the local
housing incentives program.
Eligible Uses of Grant and Loan Funds: Community development projects that meet the purposes of
the account(as described above),and support the housing goals,principles for livable communities,or
related policies in the Regional Blueprint. Eligible uses are expected to be site plans or other site-specific
planning costs,design and consulting costs, and construction of demonstration projects. Uses not antici-
pated to be eligible include comprehensive planning or other general planning costs.
Projects could demonstrate new development,infill or redevelopment on large or small sites,in fully
developed or developing communities.Components of proposed projects also could be eligible,and
proposals that connect or integrate existing land uses.Mixed-use development proposals are encouraged.
Innovation and creativity in project and site design are encouraged.
It is expected that applicants could apply in different categories--e.g.new development,redevelopment,
locating in proximity to each other or linking housing,jobs and transit.Number and type of categories to
be determined.
Project Selection Criteria: Priority will be given to proposals using innovative partnerships among
government, private for-profit, and nonprofit sectors, and to projects that best meet the purposes in the
law.
Additional selection criteria will favor projects that result in livable communities.For example,projects
that provide walkable,pedestrian-oriented areas;provide good access for transit use and safe,comfort-
able places to wait for transit;broaden the mix of housing options(type and affordability level)in a
community;foster a sense of place;provide a community or town center;incorporate design for safety in
public or private spaces;and involve community residents and businesses in defining needs,desires,land
use and design.
Application Cycle: One or two cycles yearly,beginning in 1996.If two cycles occur per year, applica-
tion deadlines would be in May and November,with awards announced in July and January.If one cycle,
applications would be due in September,awards announced in December 1996.
NEXT STEPS:
TASKS: Finalize Project Criteria,building on criteria in the Livable Communities Act and in the
Regional Blueprint.Consider whether priority should be given to certain proposals/locations. Determine
Uses of Fund,which uses should receive grants,which should receive loans.In doing this,consider how
best to leverage private investment with the available dollars.Discuss grant/loan amounts,terms.
COMPLETED: October 1995
PROCESS:
• Hold roundtable discussions in September to get input from local staff and officials,developers
and design practitioners,and others with an interest in livable communities,as well as
informal input.
• Review local and national information sources,including successful models and projects.
• Consult with administrators of loan/grant programs.
• Participate in Department of Trade and Economic Development workshops (Sept. 7 and 11)on
its contaminated site cleanup grant program,to explain the Demonstration Program,
answer questions,get feedback.
91
TASK: Develop Procedures,Application form(s),Timing of Loan/Grant Cycle,Selection Process.
Decide whether to form a grant review committee,or conduct staff review based on predetermined
criteria,with recommendations to the Livable Communities Advisory Committee.Discuss weighting
system for selection criteria. Determine whether maximum loan/grant amounts should be set,and what
those amounts should be.
COMPLETED: December 1995
PROCESS:
• Consult with staff administering other loan/grant programs,within and outside the Council.
• Get input from local staff and officials,developers,others,through meetings described above and
other discussions.
If you have questions about the Livable Communities Demonstration Program,or to participate in
roundtable discussions on the development of the program,contact Joanne Barron of the
Metropolitan Council staff at 291-6385.
•
8/22/95 lcda.pm5
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EXAMPLES
Project A is on a portion of a redevelopment site in an older city that had been in industrial use. An
adjacent area has been redeveloped as a small business park,providing space for small enterprises includ-
ing a sign-making company.The city has been working to redevelop this site as a mixed-use housing and
commercial area. The site has transit access along a major collector street that is adjacent to the site.It is
close to an older employment concentration,providing jobs paying low to middle-income wages.
The city applied for a loan and grant from the Demonstration Account to assist with the housing and
commercial part of the project.The city plans to build townhouses and condominiums that will be afford-
able to a variety of income levels.Along the collector street,the proposal calls for locating small busi-
nesses providing neighborhood services such as a drugstore,convenience store and coffee shop.One
business has told the city it will commit to the project,encouraged to do so by the 15 percent tax reduc-
tion(enacted by the 1995 Minnesota Legislature)for locating along a transit line. Other businesses have
also expressed interest.A small public square is planned in an area near the businesses and transit stop
that will connect to the townhouses via a pedestrian walkway.The proposal also calls for rerouting a
street from its original configuration to connect directly to the collector street,to allow better pedestrian
accessibility to the bus stop and neighborhood businesses.
This proposal received a$500,000 loan,as a match for the local contribution,to complete a fmancing
package for the construction of 50 townhouses and two 3-story condominium buildings.The proposal
also was awarded a$75,000 grant to undertake a process with community residents and businesses to
develop and refine the project's design.
8/22/95 lcda.pm5
33
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**DRAFT**
LOCAL HOUSING INCENTIVES ACCOUNT
GUIDELINES AND CRITERIA
Program Summary: The Metropolitan Livable Communities Act(Minn. Statutes Chapter 473.25)created
the Local Housing Incentives Account(LHIA) which authorizes the Metropolitan Council to make grants to
eligible municipalities to meet negotiated affordable and life-cycle housing goals that are consistent with and
promote the policies of the Metropolitan Council.
Purpose: The LHIA provides incentives for municipalities to create and/or maintain affordable and life-cycle
housing opportunities.
Source and Amount of Available Funds: For 1996, $1,000,000 from the proceeds of solid waste bonds
issued by the Council;for 1997 and each subsequent year,$500,000 from the Livable Communities Demon-
stration Account;for 1998 and each subsequent year,$1,000,000 from the Council's general levy. Beginning
in 1998,the LHIA may receive funds from cities that have not met their negotiated housing goals and/or have
not spent 85 percent of their Affordable and Life-cycle Housing Opportunities Amount(ALHOA). The
Council is working cooperatively to link the LHIA funds to those of other housing funders,e.g.,the Minne-
sota Housing Finance Agency,the Family Housing Fund and others;the potential pool for 1996 is$5.1
million.
Grant Terms and Amounts: To be determined.
Eligible Applicants: Any municipality in the seven-county region that(1)elects to participate in the LHIA
program,i.e.,negotiates affordable and life-cycle goals with the Council; (2)has its negotiated housing goals
adopted by the Council; (3) identifies to the Council the actions it plans to take to meet the established hous-
ing goals.
Location of Eligible Projects: LHIA funds may be used for affordable and life-cycle housing projects in
eligible,participating communities.
Eligible Uses of Grant Funds: For certain costs associated with projects that help municipalities meet their
housing goals,including,but not limited to acquisition,rehabilitation and construction of permanent afford-
able and life-cycle housing. Projects proposing homeownership opportunities for families with low and
moderate incomes are strongly encouraged. The LHIA funds must be matched on a dollar-for-dollar basis by
the municipality receiving the funds.
Project Selection Criteria: The funds in the account must be distributed annually by the Council to munici-
palities that have not met their affordable and life-cycle housing goals and are actively funding projects de-
3Y
signed to help meet the goals. The legislation gives priority to those municipalities that: (1)have net fiscal
disparities contributions of$200 or more per household; (2)demonstrate that the proposed project will link
employment opportunities with affordable housing and life-cycle housing;(3)provide matching funds from a
source other than its ALHOA;and(4)utilize innovative partnerships between government,private for-profit,
and nonprofit sectors. The Council may take other criteria into consideration when determining whether an
application will be selected,including(a)the documented need for the proposed type of residential housing in
the proposed geographic area; (b)projects that serve families and children; (c)the relationship of the proposed
development to public facilities,sources of employment,and services,including public transportation,health,
education and recreation facilities;(d)participation in the Hollman settlement.
Application Cycle: Annually,beginning in 1996. Applications for LHIA funds will be accepted from July
through August,with final selection and award by the Council in October.
Action Steps
Over the next few months, staff intends to contact a number of parties (advocacy and professional groups)
believed to have an interest in the design of the LHIA guidelines and criteria and application materials. Staff
may also hold special informational sessions and contact staff at certain cities for input. Recommended guide-
lines and criteria will be available in October.
Timelines
July/August/September 1995
Staff discussions of draft guidelines and criteria
Discuss draft criteria and issues with the Metro HRA Advisory Committee
Discuss mutual interests and possible linkages with the MHFA
Discuss draft guidelines and criteria with the Housing Implementation Group
Present draft guidelines and criteria to the LCAC
Present draft guidelines and criteria to the CDC
Staff meetings and negotiations with municipalities
Meet with interested parties (e.g.,advocates,professional organizations,etc.)
October 1995
Develop recommended guidelines,criteria and application materials
November 15. 1995
Cities must elect to participate in the LHIA program
December 15. 1995
Submit recommended guidelines,criteria and application materials for approval
January 15. 1996
Council adopts goals negotiated goals
June 30. 1996
Housing action plans from municipalities are due to the Council
July 1. 1996
Grant application cycle begins
August 30. 1996
Grant application cycle ends
October 1996
Grant award selections announced
Staff Resource: David Long, Office of Local Assistance; telephone: 229-5005.
8/22/95 lhia.pm5
To: Dennis Kraft, City Administrator
From: Mark Huge, Fire Chief and Members of the
Shakopee Fire Department
Re: Site selection for Second Fire Station
Date: October 15, 1995
Introduction:
A second fire station is needed to accommodate the city's growth and
expansion. This station has been discussed for several years. We believe the time
has come to develop a comprehensive plan for Fire Department expansion.
Proposal:
To accept and implement a comprehensive plan for Fire Department
expansion in the City of Shakopee. The comprehensive plan as envisioned consists
of the five strategically placed circles as shown on the attached map. It should be
noted that these circles would be added in phases and may be changed or
modified as levels of service are determined. This process starts with Council
directing staff (administrative and fire personnel) to research and negotiate a
possible second station site near County Rd. 16 and Vierling Drive. This area is
shown as the small circle around the number two (2) on the attached map. After
staff locates and has purchasing information on a site within this area, we will
return to the Council with final recommendation to acquire the site.
Recommendations:
The Shakopee Fire Department recommends that Council direct staff
(administrative and fire personnel) to research and negotiate possible station sites
near County Rd. 16 and Vierling Drive. After this research, staff will return to
Council with recommendations of possible sites for Acquisition.
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DOES APPLICANT DESIRE MORTGAGE E Ultimate 100 Homeowners
CANCELLATION LIFE INSURANCE? G Preferred Homeowners
MSI Coverages Policy Numbers ❑ Distinct Homeowners
❑ Life 0 Mutual Service(Seasonal,H00004,H00006) -
❑ Property • 0 Select Homeowners(Repair Cost Coverage)
❑ Casualty (Modern Service)
❑ Other 0 Ultimate-California Only Cash
Enclosed
Effective Date Expiration Date 0 Coverage Bound 0 Trial Application Payment Mode Budget Plan No.
❑ New Business Policy 0 Annual 0 Escrow
❑ Former Policyowner No. 0 BP 0 2-Pay
Named Insured(Include Spouse Name If Also Named Insured) Spouse(If Not Named Insured)
Mailing Address(Street,RFD or Box Number) Telephone(Include Area Code)
( )
City State Zip Code County
Former Address City State Zip Code
Insured Occupation Employer Business Phone Social Security#
Spouse Occupation Employer Business Phone Social Security#
Marital Status 0 Married 0 Divorced 0 Widow/ Date of Birth Employee I.D.#
0 Single 0 Separated Widower Insured Spouse
Former Carrier Address of Dwelling if other than above. If no street address, give legal descrip-
tion including lot,block,addition,section,township,range,county and state.
Policy#
Years with former carrier: Zip Code of Property:
Construction Year Roof #of Location of Dwelling #of Miles Fire Department Miles N.D. Rating Basic Protect Within Ft.
0 Frame Built Age Apts/ 0 Within 0 Outside From City that responds to to Dist. Zone Prem. Class From Fire
❑Masonry Families 0 City of Limits location F.D.: Fire# Group Hydrant
0 Mason Veneer 0 Town of -
❑Plastic/Aluminum 0 Twp p of
COVERAGE Limits of Liability Premium Form Options—Mutual Service or Select Check All That Apply:
A. Dwelling • $ —H00002_H00003_H00004_H00006 0 Woodburner
with
B.Other Structures $ CA only _H02_H03_HO4_H06 0 Metalethimney
C.Personal Property $ CHECK ONE 0 Primary 0 Seasonal 0 Secondary 0 Fireplace
D. Loss of Use $ CREDITS/DISCOUNTS
E. Personal Liability ,-- $
F.Medical Payme 1 $ Credits/Discounts Claim Free Discount
New Home/Electric % #of years
Deductible $250 500 I "11,4890---",:01.6er Burglary Alarm Credit % Companion Credit
Extension of Coverage i
'Fire Alarm Credit oho Seasonal Credit
Explain in Remarks
. \.}
1st INTEREST_Mortgagee_Fee Owner
�'�
Name
0 PPRC SUBTOTAL $ 0 Successors and/or it's assignees
TOTAL POLICY PREMIUM' $ Address(1)
Address(2)
*This is an approximation of premium.The final City,State,Zip
premium will be subject to Home Office Calculation Loan#: Balance Due:
SCHEDULED PERSONAL PROPERTY—List Items To Be Insured 2nd INTEREST_Mortgagee_Fee Owner
ITEM# DESCRIPTION AMOUNT OF PREMIUM Name
INSURANCE 0 Successors and/or it's assignees
Address(1)
Address(2)
City,State,Zip
Loan#: Balance Due:
Rater Underwriter
Initials Initials
Total
Attach Appraisals for items over$1000 Mail All Copies to: Agent ❑ Each Interested Party 0
Part 1 -Home Office Part 2-Agent Part 3-Applicant or Insured Agent No. Dist. No.
UH-2513(6-94) Minnesota Residents:See reverse side for important state information.
American Family Mutual Insurance Company
Madison,Wisconsin C7 New ❑ Replacement
HOMEOWNERS/REPAIR COST APPLICATION A CI Change ❑ Reissue
MINNESOTA E If change,who requested?
POLICY NUMBER N ❑ Underwriter ❑ Agent
T ❑ Mortgagee ElInsured
❑ Other
❑ 1 ❑ 3 ❑ G.S.4 ❑ 6 ❑ 8 AGT/DIST MO.OF CREDIT OTHER A.F.POLICY NUMBERS
❑ 2 ❑ 4 ❑ Gold Star ❑ G.S.6 ❑ 9
NAMED INSURED (L,F M) BIRTH DATE SOCIAL SECURITY NUMBER HOME TELEPHONE NO.
1. 1.
2. 2. I
LOCATION ADDRESS E=Emp. S=Self Emp. U=Unemp. R=Retired 0=Other
EMP. Occupation-Employer Work Telephone No.
CITY/VILLAGE STATE ZIP CODE
1.
Mailing Address (if different than above)
ADDRESS
2.
NAME OF PRESENT PROPERTY INSURER/AMOUNT AND RENEWAL DATE
CITY/VILLAGE STATE ZIP CODE
Named Insured Interest: ❑ Titleholder ❑ Contract Purchaser ❑ Tenant ❑ Condo Unit-Owner ❑ Leased Land ❑ Other
1. Applicant or member of household Yes No Yes No
a. had any past/current losses at any locations? ❑ ❑ 3. Dwelling have any unrepaired damage? ❑ ❑
b. been convicted of a felony? ❑ ❑ 4. Is location
c. had any collections,repossessions,judgments,liens,foreclosures,bankruptcies?❑ El -a:-subject to flooding or loCated is a spec art1iar 'L-f. .- ❑ .:
d. have any business,office.ss�noot cHad care or studio tine of the premises? ❑ ❑ area? .., { , ,,
„, _- - - - b. on ruralused to`raise feed;etc.,,at _
e. -.have anyj84ri8Ry tura;fine arcs,Buds;rxxnpu[ers,.ro bfes,,&L¢thiat exceed" --'— does it have faint ani- k or rerkedtcr x
PAY `E
the internal limits or need specific scheduling? -.. ,. �, . ., - 0 .0 others, n so,complete Row frri"riied`ehi- sk „' I
f. hada properly/liability policy canceled,non-renewal or rejected?
❑ ❑ S: Any outbuildings
(This question cannot be asked in the state of Missouri) (other than pr)ieegan3ge rt%Mhe strtiim ' r �--�
2. Is dwelling If yes,complete Optbrt P.End 42 or P1Na 118.E ed£t -?
6.: Any horses/ponies on premises or ownerkbvaheant� -rrxa
a. under construction,renovation or repair? - -
❑ ❑ member of the household? (Complete EiureF(nsw{pd - �- .-- t
b. a historic home? ❑ ❑ Chedtast) e°''• 2. - r':.
c. non-conforming under any zoning laws? ❑ ❑ 7. Any animals? If yes,has any animal injured anyone? ❑ ❑
❑ 0 Explain in REMARKS
d. adjacent to commercial property,poorly maintained or vacant buildings?
❑ El❑ 8. At present location under one year? If yes,list prior address
e. vacant,occupied part-time,seasonal,secondary or sno-bird?
CI ❑ 9. Any unrelated persons in the household? ❑ ❑
f. isolated per state location rules?
REMARKS: (EXPLAIN ALL"YES"ANSWERS. INDICATE QUESTION NUMBER AND SPECIFY INSURED TO WHOM EXPLANATION APPLIES.) /
V e e'...---..-.----------C-----------7 \ i
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Inside-City or Village Limits? Hydrant within 1,000 FT. Driving Distance to Responding Fire Dept/Fire District Name and No. County of Risk Location ,Zone - - Town Class
❑ es ❑ No ❑ Yes ❑,No Responn�ng Fke Stefan
MILES q- =,r
Fire Number If Membership/Fire Tag is required Town,Section,Range,Lot,Block,Tract No.Acres Township -.
for Fire Dept.response,is it current?
1 .
Yes ❑ No
Foundation Class of Type of Constriction Purchase Price 8 Year if
❑ Crawl Construction ❑ MAsonry ❑ Masonry Veneer ❑ Masonry Stucco ❑LOg purchased 5 yrs.ago or less
❑ Basement "' '"
❑ Slab ❑ Frame Regular ❑ Frame ANxnkwm 0 Frame-Steen/Vinyl I Plastic ❑ Frame Stucco '0 OTher
RFles.Around No.Stories`.Year Built ..., No.Fam.: Est.Market Value Replacement Cost 100% Solid Fuel Heat ❑ Yes ❑ No -Does Lack of' Heat'- Q?
SO.ea Yes ❑ No
(Other than conventional fireplace) �..: ❑ '
FT." Complete Solid Fuel Heating Form Yes No •Deserftre In Remarks
y o PRIMARY TYPE OF HEATING FUEL THERMOSTAT? Yr.'InsfafedlUpdated7 Y6G:7 sled/Updated
Hui ❑ Central EI Wall Furnace El Space EI Other ❑ Gas ❑ Wood El Electric ElElectric ❑ OCoal El Yes 1:1g,„
No Heatin «.,
,,.. ..Zi.PkupriYg :-
Jrc >ROOF YR.INSTALLED/UPDATED WIRING REDONE? :PANEL SIZE 'YR.INSTALLED/UPDATED TYPE �~^
a R
ir m Q Asphalt Shingle ❑'Flat ❑'Yds ❑ tgp"'' sings ❑ CoNduit 0 Knob&Cleat
C 4 Wood ❑ Other CIFuses ❑ Cir.Brks. ❑ Plastic Coated ❑ OTher
HO-13(MN) Ed.7/93 Page 1 of 2 Stock No. 05673 Rev.1/94
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4445117
TO: Dennis R. Kraft
FROM: Gregg Voxland, Finance Director
SUBJ: Investment Policy
DATE: November 3, 1995
Introduction
Council is requested to review and discuss a new investment policy.
Background
The events of Orange County continue to ripple through the financial
community. One of the effects is that a more comprehensive investment
policy is recommended for Minnesota cities. Attached is the draft of a
revised policy. The old one was a page and one half. This new one is
P Y P g
longer but does not make material changes from current practices.
I would like to draw Council's attention to several items in the policy
and have Council discuss them.
• Maturity length is the term satisfactory to Council as shown on
page
• Local (metro) brokers is it Council's desire to restrict the
usage of brokers to only those located in the metro area?
(page . - )
• Local (Shakopee) investment incentives/breaks
Action Requested
Discuss and give staff direction.
CITY OF SHAKOPEE, MINNESOTA
INVESTMENT POLICY
November 1, 1995
I. Scope
II. Objective
1. Safety
2. Liquidity
3. Yield
III. Standards of Care
1. Prudence
2. Ethics and Conflicts of Interest
3. Delegation of Authority
IV. Safekeeping and Custody
1. Authorized Financial Dealer and Institution
2. Internal Controls
3. Delivery vs. Payment (DVP)
V. Suitable and Authorized Investments
1. Investment Types
2. Collateralization
3. Repurchase Agreements
VI. Investment Parameters
1. Diversification
2. Maximum Maturities
VII. Reporting
1. Methods
2. Marking to Market
VIII. Policy
IX. Investment Pools
1. Definition
2. Questionnaire
X. Depositories
2
I. Scope
This policy applies to funds under the management and custody of the
City Treasurer/Finance Director. Excluded are funds of the Fire Relief
Association which has its own investment policy, funds under the
management of the deferred compensation administrator, funds held in
escrow by agents which are normally covered by the terms of the escrow
agreement and investment pools such as the 4M Fund, State Board
(of
agent
Investment and the cash flow pooling of the safe keeping
see
section IX on investment pools) .
Ii. Objective
The primary objectives, in priority order, on investment activities
shall be:
1. 5a. ety
Safety of principal is the foremost objective of the investment
program. Investments shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio.
The objective will be to mitigate credit risk and interest rate
risk.
A. Credit Risk
Credit risk is the risk of loss due to failure of the
security issuer or backer. Credit risk may be mitigated by:
Limiting investments to the safest types of securities;
Pre-qualifying the financial institutions,
broker/dealers, intermediaries, and advisors with which
the city will do business;
Diversifying the investment portfolio so that the
potential losses on individual securities will be
minimized.
B. Interest Rate Risk
Interest rate risk is the risk that the market value of
securities in the portfolio will fall due to changes in
general interest rates. Interest rate risk may be mitigated
by:
Structuring the investment portfolio so that securities
mature to meet cash requirements for ongoing operations,
thereby avoiding the need to sell securities on the open
market prior to maturity;
By investing operating funds primarily in shorter-term
securities.
2. Liquidity
3
The investment portfolio shall remain sufficiently liquid to
meet all operating requirements that may be reasonably
anticipated. This is accomplished by structuring the portfolio
so that securities mature concurrent with cash needs to meet
anticipated demands (static liquidity) . Furthermore, since all
possible cash demands can not be anticipated, the portfolio
should consist largely of securities with active secondary or
resale markets (dynamic liquidity) .
3. Yield
The investment portfolio shall be designed with the objective of
attaining a market rate of return throughout budgetary and
economic cycles, taking into account the investment risk
constraints and liquidity needs. Return on investment is of
least importance compared to the safety and liquidity objectives
described above. The core of investments are limited to
relatively low risk securities in anticipation of earning a fair
return relative to the risk being assumed. Securities shall not
be sold prior to maturity with the following exceptions:
1) a declining credit security should be sold early to minimize
the loss of principal;
2) a security swap would improve the quality, yield, or target
duration in the portfolio;
3) liquidity needs of the portfolio require that the security be
sold; or
4) there is a definite economic benefit to be realized.
III. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials
shall be the "prudent person" standard and shall be applied in
the context of managing an overall portfolio. Investment
officers acting in accordance with written procedures and this
investment policy and exercising due diligence shall be relieved
of personal responsibility for an individual security's credit
risk or market price changes, provided deviations from
expectations are reported in a timely fashion and the liquidity
and the sale of securities are carried out in accordance with
the terms of this policy.
Investments shall be made with judgment and care, under
circumstances then prevailing, which persons of prudence,
discretion and intelligence exercise in the management of their
own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as the
probable income to be derived.
2. Ethics and Confl ;r t- F Tatext t
Officers and employees involved in the investment process shall
refrain from personal business activity that could conflict with
the proper execution and management of the investment program,
4
or that could impair their ability to make impartial decisions.
Employees and investment officials shall disclose any material
interests in financial institutions with which they conduct
business. They shall further disclose any personal
financial/investment positions that could be related to the
performance of the investment portfolio. Employees and officers
shall refrain from undertaking personal investment transactions
with the same individual with whom business is conducted on
behalf of their entity.
3. Delegation of Authority
Authority to manage the investment program is granted to the
Finance Director derived from the following: (insert code
ordinance or statute) . Responsibility for the operation of the
investment program is hereby delegated to the Finance Director,
who shall carry out established written procedures and internal
controls for the operation of the investment program consistent
with this investment policy. Procedures should include
references to: safekeeping, delivery vs. payment, investment
accounting, repurchase agreements, wire transfer agreements,
collateral/depository agreements and banking services contracts.
No person may engage in an investment transaction except as
provided under the terms of this policy and the procedures
established by the Finance Director. The Finance Director shall
be responsible for all transactions undertaken and shall
establish a system of controls to regulate the activities of
subordinate officials.
IV. Safekeeping and Custody
1. Authorized Financial Dealer and Institution
A list will be maintained of financial institutions authorized
to provide investment services. In addition, a list will also
be maintained of approved security broker/dealers selected by
creditworthiness (minimum capital requirement $10,000,000 and at
least five years of operation) . These may include "primary"
dealers or regional dealers that qualify under Securities and
Exchange Commission Rule 15C3-1 (uniform net capital rule) .
All financial institutions and broker/dealers who desire to
become qualified bidders for investment transactions must be
located in the Twin City metropolitan area and supply the
following as appropriate:
• audited financial statements
• proof of National Association of Securities Dealers (NASD)
certification
• proof of state registration
• certification of having read the city's investment policy
An annual review of the financial condition and registration of
qualified bidders will be conducted by the Finance Director.
5
2. Internal Controls
The City Administrator is responsible for establishing and
maintaining an internal control structure designed to ensure
that the assets of the entity are protected from loss, theft or
misuse. The internal control structure shall be designed to
provide reasonable assurance that these objectives are met. The
concept of reasonable assurance recognizes that (1) the cost of
a control should not exceed the benefits likely to be derived;
and (2) the valuation of costs and benefits requires estimates
and judgments by management.
Accordingly, the City Administrator shall establish a process
for annual independent review by an external auditor to assure
compliance with policies and procedures. The internal controls
shall address the following points:
a. Control of Collusion. Collusion is a situation where two or
more employees are working in conjunction to defraud their
employer.
b. Separation of transaction authority from accounting and
record keeping. By separating the person who authorizes or
performs the transaction from the people who record or otherwise
account for the transaction, a separation of duties in achieved.
c. Custodial safekeeping. Securities purchased from any bank or
dealer including appropriate collateral (as defined by state
law) shall be placed with an independent third party for
custodial safekeeping.
d. Avoidance of physical delivery securities. Book entry
securities are much easier to transfer and account for since
actual delivery of a document never takes place. Delivered
securities must be properly safeguarded against loss or
destruction. The potential for fraud and loss increases with
physical delivered securities.
e. Clear delegation of authority to subordi,pace staff members.
Subordinate staff members must have a clear understanding of
their authority and responsibilities to avoid improper actions.
Clear delegation of authority also preserves the internal
control structure that is contingent on the various staff
position and their respective responsibilities.
f. Written confirmation of telephone transactions for
investments and wire transfers. Due to the potential of error
and improprieties arising from telephone transactions, all
telephone transaction should be supported by written
communications and approved by the appropriate person. Written
communications may be via fax if the safekeeping institution has
a list of authorized signatures.
g. Development of a wire transfer agreement with the lead bank
or third party custodian. This agreement should outline the
6
various controls, security provisions, and delineate
responsibilities of each party making and receiving wire
transfers.
From time to time, investors may choose to invest in instruments
offered by minority and community financial institutions. These
financial institutions may not meet all the criteria under
paragraph 1. All terms and relationship will be fully disclosed
prior to purchase and will be reported to the appropriate entity
on a consistent basis and should be consistent with state or
local law. Also, these types of investment purchases should be
approved by the appropriate legislative body in advance.
3. Delivery vs. Payment
All trades where applicable will be executed by delivery vs.
payment (DVP) . This ensures that securities are deposited in
the eligible financial institution prior to the release of
funds. Securities will be held by a third party custodian as
evidenced by safekeeping receipts.
V. Suitable and Authorized Investments
1. Investment Types
Consistent with the GFOA Recommended Practice on State Statutes
Concerning Investment Practices, the following investments will
be permitted by this policy and are those defined by state law
where applicable;
a. U.S. Government obligations, U.S. Government agency
obligations, and U.S. Government instrumentality obligations
b. Prime bankers acceptances
c. Prime commercial paper
d. Investment-grade obligations of state and local governments
and public authorities
e. Certificates of deposit
f. Investment pools or mutual funds of short to intermediate
term duration utilizing the above and repurchase agreements.
Investment in derivatives is not authorized.
2. Collateralization
In accordance with state law and the GFOA Recommended Practices
on the Collateralization of Public Deposits, full
collateralization will be required on certificates of deposits
to extent the deposits exceed the available FDIC insurance.
VI. Invest Parameters
1. Diversification
The investments will be diversified by security type and
institution. All investments other than in direct obligations
7
or agencies of the United States, secured by collateral, or
repurchase agreements, shall not exceed fifty percent of the
portfolio. This limitation is determined by type of investment,
i.e. commercial paper or bankers acceptance. Further,
investment in any one corporation shall not exceed 20t of the
portfolio and 5% of the corporation's assets.
2. Maximum Maturities
Twenty percent of the portfolio maybe invested to a maximum of
10 years maturity. The balance of the portfolio shall have a 5
year maximum maturity. Maturities shall be generally spread
across the time in a laddering effect except as needed to match
anticipated cash flow requirements.
VII. Reporting
1. Methods
The Finance Director shall prepare an investment report at least
quarterly. The report will be provided to the City
Administrator, City Council and EDA for "city funds" and to the
Shakopee Public Utilities Commission for its funds. Included in
the report shall be the following:
• A listing of individual securities held at the end of the
reporting period listed by maturity date.
• The carrying basis, the current calculated accreted basis and
the current market value.
• Weighted average yield to maturity.
• Percentage of total portfolio by type of investment.
2. Marking to Market
A statement of the market value of the portfolio, obtained from
independent sources shall be issued at least quarterly with the
above report. This will ensure that the minimal amount of
review has been performed on the investment portfolio in terms
of value and subsequent price volatility.
VIII. Policy
1. Amendment
This policy shall be reviewed on an annual basis. Any changes
must be approved by the City Council.
IX. Investment Pools
1. Definition
The purpose of an investment pool is to allow political
subdivisions to pool investable funds in order to achieve a
potentially higher yield.
There are basically three types of pools, 1) state run pools; 2)
pools operated by a political subdivision where allowed by law
8
and the political subdivision is the trustee; and 3) pools that
are operated for profit by third parties. Prior to the city
being involved with any type of pool, a through investigation of
the pool and its policies and procedures must be reviewed.
2. pool Ouestionnaire
Prior to entering a pool, the following questions and issues
should be considered.
Securities
Government pools may invest in a broader range of securities
than permitted by city policy. Deviation from the policy is
permitted for pools to the extent that securities are authorized
by state statute and the Finance Director/Treasurer is aware of
and comfortable with those securities.
1. Does the pool provide a written statement of investment
policy and objectives?
2. Does the statement contain:
a. a description of eligible investment instruments?
b. the credit standards of investments?
c. the allowable maturity range of investments?
d. the maximum allowable dollar weighted average portfolio
maturity?
e. the limits of portfolio concentration permitted for each
type of security?
f. the policy on reverse repurchase agreements, options,
short sales and futures?
3. Are changes in the policies communicated to the pool
participants?
Interest
Interest is not reported in a standard format, so it is
important to know how interest is quoted, calculated and
distributed so that you can make comparisons with other
investment alternatives.
Interest Calculations
1. Does the pool disclose the following about yield
calculations:
a. the methodology used to calculate interest? (simple
maturity, yield to maturity, etc.)
b. the frequency of interest payments?
c. how interest is paid? (credited to principal at the end of
the month, each quarter; mailed?)
d. how are gains/losses reported? factored monthly or only
when realized?
Reporting
1. Is the yield reported to participants of the pool monthly?
2. are expenses of the pool deducted before quoting the yield?
3. is the yield generally in line with the market yield for
securities in which would otherwise be purchased?
9
4. How often does the pool report, and does that report include
the market value of securities?
Security
The following questions are designed to assist in safeguarding
funds from loss of principal and loss of market value.
1. Does the pool disclose the safekeeping practices?
2. Is the pool subject to audit by an independent auditor?
3. Is a copy of the audit report available to participants?
4. Who makes portfolio decisions?
5. How does the manager monitor the credit risk of the
securities in the pool?
6. Is the pool monitored by someone on the board of a separate
neutral party external to the investment function to ensure
compliance with written policies?
7. Does the pool have specific policies with regards to the
various investment vehicles?
a. what are the different investment alternatives?
b. what are the policies for each type of investment?
8. Does the pool mark the portfolio to its market value?
9. Does the pool disclose the following about how portfolio
securities are valued:
a. the frequency with which the portfolio securities are
valued?
b. the method used to value the portfolio (cost, current
value, or some other method) ?
Operations
The answers to these questions will help determine if a pool
meets the operational needs of the city.
1. Does the pool limit eligible participants?
2. What entities are permitted to invest in the pool?
3. Does the pool allow multiple accounts and/or sub-accounts?
4. Is there a minimum or maximum account size?
5. Does the pool limit the number of transactions each month?
What is the number of transactions permitted each month?
6. Is there a limit on transaction amounts for withdrawals and
deposits?
a. what is the minimum and maximum withdrawal amount
permitted?
b. what is the minimum and maximum deposit amount permitted?
7. How much notice is required for withdrawals/deposits?
8. What is the cutoff time for deposits and withdrawals?
9. Can withdrawals be denied?
10. Are funds 1008 withdrawable at any time?
11. What are procedures for making deposits and withdrawals?
a. what is the paperwork required, if any?
b. what is the wiring process?
12. Can an account remain open with a zero balance?
13. Are confirmations sent following each transaction?
Statements
10
It is important to received statements monthly for documentation
and reconciliation purposes.
1. Are statements for each account sent to participants?
a. What are the fees?
b. how are they passed?
c. how are they paid?
d. are there additional fees for wiring funds (what is the
fee) ?
2. Are expenses deducted before quoting the yield?
Questions To Consider For Bond Proceeds
It is important to know (1) whether the pool accepts bond
proceeds and (2) whether the pool qualifies with the U.S.
Department of the Treasury as an acceptable commingled fund for
arbitrage purposes.
1. Does the pool accept bond proceeds subject to arbitrage
rebate?
2. Does the pool provide accounting and investment records
suitable for proceeds of bond issuance subject to arbitrage
rebate?
3. Will the yield calculation reported by the pool be acceptable
to the IRS or will it have to be recalculated?
4. Will the pool accept transaction instructions from a trustee?
5. Is the city allowed to have separate accounts for each bond
issue so that the city does not have to commingle the interest
earnings of funds subject to rebate with funds not subject to
regulations?
X. Depositories
Pursuant to Minnesota Statures, Section 118.005, the Finance Director is
authorized to designate as a depository of city funds such national,
insured state banks or thrift institutions as defined in Section 51A.02,
Subdivision 23, as deemed proper. The Finance Director shall inform
City Council whenever a change is made in the list of designated
depositories.
Any bank, trust company or thrift institution authorized to do business
in this state, designated as a depository of city funds may, in lieu of
a corporate or personal surety bond required to be furnished to receive
the funds, assign to or deposit with the City Finance Director/Treasurer
legally authorized investments or securities as collateral. The Finance
Director is authorized by City Council to approve of the arrangements
for safekeeping of pledged collateral.
The total amount of the collateral computed at its market value shall be
at least ten percent more than the amount of deposit in excess of any
insured portion. The depository may at its discretion furnish both a
bond and collateral aggregating the required amount. The City will not
accept mortgages as collateral.
11
Pursuant to Section 471.56, Subdivision 1, any city funds not presently
needed for other purposes may be deposited or invested in the manner and
subject to the conditions provided in Section 475.66.
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Updated: October 1995
Designated Depositories
Marquette Bank
Norwest Bank Minnesota, NA
Citizens State Bank of Shakopee
The Family Bank
Authorized Financial Dealers and Institutions
Marquette Bank
Norwest Bank Minnesota, NA
Norwest Investment Services Inc.
Smith Barney, Inc.
Piper Jaffery, Inc.
Dain Bosworth, Inc.
Juran & Moody, Inc.
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