The URL can be used to link to this page

10-15-19 HRA Agenda Packet REGULAR MEETING AGENDA Pages 1. Roll Call 2. Approval of Agenda 3. Approval of Minutes: A. Work Session – July 9, 2019 2 B. Regular Meeting – July 16, 2019 3‐4 C. Work Session – September 10, 2019 5 4. Reimbursement of City Expenditures 6 5. Receipt of September 2019 Financial Reports 7‐9 6. Approve Amendments to Housing and Redevelopment Authority By‐Laws 19‐03 10‐20 7. Approve Tax Increment Pledge Agreement or Winnetka and Medicine Lake Tax Increment District 21‐80 8. Adopt Housing and Redevelopment Authority Budgets A. Adoption of 2019 Housing Program Fund 19‐04 B. Adoption of 2020 Budgets 19‐05 and 19‐06 81‐83 84‐87 9. Adjournment October 15, 2019 – 6:30 pm Council Chambers Golden Valley City Hall 7800 Golden Valley Road WORK SESSION MINUTES Call to Order The meeting was called to order at 9:10 pm by Chair Fonnest. Present: Chair Larry Fonnest, Commissioners Joanie Clausen, Shep Harris, Gillian Rosenquist and Steve Schmidgall Staff present: HRA Director Cruikshank, HRA Attorney Cisneros, Physical Development Director Nevinski City Engineer Oliver, Engineer Kakach 1. Update on Global Pointe/Talo Sanitary Sewer Repairs City Engineer Oliver presented the staff report that included information on the inspections performed on the Talo Apartments regarding the sanitary sewer and Inflow and Infiltration of the private sanitary sewer system on the site. He answered questions from the Commissioners regarding the project. Physical Development Director Nevinski answered questions from the Commissioners regarding parking issues at Talo Apartments. HRA Director Cruikshank, HRA Attorney Cisneros and Engineer Kakach answered questions for the Commissioners. 2. Adjourn The meeting adjourned at 9:28 pm. Larry Fonnest, Chair Kristine A. Luedke, City Clerk July 9, 2019 – 9 pm Council Conference Room Golden Valley City Hall 7800 Golden Valley Road REGULAR MEETING MINUTES 1. Call to Order The meeting was called to order at 6:30 pm by Housing and Redevelopment Authority Chair Fonnest. 2. Roll Call Present: Chair Larry Fonnest, Commissioners Joanie Clausen, Shep Harris, Gillian Rosenquist and Steve Schmidgall Staff present: HRA Director Cruikshank, HRA Attorney Cisneros, Physical Development Director Nevinski and City Clerk Luedke 3. Approval of Agenda MOTION made by Commissioner Schmidgall, seconded by Commissioner Rosenquist to approve the agenda of July 16, 2019, as submitted and the motion carried. 4. Approval of Housing and Redevelopment Authority Minutes - Regular Meeting – April 16, 2019 MOTION made by Commissioner Schmidgall, seconded by Commissioner Clausen to approve the Regular Housing and Redevelopment Authority minutes of April 16, 2019, as submitted and the motion carried. 5. Reimbursement of City Expenditures Finance Director Virnig presented the staff report. MOTION made by Commissioner Harris, seconded by Commissioner Schmidgall to approve the following payments: Cornerstone Creek $27,510, Golden Villas $169,236.50, Associated Bank 26,930.43 and the City of Golden Valley $188,234.93 and the motion carried. 6. Receipt of July 2019 Financial Reports Finance Director Virnig presented the staff report. MOTION made by Commissioner Clausen, seconded by Commissioner Schmidgall to receive and file the July 2019 HRA Financial Reports and the motion carried. Jul 16, 2019 – 6:30 pm Council Chambers Golden Valley City Hall 7800 Golden Valley Road City of Golden Valley HRA Regular Meeting Minutes July 16, 2019 – 6:30 pm 2 7. Fourth Amendment and Assignment of GVEC Properties, LLC Private Development Agreement HRA Attorney Cisneros presented the staff report and answered questions from the Commissioners. Assistant Executive Director Nevinski answered from the Commissioners. MOTION made by Commissioner Schmidgall, seconded by Commissioner Clausen to approve the Fourth Amendment and Assignment of GVEC Properties, LLC Private Development Agreement and the motion carried. 8. Adjournment MOTION made by Commissioner Harris, seconded by Commissioner Schmidgall and the motion carried to adjourn the meeting at 6:43 pm. Larry Fonnest, Chair ATTEST: Kristine A. Luedke, City Clerk WORK SESSION MINUTES 1. Call to Order The meeting was called to order at 6:30 pm by Chair Fonnest. Present: Chair Larry Fonnest, Commissioners Joanie Clausen, Shep Harris, Gillian Rosenquist and Steve Schmidgall Staff present: HRA Director Cruikshank, HRA Attorney Cisneros, Physical Development Director Nevinski and Planning Intern Anderson 2. 4d Affordable Housing Incentive Program Planning Intern Anderson presented the staff report including information on the Minnesota Statute allowing qualifying low-income rental properties to be eligible for a class rate reduction in property taxes. She provided information on the Affordable Housing Incentive program and the benefits to the property owners and the City of Golden Valley along with the financial impact and overall process. She answered questions from the Commissioners. HRA Director Cruikshank and HRA Attorney Cisneros answered questions from the Commissioners. The Commissioners discussed the 4d Affordable Housing Incentive Program, ways of advertising the program, the renewal process and the HRA budget. The Commissioner’s consensus was to move forward with the program. HRA Director Cruikshank said that the item would be added to the next Housing & Redevelopment Authority meeting on October 15. 3 . Adjournment The meeting adjourned at 7:03 pm. Larry Fonnest, Chair Kristine A. Luedke, City Clerk September 10, 2019 – 6:30 pm Council Conference Room Golden Valley City Hall 7800 Golden Valley Road Golden Valley Housing and Redevelopment Authority Meeting October 15, 2019 Agenda Item 4. Reimbursement of City Expenditures Prepared By Sue Virnig, Finance Director Summary As of September 30, 2019 the HRA has no expenditures. Financial Or Budget Considerations Not applicable Recommended Action Motion to replace check #4095 with #4097 for $26,930.43 to Associated Bank. Golden Valley Housing and Redevelopment Authority Meeting October 15, 2019 Agenda Item 5. Receipt of September 2019 Financial Reports Prepared By Sue Virnig, Finance Director Summary Attached are the September 2019 Financial Reports for Housing and Redevelopment Authority (HRA) review. Financial Or Budget Considerations Not applicable Recommended Action Motion to receive and file the September 2019 HRA Financial Reports. Supporting Documents HRA General Fund Budget Report (1 page) HRA Capital Project Funds Report (1 page) Percentage Of Year Completed: 75% Over % Of 2019 July-Sept YTD (Under)Budget Revenue Budget Actual Actual Budget Received Interest Earnings (1)0 0.00 0.00 0.00 Fund Balance 12,000 0.00 12,000.00 0.00 Totals $12,000 0.00 12,000.00 0.00 100.00% Over % Of 2019 July-Sept YTD (Under)Budget Expenditures Budget Actual Actual Budget Expended Audit 12,000 0.00 12,000.00 0.00 100.00% Totals $12,000 0.00 12,000.00 0.00 100.00% Notes: 1) Interest will be allocated at year end. HRA of Golden Valley General Fund September 2019 Budget Report (unaudited) HRA Of Golden Valley 2019 Financial Report 9300 9302 9400 9250 Hwy 55/Cornerstone Winnetka North West TIF (4)Med Lk Rd Wirth #3 Cash Balance @ 07/01/19 $136,509.45 $7.84 $116,486.48 $37.10 Add: Receipts: Interest Lease revenue Increment Received Less: Expenditures: Payment to Cornerstone Creek (1); Payment to Golden Villas (2) Payment to City of Golden Valley 0.00 Payment to Associated Bank (3) Cash Balance @ 09/30/19 $136,509.45 $7.84 $116,486.48 $37.10 2)(2)(3) 1) Payment for Housing District 2) Payment for Renewal and Renovation District 3) Pay Go Note remaining $160,248.85. Capital Project Funds gofdt:v'11 va ey EXECUTIVE SUMMARY Housing and Redevelopment Authority 763-593-8006 / 763-593-8109 (fax) Golden Valley Housing Redevelopment Authority Meeting October 15, 2019 Agenda Item 6. Approve Amendments to Housing and Redevelopment Authority By-Laws Prepared By Tim Cruikshank, HRA Executive Director Summary Staff is recommending amendments to Article Ill - Meetings of the Housing and Redevelopment Authority (HRA) By-laws to include a provision for HRA Work Sessions. The Work Session shall be scheduled on the second Tuesday of the month prior the Regular HRA meeting to discuss HRA policies, projects and other HRA business. In addition, recent changes have been made to both the City and HRA agendas so that they are consistent in look as well as order of business. Staff recommends that Article Ill, Section 7 in the Housing and Redevelopment By-Laws need to reflect the recommended order of business that will begin with the January 2020 meeting. Section. 7. Order of Business. At the regular meetings of the Authority, the following shall be the order of business: 1.Roll Call 2.Reading and approval of the minutes of the previous meeting 3.Bills and Claims 4.Reports of the �xecutive Director 5.Reports of Committeese.Unfinished Business 7.�Jew Business 8./\djournment. 2.Approve Agenda 3.Consent Agenda Approval of Minutes Reimbursement of Expenditures Receipt of Financial Reports Routine Items if needed to be approved 4.Public Hearing (if needed) 5.Old Business 6.New Business 7.Adjournment City Council Regular Meeting Executive Summary City of Golden Valley October 15, 2019 2 Per the HRA By-laws, Article V – Amendments to the By-Laws require approval at two regular meeting or special meetings of the Authority. Staff recommends amending this section to allow for approval of the By-Law amendments to be made at one meeting of the Authority. Financial Or Budget Considerations Not applicable Recommended Action Motion to adopt Resolution Amending Housing and Redevelopment Authority By-Laws. Supporting Documents Resolution Amending Housing and Redevelopment Authority By-Laws (9 pages) RESOLUTION NO. 19-03 RESOLUTION AMENDING THE HOUSING AND REDEVELOPMENT AUTHORITY BY-LAWS WHEREAS, the Housing and Redevelopment Authority (Authority) for the City of Golden Valley desires to change a portion of its By-laws; and, WHEREAS, Section 3. Office of Authority currently is listed as “Civil Center” and shall be amended to “Golden Valley City Hall”; and WHERESA, Article III – Meeting should be amended to reword the Regular Meeting, add a provision for HRA Work Session and update Section 7 Order of Business to be to reflect changes in the regular meeting order; and WHEREAS, the Authority shall amend the HRA By-Laws effective to allow for approval of By-Law changes at one meeting of the Authority. NOW, THEREFORE, BE IT RESOLVED by the Golden Valley Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota that the following amendment to its By-Laws is hereby adopted: Section 3. Office of Authority. The offices of the Authority shall be at the Golden Valley City Hall, 7800 Golden Valley Road, in the City of Golden Valley, State of Minnesota, but the Authority may hold its meetings at such other place or places as it may designate by resolution. Article III – Meetings Section 2. Regular Meetings. meetings shall be held quarterly at the regular meeting place of the Authority on the third Tuesday of January (in conjunction with the annual meeting), April, July and October, unless a specific meeting is changed or cancelled at a scheduled meeting of the Authority held prior to the meeting to be changed or cancelled. Section 3. Work Sessions. Work Session meetings shall be held quarterly on the second Tuesday March, June, September and December unless a specific meeting has been changed or cancelled prior to the meeting date. Section. 7. Order of Business. At the regular meetings of the Authority, the following shall be the order of business: 1. Roll Call 2. Approve Agenda 3. Consent Agenda Approval of Minutes Reimbursement of Expenditures Receipt of Financial Reports Routine Items if needed to be approved 4. Public Hearing (if needed) HRA Resolution 19-03 -2- October 15, 2019 5. Old Business 6. New Business 7. Adjournment Article V – Amendments Amendments to By-Laws. The By-Laws of the Authority shall be amended by the affirmative vote of at least three of the members of the Authority. BE IT FURTHER RESOLVED that the By-laws as herein amended are attached and labeled "Exhibit A" By-laws of the Golden Valley Housing and Redevelopment Authority. _____________________________ Larry Fonnest, Chair ATTEST: _____________________________ Timothy J. Cruikshank, Executive Director HRA Resolution 19-03 -3- October 15, 2019 Exhibit A BY-LAWS OF THE GOLDEN VALLEY HOUSING AND REDEVELOPMENT AUTHORITY Article I – The Authority Section 1. Name of Authority. The name of the Authority shall be the “Housing and Redevelopment Authority of Golden Valley, Minnesota”. Section 2. Seal of Authority. The seal of the Authority shall be in the form of a circle and shall bear the name of the Authority and the year of its organization. Section 3. Office of Authority. The offices of the Authority shall be at the Civic Center Golden Valley City Hall, 7800 Golden Valley Road, in the City of Golden Valley, State of Minnesota, but the Authority may hold its meetings at such other place or places as it may designate by resolution. Article II – Officers Section 1. Officers. The officers of the Authority shall be a Chairperson and Vice- Chairperson. Section 2. Chairperson. The Chairperson shall preside at all meetings of the Authority. Except as otherwise authorized by resolution of the Authority, the Chairperson shall sign all contracts, deeds and other instruments made by the Authority. At each meeting, the Chairperson shall submit such recommendations and information as he/she may consider proper concerning the business, affairs and policies of the Authority. Section 3. Vice-Chairperson. The Vice-Chairperson shall perform the duties of the Chairperson in the absence or incapacity of the Chairperson; and in the case of the resignation or death of the Chairperson, the Vice-Chairperson shall perform such duties as are imposed on the Chairperson until such time as the Authority shall select a new Chairperson. Section 4. Director. The Director shall be the City Manager of Golden Valley. He/she shall have responsibility for the general supervision of the projects of the Authority and supervision of the personnel of Golden Valley who are to furnish services to the Authority. He/shall perform, or have performed, such activities as the Authority shall from time to time reasonably request. He/she shall be responsible for the care and custody of all funds of the Authority and for the deposit thereof in the name of the Authority in such bank or banks as the Authority from time to time shall designate; for the keeping of regular books of accounts showing receipts and expenditures; for rendering to the Authority, at each quarterly meeting of the Authority, an account of the income and expenses of the Authority, for rendering of such additional financial and other reports as the Authority from time to time shall request. Section 5. Support Personnel. The Director shall be responsible for and have the authority to, employ, terminate or utilize other available personnel to perform HRA functions. This authority is in keeping with and under the same provisions as the City HRA Resolution 19-03 -4- October 15, 2019 Manager of the City of Golden Valley is empowered to direct personnel under State law. Such personnel may include an Assistant Director who may perform the duties of the Director in his or her absence. Section 6. Secretary. The Secretary shall be any one of the secretaries made available from time to time by the Director for use by the Authority from the personnel of Golden Valley and shall perform all duties required of the position, including but not limited to, the following: taking of dictation, doing typing and filing for any of the Authority’s administrative staff, taking minutes and keeping records of meetings of the Authority, public hearings, and staff meetings as required by the Director, and any other secretarial work necessary to the timely and successful completion of the Authority’s projects, as required by the Director. Section 7. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the By-Laws or rules and regulations of the Authority. Section 8. Election or Appointment. The first Chairperson shall, pursuant to his/her appointment, serve in the capacity of Chairperson until the expiration of his/her term of office as Commissioner. The vice-Chairperson and the Chairperson shall be elected at the annual meeting of the Authority from among the Commissioners of the Authority, and shall hold office for one year or until their successors are elected and qualified. Section 9. Vacancies. Should the office of Chairperson or Vice-Chairperson become vacant, the Authority shall elected a successor from its membership at the next regular meeting, and such election shall be for the unexpired term of said office. When the office of the Director becomes vacant, the Authority shall appoint a successor, as aforesaid. Section 10. Additional Personnel. The Authority may, from time to time, employ such personnel as it deems necessary to exercise its powers, duties, and functions as prescribed by the Municipal Housing and Redevelopment Law of Minnesota applicable thereto. The compensation of such personnel (including the Director) shall be determined by the Authority subject to the laws of the State of Minnesota. Article III – Meetings Section 1. Annual Meeting. The annual meeting of the Authority shall be held on the third Tuesday of January, at the regular meeting place of the Authority, unless changed at a scheduled meeting of the Authority held prior to the established date. Section 2. Regular Meetings. Quarterly meetings shall be held quarterly at the regular meeting place of the Authority on the third Tuesday of January (in conjunction with the annual meeting), April, July and October, unless a specific meeting is changed or cancelled at a scheduled meeting of the Authority held prior to the meeting to be changed or cancelled. HRA Resolution 19-03 -5- October 15, 2019 Section 3. Work Sessions. Work Session meetings shall be held quarterly on the second Tuesday March, June, September and December unless a specific meeting has been changed or cancelled prior to the meeting date. Section 34. Meeting Times. Standard meeting times for the annual and regular meeting shall be established by resolution of the Authority and may only be changed by subsequent resolutions. The Authority may, however, change the meeting time for a specific meeting at a scheduled meeting of the Authority held prior to the meeting to be changed. Section 45. Special Meetings. Special meetings of the Authority may be called by the Chairperson or two members of the Authority for the purpose of transacting any business designated in the call. The call for a special meeting may be either: (a) in writing and delivered at any time prior to the time of the proposed meeting to each member of the Authority or mailed to the business or home address of each member of the Authority, or (b) verbal by direct contact or telephone. In any event, said call shall be given at least two (2) days prior to the date of such special meeting, and it shall be posted in accordance with the Minnesota Open Meeting Law. At such special meetings no business shall be considered other than as designated in the call, but if all the members of the Authority are present at special meetings, any and all business may be transacted as such special meeting. Section 56. Executive Session. Upon being duly noticed, all or part of any regular or special meeting may be held as a closed, executive session to the extent permitted by Minnesota Law. Section 67. Quorum. The powers of the Authority shall be vested in the Commissioners thereof in office from time to time. Three Commissioners shall constitute a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, but a smaller number may adjourn from time to time until al quorum is obtained. When a quorum is in attendance, action may be taken by the Authority upon a vote of a majority of the Commissioners present. Section. 78. Order of Business. At the regular meetings of the Authority, the following shall be the order of business: 1. Roll Call 2. Reading and approval of the minutes of the previous meeting 3. Bills and Claims 4. Reports of the Executive Director 5. Reports of Committees 6. Unfinished Business 7. New Business 8. Adjournment. 2. Approve Agenda 3. Consent Agenda Approval of Minutes Reimbursement of Expenditures HRA Resolution 19-03 -6- October 15, 2019 Receipt of Financial Reports Routine Items if needed to be approved 4. Public Hearing (if needed) 5. Old Business 6. New Business 7. Adjournment All resolutions shall be in writing and shall be copied in the journal of proceedings of the Authority. Section 89. Manner of Voting. Yeas and Nays of the Commissioners shall be recorded on all matters before the Authority, except those questions requiring a roll call vote. The voting on all matters shall be entered upon the minutes of such meeting. Article IV – Disbursement of Funds Funds shall be appropriated and disbursed by the Director under the direction of the Authority. There will be a two-signature requirement on any check issued by the Authority. Persons authorized to sign Authority checks are the Chairperson (or Vice-Chairperson in the absence of the Chairperson), and the Director. The signatures of the Chairperson or Vice-Chairperson may be by signature stamp to the extent authorized by the Chairperson or the Vice-Chairperson. Article V – Amendments Amendments to By-Laws. The By-Laws of the Authority shall be amended only with the approval by the affirmation vote of at least three of the members of the Authority. which shall not become effective until approved at two regular or special meetings of the Authority. Article VI – Code of Ethics Section 1. Policy. Subdivision 1. General Declaration of Policy. It is imperative that all persons acting in the public service not only maintain the highest possible standards of ethical conduct in their transaction of public business, but that such standards be clearly defined and known to the public as well as to the persons acting in public service. The proper operation of democratic government requires that public officials be independent, impartial and responsible to the people; that governmental decisions and policies are made in the proper channels of the governmental structure; that public office not be used for personal gain; and that the public have confidence in the integrity of its government. In recognition of these goals there is hereby established a Code of Ethics for public officials of the Authority. The purpose of this Code is to establish ethical standards of conduct for such officials by setting forth those acts or actions that are incompatible with the best interests of the Authority and by directing disclosure by such officials of private, HRA Resolution 19-03 -7- October 15, 2019 financial or other interests in matters affecting the Authority. The provisions and purpose of this Code are declared to be in the best interests of the Authority. Subdivision 2. Responsibilities of Public Office. Public officials are agents of public purpose and hold office for the benefit of the public. They are bound to uphold the Constitution of the United States and the Constitution of this State and to carry out impartially the laws of the nation, state and municipality and thus, to foster respect for all government. They are bound to observe in their official acts, the highest standards or morality and to discharge faithfully the duties of their office. Subdivision 3. Dedicated Service. All officials of the Authority shall be dedicated to fulfilling their responsibilities of office described herein. They shall be dedicated to the public purpose and all programs developed by them shall be in the community interest. Public officials shall not exceed their authority or breach the law or ask others to do so, and they shall work in full cooperation with other public officials and employees unless prohibited from doing to by law or by officially recognized confidentiality of their work. Subdivision 4. Scope of Persons Covered. The provisions of this Code of Ethics shall be applicable to the Director, all Commissioners of the Housing and Redevelopment Authority of Golden Valley, Minnesota, and all advisory commissions and committee members thereof. The Director shall promulgate a similar Code of Ethics for paid employees and consultants. Section 2. Fair and Equal Treatment. Subdivision 1. Subject to the provisions of Subdivision 3 below, no commissioner, advisory commission member or committee member, while acting as such, shall participate in the discussion of, or vote on, any issue in which he or she had any direct financial or personal interest which arises from blood or marriage relationships. “Direct financial interest” is hereby deemed to mean such an interest as would involve a reasonable likelihood to gain having a monetary value of substance. “Blood relationships” and “marriage relationships” shall be deemed for the purpose hereof to include only immediate family relationships of the first degree: spouse, children, mother, father, father- in-law, mother-in-law, stepfather, stepmother, brother, sister, sister-in-law and brother-in- law. Subdivision 2. Subject to the provisions of Subdivision 3 below, if a commissioner, advisory commission member or committee member has a financial interest in a business, investment, or transaction, which has a matter pending before the Authority, he or she shall not participate in the discussion as such public official or vote on the matter. Subdivision 3. No persons covered by this Code of Ethics shall take any official action with respect to a matter in which he or she has a direct financial interest or personal interest which arises from blood or marriage relationships, provided that participation in the decision-making process on his or her own behalf as a private citizen HRA Resolution 19-03 -8- October 15, 2019 shall not be prescribed by this Code of Ethics, and provided further that he or she may participate in matters leading up to or preliminary to official action to the extent that he or she may have in the same and to the extent that he or she has no discretion to make a final controlling judgment or vote on the same. Disclosure of any such financial or personal interest shall be made to the board, commission or committee of which the person is a member when the item appears on the agenda. Such disclosures shall be recorded in the minutes and become a matter of public record. Subdivision 4. No person covered by this Code of Ethics shall, without proper legal authorization, disclose confidential information concerning the property, government, or affairs of the Authority, nor shall he or she use such information to advance the financial or other private interests of any person. Subdivision 5. No person covered by this Code of Ethics shall directly or indirectly solicit any gift or accept or receive any gift of substance whether in the form of money, services, loan, travel, entertainment, hospitality, promise or any other form, under circumstances in which it could be reasonably inferred that the gift was intended to influence him or her, or could reasonably be expected to influence him or her in the performance of his or her official duties or was intended as a reward for any official action on his or her part. Subdivision 6. Commissioner shall appear in behalf of another’s private interest before the commission, any committee or board of the Authority, nor shall he or she represent another’s private interests in any action or proceeding against the interests of the Authority in which the Authority is a party. Subdivision 7. Except as specifically authorized by Section 471.88 of the Minnesota Statutes, no person covered by this Code of Ethics who is authorized to take part in any manner in making any sale, lease or contract in his official capacity shall have a direct financial interest in that sale, lease or contract or personally benefit financially therefrom. Section 3. Public Disclosure by Commissioners. Subdivision 1. Unless already on file pursuant to the Golden Valley Code of Ethics, within 30 days after the effective date of this Code of Ethics, each member of the Authority shall file, as a public record, in the office of the Director, a signed statement disclosing the following: 1. A list of names of all business corporations, governmental agencies, companies, firms or partnerships or other business with the Authority or at some location within the City of Golden Valley (a) with which he or she is connected as an employee, officer, owner, director, trustee, partner, advisor, consultant, fiduciary (other than as a nominee), or (b) in which he or she has any continuing financial interest, through a pension or retirement plan, shared income, or otherwise, as a result of any current or prior employment or business or professional association, or (c) in which he or she has any financial interest through the ownership of stocks, bonds or other securities. HRA Resolution 19-03 -9- October 15, 2019 2. A list of his or her interests in real property or rights in the same located within the City of Golden Valley. Subdivision 2. Within 30 days after each anniversary date of initial filing each person required to make such a filing under this Section 4 shall file a new disclosure statement setting forth the information required hereby as of the time of the new statement. Subdivision 3. Material changes in financial interest or in positions held shall be disclosed by filing an amended disclosure statement within 30 days after such interest is obtained or such changed position occurs. Subdivision 4. This Code of Ethics shall not be construed to require the filings of any information relating to any persons’ connection with, or interest in, any professional society or any charitable, religious, social, fraternal, educational, recreational, public service, civic or political organization, or any similar organization not conducted as a business enterprise or governmental agency and which is not engaged in the ownership or conduct of such a business enterprise or governmental agency. Nor shall disclosure be required hereby where prohibited by professional or business association ethics promulgated by any agency. Subdivision 5. The Director shall inform each person required by this Section 4 to file a disclosure statement at the time and place for filing. The Director shall notify the Authority whenever a person who is required by this Section 4 to file a disclosure statement who fails to do so. HRA Resolution 19-03 -3- October 15, 2019 Exhibit A BY-LAWS OF THE GOLDEN VALLEY HOUSING AND REDEVELOPMENT AUTHORITY Article I – The Authority Section 1. Name of Authority. The name of the Authority shall be the “Housing and Redevelopment Authority of Golden Valley, Minnesota”. Section 2. Seal of Authority. The seal of the Authority shall be in the form of a circle and shall bear the name of the Authority and the year of its organization. Section 3. Office of Authority. The offices of the Authority shall be at the Civic Center Golden Valley City Hall, 7800 Golden Valley Road, in the City of Golden Valley, State of Minnesota, but the Authority may hold its meetings at such other place or places as it may designate by resolution. Article II – Officers Section 1. Officers. The officers of the Authority shall be a Chairperson and Vice- Chairperson. Section 2. Chairperson. The Chairperson shall preside at all meetings of the Authority. Except as otherwise authorized by resolution of the Authority, the Chairperson shall sign all contracts, deeds and other instruments made by the Authority. At each meeting, the Chairperson shall submit such recommendations and information as he/she may consider proper concerning the business, affairs and policies of the Authority. Section 3. Vice-Chairperson. The Vice-Chairperson shall perform the duties of the Chairperson in the absence or incapacity of the Chairperson; and in the case of the resignation or death of the Chairperson, the Vice-Chairperson shall perform such duties as are imposed on the Chairperson until such time as the Authority shall select a new Chairperson. Section 4. Director. The Director shall be the City Manager of Golden Valley. He/she shall have responsibility for the general supervision of the projects of the Authority and supervision of the personnel of Golden Valley who are to furnish services to the Authority. He/shall perform, or have performed, such activities as the Authority shall from time to time reasonably request. He/she shall be responsible for the care and custody of all funds of the Authority and for the deposit thereof in the name of the Authority in such bank or banks as the Authority from time to time shall designate; for the keeping of regular books of accounts showing receipts and expenditures; for rendering to the Authority, at each quarterly meeting of the Authority, an account of the income and expenses of the Authority, for rendering of such additional financial and other reports as the Authority from time to time shall request. Section 5. Support Personnel. The Director shall be responsible for and have the authority to, employ, terminate or utilize other available personnel to perform HRA functions. This authority is in keeping with and under the same provisions as the City HRA Resolution 19-03 -4- October 15, 2019 Manager of the City of Golden Valley is empowered to direct personnel under State law. Such personnel may include an Assistant Director who may perform the duties of the Director in his or her absence. Section 6. Secretary. The Secretary shall be any one of the secretaries made available from time to time by the Director for use by the Authority from the personnel of Golden Valley and shall perform all duties required of the position, including but not limited to, the following: taking of dictation, doing typing and filing for any of the Authority’s administrative staff, taking minutes and keeping records of meetings of the Authority, public hearings, and staff meetings as required by the Director, and any other secretarial work necessary to the timely and successful completion of the Authority’s projects, as required by the Director. Section 7. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the By-Laws or rules and regulations of the Authority. Section 8. Election or Appointment. The first Chairperson shall, pursuant to his/her appointment, serve in the capacity of Chairperson until the expiration of his/her term of office as Commissioner. The vice-Chairperson and the Chairperson shall be elected at the annual meeting of the Authority from among the Commissioners of the Authority, and shall hold office for one year or until their successors are elected and qualified. Section 9. Vacancies. Should the office of Chairperson or Vice-Chairperson become vacant, the Authority shall elected a successor from its membership at the next regular meeting, and such election shall be for the unexpired term of said office. When the office of the Director becomes vacant, the Authority shall appoint a successor, as aforesaid. Section 10. Additional Personnel. The Authority may, from time to time, employ such personnel as it deems necessary to exercise its powers, duties, and functions as prescribed by the Municipal Housing and Redevelopment Law of Minnesota applicable thereto. The compensation of such personnel (including the Director) shall be determined by the Authority subject to the laws of the State of Minnesota. Article III – Meetings Section 1. Annual Meeting. The annual meeting of the Authority shall be held on the third Tuesday of January, at the regular meeting place of the Authority, unless changed at a scheduled meeting of the Authority held prior to the established date. Section 2. Regular Meetings. Quarterly meetings shall be held quarterly at the regular meeting place of the Authority on the third Tuesday of January (in conjunction with the annual meeting), April, July and October, unless a specific meeting is changed or cancelled at a scheduled meeting of the Authority held prior to the meeting to be changed or cancelled. HRA Resolution 19-03 -5- October 15, 2019 Section 3. Work Sessions. Work Session meetings shall be held quarterly on the second Tuesday March, June, September and December unless a specific meeting has been changed or cancelled prior to the meeting date. Section 34. Meeting Times. Standard meeting times for the annual and regular meeting shall be established by resolution of the Authority and may only be changed by subsequent resolutions. The Authority may, however, change the meeting time for a specific meeting at a scheduled meeting of the Authority held prior to the meeting to be changed. Section 45. Special Meetings. Special meetings of the Authority may be called by the Chairperson or two members of the Authority for the purpose of transacting any business designated in the call. The call for a special meeting may be either: (a) in writing and delivered at any time prior to the time of the proposed meeting to each member of the Authority or mailed to the business or home address of each member of the Authority, or b) verbal by direct contact or telephone. In any event, said call shall be given at least two 2) days prior to the date of such special meeting, and it shall be posted in accordance with the Minnesota Open Meeting Law. At such special meetings no business shall be considered other than as designated in the call, but if all the members of the Authority are present at special meetings, any and all business may be transacted as such special meeting. Section 56. Executive Session. Upon being duly noticed, all or part of any regular or special meeting may be held as a closed, executive session to the extent permitted by Minnesota Law. Section 67. Quorum. The powers of the Authority shall be vested in the Commissioners thereof in office from time to time. Three Commissioners shall constitute a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, but a smaller number may adjourn from time to time until al quorum is obtained. When a quorum is in attendance, action may be taken by the Authority upon a vote of a majority of the Commissioners present. Section. 78. Order of Business. At the regular meetings of the Authority, the following shall be the order of business: 1. Roll Call 2. Reading and approval of the minutes of the previous meeting 3. Bills and Claims 4. Reports of the Executive Director 5. Reports of Committees 6. Unfinished Business 7. New Business 8. Adjournment. 2. Approve Agenda 3. Consent Agenda Approval of Minutes Reimbursement of Expenditures HRA Resolution 19-03 -6- October 15, 2019 Receipt of Financial Reports Routine Items if needed to be approved 4. Public Hearing (if needed) 5. Old Business 6. New Business 7. Adjournment All resolutions shall be in writing and shall be copied in the journal of proceedings of the Authority. Section 89. Manner of Voting. Yeas and Nays of the Commissioners shall be recorded on all matters before the Authority, except those questions requiring a roll call vote. The voting on all matters shall be entered upon the minutes of such meeting. Article IV – Disbursement of Funds Funds shall be appropriated and disbursed by the Director under the direction of the Authority. There will be a two-signature requirement on any check issued by the Authority. Persons authorized to sign Authority checks are the Chairperson (or Vice-Chairperson in the absence of the Chairperson), and the Director. The signatures of the Chairperson or Vice-Chairperson may be by signature stamp to the extent authorized by the Chairperson or the Vice-Chairperson. Article V – Amendments Amendments to By-Laws. The By-Laws of the Authority shall be amended only with the approval by the affirmation vote of at least three of the members of the Authority. which shall not become effective until approved at two regular or special meetings of the Authority. Article VI – Code of Ethics Section 1. Policy. Subdivision 1. General Declaration of Policy. It is imperative that all persons acting in the public service not only maintain the highest possible standards of ethical conduct in their transaction of public business, but that such standards be clearly defined and known to the public as well as to the persons acting in public service. The proper operation of democratic government requires that public officials be independent, impartial and responsible to the people; that governmental decisions and policies are made in the proper channels of the governmental structure; that public office not be used for personal gain; and that the public have confidence in the integrity of its government. In recognition of these goals there is hereby established a Code of Ethics for public officials of the Authority. The purpose of this Code is to establish ethical standards of conduct for such officials by setting forth those acts or actions that are incompatible with the best interests of the Authority and by directing disclosure by such officials of private, HRA Resolution 19-03 -7- October 15, 2019 financial or other interests in matters affecting the Authority. The provisions and purpose of this Code are declared to be in the best interests of the Authority. Subdivision 2. Responsibilities of Public Office. Public officials are agents of public purpose and hold office for the benefit of the public. They are bound to uphold the Constitution of the United States and the Constitution of this State and to carry out impartially the laws of the nation, state and municipality and thus, to foster respect for all government. They are bound to observe in their official acts, the highest standards or morality and to discharge faithfully the duties of their office. Subdivision 3. Dedicated Service. All officials of the Authority shall be dedicated to fulfilling their responsibilities of office described herein. They shall be dedicated to the public purpose and all programs developed by them shall be in the community interest. Public officials shall not exceed their authority or breach the law or ask others to do so, and they shall work in full cooperation with other public officials and employees unless prohibited from doing to by law or by officially recognized confidentiality of their work. Subdivision 4. Scope of Persons Covered. The provisions of this Code of Ethics shall be applicable to the Director, all Commissioners of the Housing and Redevelopment Authority of Golden Valley, Minnesota, and all advisory commissions and committee members thereof. The Director shall promulgate a similar Code of Ethics for paid employees and consultants. Section 2. Fair and Equal Treatment. Subdivision 1. Subject to the provisions of Subdivision 3 below, no commissioner, advisory commission member or committee member, while acting as such, shall participate in the discussion of, or vote on, any issue in which he or she had any direct financial or personal interest which arises from blood or marriage relationships. “Direct financial interest” is hereby deemed to mean such an interest as would involve a reasonable likelihood to gain having a monetary value of substance. “Blood relationships” and “marriage relationships” shall be deemed for the purpose hereof to include only immediate family relationships of the first degree: spouse, children, mother, father, father- in-law, mother-in-law, stepfather, stepmother, brother, sister, sister-in-law and brother-in- law. Subdivision 2. Subject to the provisions of Subdivision 3 below, if a commissioner, advisory commission member or committee member has a financial interest in a business, investment, or transaction, which has a matter pending before the Authority, he or she shall not participate in the discussion as such public official or vote on the matter. Subdivision 3. No persons covered by this Code of Ethics shall take any official action with respect to a matter in which he or she has a direct financial interest or personal interest which arises from blood or marriage relationships, provided that participation in the decision-making process on his or her own behalf as a private citizen HRA Resolution 19-03 -8- October 15, 2019 shall not be prescribed by this Code of Ethics, and provided further that he or she may participate in matters leading up to or preliminary to official action to the extent that he or she may have in the same and to the extent that he or she has no discretion to make a final controlling judgment or vote on the same. Disclosure of any such financial or personal interest shall be made to the board, commission or committee of which the person is a member when the item appears on the agenda. Such disclosures shall be recorded in the minutes and become a matter of public record. Subdivision 4. No person covered by this Code of Ethics shall, without proper legal authorization, disclose confidential information concerning the property, government, or affairs of the Authority, nor shall he or she use such information to advance the financial or other private interests of any person. Subdivision 5. No person covered by this Code of Ethics shall directly or indirectly solicit any gift or accept or receive any gift of substance whether in the form of money, services, loan, travel, entertainment, hospitality, promise or any other form, under circumstances in which it could be reasonably inferred that the gift was intended to influence him or her, or could reasonably be expected to influence him or her in the performance of his or her official duties or was intended as a reward for any official action on his or her part. Subdivision 6. Commissioner shall appear in behalf of another’s private interest before the commission, any committee or board of the Authority, nor shall he or she represent another’s private interests in any action or proceeding against the interests of the Authority in which the Authority is a party. Subdivision 7. Except as specifically authorized by Section 471.88 of the Minnesota Statutes, no person covered by this Code of Ethics who is authorized to take part in any manner in making any sale, lease or contract in his official capacity shall have a direct financial interest in that sale, lease or contract or personally benefit financially therefrom. Section 3. Public Disclosure by Commissioners. Subdivision 1. Unless already on file pursuant to the Golden Valley Code of Ethics, within 30 days after the effective date of this Code of Ethics, each member of the Authority shall file, as a public record, in the office of the Director, a signed statement disclosing the following: 1. A list of names of all business corporations, governmental agencies, companies, firms or partnerships or other business with the Authority or at some location within the City of Golden Valley (a) with which he or she is connected as an employee, officer, owner, director, trustee, partner, advisor, consultant, fiduciary (other than as a nominee), or (b) in which he or she has any continuing financial interest, through a pension or retirement plan, shared income, or otherwise, as a result of any current or prior employment or business or professional association, or (c) in which he or she has any financial interest through the ownership of stocks, bonds or other securities. HRA Resolution 19-03 -9- October 15, 2019 2. A list of his or her interests in real property or rights in the same located within the City of Golden Valley. Subdivision 2. Within 30 days after each anniversary date of initial filing each person required to make such a filing under this Section 4 shall file a new disclosure statement setting forth the information required hereby as of the time of the new statement. Subdivision 3. Material changes in financial interest or in positions held shall be disclosed by filing an amended disclosure statement within 30 days after such interest is obtained or such changed position occurs. Subdivision 4. This Code of Ethics shall not be construed to require the filings of any information relating to any persons’ connection with, or interest in, any professional society or any charitable, religious, social, fraternal, educational, recreational, public service, civic or political organization, or any similar organization not conducted as a business enterprise or governmental agency and which is not engaged in the ownership or conduct of such a business enterprise or governmental agency. Nor shall disclosure be required hereby where prohibited by professional or business association ethics promulgated by any agency. Subdivision 5. The Director shall inform each person required by this Section 4 to file a disclosure statement at the time and place for filing. The Director shall notify the Authority whenever a person who is required by this Section 4 to file a disclosure statement who fails to do so. Golden Valley Housing and Redevelopment Authority Meeting October 15, 2019 Agenda Item 7. Approve Tax Increment Pledge Agreement for Winnetka and Medicine Lake Tax Increment District Prepared By Sue Virnig, Finance Director Summary The following Tax Increment Pledge Agreement should be approved in a written agreement to better clarify the procedure for the use of Winnetka and Medicine Lake Tax Increment. Financial Or Budget Considerations Not applicable Recommended Action Motion to approve Tax Increment Pledge Agreement. Supporting Documents •Memo from Kennedy & Graven (15 pages) •Tax Increment Pledge Agreement (44 pages) 591391v2GL135-28 Kennedy Offices in Minneapolis Saint Paul St. Cloud 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis MN 55402 612) 337-9300 telephone 612) 337-9310 fax www.kennedy-graven.com Affirmative Action Equal Opportunity Employer Graven CHARTERED TO: Office of the State Auditor Attn: Jason Nord FROM: Jenny Boulton, Kennedy & Graven, Chartered DATE: July 1 9, 2019 RE: Inquiries Regarding Tax Increment Financing (Redevelopment) District (Liberty Crossing Project) The City of Golden Valley (the “City”) and the Housing and Redevelopment Authority of the City of Golden Valley (the “HRA”) received inquiries regarding the payment of the City’s 2,580,000 General Obligation Storm Sewer Revenue Bonds, Series 2016D (the “Bonds”) with tax increments from the HRA’s Tax Increment Financing (Redevelopment) District (Liberty Crossing Project) (the “TIF District”) within the Winnetka & Medicine Lake Road Redevelopment Project Area (the “Redevelopment Project Area”) and this memorandum is intended to respond to those inquiries. A. Introduction The City Council of the City has, on September 20, 2016, adopted a resolution (the “Bond Resolution”) awarding the sale of the City’s approximately $2,580,000 General Obligation Storm Sewer Revenue Bonds, Series 2016D (the “Bonds”) to finance the public redevelopment costs identified in the Tax Increment Financing Plan for the TIF District (the “TIF Plan”) adopted pursuant to Minnesota Statutes, Sections 469.174 to 469.1794 (the “TIF Act”), including without limitation, a portion of the cost of certain storm water flood containment and storage improvements necessary in connection with the Liberty Crossing multifamily housing development consisting of 55 townhome units and 187 market rate apartment units, constructed within the TIF District (the TIF Project”). The City Council of the City also, on December 15, 2015, and the Board of Commissioners of the HRA has on April 12, 2016, adopted resolutions (the “Initial Interfund Loan Resolutions”) authorizing an interfund loan in the amount of $1,000,000 to finance a portion of the cost of the TIF Project (the “Initial Interfund Loan”). And finally, the City Council, on October 13, 2016, and the Board of Commissioners of the HRA has on October 13, 2016, adopted resolutions the “Supplemental Interfund Loan Resolutions” and, together with the Initial Interfund Loan Resolutions, the “Interfund Loan Resolutions”) authorizing an interfund loan in the amount of 1,050,000 to finance a portion of the cost of the TIF Project (the “Supplemental Interfund Loan” and, together with the Initial Interfund Loan, the “Interfund Loans”). The Interfund Loan Resolutions state that the tax increments will be applied first to pay the Bonds and second to pay the Interfund Loans. All of the costs of the TIF Project financed by the Bonds and the Interfund Loans were paid not later than April 4, 2021 (which is the date five years after certification of the TIF District on April 4, 2016). Page 2 591391v2GL135-28 B. Law Under Minnesota Statutes, Section 469.178, subd. 2, the City is authorized to “issue general obligation bonds to finance any expenditure by the municipality or an authority the jurisdiction of which is wholly or partially within that municipality, pursuant to section 469.176, subdivision 4, in the same manner and subject only to the same conditions as those provided in chapter 475 for bonds financing improvement costs reimbursable from special assessments” (emphasis added). While the Bonds were issued under the authority of Minnesota Statutes, Chapters 475 and 444, they were issued “to finance any expenditure by the municipality or an authority the jurisdiction of which is wholly or partially within that municipality, pursuant to section 469.176, subdivision 4”. Furthermore, the recommendations prepared by the City’s municipal advisor, which are attached as Exhibit A (see Security and Source of Payment on page A-4 and the Coverage Ratio table on page A-7), and the Interfund Loan Resolutions clearly indicated the expectation of using tax increments to pay the debt service on the Bonds. The City has, in fact, been invoicing the HRA for tax increments from the TIF District to make the payments on the Bonds. However, the City and the HRA acknowledge a technical error in that Minnesota Statutes, Section 469.178, subd. 2, requires that the pledge of tax increment for the payment of the principal of and interest on general obligation bonds “shall be made by written agreement by and between the authority and the municipality and filed with the county auditor”, except when the authority and the municipality are the same. While the Interfund Loan Resolutions are a written agreement reciting the pledge to use the increments first to pay the Bonds and thereafter to pay the Interfund Loans, the Interfund Loan Resolutions were never filed with the County to evidence the pledge. Therefore, to clarify and improve the record regarding the pledge of tax increments to pay the Bonds, the City and HRA have determined to enter into a Tax Increment Pledge Agreement, a draft of which is enclosed with this memorandum, and to file it with Hennepin County. C. Conclusion Upon execution and filing of the Tax Increment Pledge Agreement with Hennepin County, the City and the HRA will have satisfied the requirements of Minnesota Statutes, Section 469.178, subd. 2 and any issues regarding the use of tax increments from the TIF District to pay the Bonds should be resolved. Please let us know if the Office of the State Auditor has any further questions. A-1 591391v2GL135-28 Exhibit A A-2 591391v2GL135-28 A-3 591391v2GL135-28 A-4 591391v2GL135-28 A-5 591391v2GL135-28 A-6 591391v2GL135-28 A-7 591391v2GL135-28 A-8 591391v2GL135-28 A-9 591391v2GL135-28 A-10 591391v2GL135-28 A-11 591391v2GL135-28 A-12 591391v2GL135-28 A-13 591391v2GL135-28 587727v4GL135-28 TAX INCREMENT PLEDGE AGREEMENT THIS AGREEMENT, effective as of the 19th day of October, 2016, by and between the City of Golden Valley, a Minnesota municipal corporation (the “City”), and the Housing and Redevelopment Authority of the City of Golden Valley, a public body corporate and politic created and existing under the provisions of Minnesota Statutes, Sections 469.090 to 469.1082 the “HRA”), witnesseth that: A. WHEREAS, the City and the HRA previously established the Winnetka & Medicine Lake Road Redevelopment Project Area (the “Redevelopment Project Area”), which is a “redevelopment project” under Minnesota Statutes, Sections 469.001 to 469.047 (the “HRA Act”); B. WHEREAS, within the Redevelopment Project Area, the City and HRA have established Tax Increment Financing (Redevelopment) District (Liberty Crossing Project) within the Redevelopment Project Area (the “TIF District”) and approved the Tax Increment Financing Plan for the TIF District (the “TIF Plan”), all pursuant to Minnesota Statutes, Sections 469.174 to 469.1794 (the “TIF Act”); C. WHEREAS, the City Council of the City has, on September 20, 2016, adopted a resolution which is attached as Exhibit A hereto (the “Bond Resolution”) awarding the sale of the City’s approximately $2,580,000 General Obligation Storm Sewer Revenue Bonds, Series 2016D (the “Bonds”) to finance the public redevelopment costs identified in the TIF Plan, including without limitation, a portion of the cost of certain storm water flood containment and storage improvements necessary in connection with the Liberty Crossing multifamily housing development consisting of 55 townhome units and 187 market rate apartment units, constructed within the TIF District (the “TIF Project”); D. WHEREAS, the City Council of the City has on December 15, 2015, and the Board of Commissioners of the HRA has on April 12, 2016, adopted resolutions which are attached as Exhibit B hereto (the “Initial Interfund Loan Resolutions”) authorizing an interfund loan in the amount of $1,000,000 to finance a portion of the cost of the TIF Project (the “Initial Interfund Loan”); E. WHEREAS, the City Council of the City has on October 13, 2016, and the Board of Commissioners of the HRA has on October 18, 2016, adopted resolutions which are attached as Exhibit C hereto (the “Supplemental Interfund Loan Resolutions” and, together with the Initial Interfund Loan Resolutions, the “Interfund Loan Resolutions”) authorizing an interfund loan in the amount of $1,050,000 to finance a portion of the cost of the TIF Project (the Supplemental Interfund Loan” and, together with the Initial Interfund Loan, the “Interfund Loans”); F. WHEREAS, all of the costs of the TIF Project financed by the Bonds and the Interfund Loans were paid not later than April 4, 2021 (which is the date five years after certification of the TIF District on April 4, 2016) and, in accordance with Section 469.1763, subd. 3(a)(4) of the TIF Act, this Agreement evidences the HRA’s intent to reimburse the City 2 587727v4GL135-28 for the payment of such costs, and interest thereon, from Available Tax Increments as provided herein; and G. WHEREAS, it is necessary and desirable that the City and the HRA enter into a tax increment pledge agreement to evidence the intent of the City and the HRA to apply a portion of the tax increments derived from the TIF District to pay the Bonds and the Interfund Loans. NOW, THEREFORE, the City and the HRA, each in consideration of the mutual covenants and agreements herein contained, covenant and agree as follows: 1. Pledge of Tax Increments; Coverage Test. The HRA pledges (i) first to the payment of the Bonds and (ii) thereafter to the payment of the Interfund Loans, the tax increments derived from the TIF District which are not otherwise pledged to other obligations of the TIF District in an amount equal to the debt service on the Bonds and the Interfund Loans collectively, the “Available Tax Increments”). 2. Remittance; Segregation; Reservation of Rights. All Tax Increments of the TIF District shall be remitted directly to the HRA and the HRA shall segregate such Tax Increments so received in a special account on its official books and records. The HRA shall promptly transfer Available Tax Increments to the City in the amounts required pursuant to Section 1 in accordance with a direction from the City’s Finance Director. The HRA reserves the right to alter the pledge of tax increments as set forth in the Interfund Loan Resolutions. The City’s Finance Director is authorized and directed to determine the exact source and amount of pledged revenues used to make each principal and interest payment, and to maintain accounts evidencing such transfers. 3. Filing; Computation and Collection. In accordance with Section 469.178, Subdivision 2 of the TIF Act, an executed copy of this Agreement will be filed with the Taxpayer Services Division Manager of Hennepin County. 587727v4GL135-28 IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly executed on their behalf, and such signatures and seal to be attested, as of the day and year first above written. CITY OF GOLDEN VALLEY, MINNESOTA By_________________________________ Mayor By_________________________________ Manager 2 587727v4GL135-28 HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF GOLDEN VALLEY By_________________________________ Chair By_________________________________ Executive Director A-1 587727v4GL135-28 EXHIBIT A Bond Resolution A-2 587727v4GL135-28 A-3 587727v4GL135-28 A-4 587727v4GL135-28 A-5 587727v4GL135-28 A-6 587727v4GL135-28 A-7 587727v4GL135-28 A-8 587727v4GL135-28 A-9 587727v4GL135-28 A-10 587727v4GL135-28 A-11 587727v4GL135-28 A-12 587727v4GL135-28 A-13 587727v4GL135-28 A-14 587727v4GL135-28 A-15 587727v4GL135-28 A-16 587727v4GL135-28 A-17 587727v4GL135-28 A-18 587727v4GL135-28 A-19 587727v4GL135-28 A-20 587727v4GL135-28 A-21 587727v4GL135-28 A-22 587727v4GL135-28 A-23 587727v4GL135-28 A-24 587727v4GL135-28 A-25 587727v4GL135-28 B-1 587727v4GL135-28 EXHIBIT B Initial Interfund Loan Resolution B-2 587727v4GL135-28 B-3 587727v4GL135-28 B-4 587727v4GL135-28 B-5 587727v4GL135-28 B-6 587727v4GL135-28 C-1 587727v4GL135-28 EXHIBIT C Supplemental Interfund Loan Resolution C-2 587727v4GL135-28 C-3 587727v4GL135-28 C-4 587727v4GL135-28 C-5 587727v4GL135-28 RESOLUTION NO. 18-68 RESOLUTION AMENDING 16-61 APPROVING AN INTERFUND LOAN IN CONNE CTION WITH TAX INCREMENT FINANCING DISTRICT (REDEVELOPMENT), WINNETKA AVENUE & MEDICINE LAKE ROAD BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota (the "City"), as follows: 1.Recitals. 587727v4GLI 35-28 (a)The Housing and Redevelopment Authority of the City of Golden Valley (the "HRA") and the City adopted the Redevelopment Plan for the Winnetka and Medicine Lake Road Project Area (the "Plan"), together with the Tax Increment Financing Plan (the "TIF Plan") for Tax Increment Financing District (Redevelopment), Winnetka Avenue North & Medicine Lake Road No. 1 (the "District"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.174 to 469.1794, all inclusive, as amended (the "Act"). (b)In accordance with the TIF Plan, the HRA has agreed to undertake a project with Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company (the "Developer"), consisting of a five-story apartment building with approximately 187 apartments and approximately 55 townhomes, plus parking, landscaping, utilities and certain other improvements (the "Development"), all pursuant to a Private Development Agreement (the "Development Agreement") entered into with the Developer on April 29, 2016. {c) In support of the Development, the City is issuing its General Obligation Storm Sewer Revenue Bonds (the "Bonds") to finance storm water flood containment and storage improvements within the District. {d) In connection with the Development, the City authorized by written resolution dated December 15, 2015 an interfund loan of $1,000,000 to the HRA from the City's Storm Utility Fund, and the HRA approved the interfund loan by written resolution dated April 12, 2016 {the "Prior lnterfund Loan"). Pursuant to Section 3.7 of the Development Agreement, the HRA paid Developer $1,000,000 to accommodate the installation of a large underground storm water storage basin beneath the Development. (e)The HRA has approved on October 13, 2016 an additional interfund loan from the City to the HRA in the amount of $1,500,000 to pay qualified costs of private activity improvements relating to the Development (the "Current lnterfund Loan"). On October 16 , 2018 this amount was reduced to $1,050,000. (f)The Bonds will be a general obligation of the City, secured by its full faith and credit and taxing power. The City will also pledge net revenues of the storm sewer utility to the payment of principal and interest on the Bonds. The City expects to use tax increment revenues derived from the Development to first, repay the interfund loans and second, pay debt service on the Bonds. C-6 Resolution No. 18-68 -2- 2.Approval of the Current lnterfund Loan. (a)The City hereby authorizes the loan of up to $1,500,000 to the HRA from its Storm Utility Fund or other funds available or so much thereof as may be paid as qualified costs. The City shall be reimbursed such amount, together with interest at the rate stated below. Interest accrues on the principal amount from the date of each loan. The maximum rate of interest permitted to be charged is limited to the greater of therates specified under Minnesota Statutes, Section 270C.40 or Section 549.09, as of the date the loan is made, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09, are from time to time adjusted. The interest rate shall be 4% and will not fluctuate. (b)Principal and interest ("Payments") on the outstanding Current lnterfund Loan balance shall be paid semi-annually in two (2) equal installments per year, each installment to be paid within ten (10) business days of receipt by the City of property tax revenues from Hennepin County (the "Payment Dates"), commencing on the first Payment Date on which the City has Available Tax Increment (defined below}, or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the HRA pursuant to the TIF Plan. (c)Payments on this Current lnterfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations, if any, have been paid for the preceding six (6) months with respect to the Development Property and remitted by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1794, as amended. Payments on this Current lnterfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loanssecured in whole or in part with Available Tax Increment. (d)The principal sum and all accrued interest payable under this Current lnterfund Loan are pre-payable in whole or in part at any time by the HRA without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Current lnterfund Loan. (e)This Current lnterfund Loan is evidence of a loan in accordance with Minnesota Statutes, Section 469.178, subdivision 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. Adopted by the City Council of Golden Valley, Minnesota this 16th day of October, 2018. ATTEST: ��14 Kristine A. Luedke, City Clerk C-7 587727v4GLI 35-28 HOUSING AND REDEVELO PMENT AUTHORITY RESOLUTION NO.18-05 RESOLUTION AMENDING 16-06 RESOLUTION RELATING TO THE LIBERTY CROSSING PROJECT OF THE CITY AND APPROVING THE DEVELO PMENT AGREEMENT AND INTERFUND LOAN THEREFORE BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Golden Valley (the "HRA'), as follows: 1.Recitals. (a) The HRA and the City of Golden Valley, Minnesota (the °City") adopted the Redevelopment Plan for the Winnetka and Medicine Lake Road Project Area (the "Plan"}, together with the Tax Increment Financing Plan (the "TIF Plan") for Tax Increment Financing District (Redevelopment), Winnetka Avenue North & Medicine Lake Road No. 1 (the "District"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.17 4 to 469.1794, all inclusive, as amended (the "Act"). (b)In accordance with the TIF Plan, the HRA proposes to undertake a project with Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company (the "Developer"), consisting of a five-story apartment building with approximately 187 apartments and approximately 55 townhomes, plus parking, landscaping, utilities and certain other improvements (the "Development"); (c)The Developer proposes that the HRA enter into a Private Development Agreement to construct the Development, attached hereto as Exhibit A (the "Development Agreement"). (d)In connection with the Development, the City has authorized the loan of up to $1,000,000 to the HRA from its Storm Utility Fund or other funds available or so much thereof as may be paid as qualified costs (the "lnterfund Loan'). (e} In connection with the Development, the City has authorized the loan of up to $1,500,000 to the HRA from Its Storm Utility Fund or other funds available or so much thereof as may be paid as qualified costs (the "lnterfund Loan"). With this amendment the amount of the loan on October 16, 2018 be approved for the amount of $1,050,000 due to the actual costs are lower than the estimated cost. 2.Approval of Development Agreement. The Development Agreement is hereby approved and the Chair and Director are hereby authorized to enter into the Development Agreement by and among the HRA and the Developer. 3.Approval of lnterfund Loan. 587727v4GL135-28 (a)The HRA approves the lnterfund Loan. The City shall be reimbursed such amount, together with interest at the rate stated below. Interest accrues on the principal amount from the date of each loan. The maximum rate of Interest pennitted to be C-8 HRA Resolution No. 18-05 -2- 587727v4GLI 35-28 charged Is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09, as of the date the loan is made, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09, are from time to time adjusted. The interest rate shall be 4% and will not fluctuate. (b)Prindpal and interest rPayments") on the lnterfund Loan shall be paid semi annually in two (2) equal installments per year, each installment to be paid within ten (10) business days of receipt by the City of property tax revenues from Hennepin County (the "Payment Dates·), commencing on the first Payment Date on which the City has Available Tax Increment (defined below), or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the HRA pursuant to the TIF Plan (the "maximum term"). (c)Payments on this lnterfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations have been paid for the preceding six (6) months with respect to the Development Property and remitted by Hennepin County, all In accordance with Minnesota Statutes, Sections 469.17 4 to 469.1799, as amended. Payments on the Jnterfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or In part with Available Tax Increment. (d) The principal sum and all accrued interest payable under this lnterfund Loan are pre payable in whole or in part at any time by the HRA without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this lnterfund loan. (e) This lnterfund Loan is evidence of a loan in accordance with Minnesota Statutes, Section 469.178, subdivision 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. ��Joanie Clausen, Chair C-9 gofdt:v'11va ey EXECUTIVE SUMMARY Housing and Redevelopment Authority 763-593-8006 / 763-593-8109 (fax) Golden Valley Housing and Redevelopment Authority Meeting October 15, 2019 Agenda Item 8.A. Adoption of 2019 Housing Program Fund Prepared By Sue Virnig, Finance Director Summary Throughout the last two years, the City and HRA have been working on goals for a Housing Program. The 2040 Comprehensive Plan lists implementation actions. Once of the first steps is to approve a budget to help us guide these actions. HRA currently has approximately $104,252.43 in funds in their Housing Program Fund. In 2019, $10,000 is needed to start a strategic plan and investment options. The needs currently are outlined in the supporting documents. Financial Or Budget Considerations Approve budget for $10,000 for 2019. This amount would come from fund balance. Recommended Action Motion to adopt Resolution adopting a Housing Program Budget. Supporting Documents •Resolution Housing Program Budget (1 page) •Memo from Jason Zimmerman for Consulting Services (1 page) HRA RESOLUTION NO. 19-04 RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) ADOPTING THE 2019 HOUSING PROGRAM FUND BUDGET BE IT RESOLVED by the HRA that the appropriations for the Housing Program Fund for the calendar year 2019 as follows: GENERAL FUND Expenditures Proposed Budget Professional Services $10,000 BE IT FURTHER RESOLVED by the HRA that the sources of financing the sums appropriated shall be: HOUSING PROGRAM FUND Revenue ______ Fund Balance $10,000 Larry Fonnest, Chair ATTEST: Timothy J. Cruikshank, Executive Director 1 Date: October 15, 2019 To: Sue Virnig, Finance Director From: Jason Zimmerman, Planning Manager Subject: Consulting Services Proposal Summary At the direction of the Housing and Redevelopment Authority (HRA), staff is in the process of retaining the services of a housing consultant to provide technical assistance and meeting facilitation for the City in order to develop a Housing Strategic Plan. This process would help identify the City’s housing needs and would develop goals and strategies for the HRA over the next 5-10 years. The estimated cost to begin this process in 2019 is $10,000 and would be funded by the HRA. Additional funds of up to $10,000 are requested for 2020. The process is scheduled to be completed prior to the April 2020 HRA meeting so that decisions about future housing programs could be made at the regular quarterly meeting. gofdt:v'11va ey EXECUTIVE SUMMARY Housing and Redevelopment Authority 763-593-8006 / 763-593-8109 (fax) Golden Valley Housing and Redevelopment Authority Meeting October 15, 2019 Agenda Item 8.B. Adoption of 2020 Budgets Prepared By Sue Virnig, Finance Director Summary The following proposed budgets need to be considered. Those budgets are for the HRA General Fund and Housing Program Fund. The 2020 General Fund Budget is for the HRA's portion of the audit. The 2020 Housing Program Fund Budget is for the Affordable Housing Incentive Program and the remainder of the Housing Program Strategic Plan and Investment Options. Financial Or Budget Considerations Approve budget for $12,000 for 2020 HRA General Fund and $30,000 for the HRA Housing Program Fund. Both budgets are using fund balance. Recommended Action Motion to adopt Resolution Adopting 2020 HRA General Fund Budget and Housing Program Fund. Supporting Documents •Resolution Adopting 2020 General Fund Budget (1 page) •Resolution Adopting 2020 Housing Program Fund Budget (1 page) •Memo from Jason Zimmerman, Planning Manager on 4D Affordable Housing Incentive Program (17 page) HRA RESOLUTION NO. 19-05 RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) ADOPTING THE 2020 GENERAL FUND BUDGET BE IT RESOLVED by the HRA that the appropriations for the General Fund Program for the calendar year 2020 as follows: GENERAL FUND Expenditures Proposed Budget Audit Services $12,000 BE IT FURTHER RESOLVED by the HRA that the sources of financing the sums appropriated shall be: GENERAL FUND Revenue ______ Fund Balance $12,000 Larry Fonnest, Chair ATTEST: Timothy J. Cruikshank, Executive Director HRA RESOLUTION NO. 19-06 RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) ADOPTING THE 2020 HOUSING PROGRAM FUND BUDGET BE IT RESOLVED by the HRA that the appropriations for the Housing Program Fund for the calendar year 2020 as follows: GENERAL FUND Expenditures Proposed Budget Professional Services $30,000 BE IT FURTHER RESOLVED by the HRA that the sources of financing the sums appropriated shall be: HOUSING PROGRAM FUND Revenue ______ Fund Balance $30,000 Larry Fonnest, Chair ATTEST: Timothy J. Cruikshank, Executive Director 1 Date: October 15, 2019 To: Sue Virnig, Finance Director From: Jason Zimmerman, Planning Manager Subject: 4d Affordable Housing Program Summary At the direction of the Housing and Redevelopment Authority (HRA), staff has prepared materials to initiate a 4d Affordable Housing Program to begin in 2020. The estimated cost to support this program in its first year is $11,000. The HRA is being asked to provide financial support while the City Council will be asked to approve the program at its regular meeting on October 15. Materials detailing the program and how it will operate are attached. Attachments Executive Summary to the City Council dated October 15, 2019 (2 pages) Resolution 19-58 Authorizing the Execution of the Golden Valley 4d Affordable Housing Program (1 page) Golden Valley 4d Affordable Housing Program Guide (4 pages) 4d Impact Calculations (1 page) Participant Agreement (2 pages) Declaration of Restrictive Covenants (7 pages) Golden Valley City Council Meeting October 15, 2019 Agenda Item 6. B. Golden Valley 4d Affordable Housing Program Prepared By Emily Anderson, Planning Intern Summary Minnesota Statutes section 273.128 allows certain low-income rental properties to qualify for a rate reduction in property taxes from a 1.25% classification rate to a 0.75% classification. A property can qualify in four ways for this rate reduction. One way to qualify is through participation in a 4d Affordable Housing Program sponsored by a local unit of government.1 4d programs preserve affordable housing by helping apartment building owners obtain property tax reductions if they agree to keep 20% or more of their rental units affordable to households making 60% of Area Median Income for 10 years. In Golden Valley, there are 418 units over seven buildings that currently have 4d property tax status.2 There are an additional 532 NOAH units in nine apartment complexes that would likely qualify for a 4d tax incentive if the City were to adopt a 4d Affordable Housing Program (“4d Program”). The City can encourage these properties to commit to maintaining affordable units by establishing its own 4d Program. The City can establish its 4d Program by passing the attached resolution. Under the program, the City would offer financial assistance to interested property owners. The property owners would agree to keep 20% or more of their rental units affordable to households making 60% of Area Median Income for 10 years. These commitments would be recorded in a participation agreement and declaration, examples of which are attached to this memorandum. The City Council considered the 4d Program for first time at the March 12, 2019 Council/Manager Meeting and directed staff to further investigate the process and cost of adopting such a program. The HRA discussed 4d tax incentive programs at its September 10, the 2019 work session. At that session, the HRA directed staff to develop a program for the City with a budget of $11,000 to cover the costs discussed below. 1 Minn. Stats. § § 273.13, subd. 25(e); 273.128. 2 These units qualify under criteria other than a locally sponsored 4d program. See Minn. Stat. § 273.128, subd. 1. City Council Regular Meeting Executive Summary City of Golden Valley October 15, 2019 2 Financial/Budget Considerations Staff recommends that the HRA allocate $11,000 to the 4d Program in its 2020 budget. This amount would cover all costs for the first year of the program if all of the targeted properties participate and sign up all of their eligible units. This would fund the following required costs: • The property owner’s application fee of $10 per unit up to a cap of $150 to Minnesota Housing (first year only); • The cost of recording each property’s affordability declaration in the Hennepin County property records (one-time cost); and • A one-time grant of $100 per affordable unit up to a cap of $1,000 to each enrolled property. Depending on its adoption rate by rental property owners, the 4d Program will end up decreasing the City’s overall property tax levy by reducing the tax rate of participating properties. The exact amount of lost revenue is hard to evaluate without staff knowing the level of participation, however the attached set of tables shows several estimates of the 4d Program’s potential impact in its first year on property tax levies. Recommended Action Motion to adopt Resolution establishing the Golden Valley 4d Affordable Housing Program and authorizing staff to make and execute Participation Agreements for enrolling eligible properties in the program. Supporting Documents • Resolution Authorizing the Execution of the Golden Valley 4d Affordable Housing Program (1 page) • Golden Valley 4d Affordable Housing Program Guide (4 pages) • Participation Agreement (2 pages) • Declaration of Restrictive Covenants (7 pages) • 4d Tax Impact Calculations (1 page) RESOLUTION NO. 19-58 RESOLUTION AUTHORIZING THE EXECUTION OF THE GOLDEN VALLEY 4D AFFORDABLE HOUSING PROGRAM WHEREAS, Minnesota Statute 273.128 allows rental properties to be eligible for a class rate reduction in property taxes if at least 20% of the units are rent and income restricted by a declaration recorded against the property and receive financial assistance from a local unit of government; and WHEREAS at the direction of the Golden Valley City Council and the Housing and Redevelopment Authority in and for the City of Golden Valley, City staff has designed the Golden Valley 4d Affordable Housing Program (“4d Program”); and WHEREAS, the 4d Program will provide financial assistance through the recording of a rent and income restrictive declaration against the property, a one-time grant, and the 4d application fee for the first year to eligible rental properties who sign up for the program; and WHEREAS, the 4d Program is intended to secure affordable housing for 10 year periods in the City of Golden Valley at 60% of the area median income as determined by the United States Department of Housing and Urban Development; and WHEREAS, the 4d Program is consistent with the City’s goals to address the issues of equity and affordable housing as identified in the 2040 Comprehensive Plan and City Equity Plan. NOW THEREFORE BE IT RESOLVED, by the City Council of Golden Valley That the City Council authorizes the creation of the Golden Valley 4d Affordable Housing Program to help preserve naturally occurring affordable housing in the City of Golden Valley; and That the City Council delegates authority to the City Manager or their designee to make and execute Participation Agreements in the form approved by the City Attorney for enrolling eligible properties into the 4d Program in accordance with the program’s policies and procedures established from time to time by the City Council. Adopted by the City Council of Golden Valley, Minnesota on this 15th day of October, 2019. _____________________________ Shepard M. Harris, Mayor ATTEST: _____________________________ Kristine A. Luedke, City Clerk Golden Valley 4d Affordable Housing Program Affordable, safe, and stable housing is vital to the wellbeing and prosperity of the City of Golden Valley. Due to current market trends, already burdened low- to moderate-income residents are spending more than 30% of their income on housing and utilities and many rental property owners face increased operating costs, maintenance costs, and property taxes. In response, the City of Golden Valley is creating its 4d Affordable Housing Program (“4d Program”). The 4d Program offers incentives that will reduce property tax liability with the ultimate goal of preserving affordability and strengthening the bottom line for rental property owners. What are the benefits to participants? Qualified rental property owners that agree to keep a minimum of 20% of units per building affordable to households making 60% (or lower) of area median income for 10 years will receive 10 year eligibility for the 4d property tax rate, which provides a tax reduction on qualifying units. A 2015 study by the Housing Justice Center suggests that 4d property tax status would directly result in a property tax reduction of approximately $40 per unit per month. This amount varies based on the value of the property, the tax levy, and the number of units enrolled in the program, but as tax bills tend to go up every year, the value of the 4d tax reduction would likely continue to increase in value. Additional benefits to rental property owners include: 1. Payment of the first year’s application fee to the State of Minnesota for certification of the 4d property tax classification ($10 per unit, capped at $100 per property) 2. One time grant in the amount of $100 per affordable unit, capped at $1,000 per property 3. Free energy efficiency and healthy homes assessments through Xcel Energy and CenterPoint Energy 4. Payment of the recording fee for the declaration against the property 5. Reduced renter turnover due to tenant stability 6. Lower maintenance and operating costs, if owners take advantage of opportunities to make energy efficiency improvement to properties Who is eligible? To be eligible for the 4d Program, owners of multifamily rental properties must meet the following criteria: 1. The building or tax parcel must have at least 10 units 2. Able to register at least 20% of the rental units in a building to be affordable to households whose family income is at or below 60% of the area median income 3. Are a licensed rental property in good standing with no code compliance violations 4. Buildings can include units with owner occupants, but only rental units are eligible for 4d tax status. The City of Golden Valley reserves the right to deny applications for the Golden Valley 4d Affordable Housing Program if the owner or property manager applying owns or manages other properties with outstanding code compliance issues. Process and Program Requirements 1. The City of Golden Valley receives and reviews 4d Program applications on an annual basis and will accept applications from ______________ to February ___. 2. Property owners submit a 4d program application and rent roll to the City and sign a participation agreement. The participation agreement includes a commitment to accept tenant based assistance and affirmative fair marketing, and prohibits involuntary displacement of existing tenants. 3. The City of Golden Valley drafts and records a declaration against the property that limits the rents and income on the qualified units for 10 years. A recorded document is required for 4d tax classification status per Minnesota Statute 273.128. The declaration also limits rent increases for tenants in affordable units to 5% or less annually as long as the rent stays at or below the 60% AMI limit as determined by the U.S. Department of Housing and Urban Development each year for the Minneapolis-St. Paul-Bloomington area. Exceptions to this increase limit will only be allowed if the unit is turning over to a new tenant before the next allowed annual increase or the owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases. 4. The City of Golden Valley will provide a grant to each 4d property, in the amount of $100 per affordable unit, capped at $1,000 per property. The funding is intended to help property owners cover the cost of 4d administrative and reporting requirements associated with the program as well as to help rental property owners make health, safety, and energy efficiency improvements to properties. 5. Rental property owners select the percentage of units to restrict with a required minimum of 20%. If rental property owners select more than 20% of their units, after 5 years and upon request, City staff will approve a reduction of the percentage of rent-restricted units to a minimum level of 20% of the units per property. 6. Property owners complete and sign a Minnesota Housing Low Income Rental Classification Application once the declaration is filed. 7. The City of Golden Valley will submit a signed 4d application, application fee, and declaration to Minnesota Housing on behalf of the rental property owner for the first year only. After the first year, rental property owners are responsible for submitting annual applications to Minnesota Housing to renew 4d tax classification status. 8. Optionally, property owners may be eligible for the Multifamily Building Efficiency Program through Xcel Energy and/or CenterPoint Energy. This free energy assessment includes direct install of low-cost improvements such as LED lights and faucet aerators. Additionally, because the building would be certified as multifamily affordable housing, twice the amount of incentives would be available compared to multifamily market rate housing. More information can be found at multifamilyenergysolutions.com. Modifications to Declarations The declaration for the 4d Program runs with the property. Anyone buying or selling 4d property should contact the City’s Planning Manager, Jason Zimmerman, to complete an assignment, assumption, and consent form transferring the declaration to the new property owner. Any other changes to the declaration, such as revisions to the Exhibit B document specifying which units in the building are restricted, should also contact Mr. Zimmerman. Annual Compliance Beyond the first year, 4d Program property owners are required to submit the following documents annually to maintain their 4d tax classification status: 1. Annual 4d application to Minnesota Housing 2. Annual report form to the City of Golden Valley These forms will be provided on Minnesota Housing and the City of Golden Valley’s websites. 2019 Rent and Income Restrictions Rent and income limits are based on 60% of the Minneapolis-St. Paul-Bloomington area median income (AMI) as determined and updated by the U.S. Department of Housing and Urban Development each year in the spring. 60% AMI Maximum Rent Limits, FY 2019 60% AMI Maximum Income Limits, FY 2019 Unit Type Rent Limit Studio/Efficiency $1,050 1 Bedroom $1,125 2 Bedrooms $1,350 3 Bedrooms $1,560 4 Bedrooms $1,740 5 Bedrooms $1,920 The City of Golden Valley will publish an annual rent and income schedule based on the Minneapolis- St. Paul-Bloomington 60% area median income (AMI) standard set by the U.S. Department of Housing and Urban Development. Rental property owners do not need to verify incomes of existing tenants. Thereafter, increased incomes of tenants in affordable units will not violate the program requirements. If units turn over and new tenants move in, owners must verify tenant incomes and report them to the City of Golden Valley on an annual basis. Owners can verify tenant incomes using the Adjusted Gross Income reported on the tenant’s tax returns. Additionally, owners can advertise vacancies on HousingLink, as renters who meet income qualification standards for the program often use this website to find housing. Household Size Income Limit 1 person $42,000 2 people $48,000 3 people $54,000 4 people $60,000 5 people $64,800 6 people $69,600 7 people $74,400 8 people $79,200 4d AFFORDABLE HOUSING PROGRAM PARTICIPANT AGREEMENT Property owner(s): Property address: Legal description of property: Total number of units in property: Percentage (%) of units restricted to be affordable to and occupied by households at or below 60 percent the area median income (AMI): ________% A. Owner certifies that he/she/they are the Owner(s) of record of the Property. B. Owner has previously submitted to the City a complete 4d Program application and rent roll demonstrating that _____% of the rental housing units located on the Property have rents that do not exceed 30% of the gross income of a family whose income equals 60% of the median family income as most recently established by HUD for the Minneapolis/St. Paul standard metropolitan statistical area. C. Owner has agreed to record a declaration against the above described Property limiting the rents and incomes on _____% of the rental housing units located on the Property as further described in the form of declaration attached hereto as Exhibit A (the “Declaration”) so that Owner can qualify for preferable tax classification as class 4d under Minnesota Statutes, sections 273.128 and 273.13, subdivision 25. The Owner specifically represents that such preferable tax classification along with access to the other financial incentives described in this Participation Agreement is sufficient consideration for executing and filing the Declaration. D. The Owner certifies that no existing tenants in the Property have been or will be evicted because of the filing of the Declaration. E. Upon satisfaction of the foregoing conditions, the City will, in cooperation with the Owner: a. Record the Declaration in the Hennepin County land records. b. Submit Owner’s first application to the State of Minnesota for the certification of 4d classification under Minnesota Statutes §273.128 and pay the associated application fee (“4d Application Fee”). c. Provide Owner with a grant in an amount equal to $_________ ($100/affordable unit not to exceed $1,000) to assist the Owner in covering the cost of making health, safety and energy efficiency improvements to the Property. Owner must submit a plan for the proposed use of the funds and certify the use of the funds to make property improvements. IN FURTHERANCE WHEREOF, the parties have executed this Agreement as of _____________, 20__. OWNER(S): CITY OF GOLDEN VALLEY: _____________________________________ Name: _______________________________ _____________________________________ Name: _______________________________ _____________________________________ Timothy J. Cruikshank, City Manager DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS, is made on or as of the day of 20 by , a (“Owner”), having its offices at , and the City of Golden Valley, a Minnesota municipal corporation (the “City”). WHEREAS, Owner and the City have entered into that certain Affordable 4D Participation agreement dated , 20 (the “Participation Agreement”), pursuant to which the City is offering certain financial incentives in exchange for Owner limiting rents and incomes on certain rental housing units located at ; and WHEREAS, but for the making and recording of this Declaration, the City would be unwilling to qualify the property for preferable tax classification or provide the other financial incentives described in the Participation Agreement; NOW, THEREFORE, in consideration of said mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: SECTION 1. Definitions. In this Declaration, unless a different meaning clearly appears from the context: AFFORDABILITY PERIOD – A period commencing on the Date of this Declaration and continuing for 10 years. AFFORDABLE UNITS– Units in the Project as identified on Exhibit B attached hereto [unless reduced pursuant to Section 8 hereof]. ANNUAL INCOME –Adjusted gross income as defined in § 62 of the United States Internal Revenue Code, of all members of a household (this is the “Adjusted Gross Income” amount reported on IRS form 1040). HUD – The United States Department of Housing and Urban Development. LAND – The real property located in Hennepin County, Minnesota, and legally described on Exhibit A attached hereto and made a part hereof. LOW-INCOME FAMILIES – Individuals or families whose Annual Income does not exceed 60 percent of the Median Family Income. MEDIAN FAMILY INCOME – The “Median Family Income” as most recently established by HUD for the Minneapolis/St. Paul standard metropolitan statistical area, adjusted for family size. PROJECT – A unit rental housing project located at in Golden Valley, Minnesota. SECTION 2. Representations. Owner represents to and for the benefit of the City that Owner has duly authorized, executed and delivered this Declaration pursuant to proper authorization therefor; that this Declaration constitutes a valid and binding obligation of the Owner, enforceable in accordance with its terms, except only as such enforceability may be limited by bankruptcy, moratorium, reorganization or other laws, or principles of equity, affecting creditors’ rights; and that the execution and delivery of this Declaration does not constitute a breach, violation or default under any law, regulation, order, judgment or ruling binding upon Owner, or a default under any indenture, mortgage, agreement or other instrument to which Owner is subject or by which it or its property is bound. SECTION 3. Restrictions on Use. A. Owner agrees to develop, operate and manage the Project according to the terms of this Declaration for the duration of the Affordability Period. B. During the Affordability Period, this Declaration shall constitute covenants running with the land and be binding on the successors and assigns of Owner and on all parties having or acquiring any rights, title, or interest in the Project. C. Rental of the Project shall be in accordance with the following: (a) All of the Affordable Units shall be occupied by households with incomes that are 60 percent or less of the Median Family Income and shall bear rents not greater than 30 percent of the adjusted income of a family whose gross income equals 60 percent of the Median Family Income. The requirements of this Section 3(C)(a) shall be satisfied despite a temporary non-compliance with Section 3(C)(a), if the non-compliance is caused because either (i) a current tenant as of the date of this Declaration is in one of the Affordable Units or (ii) the incomes of tenants that were income qualified upon occupancy increase and if actions satisfactory to the City are being taken to ensure that all vacancies of Affordable Units are filled in accordance with this Section 3(C)(a) until the non-compliance is corrected. (b) The initial rent schedule for the Affordable Units is attached hereto as Exhibit B. In no event will the City require the Affordable Unit gross rents to be set lower than the rents listed on Exhibit B. (c) Subject to the limitations on rent imposed by Section 3(C)(a), Owner shall not raise rents for tenants in the Affordable Units by more than 6% annually unless the Owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases and City staff approves such larger rent increase. (d) Owner may not refuse to lease an Apartment Unit in the Project to a prospective tenant because the prospective tenant is a Section 8 certificate or voucher holder, or a participant in any other tenant-based assistance program. (e) The City may, upon request, review and approve rents not more frequently than annually for consistency with this Agreement. (f) Except for tenants already in the Affordable Units, Owner shall secure an income certification from the proposed tenant(s) of each Affordable Unit prior to such tenant(s)’ initial occupancy. Such income certificate shall contain a statement of the total Annual Income for the previous year of each person who proposes to live in the Affordable Unit during that year. Upon request of the City, Owner shall re-certify the annual Incomes of tenants in Affordable Units, provided that the City may not request re-certification more frequently than every three (3) years. Owner shall retain all records related to compliance with this Declaration for a minimum of six (6) years after termination of the Affordability Period. (g) On or before March 31 of each year of the Affordability Period, Owner shall make annual reports to the City in the form attached hereto as Attachment I. (h) Owner shall use affirmative fair housing marketing practices in soliciting renters, determining eligibility and concluding all transactions and provide evidence of compliance to the City upon request. SECTION 4. Restrictions on Sale of the Project. Owner agrees not to sell, transfer, convey or assign the Affordable Units (except leases in the ordinary course of business) without first obtaining the express written assumption by the purchaser, transferee, grantee, or assignee of the obligations imposed on Owner by this Declaration; provided, however, that this Declaration shall remain enforceable against a purchaser, transferee, grantee, or assignee even in the absence of a written assumption. Any sale in violation of this Declaration shall be null and void at the election of the City. SECTION 5. Covenants: Binding Upon Successors in Interest. It is intended and agreed that the covenants provided in this Agreement shall be covenants running with the land and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, be binding on Owner, the successors and assigns of Owner, and all parties having or acquiring any right, title, or interest in all or any part of the Land. This Declaration shall be enforceable against all such parties to the fullest extent permitted by law and equity for the benefit and in favor of the City, its successors and assigns. It is expressly agreed and acknowledged that: the covenants provided in this Declaration are in addition to the provisions of any other documents; this Declaration shall not be deemed to limit or merge into any other documents or vice versa; this Declaration shall survive the expiration or termination of any of the other documents; and the satisfaction or release of any other documents shall not be deemed to a satisfaction or release of this Declaration. SECTION 6. Remedies for Default. In the event of any default, failure, violation, or any other action or inaction by Owner specified in this Declaration, the City at its option may institute such actions or proceedings at law or in equity as it may deem desirable for effectuating the provisions of this Declaration, including without limitation actions for specific performance, damages, and injunctive relief, and including also any remedy allowed under the terms of any other documents. In any successful action or proceeding to enforce its rights under this Declaration, the City shall be entitled to the recovery from Owner of reasonable attorneys’ fees. SECTION 7. Notices and Demands. A notice, demand, or other communication under this Declaration by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and in the case of Owner, is addressed to or delivered personally to Owner at: in the case of the City, is addressed to or delivered personally to the City at: City of Golden Valley Physical Development Department 7800 Golden Valley Road Golden Valley, MN 55427 ATTENTION: Planning Manager or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. [SECTION 8. Reduction of Affordable Units. If Owner has complied with the terms of this Declaration for at least five (5) years, then, upon request from Owner, the City will execute an amendment to this Declaration agreeing to reduce the number of Affordable Units down to a minimum of __________ Affordable Units.] IN WITNESS WHEREOF, Owner has caused this Declaration to be executed this _______ day of ___________________, 20___. Name: _________________________________ Title: _________________________________ STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of _______________, 2019, by ______________________, as Owner. ________________________________________ Notary Public This instrument drafted by: CITY OF GOLDEN VALLEY 7800 Golden Valley Road Golden Valley, MN 55427 EXHIBIT A TO AFFORDABLE HOUSING DECLARATION OF RESTRICTIVE COVENANTS LEGAL DESCRIPTION EXHIBIT B TO AFFORDABLE HOUSING DECLARATION OF RESTRICTIVE COVENANTS INITIAL RENT SCHEDULE Unit # Bedroom Size Maximum Rent EXHIBIT C TO AFFORDABLE HOUSING DECLARATION OF RESTRICTIVE COVENANTS Annual Certification Project Address # of Affordable Units # of Total Units Owner Property Manager Monitoring Year UNIT INFORMATION TENANT NAME MOVE IN ELIGIBILITY RENTS Unit # # BR's Tenant Name Move In Date Income at Household Meets Lowest Section 8 Voucher (Y/N) Rent Unit Rent Restrict ed Comme nts Income Restriction at % AMI Move-in at 60% AMI $ - $ - $ - $ - $ - $ - $ - $ - $ - Building Name Crosswoods Copacabana Colonial Trentwood West End Valley Village Valley View Valley Creek West End Trails Total Number of units 35 49 36 54 79 112 72 37 58 532 Grant 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 9,000.00 MHFA Application Fee 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 1,350.00 Record Declaration 46.00 46.00 46.00 46.00 46.00 46.00 46.00 46.00 46.00 414.00 Total 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 10,764.00 Difference in Property Tax 6,846.00 11,660.00 7,255.00 11,867.00 19,974.00 23,012.00 20,393.00 12,286.00 12,084.00 125,377.00 Upfront Costs and Property Tax 8,042.00 12,856.00 8,451.00 13,063.00 21,170.00 24,208.00 21,589.00 13,482.00 13,280.00 136,141.00 $20.23 in up front costs per unit Loss of $196.30 in City tax revenue per unit $210.89 total per unit Building Name Crosswoods Copacabana Colonial Trentwood West End Valley Village Valley View Valley Creek West End Trails Total Number of units 35 49 36 54 79 112 72 37 58 532 Number of units in this calculated scenerio 17 25 18 27 40 56 36 19 29 267 Grant 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 9,000.00 MHFA Application Fee 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 1,350.00 Record Declaration 46.00 46.00 46.00 46.00 46.00 46.00 46.00 46.00 46.00 414.00 Total 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 1,196.00 10,764.00 Difference in Property Tax 3,423.00 5,830.00 3,627.50 5,933.50 9,987.00 11,506.00 10,196.50 6,143.00 6,042.00 62,688.50 Upfront Costs and Property Tax 4,619.00 7,026.00 4,823.50 7,129.50 11,183.00 12,702.00 11,392.50 7,339.00 7,238.00 73,452.50 $40.31 in up front costs per unit Loss of $234.78 in City tax revenue per unit $275.10 total per unit Building Name Crosswoods Copacabana Colonial Trentwood West End Valley Village Valley View Valley Creek West End Trails Total Number of units total 35 49 36 54 79 112 72 37 58 532 Number of units in this calculated scenerio 7 10 7 11 16 22 14 7 12 106 Grant 700.00 1,000.00 700.00 1,000.00 1,000.00 1,000.00 1,000.00 700.00 1,000.00 8,100.00 MHFA Application Fee 70.00 100.00 70.00 110.00 150.00 150.00 140.00 70.00 120.00 980.00 Record Declaration 46.00 46.00 46.00 46.00 46.00 46.00 46.00 46.00 46.00 414.00 Total 816.00 1,146.00 816.00 1,156.00 1,196.00 1,196.00 1,196.00 816.00 1,166.00 9,494.00 Difference in Property Tax 1,608.40 2,571.20 1,451.00 2,612.60 4,234.00 4,602.40 4,078.60 2,696.40 1,816.80 25,671.40 Upfront Costs and Property Tax 2,424.40 3,717.20 2,267.00 3,768.60 5,430.00 5,798.40 5,274.60 3,512.40 2,982.80 35,175.40 $89.56 in up front costs per unit Loss of $206.85 in City tax revenue per unit $294.49 total per unit This is an estimate prepared as requested. Actual tax liability may be different and is dependent upon many factors. This estimate assumes as much value as possible fits within the 1st value tier of $139,000 per unit for taxes payable in 2018. Tax estimates are based upon assessed values and tax rates payable in 2018. 2018 Pay 2019 Estimated Tax in Golden Valley 100% of buildings, 100% of eligible units, first year only (estimate) 100% of buildings, minimum of 20% of eligible units, first year only (estimate) 100% of buildings, 50% of eligible units, first year only (estimate)