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HomeMy WebLinkAbout02-27-20 CITY OF Meeting Location: FARMI NGTON Farmington City Hall /egk 430 Third Street �/ Farmington, MN 55024 ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING AGENDA February 27, 2020 6:30 PM Hannah Simmons, Chair; Steve Wilson, Vice-Chair Katie Bernhjelm, Ryan Butterfield, Jake Cordes, Robyn Craig Geraldine Jolley 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Introductions 4. APPROVE AGENDA 5. CITIZENS COMMENTS 6. CONSENT AGENDA (a) Approve Meeting Minutes (January 30, 2020, Regular Meeting) (b) Monthly Financial Statements 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS (a) Annual Organizational Matters (b) EDA Financing Program Ideas (c) City Council Update 9. DIRECTOR'S REPORT (a) February Director's Report 10. ADJOURN CITY OF 0 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 OFarmingtonMN.gov TO: Economic Development Authority FROM: Cynthia Muller, Administrative Assistant SUBJECT: Approve Meeting Minutes (January 30, 2020, Regular Meeting) DATE: February 27, 2020 INTRODUCTION/DISCUSSION Please find attached the draft meeting minutes from the January 30, 2020, EDA meeting. ACTION REQUESTED Approve the January 30, 2020, EDA minutes. ATTACHMENTS: Type Description o Exhibit Minutes MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting January 30, 2020 1. CALL TO ORDER The meeting was called to order by Chair Simmons at 6:30 p.m. Members Present: Simmons, Bernhjelm, Butterfield, Cordes, Craig,Jolley, Wilson Members Absent: None Also Present: Adam Kienberger, Community Development Director; Terry Donnelly, Councilmember; Kara Hildreth, Dakota County Tribune 2. PLEDGE OFALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA MOTION by Wilson, second by Cordes to approve the Agenda. APIF, MOTION CARRIED. • 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Craig, second by Bernhjelm to approve the Consent Agenda as follows: a) Approved Meeting Minutes (November 21, 2019, Regular Meeting) b) Received Monthly Financial Statements APIF,MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) Continued—Downtown Facade Improvement Grant Program Application 345 Third Street—Fletcher Building This item was continued from the October EDA meeting pending availability of funds and the decision by the Planning Commission whether to issue a Certificate of Appropriateness. Staff presented an outline of events that have occurred with this item. On January 14, 2020, the Planning Commission denied the Certificate of Appropriateness. That decision is being appealed to the City Council. The applicant's original request for a façade grant in the amount of$20,772 was before the EDA tonight. This building was designated a Heritage Landmark in 2001 by the Heritage Preservation Commission. The amount allocated to the façade grant program is $20,000 annually. Grant awards range from $1,500 to $10,000 with required 1:1 matching funds. There are no changes to the program for 2020. EDA Minutes(Regular) January 30,2020 Page 2 Member Bernhjelm recalled it was mentioned to remove the building from the Heritage Landmark designation. Member Craig noted that will be brought up at an upcoming City Council meeting. Member Bernhjelm recalled removing that designation would free up the EDA to approve grant money. Chair Simmons stated for the next item, there was discussion around reducing the limit for the façade grant program and getting back to the smaller projects. Chair Jolley asked who makes the decision as to whether a building is designated as historic. Member Craig stated there isn't an official Heritage Preservation Commission anymore. Because of that, the Planning Commission would be responsible. Chair Jolley clarified the Planning Commission will make the decision whether or not it is designated as a historic building. Members stated the City Council will make that decision. The Planning Commission was working to see how they could make Ms. Heikkila's request work. There are guidelines as to what can be done with a Heritage Landmark building. Member Bernhjelm stated the City Council will decide whether to remove the building from the Heritage Landmark list. Ms. Heikkila did not own the building when it was designated. Chair Simmons stated this current application does not meet the guidelines for the façade grant program. If the building is removed from the list and she submits an application that is within the limits,then we can move forward. Member Jolley noted this is a complicated process for her to know what needs to be done. She wanted her to stay in business and be able to fix the building, but it is not at a stage where we can enter into the discussion. Member Craig stated she cannot do anything right now because of the cold weather so this is not hurting her. Chair Simmons stated it is beyond the scope and authority of this board to approve the grant application in its current form. By closing the loop,we can say when you have an application that meets the grant requirements, bring it back to us. Member Jolley stated we have someone in front of us who has been here a long time so let's try to keep her in business. She understood the problems, but it is frustrating. Member Craig stated the community could do a fundraiser. Depending on whether she is on the landmark list or not, maybe some people could help with labor. Member Wilson asked if the idea behind three Planning Commission meetings was due to the fact that staff was waiting for Robert Vogel to have an opinion on materials that were going to be used? The applicant may have waited a little longer than need be knowing the materials proposed were inconsistent with what could be used. Staff explained at the first Planning Commission meeting they felt they did not have enough information to make an informed decision and sought additional information which was brought to the October meeting. After the additional information,they wanted an outside expert for a third opinion which was commissioned from November to January 14, 2020. The city paid for the historic consultant's report. Chair Simmons stated we have consensus that we cannot act on this application in its current form so the options are to continue this to future meetings or close the loop on the application that both exceeded the program limits as well as did not have plans that comply with city requirements and ask her to re-submit when those other pieces are in place. MOTION by Wilson, second by Cordes to deny the active application and have the applicant re-apply in EDA Minutes(Regular) January 30,2020 Page 3 the future with the materials that will comply with the program. APIF, MOTION CARRIED. b) Business Retention and Expansion Update The EDA created a subcommittee to deal with business retention and expansion. This item is a recap to present the work that has been done so far. The subcommittee is tasked with setting up business visits, selecting who will make the visits, create and maintain a training program for those selected to visit businesses and report back to the EDA. A pilot program has been approved with a few businesses to try it out. Member Wilson stated there are some businesses that are very committed to this program and we have to make sure that information doesn't get dusty. Member Butterfield noted the committee felt the survey questions could be burdensome and it was discussed to narrow it down to high level questions and then during the meeting get more detail. Chair Simmons asked if it was decided who would conduct the visits. Member Bernhjelm stated each meeting will be a little different, but there will be a pool of people to draw from to go on the visit. As the City Council did interviews for boards and commissions,that was one of the questions to the applicants, whether they would be interested in doing that. Member Butterfield stated the committee decided it would only be staff, members of the EDA and City Council for the pilot program visits. c) EDA Programs and Financing Discussion Staff presented a list of things the EDA currently doesn't engage in along with costs and funding mechanisms. The EDA receives an allocation of$40,000 each year from the City Council which comes from the general fund. Staff provided a list of programs the EDA currently funds which includes the Site Readiness Program with an annual allocation of$20,000; Commercial Rehabilitation Grant Program with $27,000 currently available; Open to Business Program where the EDA contributes $5,513 annually; General Operations to cover legal, IT, professional development,programming expenses, etc. amounts to $20,000 annually;the EDA earmarked $100,000 in 2018 for the creation of a Rambling River Center Plaza which has not been scheduled for implementation. After current commitments there is approximately $50,000 of unprogrammed funds left in the EDA fund balance. An optional revenue stream is an EDA Levy. An EDA is able to levy taxes with provisions, statutory guidelines and City Council approval. Our financial advisors note we have the best of both worlds right now, as this group is overseen by the City Council and appropriate dollars as part of the tax levy to the EDA. Member Wilson asked if surrounding cities have an EDA levy. Staff noted Burnsville does and the revenue is based on your estimated tax value for the city which would be around$380,000 maximum levy. Chair Simmons noted we have a lot of things allocated and not utilized. One being site readiness which hasn't been utilized since its creation. Especially for EDA Minutes(Regular) January 30,2020 Page 4 the $100,000 for the plaza, is this a continued value to save these dollars now? Councilmembers Bernhjelm and Craig stated yes. Anywhere we can save funds to be part of future financing is huge especially if we don't have an immediate need for it. Chair Simmons suggested starting the discussion with the items that exist. Regarding the $20,000 façade grant allocation she recalled the last discussion was to get back to the original goals of the program which was to make the grant amounts less than $10,000. We want the funds utilized, but we would rather have six businesses doing $5,000 than one business doing a$10,000 grant. Member Wilson does not want to handcuff the EDA to a certain dollar amount. He would prefer to go down to smaller dollars, but doesn't want to keep modifying the plan and say we can't do $10,000. Member Bernhjelm asked if we need more than $20,000 to allocate in a year or is that sufficient. That is where we get into the question of budgeting and having to ask the Council to budget more for a program like this. Member Craig asked for some history as to how many applicants we had each year and the size of the grants. Staff stated that was provided at the last meeting. Over the past couple years,we have adjusted the amounts. Last year we did not spend the full amount. The $20,000 provides for a couple good projects each year. Member Butterfield felt it was a successful program and doing what was intended. It is a little off putting to talk about decreasing the amount now when we just punted one forward for the full amount. It would be a great idea to add additional funding. The value over the last two years of$140,000 in increased property value is a great story. Chair Simmons' concern with increasing was she is more interested in allocating dollars towards some of the implementation things we can do to support the highway 3 corridor plan. She would like to see dollars go there before we increase an existing program. The façade program has existed for three years and we increased the grant amount because we weren't getting a response and that caused it to grow. She would like to discuss that and as far as the limit, what if we get two $10,000 applications by March? Do we tell everyone else no? That goes back to the budgeting and how we want to be really intentional about using dollars this year. She did not want to self-impose rigid standards that don't have a benefit, but we want to think about that. Member Jolley agreed it is realistic to think that after three years a lot of the work has already been done. She didn't think we need to increase it. Our budget is holding and if we have additional dollars,there are other projects that are needy as well. The downtown was the main focus because the facades needed some work. Other areas are newer. It is a great program and she is happy people have taken advantage of it. She is not in favor of increasing it. Member Bernhj elm stated an option is to expand the program so it is not just downtown, but for any business to apply towards. That way it is all encompassing and you can increase the dollars so it can accommodate other businesses including highway 3. This increase would be for 2021. Members agreed with that option. Chair Simmons suggested for this first year, expand from downtown to highway 3 and see how that goes. Those were the redevelopment areas prioritized in our strategic plan. Staff stated the reason the focus has been on the downtown is that is an area EDA Minutes(Regular) January 30,2020 Page 5 identified in our strategic plan as well as the downtown redevelopment plan. Rationale is similar for the highway 3 corridor plan. If McDonald's want to put up a new awning and it cost them $30,000 and we get an application for$10,000, is that a good use of public taxpayer dollars to put a facade grant towards a very large business that is capable of doing it on their own, versus a designated, targeted area in the community. The EDA could be put in a position of more winners than losers based on the timing of the application or who has the most merit for their application. Member Butterfield stated the EDA has the right to approve or deny an application and say we are targeting a different audience. Staff noted that is what your policy discussion is around and what position do you want to be put in when an application is received. You are going to be more challenged to approve it if it meets the merits of the program. Chair Simmons does not want to lose site of the goal to build relationships with businesses. She would rather have a program that defines that spirit that we can agree on and captures the goals we set forth so that we don't feel like we are sacrificing relationships. Member Craig stated the spirit of the program was to work with the area that would need facade improvement. That would still be downtown and the highway 3 corridor. We want it to improve the look of Farmington. She agreed with staying with that and expand from there. Chair Simmons felt it was easy to explain expanding the program to highway 3 because we spent$50,000 to have that study done. We have a strategic plan for highway 3 and downtown. It was intentional; something we paid for. Chair Simmons asked if the EDA agreed to expanding the facade program to highway 3. Member Bernhj elm suggested putting extra dollars on the wish list to expand the program. Member Jolley asked about the amount to expand the dollars to include highway 3. She felt we could include highway 3 in the current budget, because the downtown looks good. Member Butterfield suggested adding to the wish list facility upgrades or rehabilitation for more industrial type businesses, or grant dollars they can apply for as far as assembly lines that would increase the value of their property or the number of workers. He has also seen energy type projects. A city level grant fund for solar generation on the roof or generators because that increases the tax value of the property and they are large capital investments that draw both workers and tax dollars into the city. Maybe expand the spirit of the façade program where it is driving directly at an objective of the EDA to bring foot traffic downtown to increase retail value. Some of those programs would increase the tax base. Members agreed with those suggestions. Chair Simmons recalled from the last meeting there was interest in creating a new program that was beyond facade improvement by identifying key properties and the example was Dakota Motors. The sprinkler system could be a barrier to a buyer. That is a highly visible,prime location. Create a program where the EDA would prioritize properties where we could allocate dollars that fills a gap in our funding. EDA Minutes(Regular) January 30,2020 Page 6 Member Jolley recalled several years ago the city put forward dollars to bring the Dueber's building up to code. It came from a grant of some kind. Without that they couldn't have partitioned the separate offices. If the sprinkler system is a deterrent for the buyer then that is a good program. Staff stated it amounts to approximately $100,000 for a sprinkler system. The EDA would partially fund it. For the Dueber's building we used community development block grant dollars for improvements to their HVAC that were a required building code improvement. We still have some CDBG dollars for the commercial rehab, but it is restrictive in how the dollars are used because it's a federal program. The intent of that is to make improvements to buildings that have code deficiencies. We could look at something that mirrors that, but retain local flexibility in how we administer it. Staff summarized the suggestions. A desire to focus on highway 3 and recommended a separate, but similar program to make sure the outcomes are tailored specific to that geographic area rather than cast a wider net to our existing program. Chair Simmons asked what the distinction would be between the existing program and expanding the allowed area. Staff explained we have an in- depth document that refers to a defined geographic area with downtown. The façade program is based on deliverables in this plan. The draft theory instead of taking what was built for the downtown and opening it wider so we capture a different geographic area,why not create a similar but separate program that has more mirrored goals with a program that speaks to the validity of the highway 3 area. Staff heard a desire for a third, less geographically focused, but for removing barriers for re-investment into commercial/industrial, rewarding those that are expanding, adding industrial lines, etc. It could include energy efficiency programs. Then we have the question what dollars do we assign to a program like that. Member Bernhj elm suggested putting together examples of other cities that have these programs and the types of projects it funds,that will help drive the conversation about how much money we need to request to fund it. Member Butterfield stated Minnetonka and Edina have done those types of things and see if it gets the bang for the buck and does it increase taxable value by more than $100,000. Staff agreed that is a key point. Consistency with a program drives credibility within the program and attracts new applicants to the program. If you are always moving the goal posts it is difficult for applicants to figure out how and when to maneuver within the program. Member Butterfield clarified we are discussing 2021 programs. Member Bernhjelm stated the idea is we go to the City Council this spring and say these are some programs and funding we would be interested in for 2021 so when Council does budgeting in the summer, it can be considered. Chair Simmons noted we still have $50,000 unallocated for 2020 and have to determine what we can do for our current programs. Member Jolley suggested a wish list item the EDA used to talk about which is putting up some wayfinding signs. As you come into each of the entrances to Farmington, signs that say EDA Minutes(Regular) January 30,2020 Page 7 Downtown, High School, historic downtown Farmington, Fairgrounds. So when people come in,they know where to go. Can we get started on that and put up at least one? That is something that is visible and inexpensive to accomplish. Staff noted it is identified as an outcome in the highway 3 and downtown plans. The programmable reader board was about$50,000. Members stated it could be just a sign with our logo and wording. Staff agreed to look into the cost of signage. Staff stated the EDA sign next to Dakota Motors is lit and is in need of repair and is outdated. Member Bernhjelm stated only one of the entrance signs, along Pilot Knob was lit and we could add lighting for the others to this package. Chair Simmons noted there was some tangible things in the short-term highway 3 plan that we could accomplish. She asked staff to bring recommendations around that. Regarding Member Butterfield's suggestions for industrial investment would that capture what we discussed for easily accessible, internal barriers to re-investment. Staff agreed. Chair Simmons summarized that we want a similar program to the façade program created for highway 3; facility upgrades for industrial energy projects; rehab for eliminating barriers to key redevelopment properties; and options for wayfinding signage. Staff also heard to leave the downtown façade program as is. Members agreed. One of the biggest hurdles mostly for restaurants are SAC units for new businesses when they come into existing spaces that may not have been a high- water user in the past. It is a rather substantial fee that is imposed by the Met Council and the city has their own sister fee that is tied to that before any business can open. Staff has heard of a city having a sale for SAC units as a way to promote restaurants so that they are more competitive than surrounding cities and here is the barrier we are looking to remove or do a cost share. We could catch that into the removing barriers program. Staff also suggested one of the biggest pieces of redevelopment is site control. We haven't owned a lot of property. The only piece we have left is the Riste lot downtown. We haven't spent time talking about redevelopment via the powers of site control. Ultimately,whoever owns the land gets to control who goes in there. Staff asked for thoughts on economic development, redevelopment, site acquisition and control. Member Bernhjelm did not have an extreme appetite for it because it is very expensive and you have the liability of maintaining land and properties. Member Craig stated the last time the City Council discussed this, we were in agreement that the city did not want to be in the business of owning property. Staff noted it is one of the most powerful tools this group has. One of the fundamentals of an EDA and HRA is land acquisition and sale, but it is not for every community. For example, in the downtown plan it highlights a number of key properties for redevelopment. If that property becomes for sale, does the city have an interest in acquiring it so it can control the outcome of that property versus it going to whoever purchases it and as long as it fits within the zoning they are entitled to do what they want. The Dakota Motors building is for sale. The best way to figure out what goes in there, is you get to make the decision. You don't make the decision if you don't own it. Member Bernhjelm stated the city is going to have to make a lot of decisions on if they will want to purchase land anyway for other projects whether it is a liquor EDA Minutes(Regular) January 30,2020 Page 8 store or another sheet of ice, etc. Without resolving some of those things,to buy the property for redevelopment doesn't seem strategic. The EDA would have to levy for it or appropriate significantly more dollars to the EDA. It is within the statutory power of the EDA. That is why cities have EDA's is primarily levying dollars for economic development and land deals. Member Butterfield stated one of the big constraints with the City Council is not to raise taxes in the future. Until you start showing increases in the tax base, it is difficult to do. Staff noted there is a section in the downtown plan that mirrors that exact argument. It is your biggest tool, but it adds to the tax burden. Member Jolley wouldn't have a problem with that if we already had a vision in mind of something we would like to do, but we can't because we don't have the property to do it. She would like to see the plan first rather than just buy something because it is strategically located. Member Butterfield stated the highway 3 plan has a lot of examples of what the vision is with the strip mall if that came up for sale. In the plan,that is a multi- residential type community. If that came up for sale,we could jump on that and develop it into multi-residential. Member Wilson didn't know if the city should determine what goes at the Dakota Motors location. It should be a market activity. That is such a pivotal development. He could see it both ways. Member Bernhjelm was concerned that if we own property,then residents are really upset when we don't let certain businesses in. Staff stated primarily when a city acquires land it is for demolition and sale to a suitable end user. That is what was done with the Riste building. Chair Simmons asked about Member Wilson's suggestion to keep an open mind about property acquisition, but not a priority right now. Members agreed. Staff attended the Economic Development Association Winter Conference last week and one of the topics was on downtown Main Street redevelopment. One of the big things where they see success is regular small incremental projects to show progress because that builds momentum rather than big projects. But you need to be active about programming dollars towards that. Chair Simmons stated that ties to our annual plan so every meeting we are checking on goals for the year. Member Butterfield asked that as staff identifies the small things that are incremental that could align to the strategic plans, he would be open to bringing those up whether it be signage, etc. and tackling one a year. c) City Council Update Member Bernhj elm stated the City Council has their annual goal planning session next Friday. So this discussion was valuable for us. She encouraged members to look at council's priorities from 2019 and to contact Councilmembers for any ideas. 9. DIRECTOR'S REPORT a) January Director's Report The city in partnership with the school district held a Realtor Rally. There were 25 realtors attending. Chair Simmons noted the flyer is similar to what she had in mind for the why Farmington landing page for economic development on the EDA Minutes(Regular) January 30,2020 Page 9 website. Staff attended the Farmington Expo this past Saturday. The next EDA meeting is February 27, 2020, and is our annual organizational meeting. 10. ADJOURN MOTION by Bernhjelm, second by Cordes to adjourn at 8:03 p.m. APIF,MOTION CARRIED. Respectfully submitted, c�wthLa Mu.LLer Cynthia Muller Administrative Assistant CITY OF O 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 I�IIII® O FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: Monthly Financial Statements DATE: February 27, 2020 INTRODUCTION/DISCUSSION Please find attached the monthly financial statements of the EDA. ACTION REQUESTED Acknowledge the monthly financial statements and ask any questions you may have. ATTACHMENTS: Type Description i Exhibit Financial Snapshot- February D Cover Memo EDA-Actual Vs Budgeted Rev and Exp- February 2020 Department Actual vs Budget-Generic Time Period Business Object Account Cumulative 12 Cumulative 12 Actual Budget Unit Account Description 2020 2020 2000-HRA/ECONOMIC DEVELOPME 1010 CASH 258,810.81 2000-HRA/ECONOMIC DEVELOPME 1010 CASH-LGA ASSMNT RELIEF 35,000.00 2000-HRA/ECONOMIC DEVELOPME 3510 UNRESERVED FUND BALANCE -292,073.72 2000-HRA/ECONOMIC DEVELOPME 4955 INTEREST ON INVESTMENTS -588.22 -2,700.00 2000-HRA/ECONOMIC DEVELOPME 5205 OPERATING TRANSFERS -3,333.33 -40,000.00 2000-HRA/ECONOMIC DEVELOPME 6401 PROFESSIONAL SERVICES 0.00 12,000.00 2000-HRA/ECONOMIC DEVELOPME 6403 LEGAL 0.00 2,500.00 2000-HRA/ECONOMIC DEVELOPME 6404 IT SERVICES 730.58 8,767.00 2000-HRA/ECONOMIC DEVELOPME 6422 ELECTRIC 20.71 300.00 2000-HRA/ECONOMIC DEVELOPME 6426 INSURANCE 11.89 130.00 2000-HRA/ECONOMIC DEVELOPME 6450 OUTSIDE PRINTING 0.00 500.00 2000-HRA/ECONOMIC DEVELOPME 6460 MEMBER DUES&LICENSURE 795.00 2,000.00 2000-HRA/ECONOMIC DEVELOPME 6470 TRAINING&SUBSISTANCE 605.00 4,000.00 2000-HRA/ECONOMIC DEVELOPME 6485 MILEAGE REIMBURSEMENT 21.28 800.00 2000-HRA/ECONOMIC DEVELOPME 6570 PROGRAMMING EXPENSE 0.00 7,733.00 Total 2000-HRA/ECONOMIC DEVELOPM 0.00 -3,970.00 0.00 -3,970.00 0.00 -3,970.00 2/20/2020 1:12:10 PM Page 1 of 1 0 0 `0 N 0 C O O CO O) CO O LO LA O) co O co r 0 1D M 0 ON O O CO O O 0) N- CO Cr O D CO O ❑-O N e- O LO O N In N CO h 1- .' t/) O CD N _ 03 d N N N M V v CO- N� M CO •cv M- v Cll v-6_, g v 0) ❑ a3 U co CL a> 0 0 O CD O V CD CD CD O 0 O CO O 0 0 0 0 0 0 CD CDCO 0 CO 0 CO 0 0 0 0 CO CO<") 0 0 ~• p)0 r N- O LC) N- CO LO O O CO r r n O O O) ymN N N T N CO- N V' r _,..r.- co- V CO ❑ O co O CO CD CD N O Lf) Lf) C) '7 Tr CO 0 CO n CO CO CO N ,- O) O N O 00 M M M } N O lA f� N� CO c- M M T O )0 N N CO CO CU Q N ❑ 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ▪ 0 E 3 N U Q C1 CD 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 d To O E 3 N > L)N O Q Z I Ti, 0 0 0 O CD 0 CD 0 CD 0 0 0 0 0 0 0 0 0 0 0 a) O o▪ 3 N )Q N O iil =0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O E 3 N 6)50 aQN CU 0 0 0 O CD C) 0 0 0 C) 0 0 0 0 0 0 0 0 0 0 4... 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Section 1,subdivision 3 of the by-laws requires direction from the EDA regarding the following: a. Election of Officers The EDA By-Laws provides that each year,the EDA shall choose a Chairperson and Vice- Chairperson. A Secretary and Treasurer must also be appointed which typically is assigned to the Executive Director, as neither needs to be a commissioner. In 2019 Hannah Simmons served as Chair and Commissioner Wilson served as Vice-Chair. b. Meeting Schedule The EDA shall establish a meeting schedule for the year. Attached is the City's Board and Commission meeting calendar which identifies the date of each EDA meeting. EDA meetings are held the fourth Thursday of each month at 6:30 p.m. Normally, if a meeting falls on a holiday,the meeting is held the following Thursday. In 2020,Thanksgiving falls on the fourth Thursday. Therefore,the November 2020 EDA meeting will be held on the third Thursday of November. EDA members should confirm that this meeting schedule works for all members. c. Acknowledge Official Newspaper The EDA shall acknowledge City Council's designation of the official newspaper. For 2020 the official newspaper is the Dakota County Tribune. Please provide action for the above listed items. A copy of the current by-laws is enclosed. ACTION REQUESTED Approve by separate motions the 2020 Economic Development Authority by-laws, elect officers, approve the 2020 EDA meeting schedule, and acknowledge the City Council's designation of the official newspaper. ATTACHMENTS: Type Description D Exhibit EDA By-Laws 2020 D Exhibit Meetings Calendar 2020 O Exhibit Open Meeting Law Memo-Administration D Exhibit LM NC Open Meeting Law Article 2020 ECONOMIC DEVELOPMENT AUTHORITY BY-LAWS These By-Laws, when adopted, are intended to deal with matters not otherwise covered by State Law, City Ordinance or elsewhere. Section I—Meetings SUBD. 1 —Regular meetings of the Economic Development Authority shall be held on the fourth(4th) Thursday of each month at 6:00 p.m. Any regular meeting falling upon a holiday shall be held on the following Thursday at the same time and place. All meetings, including special and adjourned meetings, shall be held in the City Hall unless otherwise designated. SUBD. 2—Special meetings of the Authority may be called by the Chairperson or in written form by any other two (2) members of the Authority, filed with the Executive Director. The Executive Director may also call a special meeting. At least three (3) days before the meeting, the Executive Director shall notify each member of the time,place and purpose of the meeting by causing written notice thereof to be delivered to him/her by e-mail. At least three (3) days prior to the meeting,the Executive Director shall also post notice of the meeting and if applicable, notify each person who has filed an applicable written request for notice, or may, if necessary, provide such other more restricted notice, including but not limited to (as allowed by Statute, such as) M.S. 471.705, subd. 1C, paragraph g, " if a person receives actual notice of a meeting of a public body at least 24 hours before the meeting, all notice requirements of this subdivision are satisfied with respect to that person, regardless of the method of receipt of notice." Emergency meetings may be held because of circumstances that, in the judgment of the Authority require immediate attention. The notice of special meeting shall state the item(s)to be discussed and acted upon. Items not stated in the notice may be discussed, but no action may be taken if any member objects. Any special meeting attended by a majority of the Authority members shall be a valid meeting for the transaction of business that may come before the meeting. SUBD. 3 —At the regular Authority meeting in February of each year,the Authority shall (1) acknowledge City Council's designation of the official newspaper; (2) establish the meeting schedule for the year; (3) choose a Chairperson and a Vice-Chairperson, who shall perform the duties of the Chairperson during the Chairpersons disability or absence, and in case of a vacancy in the office of Chairperson, and until a successor has been appointed and qualifies to fulfill the duties of Chairperson, and; (4) appoint a Secretary and Treasurer, which need not be a commissioner. SUBD. 4—All Authority meetings, as defined by State Law, including special and adjourned meetings shall be open to the public. The Authority Attorney shall advise the Authority in writing as to their interpretation of the state "Open Meeting Law" and all new members shall be provided such written interpretation. 1 Section II Presiding Officer; Rules of Order SUBD. 1 —The Chairperson shall preside at all meetings of the Authority. In the absence of the Chairperson, the Vice-Chairperson shall preside. In the absence of both,the Executive Director shall call the meeting to order and shall preside until the Authority members present at the meeting choose one of their members to act temporarily as presiding officer. SUBD. 2—The presiding officer shall preserve order, enforce the rule of procedure herein prescribed, and determine all questions of procedure and order. Except as otherwise provided by statute or by these rules, the proceedings of the Authority shall be conducted in accordance with the following rules of order: A. A motion must be seconded before being considered by the Authority and the presiding officer must recognize mover, as well as the seconder. B. Any motion may be withdrawn by its mover with the consent of his/her second. But a motion, once debated, cannot be withdrawn except by a majority vote of the Authority. C. A motion will not be subject to debate until it has been stated by the presiding officer and he/she has opened it to debate. D. Each member, while speaking, shall confine himself/herself to the question at hand and avoid all personal, indecorous or sarcastic language. E. Whenever any member of the Authority desires to speak on any question, which affects him/her personally, he/she shall first vacate his/her chair and shall not resume his/her seat until the matter under consideration has been acted upon. He/she shall be allowed to make comments on the question as a private citizen only and while a member of the audience. F. Whenever public hearings are held, the presiding officer shall allow any member of the public, the privilege of speaking. A reasonable time shall be allowed to anyone as long as they are not repeating points already made. The presiding officer shall maintain order and may rule anyone out of order. G. At any meeting,the presiding officer will allow the public to participate as long as there is reason to believe the input is beneficial. SUBD. 3 —Any member may appeal to the Authority from a ruling of the presiding officer. If the appeal is seconded,the appealing member may speak first on the reason for his/her appeal. General discussion can then take place on the appeal before a vote. The appeal shall be sustained if it is approved by a majority of the members present. 2 Section III—Agendas SUBD. 1 —The agenda shall be prepared by the EDA Executive Director and shall be closed at noon on the Friday preceding the meeting for publication purposes. SUBD. 2—Any member may place an item on the agenda by so instructing the Executive Director. SUBD. 3—No item shall be placed on the agenda unless the item is expressed in such a way as to clearly show the subject matter involved. SUBD. 4 —The agenda add-ons are subject to approval by a majority vote of the members present and further such add-on items may be discussed, but no action may be taken if any member objects. Section IV—Order of Business SUBD. 1 —Each meeting of the Authority shall convene at the time and place appointed therefore. Authority business shall be conducted in the following order: 1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Approve Agenda 5) Citizen Comments 6) Approve Consent Agenda a. Minutes b. Monthly Statements c. Additional Consent Agenda items 7) Public Hearings 8) Discussion Items 9) Director's Report 10)Adjourn SUBD. 2—The order of business may be varied by the presiding officer, except that all public hearings shall be held at the time specified in the notice of hearing. Section V—Minutes SUBD. 1 —Minutes of each Authority meeting shall be kept by the Executive Director or, in his/her absence, his/her designee. In the absence of both, the presiding officer shall appoint a secretary pro tern. Resolutions need not be recorded in full in the minutes if they appear in other permanent records of the Executive Director and can be accurately identified from the description given in the minutes. SUBD. 2—Minutes of each meeting shall be reduced to typewritten form. At the next regular Authority meeting, approval of the minutes shall be considered by the Authority. The minutes need not be read aloud, but the presiding officer shall call for any additions or corrections. If there is an objection,the Authority shall vote upon the addition or correction. If there are no additions or 3 corrections, the minutes shall stand approved by motion. If there is an objection,the Authority shall vote upon the addition or correction and approve the minutes by motion as amended. Section VI—Quorum and Voting SUBD. 1 —At all meetings a majority of all members shall constitute a quorum for the transaction of business. SUBD. 2—The votes of members on any question pending before the EDA shall be by voice votes. Roll call vote can be requested by any member, except for the following agenda items; approval of the agenda; approval of the consent agenda; and the adjournment. The names of those voting for and against the question shall be recorded in the minutes. If any member present does not vote,the minutes shall state: "Abstain: Name". SUBD. 3 —Except as otherwise provided by statute, a majority vote of the quorum shall prevail. Section VII—Executive Director The Authority may appoint and provide for annual performance reviews of an Executive Director. Section VIII—Suspension or Amendment of the By-Laws SUBD. 1 —These by-laws may be temporarily suspended by a unanimous vote of the members present. SUBD. 2—These by-laws shall not be repealed or amended except by a majority vote of the whole Authority after notice has been given at some preceding meeting. Section IX—Effective Date SUBD. 1 —These by-laws have been adopted by the Economic Development Authority on the 27th day of February, 2020 and become effective immediately. Attest: Q\LAAA -2 '°2t EDA Executi e Director EDA Chairperson Date: g/490Date: 2( V? 2 D 4 City of Farmington 2020 Meetings, Holidays, Pay Days, Election Days January 2020 July 2020 SMTWT F S SMTWT F S yi2 . 4 1 2 3 4 FARMINGTON 59 10 11 5 7 $... 9 10 11 12 16 18 12 13 14 15 16 1 17 18 19 24 25 19 21 22 3 24 25 26 30 26 28 29 30 31 February 2020 August 2020 SMTWT F S SMTWT F S 1 1 24 5 6 7 8 2 4 5 6 7 8 City Holidays 9 13 . 15 9 10 11 12 13 11115 16 17 19 20 21 22 16 18 19 20 21 22 El City Council 23 25 26_ 29 23 25 26 29 30 31 .EDA March 2020 September 2020 mi Parks and Rec Commission SMTWT F S SMTWT F S 1 2 3 4 5 6 7 1 2 3 4 5 Parks and Rec Commission 8 9 10 11 12 131 14 6 7 8 9 10 111 12 Planning Commission 1517 18 19 20 21 13 14 15 16 17 18 19 (Separate Meetings-Same Night) 22 24 25 28 20 21 22 23 24 251 26 29 30 31 27 28 29 30 11,Planning Commission April 2020 October 2020 RRC Advisory Board SMTWT F S SMTWT F S 1 2 3 4 1 2 3 .Water Board 5le9 . 11 4 . 6 7 8 . 10 12 16 17 18 11 15 16 17 MilPay Days 1921 22 _ 25 18 20 21 24 2628 29 30 25 27 28 29 30 31 Election Days May 2020 November 2020 SMTWT F S SMTWT F S 1 2 1 2 3 4 5 7 3 or 5 6 7 . 9 8 9 10 11 13 14 10 11 12 13 14 1516 15 17 18 21 17 18 19 20 21 23 22 24 25 26 27 28 24 25 2b 27 "' 29 30 29 30 31 June 2020 December 2020 SMTWT F S SMTWT F S 2 3 4 . 6 1 2 3 . 5 7 11 12 13 6 10 11 12 14 16 1718 20 13 ; 15 16 ;° z 19 21 23 24 26 27 20 22 23 24 25 26 28 29 30 27 29 301'.31 CITY OF 0430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 FarmingtonMN.gov Date: January 10, 2020 To: Farmington City Council Farmington Planning Commission Farmington Economic Development Authority Farmington Parks and Recreation Advisory Commission Farmington Rambling River Center Advisory Board From: David McKnight, City Administrator RE: Open Meeting Law Each year I like to remind the elected and appointed officials of the importance of the open meeting law and how it affects the work that you do for Farmington. This law applies to the city council and all of our boards and commissions. Open Meeting Law The open meeting law requires that meetings of public bodies must generally be open to the public. It serves three vital purposes: ✓ Prohibits actions from being taken at a secret meeting where the interested public cannot be fully informed of the decisions of public bodies or detect improper influence. ✓ Ensure the public's right to be informed. ✓ Gives the public an opportunity to present its views. While the work of ensuring that meeting dates,times and locations are made public in a timely fashion falls on city staff, it is important for each of you as board or commission members to remember the following items in regards to the open meeting law. ✓ Please avoid gathering in a quorum of board/commission members outside of the regular meeting. On the chance that a quorum is present at a social gathering, please do not discuss city business. ✓ While there are exceptions to the open meeting law, this small number of exceptions typically pertains to the city council meeting in a closed session on a very limited number of topics. - 1- ✓ Avoid having a serial meeting by telephone, email, text or social media. A serial meeting example is when one member contacts a second member and shares how a third or fourth member feels about a topic. Avoid these types of pitfalls and have these discussions as a part of the regular meeting. ✓ There are legal penalties for those that intentionally violate the open meeting law. A civil penalty of$300 for a single occurrence is the first penalty and the public body may not pay the penalty. A number of years ago I attended a training on this issue that is encompassed below: The most basic summary of this sometimes-complicated law is to conduct city business at the meetings, call city staff with any questions you have or assistance you need and when the meeting is over, go home. I have included information on the open meeting law put together by the League of Minnesota Cities. It is much more than you will probably want, but I wanted to make it available to those who have an interest. If you have any questions on this information, please let me know. Thank you for your time on this important matter and thank you for the work you do for Farmington! RELEVANT LINKS: Therefore,if a school district is holding a special election on a particular day, no other unit of government totally or partially within the school district may hold a meeting between 6 p.m. and 8 p.m. Meetings are also prohibited after 6 p.m. on the day of a major political precinct caucus. II. Open meeting law See LMC information memo, Meetings of City Councils, A. Purpose for more information about the open meeting law. Minn.Stat.§ 13D.01.St. The open meeting law requires that meetings of public bodies must Cloud Newspapers,Inc.v. Dist,742 Commm,ih, generally be open to the public. It serves three vital purposes: &hoots,332 N.W.2d 1 (Minn.1983). • Prohibits actions from being taken at a secret meeting where the interested public cannot be fully informed of the decisions of public bodies or detect improper influences. • Ensures the public's right to be informed. • Gives the public an opportunity to present its views. B. Public notice See section I-7}pes of Public notice generally must be provided for meetings of a public body council meetings and notice requirements.Minn.Stat.§ subject to the open meeting law. The notice requirements depend on the 131104,subd.7. type of meeting. However, if a person receives actual notice of a meeting at least 24 hours before the meeting, all notice requirements under the open meeting law are satisfied regardless of the method of receipt. C. Printed materials Minn.Slat.§ 13D.01,subd. At least one copy of the printed materials relating to agenda items that are 6006 Po 08-015.DPO 17- provided to the council at or before a meeting must also be made available DPO 13-015(noting that the for public inspection in the meeting room while the governing body open meeting law"is silent with respect to agendas;it considers the subject matter. neither requires them nor prohibits them"). Minn.Stat.§ 13D.01,subd. This requirement does not apply to materials classified by law as other 6. than public or to materials relating to the agenda items of a closed meeting. D. Groups governed by the open meeting law Minn.Stat.§ 13D.01,said. Under the Minnesota open meeting law, all city council meetings and 1. executive sessions must be open to the public with only a few exceptions. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 Page 12 RELEVANT LINKS: Minn.Stat.§465.719,subd. The open meeting law also requires meetings of a public body or of any 9. committee, subcommittee,board, department, or commission of a public body to be open to the public. For example,the governing bodies of local public pension plans, housing and redevelopment authorities, economic development authorities, and city-created corporations are subject to the open meeting law. Southern Minnesota The Minnesota Supreme Court has held, however,that the governing body Mumicipal Power Agency it Boyne,578 N.W.2d 362 of a municipal electric power agency is not subject to the open meeting (Minn.1998). law because the Legislature has granted these agencies authority to conduct their affairs as private corporations. E. Gatherings governed by the open meeting law Moberg v.hrdep.Sch.Dist. The open meeting law does not define the term"meeting."The Minnesota Aro.231,336 N,W.2d 510 (Minn.1983).St.Cloud Supreme Court,however,has ruled that meetings are gatherings of a Newspapers,Inc.v.DIV,742 quorum or more members of the governing body—or a quorum of a Community y Schools,332 N.W.2d 1(Minn. 1983). committee, subcommittee,board, department,or commission thereof—at which members discuss, decide, or receive information as a group on issues relating to the official business of that governing body. Mimi.Stat.§412.191,subd. For most public bodies, including statutory cities, a majority of its Minn.Stat.§645.08(5). qualified members constitutes a quorum. Charter cities may provide that a different number of members of the council constitutes a quorum. See Section 11-0-4 for more The open meeting law does not generally apply in situations where less information about serial meetings. than a quorum of the council is involved. However, serial meetings, in groups of less than a quorum,that are held to avoid the requirements of the open meeting law may be found to violate the law, depending on the specific facts. • F. Open meeting law exceptions The open meeting law is designed to favor public access. Therefore, the few exceptions that exist are carefully limited to avoid abuse. Minn.Stat.§ 13D.05,subd. All closed meetings(except those closed under the attorney-client 1(d). privilege) must be electronically recorded at the expense of the public body. Unless otherwise provided by law,the recordings must be preserved for at least three years after the date of the meeting. Minn.Stat.§ 13D.01,sttbd. Before closing a meeting under any of the following exceptions, a city 3. council must make a statement on the record that includes the specific grounds that permit the meeting to be closed and describes the subject to be discussed. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 71 Page 13 RELEVANT LINKS: DPO 14-005.DPO 13-012. The commissioner of the Minnesota Department of Administration has DPO 06-020.DPO 14-005. See Me Five Presse,County advised that a member of the public body(and not its attorney) must make of BlueEoril?,677N.W.2d the statement on the record. The commissioner has also advised that citing 471(Minn.Ct.App.2004) (holding that the county's the specific statutory authority that permits the closed meeting is the statement that it was closing simplest way to satisfy the requirement for stating the specific grounds a meeting under the attorney- client privilege to discuss permitting the meeting to be closed. Both the conunissioner and the "pending litigation"did not Minnesota Court of Appeals have concluded that something more specific satisfy the requirement of describing the subject to be than a general statement is needed to satisfy the requirement of providing a discussed at the closed description of the subject to be discussed. meeting). Minn.Stat.§13D.04,subd. The same notice requirements that apply to open meetings also apply to 5. closed meetings. For example, if a closed meeting takes place at a regular meeting, the notice requirements for a regular meeting apply. Likewise, if a closed meeting takes place as a special meeting or as an emergency meeting,the notice requirements for a special meeting or an emergency meeting would apply. 1. Labor negotiations Minn.Stat.§ 13D.03,subd.1 The city council may, by majority vote in a public meeting,decide to hold DPO 13-012. a closed meeting to consider its strategy for labor negotiations, including Minn.Stat.§§ 179A.01-25. negotiation strategies or developments or discussion of labor-negotiation proposals conducted pursuant to Minnesota Statutes sections 179A.01 to 179A.25. The council must announce the time and place of the closed meeting at the public meeting. Minn.Stat.§i3D.03,subds. After the closed meeting, a written record of all members of the city DPo 05 -027. council and all other people present must be available to the public. The DPO 00-037. council must tape-record the proceedings at city expense and preserve the tape for two years after signing the contract.The tape-recording must be available to the public after all labor contracts are signed for the current budget period. Minn.Stat.§I 3D.03,subd. If someone claims the council conducted public business other than labor 3' negotiations at the closed meeting, a court must privately review the recording of the meeting. If the court finds the law was not violated, the action must be dismissed, and the recording sealed and preserved. If the court determines a violation of the open meeting law may exist,the recording may be introduced at trial in its entirety, subject to any protective orders requested by either party and deemed appropriate by the court. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 14 RELEVANT LINKS: 2. Not public data under the Minnesota Government Data Practices Act Minn.Stat.§130.05,subd. The general rule is that meetings cannot be closed to discuss data that are 2. not public under the Minnesota Government Data Practices Act. A meeting must be closed,however, if certain not public data is discussed. Any portion of a meeting must be closed if expressly required by law or if any of the following types of not public data are discussed: • Data that would identify victhns or reporters of criminal sexual conduct, domestic abuse, or maltreatment of minors or vulnerable adults. • Active investigative data created by a law-enforcement agency, or internal-affairs data relating to allegations of law-enforcement personnel misconduct. • Educational, health, medical,welfare, or mental-health data that are Minn.Stat.§§ 144.291-298. not public data. • Certain medical records. Minn.Stat.§ 13D.05,subd. A closed meeting held to discuss any of the not public data listed above 1(a). must be electronically recorded, and the recording must be preserved for at least three years after the meeting. Minn.Stat.§ 130.05,subd. 1 Other not public data may be discussed at an open meeting without (b),(c). DPO09-012. liability or penalty if the disclosure relates to a matter within the scope of the public body's authority, and it is reasonably necessary to conduct the business or agenda item before the public body. The public body, however, should make reasonable efforts to protect the data from disclosure. Data discussed at an open meeting retains its original classification;however, a record of the meeting shall be public. 3. Misconduct allegations or charges Minn.Stat.§ 13D.05,subds. A public body must close one or more meetings for"preliminary 1(d),2(b). DPO 03-020.(Advising that consideration"of allegations or charges of misconduct against an wltett a meeting is closed individual subject to its authority. This type of meeting must be open at the under this exception,ivtinn. Slat.§13.43,subd.2 request of the individual who is the subject of the meeting. If the public requires the government body concludes discipline of any nature may be warranted, further entity to identify the individual who is being meetings or hearings relating to the specific charges or allegations that are discussed). held after that conclusion is reached must be open. This type of meeting must be electronically recorded, and the recording must be preserved for at least three years after the meeting. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 15 RELEVANT LINKS: DPO 14-004. The commissioner of the Minnesota Department of Administration has advised that a city could not close a meeting under this exception to consider allegations of misconduct against a job applicant who had been extended a conditional offer of employment.The job applicant was not a city employee. The commissioner reasoned that the city council had no authority to discipline the job applicant or to direct his actions in any way; therefore,he was not"an individual subject to its authority." DPo 10-001. The commissioner has also advised that a tape recording of a closed Minn.Stat.§13.43. meeting for preliminary consideration of misconduct allegations is private personnel data under Minn. Stat. § 13.43, subd. 4,and is accessible to the subject of the data but not to the public. The commissioner noted that at some point in time, some or all of the data on the tape may become public under Minn. Stat. § 13.43, subd. 2. For example, if the employee is disciplined and there is a final disposition, certain personnel data becomes public. 4. Performance evaluations Minn.Stat.§ 13D.05,subds. A public body may close a meeting to evaluate the performance of an 1(d),3(a).See DPO 14-007, DPO 15-002,and DPO 16- individual who is subject to its authority. The public body must identify 002(discussing what type of the individual to be evaluated before closing the meeting. summary satisfies the open meeting law). DPO 05-013(advising that a At its next open meeting,the public body must summarize its conclusions government entity could close a meeting under this regarding the evaluation. This type of meeting must be open at the request exception to discuss its of the individual who is the subject of the meeting. If this type of meeting contract with an independent contractor when that is closed, it must be electronically recorded, and the recording must be contractor is an individual preserved for at least three years after the meeting. human being). 5. Attorney-client privilege Minn.Stat.§ 13D.05,subd.3 A meeting may be closed if permitted by the attorney-client privilege. (b). Brainerd Daily Dispatch, Meetings between a government body and its attorney to discuss active or LLC v.Dehen,693 N.W.2d threatened litigation may only be closed, under the attorney-client 435(Minn.Ct.App.2005). Prior Lake American v, privilege, when a balancing of the purposes served by the attorney-client Mader,642 N.W.2d 729 privilege against those served by the open meeting law dictates the need Publications,(M2002)Inc.v.Northwest for absolute confidentiality. The need for absolute confidentialityshould ua v.City of y St.Paul,435 N.W.2d 64 relate to litigation strategy and will usually arise only after the city has (Minn.Ct.App.1989). Minneapolis Star&Tribune made a substantive decision on the underlying matter. This privilege may v.Housing and not be abused to suppress public observations of the decision-making Redevelopment Authority in and for the City of process and does not include situations where the council will be receiving Minneapolis,251 N.W.2d general legal opinions and advice on the strengths and weaknesses of a 620(Minn. ).DPO 14-005.DPO 14-017, proposed underlying action that may give rise to figure litigation. DPO 16-003.DPO 17-003. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 16 RELEVANT LINKS: 6. Purchase or sale of real or personal .property Minn.Stat.§ 130.05,subd.3 A public body may close a meeting to: (c). • Determine the asking price for real or personal property to be sold by the public body. Minn. S .§ 13.44,subd.3. • Review confidential or protected nonpublic appraisal data. • Develop or consider offers or counteroffers for the purchase or sale of real or personal property. Minn.Stat.§ 130.05,subd.3 Before holding a closed meeting under this exception,the public body (e)' must identify on the record the particular real or personal property that is the subject of the closed meeting. vik v.Wild Rice Watershed The closed meeting must be tape-recorded. The recording must be Ct. .Aug.10,2 10)ion' preserved for eightyears and must be made available to thepublic only App. rig.10,20 f 0) g (unpublished opinion) after all real or personal property discussed at the meeting has been (holding that this exception authorizes closing a meeting purchased or sold, or after the public body has abandoned the purchase or to discuss the development or sale. The real or personal property that is being discussed must be consideration ofa property transaction and is not limited identified on the tape. A list of members and all other persons present at to the discussion of specific the closed meeting must be made available to the public after the closed terms of advanced negotiations).DPO 08-001. meeting. The actual purchase or sale of the real or personal property must DPO 14-014. be approved at an open meeting, and the purchase or sale price is public data. 7. Security reports Minn.Stat.§ 13D.05,subd.3 Meetings may be closed to receive security briefings and reports,to (d) discuss issues related to security systems,to discuss emergency-response procedures, and to discuss security deficiencies in or recommendations regarding public services,infrastructure, and facilities, if disclosure of the information would pose a danger to public safety or compromise security procedures or responses. Financial issues related to security matters must be discussed and all related fmancial decisions must be made at an open meeting. Before closing a meeting under this exception,the public body must, when describing the subject to be discussed,refer to the facilities, systems,procedures, services or infrastructures to be considered during the closed meeting. The closed meeting must be tape-recorded,and the recording must be preserved for at least four years. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 17 RELEVANT LINKS: G. Common issues 1. Interviews Channel 10,Inc.v.Indep. The Minnesota Supreme Court has ruled that a school board must Sch.Dist.No.709,215 N.W.2d 814(Minn.1974). interview prospective employees for administrative positions in open sessions. The court reasoned that the absence of a statutory exception indicated that the Legislature intended such sessions to be open. As a result, a city council should conduct any interviews of prospective officers and employees at an open meeting if a quorum or more of the council will be present. Mankato free Press v.City The Minnesota Court of Appeals considered a situation where individual of North Mankato,563 N.W.2d 291(Minn.Ct.App. councilmembers conducted separate, serial interviews of candidates for a 1997). city position in one-on-one closed interviews. The district court found that no"meeting" of the council had occurred because there was never a quorum of the council present during the interviews. However,the court of appeals sent the case back to the district court for a determination of whether the councilmembers had conducted the interview process in a serial fashion to avoid the requirements of the open meeting law. Mankato Free Press i.City On remand the district court found that the individual interviews were not of North Mankato,No.C9- 98-677(Minn.Ct.App.Dec. done to avoid the requirements of the open meeting law. This decision was 15,1998)(unpublished also appealed, and the court of appeals affirmed the district court's opinion). decision. Cities that want to use this type of interview process should first consult their city attorney. 2. Informational meetings and committees St.Cloud Newspapers,Inc.v. The Minnesota Supreme Court has held that informational seminars about Dist.742 Community Schools,332 N.W.2d 1 school-board business, which the entire board attends, must be noticed and (Minn.1983). open to the public. As a result, it appears that any scheduled gatherings of a quorum or more of a city council must be properly noticed and open to the public, regardless of whether the council takes or contemplates taking action at that gathering. This includes meetings and work sessions where members receive information that may influence later decisions. Many city councils create committees to make recommendations regarding a specific issue. Commonly, such a committee will be responsible for researching the issue and submitting a recommendation to the council for its approval. • League of Minnesota Cities Handbook for Minnesota Cities 8/3012019 Meetings,Motions,Resolutions,and Ordinances Chapter 7'Page 18 RELEVANT LINKS: These committees are usually advisory, and the council is still responsible DP008-007. for making the final decision. This type of committee may be subject to • DPO 13-015. the open meeting law. Some factors that may be relevant in deciding whether a committee is subject to the open meeting law include: how the committee was created and who are its members; whether the committee is performing an ongoing function, or instead, is performing a one-time function; and what duties and powers have been granted to the committee. DPO 05-014. For example,the commissioner of the Minnesota Department of Administration has advised that "standing"committees of a city hospital board that were responsible for management liaison, collection of information, and formulation of issues and recommendations for the board were subject to the open meeting law. The advisory opinion noted that the standing committees were performing tasks that relate to the ongoing operation of the hospital district and were not performing a one-time or "ad hoc" function. DP007-025. In contrast,the commissioner has advised that a city's Free Speech Working Group,consisting of citizens and city officials appointed by the city to meet to develop and review strategies for addressing free-speech concerns relating to a political convention, was not subject to the open meeting law. The advisory opinion noted that the group did not have decision-making authority. A.G.Op.63a-5(Aug.28, It is common for city councils to appoint individual councilmembers to act 1996). Sovereign v.MUM,498 as liaisons between the council and particular council committees or other N.W.2d 62(Minn.Ct.App. government entities. The Minnesota Court of Appeals considered a 1993). DPO 07-025. situation where the mayor and one other member of a city council attended a series of mediation sessions regarding an annexation dispute that were not open to the public. The Court of Appeals held that the open meeting law did not apply to these meetings concluding "that a gathering of public officials is not a `committee, subcommittee,board, department or commission' subject to the open meeting law unless the group is capable of exercising decision- making powers of the governing body." The Court of Appeals also noted that the capacity to act on behalf of the governing body is presumed where members of the group comprise a quorum of the body and could also arise where there has been a delegation of power from the governing body to the group. If a city is unsure whether a meeting of a committee, board,or other city entity is subject to the open meeting law, it should consult its city attorney or consider seeking an advisory opinion from the commissioner of the Minnesota Department of Administration. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 Page 19 RELEVANT LINKS: Thunra v.Kroschel,506 Notice for a special meeting of the city council may be needed if a quorum 99)d Ld(Minn.a.App. of the council will be present at a committee meeting and will be DPO 16-005. participating in the discussion. For example, when a quorum of a city council attended a meeting of the city's planning commission, the Minnesota Court of Appeals ruled that there was a violation of the open meeting law not because the councilmembers simply attended the meeting but because the councilmembers conducted public business in conjunction with that meeting. A.G.Op.63n-5(Aug.28, Based on this decision,the attorney general has advised that mere 1996). attendance by councilmembers at a meeting of a council committee held in compliance with the open meeting law would not constitute a special city council meeting requiring separate notice. The attorney general cautioned, however, that the additional councilmembers should not participate in committee discussions or deliberations absent a separate special-meeting notice of a city council meeting. 3. Social gatherings SI.Cloud Newspapers,Inc.v. Social gatherings of city councilmembers will not be considered a meeting Dist.742 Conununiry Schools,332 N.W.2d 1 subject to the requirements of the open meeting law if there is not a (Minn.1983).Moberg v. quorum present, or, if a quorum is present, if the quorum does not discuss, Indep.Sch.Dist.No.281, 336 N.W.2d 510(Minn. decide, or receive information on official city business. The Minnesota 1984 Hubbard Supreme Court has ruled that a conversation between two city Broadcasting,Inc.v.CV of Afton,323 N.W.2d 757 councilmembers over lunch about a land-use application did not violate (Minn.1984 the open meeting law because a quorum of the council was not present. 4. Serial meetings Moberg v.Indep.Sch.Dist. The Minnesota Supreme Court has noted that meetings of less than a No.281,336 N.W.2d 510 (Mimi.1983).DPO 10.011, quorum of a public body held serially to avoid a public meeting or to DPO 06-017. fashion agreement on an issue of public business may violate the open meeting law. ,Mankato Free Press v.Ci0y The Minnesota Court of Appeals considered a situation where individual of North Mankato,563 N.W.2d 291(Minn.Ct.App. councilmembers conducted separate, serial interviews of candidates for a 1997). city position in one-on-one closed interviews. The district court found that no "meeting"of the council had occurred because there was never a quorum of the council present during the interviews. However,the court of appeals sent the case back to the district court for a determination of whether the councilmembers had conducted the interview process in a serial fashion to avoid the requirements of the open meeting law. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 20 RELEVANT LINKS: Mankato Free Press v.City On remand,the district court found that the individual interviews were not ojNorth Mankato,No,C9- 98-677(Minn.Ct.App.Dec. done to avoid the requirements of the open meeting law. This decision was 15,1998)(unpublished also appealed,and the court of appeals affirmed the district court's opinion). decision. Cities that want to use this type of interview process with job applicants should first consult their city attorney. 5. Training sessions Compare Si.Cloud It is not clear whether the participation of a quorum or more of the Newspapers,Inc.v.Dist.742 Community 332 members of a city council in a training program would be defined as a N.W.2d 1(Minn. 1983)and meeting under the open meeting law. The determining factor would likely A.G.Op.63a-5(Feb.5, 1975).DPO 16-006. be whether the program includes a discussion of general training information or a discussion of specific matters relating to an individual city. A.G.Op.63a-5(Feb.5, The attorney general has advised that a city council's participation in a 1975).DPO 16-006. non-public training program devoted to developing skills was not a meeting subject to the open meeting law. The commissioner of the Department of Administration has likewise advised that a school board's participation in a non-public team-building session to "improve trust, relationships, communications, and collaborative problem solving among Board members,"was not a meeting subject to the open meeting law if the members are not"gathering to discuss, decide, or receive information as a group relating to 'the official business' of the governing body." However, the opinion also advised that if there were to be any discussion of specific official business by the attending members, either outside or during training sessions, it could be a violation of the open meeting law. 6. Telephone, email, and social media Moberg v.Indep.Sch.Dist. It is possible that communication through telephone calls, email, or other Aro.281,336 N.W.2d 510 (Mimi.1983).DPO 17-005 technology could violate the open meeting law. The Minnesota Supreme (advising communication Court has indicated that communication through letters and telephone calls through a letter violated the open meeting law). could violate the open meeting law under certain circumstances. DPO 09-020.DPO 14-015. The commissioner of the Department of Administration has advised that back-and-forth email communications among a quorum of a public body that was subject to the open meeting law in which the members commented on and provided direction about official business violated the open meeting law. However,the conunissioner also advised that"one-way communication between the chair and members of a public body is permissible, such as when the chair or staff sends meeting materials via email to all board members, as long as no discussion or decision-making ensues." League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 21 RELEVANT LINKS: O'Keefe v.Carter,No.Ail- In contrast,an unpublished opinion by the Minnesota Court of Appeals 0811(Minn.Ct.App.Dee. 31,2012)(unpublished concluded that email communications are not subject to the open meeting opinion). law because they are written communications and are not a"meeting" for purposes of the open meeting law. The decision also noted that even if email communications are subject to the open meeting law,the substance of the emails in question did not contain the type of discussion that would be required for a prohibited "meeting"to have occurred. The court of appeals noted that the substance of the email messages was not important and controversial; instead, the email communications discussed a relatively straightforward operational matter. The decision also noted that the town board members did not appear to make any decisions in their email communications. Because this decision is unpublished, it is not binding precedent on other courts. In addition, the outcome of this decision might have been different if the email communications had related to something other than operational matters,for example, if the board members were attempting to build agreement on a particular issue that was going to be presented to the town board at a future meeting. Minn.Stat.§130.065. The open meeting law was amended in 2014 to provide that"the use of social media by members of a public body does not violate the open meeting law as long as the social media use is limited to exchanges with all members of the general public."Email is not considered a type of social media under the new law. The open meeting.law does not defame the term"social media,"but this term is generally understood to mean forms of electronic communication, including websites for social networking like Facebook, Linkedln, and MySpace as well as blogs and microblogs like Twitter through which users create online communities to share information, ideas, and other content. It is important to remember that the use of social media by councilmembers could still be used to support other claims such as claims of defamation or of conflict of interest in decision-making. As a result, councilmembers should make sure that any comments they make on social media are factually correct and should not comment on issues that will come before the council in the future for a quasi-judicial hearing and decision, such as the consideration of whether to grant an application for a conditional use permit. See 11-G-4-Serial meetings. It is also important to remember that serial discussions between less than a quorum of the council could violate the open meeting law under certain circumstances. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 22 RELEVANT LINKS: As a result, city councils and other public bodies should take a conservative approach and should not use telephone calls, email, or other technology to communicate back and forth with other members of the public body if both of the following circumstances exist: • A quorum of the council or public body will be contacted regarding the same matter. • Official business is being discussed. Minn.Stat.g 13.02,subd.7. Another thing councilmembers should be carefitl about is which email account they use to receive emails relating to city business because such emails likely would be considered government data that is subject to a public-records request under the Minnesota Government Data Practices Act(MGDPA). The best option would be for each councilmember to have an individual email account that the city provides, and city staff manage. However, this is not always possible for cities due to budget, size, or logistics. If councilmembers don't have a city email account,there are some things 1 to think about before using a personal email account for city business. First,preferably only the councilmember should have access to the personal email account. Using a shared account with other family members could lead to incorrect information being communicated from the account, or incoming information being inadvertently deleted. Also, since city emails are government data, city officials may have to separate j personal emails from city emails when responding to a public-records request under the MGDPA. Second, if the account a city councilmember wants to use for city business is tied to a private employer,that private employer may have a policy that restricts this kind of use. Even if a private employer allows this type of use, it is important to be aware that in the event of a public-records request under the MGDPA or a discovery request in litigation,the private employer may be compelled to have a search done of a councilmember's email communications on the private employer's equipment or to restore files from a backup or archive. See Handbook,Records What may work best is to use a free,third-party email service, such as Management,for more information about records Gmail or Hotmail, for your city account and to avoid using that email management. account for any personal email or for anything that may constitute an official record of city business since such records must be retained in accordance with the state records-retention requirements. League of Minnesota Cities Handbook for Minnesota Cities 8/302019 Meetings,Motions,Resolutions,and Ordinances Chapter 71 Page 23 RELEVANT LINKS: H. Advisory opinions 1. Department of Administration Minn,Stat.§ 13.072,subd. 1 The commissioner of the Minnesota Department of Administration has (b).See Minnesota Department of authority to issue non-binding advisory opinions on certain issues related Administration,Data to the open meeting law. A $200 fee is required. The Data Practices Office Practices for an index of advisory opinions. (DPO) handles these requests. See Requesting an Open A public body, subject to the open meeting law, can request an advisory Meeting Law Advisory Opinion, opinion. A person who disagrees with the way members of a governing body perform their duties under the open meeting law can also request an advisory opinion. 2. Attorney General Minn.Stat.§8.07. The Minnesota Attorney General is authorized to issue written advisory See index of Attorney General Advisory Opinions opinions to city attorneys on"questions of public importance."The from 1993 to present. Attorney General has issued several advisory opinions on the open meeting law. I. Penalties Minn,Stat.§13D.06,subd. Any person who intentionally violates the open meeting law is subject to I. personal liability in the form of a civil penalty of up to $300 for a single Claude v.Collins,518 occurrence. The public body may not pay the penalty. A court may N.W.2d 836(Minn.1994). consider a councilmember's time and experience in office to determine the amount of the civil penalty. Minn.Stat.§130.06,subd. An action to enforce this penalty may be brought by any person in any o'Keefe v.Carter,No.Al2- court of competent jurisdiction where the administrative office of the 0811(Minn.a.App.2012) governing body is located. (unpublished opinion), In an unpublished decision, the Minnesota Court of Appeals concluded that this broad grant of jurisdiction authorized a member of a town board to bring an action against his own town board for alleged violations of the open meeting law. This same decision also concluded that a two-year statute of limitations applies to lawsuits under the open meeting law. Minn.Stat.§ i 30.06,subd. The court may also award reasonable costs, disbursements,and attorney 4.See LMC information memo,LMMCITfees of up to$13,000 to any party in an action alleging a violation of the Coverage Guide,for open meeting law. The court may award costs and attorney fees to a information about insurance coverage for lawsuits under defendant only if the action is found to be frivolous and without merit. the open meeting law. A public body may pay any costs, disbursements, or attorney fees incurred by or awarded against any of its members. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 24 RELEVANT LINKS: Minn.Stat.§ 13D.06,subd. If a party prevails in a lawsuit under the open meeting law, an award of 4. reasonable attorney fees is mandatory if the court determines that the public body was the subject of a prior written advisory opinion from the commissioner of the Minnesota Department of Administration, and the court finds that the opinion is directly related to the lawsuit and that the public body did not act in conformity with the opinion. A court is required to give deference to the advisory opinion. Minn.Stat.§ 13D.06,subd.4 No monetary penalties or attorney fees may be awarded against a member (d).Coahrell v.Murray, No. C6-95-2436(Minn.ct.App. of a public body unless the court finds that there was intent to violate the . Aug 6,1996)(unpublished open meeting law. decision).Clsetl v.Halle, No Al2-1496(Minn.Ct.App. May 13,2013)(unpublished opinion). Minn.Stat§13D.06,subd.3 If a person is found to have intentionally violated the open meeting law in (a).Brown v.Cannon Falls Tup.,723 N.W.2d 31(Minn. three or more separate actions involving the same governing body,that Ct.App.2006). person must forfeit any further right to serve on the governing body or in any other capacity with the public body for a period of time equal to the term of office the person was serving. Minn.Stat.§ 13D.06,subd.3 If a court finds a separate,third violation that is unrelated to the previous (b) violations, it must declare the position vacant and notify the appointing authority or clerk of the governing body. As soon as practicable, the appointing authority or governing body shall fill the position as in the case Minn.Const.art.VIII,§5. of any other vacancy. Under the Minnesota Constitution,the Legislature may provide for the removal of public officials for malfeasance or Jacobsen v.Nagel,255 nonfeasance. To constitute malfeasance or nonfeasance, a public official's • Minn.300,96 N.W.2d 569 conduct must affect the performance of official duties and must relate to (Minn.1959). something of a substantial nature directly affecting the rights and interests of the public. Jacobsen v.Nagel,255 "Malfeasance" "Nonfeasance" Minn.300,96 N.W.2d 569 Malfeasance refers to evil conduct or an illegal deed. is (Mimi.1959).Claude v. described as neglect or refusal,without sufficient excuse, to perform what Coffins,518 N.W.2d 836 is a public officer's legal duty to perform. More likely than not,a violation (Minn.1994)• of the open meeting law would be in the nature of nonfeasance. Although good faith does not nullify a violation,good faith is relevant in determining whether a violation amounts to nonfeasance. Sullivan v.Credit River The open meeting law does not address whether actions taken at a meeting Tup.,299 Minn. 170,217 N.W.2d 502(Minn.1974). that does not comply with its requirements would be valid. Hubbard Broadcasting,Inc. v.City of Afton,323 N.W.2d 757(Minn.1982).In re D ct: A Truck Line,Inc.,524 N.W.2d 1(Minn.Ct.App. 1994). • League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 25 RELEVANT LINKS: Lac Qid Parle-Yellow Bank Minnesota courts have generally refused to invalidate actions taken at an Watershed Dist,v. Wol/schtager,No.C6-96- improperly closed meeting because this is not a remedy the open meeting 1023(Minn.Ct.App.Nov. law provides. 12,1996)(unpublished opinion),DPO 1I-004. Quasi v.Knutson,276 Minn. But the Minnesota Supreme Court has held that an attempted school 340,150 N.W.2d 199(Minn. 1967). district consolidation was fatally defective when the initiating resolution was adopted at a meeting that was not open to the public. III. Meeting procedures A. Citizen involvement Any person may observe council meetings. In fact,the council should encourage citizen attendance to help raise awareness of the city's problems and help create support for programs suggested by the council. Minn.Stat.§13D.01,subd. Citizens must be able to hear the discussion at a meeting and must be able 6. to determine who votes for or against a motion. DPO 08-015.DPO 17.006. One copy of any printed materials relating to the agenda items of the meeting that have been distributed or made available to all members of the council must be made available to the audience unless doing so would violate the Minnesota Government Data Practices Act. Although anyone can attend council meetings, citizens cannot speak or Minn.Stat.§412.191,subd. otherwise participate in any discussions unless the mayor or the presiding 2. officer recognizes them for this purpose. The decision to recognize speakers is usually up to the mayor or presiding officer, but the council can overrule this decision. The council can, through a motion, decide to hear one or more speakers from the audience. Participation in council meetings can be intimidating for the average citizen. Councils should make sure citizens are invited to participate when appropriate and listened to with courtesy. Individual councilmembers should not argue with citizens. Citizens attend council meetings to give information for the council to consider. Discussions or debates between individual councilmembers and citizens during council meetings is inappropriate and may reflect badly on the decision-making process. B. Recording and broadcasting of meetings A.G.Op.63a-5(Dec.4, The public may make an audio or videotape of an open meeting if doing so 1972). does not have a significantly adverse impact on the order of the meeting. The city council may not prohibit dissemination or broadcast of the tape. League of Minnesota Cities Handbook for Minnesota Cities 8/30/2019 Meetings,Motions,Resolutions,and Ordinances Chapter 7 I Page 28 CITY OF O430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 FarmingtonMN.gov TO: Economic Development Authority FROM: Kalley Swift, Community Development Specialist SUBJECT: EDA Financing Program Ideas DATE: February 27, 2020 INTRODUCTION/DISCUSSION After current financial commitments,there is approximately$50,000 of unprogrammed funds left in the EDA fund balance. EDA discussions surrounding programs and financing have identified items in a "wish list"category.This "wish list"category is where the EDA can spend a significant amount of time in identifying new ideas which would use some of the unprogrammed funds or require additional budget requests or a demand for outside funding. Items listed in the"wish list" have been acknowledged as either unfunded or yet to be created programs highlighted from various adopted plans. Some of these items include a Highway 3 Improvement Program similar to the Downtown Façade Improvement Program,wayfinding improvements noted in the Downtown Redevelopment Plan, potential property acquisition to further the Downtown Redevelopment Plan or Highway 3 Corridor Plan goals, and facility and infrastructure improvements and cost participation which may be necessary to remove barriers for redeveloping key properties within the city. Two draft program ideas are attached for review. Based on EDA discussions,there is a want for an EDA funded program which will help remove barriers for reuse and redevelopment of key properties throughout the city.To fulfill that want, one program for review is the idea of a Redevelopment and Property Reinvestment Program.This program is not geographically based within one area of the city. Instead it is available to all commercial and industrial areas. However,this program will have a focus on aiding unutilized and underutilized sites.This program will concentrate on properties currently for sale or lease, recently acquired properties which would be underutilized in "as is"conditions, and underutilized properties which are in dire need for facility upgrades and rehabilitation in order to retain and reinvigorate their site, increase the property value, and draw additional employees to their site. Funds may be used for improvements to buildings, code deficiencies, and helping aid in barriers faced by current and potential property owners and leasers for reuse and/or redevelopment of a site.The project being funded needs to be permanent and anchored to the site of improvements (mechanical, electrical, plumbing, etc.). The second program for review is the idea of Public Space Improvement Program (working title).This program will focus on dedicating money annually or bi-annually to accomplish smaller project victories outlined in various city adopted plans.These small project victories can include wayfinding creation and upgrades, bike racks, benches, seat walls, bump outs,areas for public seating, community gardens, refurbishing depot art park, new banners on downtown light poles, etc.A proposal for a project under this program would be submitted for EDA approval by city staff to accomplish an objective in an approved city plan. Funding for these projects would not be available for use by outside applicants.This program provides funding dedicated to removing barriers for making and showing progress on city adopted plans. ACTION REQUESTED Review and discuss changes within the draft ideas of the Redevelopment and Property Reinvestment Program and the Public Space Improvement Program along with ideas for a different program title. Provide additional direction for crafting EDA funded programs. ATTACHMENTS: Type Description D Exhibit Redevelopment and Property Reinvestment Program D Exhibit Public Space Improvement Program CITY OF © 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 FarmingtonMN.gov City of Farmington Redevelopment and Property Reinvestment Program DRAFT IDEA In conjunction with various city adopted plans,such as the Downtown Redevelopment Plan and Trunk Highway 3 Corridor Plan, it has been acknowledged that redevelopment needs to focus on retaining, reinvesting,and reinvigorating underutilized sites, buildings,and properties within our commercial and industrial areas.This draft program idea for redevelopment and property reinvestments is intended to directly aid current property owners/leaser and incentivize potential future property owners/leasers in key areas of the city.These areas encompass our downtown area,the industrial park,the TH 3 corridor, and other vital commercial and industrial areas within the city. The smartboard will be utilized during the EDA meeting with our online zoning map to show all properties currently eligible under the draft idea program.The goal is to provide a new EDA funded program in order to positively impact, revitalize, and reinvest in multiple areas throughout the City. By providing funding for unutilized and underutilized sites for reinvestment and redevelopment, it will provide opportunities and support for increasing our tax base, revitalizing vacant properties,and strengthening all commercial and industrial areas throughout the city. Chapter 3 of the Downtown Redevelopment Plan outlines a market analysis which was conducted to identify categories of retail demand which is leaving the area,yet would be a good "fit" in a downtown location.These categories included gift shops,drugstores, hair salons,children and family friendly shops, salons, and casual and sit down restaurants. By providing an EDA funded program which fosters redevelopment and reinvestment upgrades within vacant and underutilized sites,we are able to prep buildings and properties,especially in our downtown area,to be able to fill with new commercial uses and draw residents to commercial/retail uses within city limits.This program also has a special focus on key properties such as the old Dakota Motors building because redevelopment of this property is significant to providing momentum for additional redevelopment downtown. The guidelines of the Redevelopment and Property Reinvestment Program could look like the following(formatting exception: lists have been pulled out into bullet points for easier review): The Economic Development Authority(EDA) has made funding available to properties zoned commercial, industrial, and other districts which include a commercial or industrial component.This criteria includes the following zoning districts: R-T, B-1, B-2, B-3, B-4, Business/Commercial Flex, I-1, IP, Mixed Use, and Mixed Use Commercial/Residential within City of Farmington limits.This program is focused on retaining, reinvesting, and reinvigorating unutilized and underutilized sites, buildings,and properties.This program is available to provide assistance with financing for projects which focus on building improvements and code improvements in order to remove barriers faced by current and future property owners and leasers for reinvestment, reuse,and redevelopment of a property. CITY OF 0 430 Third St., Farmington, MN 55024 FARM I NGTON © FarmingtonMN.gov Eligible Properties Any property within the City of Farmington which is within commercial or industrial zoning districts or within a district with a commercial or industrial component.This criteria includes properties zoned R-T, B-1, B-2, B-3, B-4, Business/Commercial Flex, I-1, IP, Mixed Use,and Mixed Use Commercial/Residential. Funding Source EDA discussions have concluded with the desire for additional program financing around$20,000 annually. However, depending on the type of projects the EDA is hoping to attract through this program, there will be a need in dedicating a large portion of the unprogrammed funds in the current EDA balance or requesting for additional funds from the City Council or outside sources. EDA fund balance of$50,000 annually.This could allow for 5 large and meaningful projects a year with projects that provide up to a$10,000 match. Raising the maximum limit for a single project funding above$10,000 can be discussed. Grants will be awarded according to the following scale: Grant Amount 1:1 Match Project Amount $1,500—2,500 $3,000—5,000 $2,501—5,000 $5,001-10,000 $5,001-10,000 $10,001—20,000+ Grant Term and Requirements No more than one grant may be granted per property within one year from the initial application.A 1:1 match is required by the applicant. For every dollar contributed to funding eligible project costs,the applicant must contribute at least one dollar.The amount of grants to be awarded shall be$1,500 up to $10,000 according to the scale. Program Objectives The intent of this program is to leverage investment in commercial and industrial districts and districts with commercial and industrial components to foster property improvements and redevelopment growth within the City of Farmington.The focus of the program will be those properties currently for sale or lease and properties in need of assistance for building improvements and code violation improvements. A strategic and targeted focus within this program can be for the Trunk Highway 3 corridor since the Trunk Highway 3 Corridor Plan outlines property reinvestment and redevelopment as an objective of the program.The intent is to provide assistance to: • Current property owners who are looking to update and fix issues on their property in order to make it more appealing to potential buyers and leasers. CITY OF O430 Third St., Farmington, MN 55024 FARM I N GTO N © 651.280.6800 FarmingtonMN.gov • Current property owners who have underutilized sites and are in dire need of buildings improvements, code improvements,facility upgrades,and rehabilitation in order to retain and reinvigorate their site, increase the property value, and draw additional employees to their site. • Attract potential buyers and leasers who are interested in a property or building for sale/lease. This program may give incentive to purchase the property or lease the building with the conditions "as is"when they would not purchase or lease otherwise. o This program would allow new property owners/building leasers to have a more successful start when handling the finance of known monetary improvements needed. o This program can also be a potential resource for unknown extra financial burdens for building and code improvements which arise causing additional financial burdens and potential end of projects. • Leaseholders who are currently leasing a portion or the entirety of a building can also be eligible. o The owner of the property must also join in with the application and comply with program requirements o These type of applications will be reviewed thoroughly to determine program funding eligibility ■ Additional things to consider of applications from leaseholders: • When does their current lease expire? • Do they intend to remain in the same space with a new lease or are they planning on switching locations when the lease is over? • How long have they had their business in Farmington? Program Definitions Program Administrator The Program Administrator shall be the City of Farmington Economic Development Authority,430 Third Street, Farmington, MN 55024, phone 651-280-6820. Applicant Any property within the R-T, B-1, B-2, B-3, B-4, Business/Commercial Flex, I-1, IP, Mixed Use, and Mixed Use Commercial/Residential within City of Farmington limits seeking to obtain assistance under the terms of this program. CITY OF 0430 Third St., Farmington, MN 55024 FARMINGTON 0 651-280-6800 FarmingtonMN.gov Building Official The Building Official for the program shall be a City of Farmington employee and shall provide plan review and technical expertise relating to inspections,construction quality, code compliance and scope of work to be accomplished if required. Project Coordinator The Project Coordinator for the program shall be the Executive Director of the EDA. Target Area Any property within the R-T, B-1, B-2, B-3, B-4, Business/Commercial Flex, I-1, IP, Mixed Use, and Mixed Use Commercial/Residential within City of Farmington Eligible Improvements Funds may be used for building improvements and code improvements which are permanent and anchored to the site of improvements (mechanical,electrical, plumbing,etc.).The project being funded needs to be improvements which will help redevelop, maintain,and/or expand the variety of options to use the existing property. Funds may be used for, but not limited to: • Correcting/improving code violations o Paving, resurfacing,etc. • Correcting handicap accessibility issues o Eliminate accessibility restrictions • Fix current deterioration/blight of structure(s) • Prevent potential future deterioration/blight of structure(s) • Roofing,siding,windows, and doors • Plumbing o Repair and replacement of fixtures and appliances,filtration systems, backflow prevention, line and hose repair and replacement,sump pump • Elevator install/update • Heating and air conditioning systems/HVAC controls and upgrades • Gas piping • Ventilation • Solar panels/other types of solar photovoltaic • Installing more energy efficient windows,skylights, etc. • SAC Credits o There is a substantial fee by the Metropolitan Council and a city fee which must get paid before a business opens.We could provide a "sale"or cost share for the city fee portion CITY OF 0 Q43o Third St., Farmington, MN 55024 FARMINGTON 0 651-280-6800 ��1■■�■�� FarmingtonMN.gov as a way to promote restaurants so Farmington is a more competitive area for these types of business which would require additional SAC units • Sealing air leaks around floors,walls, ceilings,windows, doors, and fireplaces with caulk,spray foam,or weather stripping • Insulation to attic,crawl spaces or basements, and exterior walls • Seal ducts and make sure they are straight and properly connected • Sprinkling a building • Demolition • Reconfiguration of interior space to suite a new user and provide lower cost space to small and medium sized businesses. Multi-tenant buildings allows for a variety in businesses and increases the potential draw downtown and other areas of the city. • *Facade improvements o Focus would be more on repairs and replacement for deteriorating buildings. It would not be aesthetically based repairs or additions Ineligible Projects • Any improvements (furniture, equipment,etc.)which can be removed when the tenant/owner leaves o Removable fixtures • Business and operating costs • Acquisition costs • Costs prior to acceptance of application Special Conditions Contractors All project work undertaken with City of Farmington funds must be completed by bona fide contractors who are licensed (as applicable)and provide proof of insurance. Data Privacy All information provided by applicants under the Downtown Facade Improvement Program shall be maintained in accordance with the Minnesota Data Practices Act. Historic Properties The City of Farmington is a Certified Local Government under the Historic Preservation Act. Each project submitted for review that is for a property determined eligible for designation or is a heritage landmark property will be reviewed as outlined in city code to receive a Certificate of Appropriateness. CITY OF 0 0 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 �� FarmingtonMN.gov ism Procedures *For reference,the procedures listed below match the Downtown Façade Improvement Program procedures Application Intake Applications are accepted on an ongoing basis and are reviewed based upon funds availability and in the order received.Applications will be reviewed for participation in the program based upon the following guidelines: 1. Whether the applicant has clear title to the property to be improved. Prior to project approval, the following will be ascertained: a. Title verification; b. All real estate taxes and any city fees or charges are current; c. All individuals having an ownership interest, including contract holders, have agreed in writing to join in the application; 2. The extent to which the project meets the program objectives; 3. The degree of the project's overall impact on the surrounding area If necessary,applications competing for limited funds may be selected based upon these criteria. Property Inspections Upon determination that a property owner applying for rehabilitation assistance is eligible based on the program guidelines,the Building Official may conduct an inspection of the property to determine if the proposed improvements conform to City of Farmington building code standards. Scope of Work Upon completion of the initial inspection,the property owner shall provide a report or elevation drawing indicating any planned improvements.This report will be reviewed by the City of Farmington. Project Approval The final application will be approved by the Farmington EDA,following review by City of Farmington staff and recommendation of the Project Coordinator. Approval by the Economic Development Authority(EDA) The contract for work to be completed will be between the applicant and the contractor. Once the applicant has accepted a bid,staff will prepare the information for presentation to the EDA. Upon EDA approval,a Grant Agreement will be signed by the applicant and a designated city official.This CITY OF 0430 Third St., Farmington, MN 55024 FARMINGTON © 651-280-6800 I�il®lt�r 0 Farm ington M N.gov agreement will outline the terms and conditions of the project, including the city's role and the applicant's responsibilities,and any corrective actions to be taken in the event of a dispute. Notice to Proceed Upon approval of the work to be done,and obtaining the required permits,the contractor will normally have six(6) months in which to complete the awarded contract. If construction work does not begin within 90 days of the award of contract,the Grant Agreement is null and void; however,the applicant may apply for one extension if necessary.The length of the extension will be determined on a case-by- case basis. Acceptance of Work Interim inspections may be scheduled with the Building Official to monitor work in progress. Final inspection shall be required to ensure that the work has been completed in a satisfactory manner. In the event of a dispute between the owner and contractor concerning the completion of work,the Project Coordinator shall work with both parties to try to negotiate a satisfactory solution. Disputes that cannot be resolved by negotiation,and that result in legal action by either party to the contract,shall be resolved in accordance with applicable state law. EDA funds shall not be released to either the owner or contractor until such dispute has been settled. Hold Harmless The owner and the contractor shall indemnify and hold harmless the City of Farmington,the Farmington EDA,employees,and officials from any damages or liability arising from, or occurring as a result of,the activities funded through this program. EDA Payment All EDA funds will be disbursed by the EDA upon authorization by the owner and the City of Farmington. Payments will be made only after all work has been completed according to the authorized scope of work, and has been accepted by the owner. Funds will be released once all improvements are completed to the satisfaction of the city Building Official and final project inspection by the Project Coordinator. Payment may be made directly to the contractor or in reimbursement to the owner, upon presentation of paid receipts for approved work to the Project Coordinator. CITY OF O Q430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 FarmingtonMN.gov ___,..... ....,„„,,,, Th.... , Appeals Process Appeals concerning eligibility for the Downtown Façade Improvement Program or the proposed improvements shall be made in writing and addressed to the Project Coordinator.The coordinator will contact the applicant and attempt to rectify any concerns.A written response will be made within fifteen (15)days. CITY OF 0 0430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 ; CITY OF 0430 Third St., Farmington, MN 55024 FARM I N GTO N O 651-280-6800 J# FarmingtonMN.gov Program Terms and Requirements Funding allocated for a Public Space Improvement project must be used and completed within the same year.This will ensure the benefit of the new improvement project can be used/benefitting the public as soon as possible. Program Objectives The intent of this program is to leverage investment in public areas for benefit, use,and enjoyment of all sectors of the public.This program is dedicating EDA funds to move adopted city plans along and provide real,tangible outcomes which everyone can see and enjoy. Program Definitions Program Administrator The Program Administrator shall be the City of Farmington Economic Development Authority,430 Third Street, Farmington, MN 55024, phone 651-280-6820. Applicant The only applicant available for submittal and approval of a Public Space Improvement project is the City of Farmington. Target Area While any property and public space owned by the City of Farmington is available for benefitting from this program,there will be an intentional focus on work in the downtown area,trunk highway 3, and wayfinding signage throughout the city. Eligible Improvements Funds may be used for projects directly outlined as an outcome, implementation step,or identified need for public benefit within a City of Farmington adopted plan. Funds may be used for, but are not limited to: • Wayfinding creation and upgrades • Bike racks • Benches,seat walls, bump outs, small community/library plazas,areas for public seating and casual public gatherings • Community gardens • Refurbishing depot art park CITY OF O 430 Third St., Farmington, MN 55024 FARM I N GTO N © 651-280-6800 /Il��lll�lwy FarmingtonMN.gov • New banners on downtown light poles with new logo.The city owns and maintains streetlights primarily in the downtown and Vermillion River Crossings. • Adding lighting to already erected City of Farmington entrance/identification signs • Adding additional signage and identification pillars for increasing visibility and awareness for our downtown, historic areas,etc.throughout the city to increase the feeling of community • Refurbishing current signage on 2nd Street/Elm and Spruce/Denmark or removal/replacements of these signs with new ones • Improving character streets,such as Elm Street,2nd Street,etc.with natural beauty pieces such as increased trees,flower pots, bushes, etc. • Increasing walkability and pedestrian friendly areas in the city with pedestrian activated signals and visible crosswalk pavement marking • Cost participation for downtown brick repairs and replacement • Public art Ineligible Projects • Projects not located within public space and City of Farmington owned property. Procedures Application Intake Applications are accepted from the City of Farmington annually or bi-annually and are reviewed based upon fund availability. Applications will be reviewed for participation in the program based upon the following guidelines: 1. Whether the project area is a public space and owned by the City of Farmington. 2. The degree of the project's overall impact on the surrounding area 3. If the project is outlined in a city adopted plan Project Approval The application will be approved by the Farmington EDA. EDA Reporting Requirement The EDA will be provided monthly project updates upon approval of an eligible project. CITY OF 0430 Third St., Farmington, MN 55024 FARMINGTON © 651-280-6800 �IIS� O FarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: City Council Update DATE: February 27, 2020 INTRODUCTION/DISCUSSION This is a standing agenda item to allow City Council members the opportunity to provide the EDA with any updates they feel are pertinent to the work plan of the EDA. ACTION REQUESTED Receive an update on recent City Council actions or discussions. CITY OF O 430 Third St., Farmington, MN 55024 FARM I NGTON © 651-280-6800 OFarmingtonMN.gov TO: Economic Development Authority FROM: Adam Kienberger, Community Development Director SUBJECT: February Director's Report DATE: February 27, 2020 INTRODUCTION/DISCUSSION Recognition of outgoing EDA member Jeri Jolley EDA member Jeri Jolley's term expired on January 31st, 2020. Steven Hudlemeyer was appointed by the City Council to serve the new six-year term on the EDA on February 18th. I would like to thank Jeri for her 8.5 years of service to the city on the EDA. 2019-2021 Strategic Plan for Economic Development An updated status of items in the 2019-2021 Strategic Plan for Economic Development will be provided on a monthly basis.The plan and summary sheet are attached. EDA members should review the plan on a regular basis. Related Articles 5 Predictions That May Reshape Site Selection & Economic Development Strategies in the Next Decade— siteselectiongroup.com Manufacturing has become a weak spot in a healthy economy—startribune.com NEXT MEETING Our next regular is scheduled for March 26. ACTION REQUESTED None,this report is intended to be a monthly update on various development and industry related topics. ATTACHMENTS: Type Description 5 Predictions That May Reshape Site Selection & D Exhibit Economic Development Strategies in the Next Decade—siteselectiongroup.com D Exhibit Manufacturing has become a weak spot in a healthy economy—startribune.com D Exhibit 2019-2021 Strategic Plan for Economic Development D Exhibit Strategic Plan Summary and Status Report https://info.siteselectiongrou p.com/blog/5-predictions-that-may-reshape-site-selection-economic- development-strategies-in-the-next-decade 5 Predictions That May Reshape Site Selection & Economic Development Strategies in the Next Decade syy{ Kinq White I January 22, 2020 As we roll into the next decade, it is evident that exponential growth in technology and economic conditions will be key drivers in the changes over the next decade that will impact workforce, real estate and logistics, among other things. These changes will have a dramatic impact on site selection and economic development strategies as we try to adapt to the new global economy. To help prepare for some of these changes, we have identified the following five key predictions that may change site selection and economic development in the very near future. 1. Logistics reimagined From autonomous electric trucks to drone delivery, the logistics industry has major changes ahead over the next decade. The whole supply chain model is going to look a lot different which will have an impact on site selection and economic development strategies. The following summarizes some of the possible impacts: • Unskilled talent will decrease in importance —Automation within distribution centers will ease the pressure of attracting and retaining low-skilled talent. It will also allow distribution centers to locate in higher-cost labor markets, closer to consumers and locations with a less desirable business climates due to taxes, minimum wages, etc. • Increased capital investment— Capital investment to set up a distribution center will increase as automation will drive up the capital investment which in turn will create more tax revenues on equipment as well as drive the need for economic incentives such as tax abatements and credits. • Multistory distribution centers—Amazon is pioneering the multistory distribution center as it expands into urban areas so it can be closer to customers. These facilities will be more expensive to build but require less land. It will create a whole new dynamic for real estate developers and investors. 2. Exponential technological advances Technological advances in automation, 3D printing, artificial intelligence and driverless transportation will infiltrate multiple industries and create massive changes in site selection strategies and workforce needs. Some possible changes include: • Increased manufacturing reshoring —The manufacturing industry may soon see an even greater domestic resurgence as automation, 3D printing and artificial intelligence will minimize the need for semi-skilled workers and enable companies to dramatically reduce logistics costs by shifting manufacturing back to the U.S. Obviously, there are some products that this trend may not apply to due to source materials or a global customer base. If this happens, then we could see massive capital investments in these facilities which may begin to cluster into the larger metro areas to take advantage of accessing their customer bases more directly. • Declining growth of offshore and nearshore call centers — Call centers will be impacted by automation and artificial intelligence. Automation has already been reducing call volume in the industry while artificial intelligence for call centers is in its very early stages. The impact of these technological advances could rattle the offshore and nearshore call center markets. Companies have historically offshored their easy and less complicated calls while onshoring the more complex, higher-level calls. The end result could diminish the offshore markets and push higher paying call center and back office jobs into the U.S. and Canada where the highest quality of workers can be found. 3. 5G will be an enabler The roll-out of 5G networks across the U.S. is going to dramatically change how we do everything including how we build things, how we deliver them and where we store our data. It will be the backbone that will enable automation and artificial intelligence to really take hold. Some of the effects include: • Smart manufacturing and distribution — 5G will allow manufacturers to design, build and deliver a true just-in-time model. The impact will be similar to automation and artificial intelligence which will change site selection strategies, increase capital investment in facilities and change overall facility design of manufacturing plants and distribution centers. • Drastic changes in transportation —Autonomous cars, trucks, buses, boats and planes are coming fast. 5G will enable these modes of transportation to be safely rolled into reality. Companies will require less parking at their buildings, high demand occupations like truck drivers will no longer be needed, and future commercial real estate development will need minimal parking. In addition, this could also be the future solution to the national truck driver shortage problem. • Edge data centers — Edge data centers that support cloud applications allow data to be processed as close to the source as possible. Because it doesn't travel as far, it can be processed much faster, making things like autonomous vehicles safer to drive. 5G will provide high speed, low latency data transmission that will enable edge data centers to support anything from smart cities and factories to retailers for real-time analytics. The ultimate impact will create plenty of opportunities for future capital investment in large and small data centers across all metro areas of the U.S., not just the typical top 10 data center cities. 4. Economic incentive transparency The regulatory environment for economic incentives issued by economic development organizations to companies and real estate developers has slowly become more sophisticated over the last decade. The c-suite and media have really latched onto economic incentives now so it is only natural that more transparency will be required in the future. • Roll-Out of GASB 77 —The Governmental Accounting Standards Board (GASB) Statement No. 77 could be expanding in interpretation to encompass state and local governments to disclose key information about their economic incentives that have not been consistently or comprehensively available before. The release of this economic incentive data and the company receiving them will create a whole new level of accountability which will require economic incentive software management platforms like IncenTrak which was developed by Site Selection Group. • SEC reporting requirements —The Securities and Exchange Commission (SEC), via proposed Accounting Standards Update (ASU) 2015- 340, Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance in November 2015, is also likely to require publicly traded companies to disclose economic incentives they are receiving from governmental bodies. This means companies will have to report on their financial statements how much they are receiving from tax abatements, tax credits, training grants, sales tax abatements, training grants and other related programs. This will create more transparency to shareholders, but also make companies more focused on compliance. 5. Low and slow economic growth If anything, we learned over the last decade what prolonged, slow economic growth looks and feels like. It is likely there will be much of the same with a few light recessions along the way. The following summarizes some of the good and bad things that might happen: • Moderate economic growth — It is projected that the growth rate of the U.S. economy will be around 1.7% through 2029, according to the Federal Reserve. This may be due to the expectation that the labor force will grow slower than in past years. This isn't great news but it sure isn't bad news. • Healthcare focused economy— Healthcare costs will continue to increase which will continue to put a strain on workers and make it more important for employers to try and help. The healthcare engine will in turn continue to create and deliver new services and products that will drive growth in the medical device manufacturing sector, call centers supporting the industry, and continued growth in medical office building development to keep up with demand. • Peaking oil demand — It is projected by the U.S. Energy Information Administration that oil demand will peak around 2027 and remain at that level through 2040. Oil prices will reach $90-100 per barrel which will only create more demand for electric vehicles and more mass transportation. The demand will only support the growth of the production of electric vehicles. • Stable site selection activity—We should see a steadier economy which should equate to a steady supply of new projects fueled by many of the items outlined above including new manufacturing plants, distribution centers, call centers, data centers and other corporate facilities. Conclusions Predicting the future is not a science but it's definitely interesting to think about what our world might look in the next 10 years and how it might impact site selection and economic development. Hopefully, you will find this glimpse of the future compelling and find a way to plan for your next site selection project 2/20/2020 Schafer:Manufacturing has become a weak spot in a healthy economy-StarTribune.com BUSINESS Manufacturing has become a weak spot in a healthy economy JANUARY 13,2020—11:31PM pr, The latest of the very closely watched purchasing managers index readings just confirmed what we have been hearing for a while,that American manufacturing went south pretty much all of last year. Called the PMI,it's published by the Institute for Supply Management from surveys of people in the supply chains of LEE SCHAFER privately held companies.It reached its 2019 peak last January at a @LEEASCHAFER healthy 56.6 and bottomed out for the year in December at 47.2, lower than it has been since 2009,when the economy was in the deep hole of the Great Recession. One interesting thing about this,though,is that a manufacturing slowdown isn't enough to push the whole economy into reverse.The streak of monthly job growth remains intact at 111 months and the unemployment rate bumps along at a rate last seen five decades ago.And if any reputable economic forecaster thinks the U.S.economy actually contracted in the fourth quarter,I missed it. Manufacturing bottoms in December :r The ISM manufacturing index tracks overall U.S.business activity for more than 300 companies peaked in August 2018 at 60.8 and bottomed out for the year in December at 47.2,lower than it's ,; :, ` . been since 2009. ;*":"*. * 65 60 +� 55 ELIZABETH FLORES-STAR TRIBUNE 50 The latest slowdown in manufacturing is tied to the trade war. 45 NOTE:Readings above 40 50 indicate sector growth. 35 on Chart:Jim Foster,Star Tribune•Source:Institute for Supply Management,Thomson Reuters But that doesn't mean it's not painful to some in manufacturing.Job growth in"goods producing"businesses has been sliding since 2018 and manufacturing actually shed jobs in December,one headline out of last Friday's closely watched jobs report.Shifts and hours have been cut,and it sure would be good to know why this has happened and how soon the slump might be ending. One interesting aspect of this whole story is that there's at least one competing indicator more upbeat(http://news.ihsmarkit.com/prviewer/release only/slug/bizwire-2020-1-2- ihs-markit-us-manufacturing7pini)about manufacturing than the one published by ISM. Yet no one really disputes that a slowdown in the industrial sector has been underway. Here in the Upper Midwest,reports of the brakes being applied started reaching the regional economic research team at the Federal Reserve Bank of Minneapolis around midyear,said Joe Mahon,regional outreach director for the bank. "One of the most informative developments that we saw over the second half of 2019 was a lot of the reports I was hearing about a slowdown were from producers of capital equipment,"he said."They were from custom manufacturers...and the manufacturers www.startribune.com/lee-schafer-manufacturing-has-become-a-weak-spot-in-a-healthy-economy/566942032/ 1/3 2/20/2020 Schafer:Manufacturing has become a weak spot in a healthy economy-StarTribune.com who sell to other manufacturers.That to me seemed to be more of a leading indicator of a slowdown in manufacturing.And we have started to see some of that borne out in the data now." There's another great source of insight into the health of the manufacturing economy here in the region,and that's Winona-based Fastenal Co.This company remains best known for distributing metal fasteners of all kinds,but it also sells a lot of other stuff, from employee safety gear to factory cleaning supplies. It hasn't announced its fourth-quarter results yet,and sales for the company were still growing nicely through the third quarter that ended in September,although the pace of that growth had slowed a lot.The most cyclical product category,fasteners,had daily sales growth of just 3%in the third quarter,vs.nearly 12%back in the first quarter of the year. The last time company managers provided a lot of commentary was on its conference call with investors and analysts in October,and then management was matter of fact about the slowdown in the industrial economy.The company has since released its monthly sales through the end of November,and the daily sales trend has continued. The customer segment where growth has slowed the most is heavy equipment.That information squares with what Mahon has heard at the Minneapolis Fed,that what's really being affected are the kinds of products that are built not for consumers but for other businesses that make or ship goods. The last time there was one of these slowdowns in manufacturing was in 2015 and 2016, also caused by a slowdown in business investment.The main reason then,though,was a decline in oil prices,and that in turn crushed the capital-spending plans of companies that drill for oil. The top 25 U.S.oil companies cut their spending by almost a third in 2015,then slashed spending again by roughly 40%the following year. There aren't that many companies that manufacture pipes and valves for the oil fields, of course,but it's the kind of industry-specific event that ripples outside of an industry and affects a lot of other companies. When cuts in capital spending take shape,that makes equipment suppliers pare back on their own capital spending plans for the stuff they use,like new trucks,shop floor machines,computers and so on.That's how a slowdown in the oil patch shows up in a lower sales forecast for a Midwestern producer of heavy-equipment brake components. The 2019 slowdown has a fundamentally different explanation,and it really is related to the international trade disputes and tariffs.Fastenal CEO Dan Florness put it this way on his company's last call:"The supply chain for our customers has become more expensive in the last one and a half years and more volatile." The keyword here might be volatile,as business planning and decisionmaking in long manufacturing supply chains amid tariffs and threats of more tariffs became so much harder.When the decisions get tougher to make,Florness said,what starts to look easier is making no decision.That's how a plant expansion gets pushed to next year and put into the following year's preliminary capital spending budget. As last year ended,though,the chatter from manufacturers in our region seemed to get more positive than it had been earlier,said Mahon of the Minneapolis Fed. "What I hear a lot is that there's just a lot of uncertainty for 2020,"he said."The phrase I hear over and over again is`cautious optimism.'They're kind of optimistic that the sector might bounce back,but they're not tremendously confident." Things turn fast in business,and for manufacturers of big-ticket items just a few new orders can be enough to turn a so-so year into a good one. On the other hand,the manufacturing economy seemed to be sliding sideways through the most recent annual season of business planning and budgeting.We have to assume that there were a lot of promising projects at manufacturers in our region that didn't get www.startribune.com/lee-schafer-manufacturing-has-become-a-weak-spot-in-a-healthy-economy/566942032/ 2/3 2/20/2020 Schafer:Manufacturing has become a weak spot in a healthy economy-StarTribune.com any money in the 2020 budget. lee.schafer@startribune.com 612-673-4302 Lee Schafer joined the Star Tribune as a columnist in 2012 after 15 years in business,including leading his own consulting practice and serving on corporate boards of directors.He's twice been named the best in business columnist by the Society of American Business Editors and Writers,most recently for his work in 2017. lee.schafer@startribune.com 612-673-4302 @LeeASchafer www.startribune.com/lee-Schafer-manufacturing-has-become-a-weak-spot-in-a-healthy-economy/566942032/ 3/3 Strategic Plan 2019 - 2021 Farmington Economic Development Authority .,_. , , . _- -. 41 t:r:,, :.- . , „,:, 111!`f,,, ,... -- ''''' "' P'.-- ,....o ^ ''''' ..:',..,,I; ' ,,,?... ..t], wr - - f---.------:-.--- z.- -v. 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January 2019 NORTHLAND PUBLIC FINANCE EDA Strategic Plan 2019-2021 CONTENTS Contents 1 Introduction 2 Context 3 EDA Powers 3 Comprehensive Plan 3 City Government 4 EDA Resources 5 Strategic Plan 6 Objective: Expand and Diversify the Tax Base 6 Objective: Encourage development that brings additional goods and services to Farmington 11 Objective: Promote the economic and physical health of older sections of Farmington....12 Objective: Effectively communicate information about the EDA within City government,to the community and to people and businesses outside of Farmington. 13 Objective: Conduct the business of the EDA to maximize its effectiveness. 14 January 2019 EDA Strategic Plan 2019-2021 2 INTRODUCTION This document presents the Strategic Plan for the Economic Development Authority(EDA) of the City of Farmington.The EDA Strategic Plan serves several purposes: • The plan articulates the vision,mission and fundamental principles that guide decision making and actions for the EDA. • The plan provides a framework for identifying potential roles for the EDA,prioritizing use of resources and periodically reviewing actions taken by the EDA. • The plan serves as a tool for communicating information about the EDA to the city council,city departments and advisory boards,partner organizations in the economic development community and Farmington residents and businesses. The Strategic Plan focuses on the years 2019 through 2021. Vision Statement The Economic Development Authority's vision is to improve the economic vitality of the City of Farmington and to enhance the overall quality of life by attracting and retaining businesses, creating partnerships,fostering employment opportunities, promoting workforce housing, business growth, and expanding the tax base through development and redevelopment. Mission Statement Farmington is commerce friendly, responsive, and innovative in the realm of economic development. The Economic Development Authority's mission is to position Farmington as one of Minnesota's most desirable cities to open, grow, and maintain a business. January 2019 EDA Strategic Plan 2019-2021 3 CONTEXT The actions of the EDA do not occur in a vacuum,but within the context of city government and development forces that affect Farmington and the region. Understanding this context is an important element of creating and implementing the strategic plan. EDA Powers The powers of the EDA come from both State Law and city enabling resolution.The EDA can exercise the powers set forth in Minnesota Statutes,Section 469.090 through 469.108 unless otherwise limited by the city council.The Farmington EDA was established by Resolution R104- 05(the "Enabling Resolution").The Enabling Resolution empowers the EDA to use all statutory authority with the following exceptions: • The sale of all bonds or other obligations issued by the EDA shall first be approved by the city council. • The EDA shall follow the budget process for city departments as may be provided by the city and as implemented by the city council and Administrator. • All official actions of the EDA shall be consistent with the city comprehensive plan and official controls implementing the comprehensive plan. The Enabling Resolution also transferred all activities,programs,operations and authority relating to economic development from the Farmington Housing and Redevelopment Authority (HRA).The EDA is authorized to exercise all of the powers granted to the HRA pursuant to Minnesota Statutes,Sections 469.001 through 469.047. No actions contemplated by the Strategic Plan are impaired by the limitations of State Law or the Enabling Resolution. Comprehensive Plan The Economic Development chapter of the 2040 Comprehensive Plan provides a framework of the activities of the EDA. "The Economic Development Plan (Chapter 9 of the Comprehensive Plan)provides a high level and long- term roadmap for the City of Farmington and its partners (public, private, and nonprofit sectors) to work together to enhance employment, investment and quality of life opportunities that benefit the entire community. The city recognizes that local government has a responsibility for creating an environment in which economic development can occur. This plan also serves to examine and strengthen the city's ability to compete effectively and prosper in both the regional and increasingly global economy." The Comprehensive Plan contains eight(8)economic development goals. As part of the process of creating this Strategic Plan,the EDA validated the importance of these goals for guiding the actions of the EDA.The following list contains the economic development goals in order of the ranking of the EDA Board: January 2019 �� EDA Strategic Plan 2019-2021 4 1. A three-year Strategic Plan for Economic Development that provides a dynamic and actionable tool for achieving the community's economic development vision. 2. Cultivation of strong relationships between existing businesses and the city to increase business retention. 3. A desirable commercial environment for residents is created through growth from existing and new businesses. 4. Healthy and diversified growth of existing and new businesses to achieve the community's 2030 and 2040 employment projections. 5. Redevelopment of vacant and underutilized properties in older areas to revitalize these vital community areas. 6. Public and private sector reinvestment in downtown to revitalize it as the community's commercial,cultural,and recreational center. 7. Diverse housing options and quality of life amenities that support the needs and preferences of the community's workforce into the future. 8. A well-trained and adaptable workforce is maintained within the community to support the projected business and job growth. These goals provide a useful tool for evaluating EDA activities.How does the activity help to achieve the goals of the Comprehensive Plan?A consistent connection between these goals and EDA activities ensures that the EDA meets its mandate of consistency with the Comprehensive Plan. City Government An essential factor shaping the Strategic Plan is the EDA's fit within the overall structure of the city. The EDA is one of five advisory boards and commissions established by the city council. The EDA is different from any other board in that it has the power and resources to undertake projects in a relatively autonomous manner.State Law designates EDAs as political subdivisions. Farmington Community Community City Council city Development Residents Business Administrator Director Economic IP Development Authority(EDA) The EDA is governed by a 7-member board of commissioners appointed by the city council. Members of the EDA board consist of two city council members,one Independent School District 192 school board member,and four residents.Economic development staff is part of the January 2019 �� EDA Strategic Plan 2019-2021 5 city's Community Development Department.The Community Development Director serves as the Executive Director of the EDA. This structure combines the dedicated focus on economic development and statutory powers of the EDA with a day-to-day foundation in the core structure of the city. EDA Resources Creating and implementing the Strategic Plan must be done with an eye towards the resources of the EDA.With limited resources,the effective use of resources should be a factor in evaluating current and future activities. Do the potential benefits of the action merit the allocations of EDA resources? The most important resource of the EDA is city staff.The experience and technical skills of economic and community development staff provide the capacity to successfully achieve EDA objectives.The staff resource available to the EDA is a finite commodity. It is also a commodity that serves other functions within city government. January 2019 -11 EDA Strategic Plan 2019-2021 6 STRATEGIC PLAN The EDA Strategic Plan is based on the following Core Strategies: • Attract new businesses that provide jobs,needed goods and services,and tax base • Encourage the retention and expansion of existing business • Encourage revitalization and redevelopment • Manage EDA programs and projects • Be the voice of economic development in city government The Core Strategies guide EDA actions.All actions shall be consistent with one or more of the Strategies. Objective: Expand and Diversify the Tax Base Economic development is not an end itself,but rather a means to achieve certain outcomes. An important outcome in Farmington is to grow the property tax base.Preliminary tax rates for taxes payable 2019 show Farmington with the fifth highest city tax rate for Dakota County cities (over 1,000 population).When all other taxing jurisdictions are included,the total tax rate in Farmington is the highest in Dakota County. Preliminary 2019 Tax Rates 160.00 140.00 120.00 - w 100.00 - — — ro �,. . 80.00 s — min — k • 60.00 40.00 20.00 Q� QaJ �`� rN� roc ���e r�� PKC Oen ���e a� ��, a� \xe, `�� �• \\e, ego e a awe �a4 �e�� �oGC �� �ao�a �o� PQM\ ��e� \-1\e' •City Rate M All Others Rate Figure 1 Tax base is a key factor in a higher tax rate.A lower tax base means that the city must tax at a higher rate to generate revenue needed to operate the city.A comparison with other Dakota County cities provides some perspective on Farmington's tax base.Figure 2 shows total Pay January 2019 EDA Strategic Plan 2019-2021 7 2019 Taxable Market Value by property classification. Figure 3 compares the distribution of Taxable Market Value among the property classifications. Taxable Market Value Taxes Payable 2019 8,000,000,000 7,000,000,000 6,000,000,000 ■All Other 5,000,000,000 IN Agriculture 4,000,000,000 Industrial 3,000,000,000 •Commercial 111109110191111316111 2,000,000,000 . 1111, • •Apartments 1,000,000,000 ■Residential Farmington Lakeville Rosemount Hastings Apple Valley Figure 2 Taxable Market Value Taxes Payable 2019 100% t <n,«r 90% 80% ■ 70% ■ ■ ■ ■ All Other 60% ■ ■ ■ ■ II Agriculture 50% ■ ■ ■ ■ Industrial 40% ■ ■ ■ ■ •Commercial 30% ■ ■ ■ ■ ■Apartments 20% ■ ■ ■ ■ •Residential 10% ■ ■ ■ ■ 0% Farmington Lakeville Rosemount Hastings Apple Valley Figure 3 January 2019 -� EDA Strategic Plan 2019-2021 8 • Hastings has less Taxable Value than Farmington($1.52 billion to$1.74 billion). However,the portion of the total tax base in commercial and industrial property is more than double in Hastings(11%)in comparison to Farmington(5%). • The commercial/industrial share of the tax base in the comparison cities ranges from 9.66% in Apple Valley to 11.24% in Rosemount. • Rosemount provides a good contrast to Farmington. The cities have similar populations (Farmington 22,421 -Rosemount 23,956),but Farmington has 29% less tax base.Total Taxable Market Value per capita in Farmington is$87,866 and$116,100 in Rosemount. Growing and diversifying the tax base has a variety of benefits.A growing tax base gives the city more flexibility in funding services and capital improvements.This flexibility would likely extend to the EDA budget.The demands for operating revenues may limit the ability to lower the tax rate,but a growing tax base lessens the need to raise rates. Growing the tax base is one of the only means available to the city to promote reductions in other parts of the total tax rate. A diversified tax base changes the impacts of economic downturns as value changes vary among property types.Commercial and industrial development make different use of city services than residential with the potential for comparably less pressure to increase services and spending. EDA efforts to grow the tax base must be done thoughtfully and strategically.The Minnesota property tax system affects the ability of the city to realize growth in the tax base from new development.40% of all new commercial-industrial value goes into the Fiscal Disparities Pool and is not available for local taxation.The use of tax increment financing(TIF) or tax abatement defers the benefits of new tax base until the financial assistance ends.Property class rates set by the Legislature convert the Assessor's Estimated Market Value to Tax Capacity(taxable)value at different rates. Figure 4 illustrates these points.This chart compares the Tax Capacity value available to the city (and other taxing jurisdictions)from alternative development of 100 acres. January 2019 EDA Strategic Plan 2019-2021 9 Tax Capacity From Alternative Land Uses Industrial Retail Single Townhome Acres 100 100 100 100 Lot Coverage/Density 30% 30% 3 6 Development(SF or Units) 1,306,800 1,306,800 300 600 EMV per SF or Unit 65 125 330,000 330,000 EMV 84,942,000 163,350,000 99,000,000 198,000,000 Tax Capacity 1,698,090 3,266,250 990,000 1,980,000 Fiscal Disparities 40% 40% 0% 0% Net Local Tax Capacity 1,018,854 1,959,750 990,000 1,980,000 2,500,000 2,000,000 2 1,500,000 Ua m 1,000,000 500,000 0 Industrial Retail Single Townhome Figure 4 Expansion of the tax base also comes from within.The Economic Development chapter of the Comprehensive Plan notes that"research from numerous sources shows that existing businesses create 60%-90% of all new economic growth in a community". A focus on local businesses is a more efficient means of expanding the tax base. Resources applied to business expansion are more likely to yield returns than using the same resources to compete with other cities. Resources are applied to businesses already in Farmington rather than competing with January 2019 EDA Strategic Plan 2019-2021 10 other cities.The use of financial incentives (if needed)is typically lower and more closely aligned with project need. Tactics 1. Create and maintain strong relationships and lines of communication with local business to identify opportunities for the EDA to enhance success and encourage expansion. 2. Be prepared to receive and effectively respond to inquiries about locating businesses in Farmington. 3. Make use of tax increment financing and tax abatement,pursuant to city policies,to achieve the objectives of the Strategic Plan. 4. Use tax increment financing and tax abatement only when the benefits received from the development outweigh the deferred tax base. 2019 Action Plan 1. Create and conduct a comprehensive business needs/assessment survey. 2. Review and update(as needed)economic development promotional materials. January 2019 �� EDA Strategic Plan 2019-2021 11 Objective: Encourage development that brings additional goods and services to Farmington Building and maintaining a strong core of commercial development is important to Farmington. When necessary goods and services are not available locally,residents travel to other cities to shop.These trips often result in additional shopping that could have occurred in Farmington. The EDA seeks to encourage commercial development that reduces this out-migration and complements existing businesses. The EDA has limited control over the type and pace of commercial development. Market forces tend to be the primary force in commercial growth. In that regard,commercial development and job growth are directly related. New,well-paying jobs located in Farmington may produce the demand for new housing.These new"rooftops" create the market sought by commercial development. The EDA can facilitate commercial development by providing desirable business districts. Farmington has a history of creating community plans for such business districts.Plans for Vermillion River Crossing and Downtown Farmington provide the framework for public and private investment. In 2019,the city will be completing a plan for development in the Highway 3 Corridor.The ongoing implementation of these plans is an important EDA objective. Tactics 1. Attract new businesses that produce jobs that are likely to create or retain households and expand the local market for new commercial development. 2. Prepare and implement plans that provide desirable locations for new commercial development. 2019 Action Plan 1. Continue to work with brokers and land owners to attract developments to Vermillion River Crossings area. 2. Create ongoing means of communicating actions related to the implementation of the Downtown Redevelopment Plan to the EDA. 3. Play an active role in the completion of the Highway 3 Corridor Study and seek effective implementation strategies. January 2019 EDA Strategic Plan 2019-2021 12 Objective: Promote the economic and physical health of older sections of Farmington. One of the Economic Development Goals of the Comprehensive Plan is"redevelopment of vacant and underutilized properties in older areas to revitalize these vital community areas". In reality,there are two aspects to redevelopment.The most effective strategy is to promote the economic and physical health of the community to avoid the need for redevelopment.If the need for redevelopment exists,however,it is important to prevent blighting conditions to spread to other properties. The EDA has taken a proactive approach to redevelopment by creating plans for the Downtown and the Highway 3 Corridor.These plans provide a framework for public and private investment.Implementation of these plans is not the sole responsibility of the EDA.The EDA must coordinate its efforts with the city council,planning commission and other stakeholders. Tactics 1. Engage on a consistent basis with the planning commission to share goals and develop strategies. 2. Support the outcomes and implementation of the Highway 3 Corridor Plan. 3. Review and promote existing programs that target key areas. 2019 Action Plan 1. Schedule quarterly joint work sessions with the planning commission and semi-annual work sessions with the city council to align priorities. 2. Complete and identify initial implementation steps of the Highway 3 Corridor Plan. 3. Meet with Dakota County CDA staff(or invite to EDA meeting) to discuss programs. January 2019 EDA Strategic Plan 2019-2021 1.3 Objective: Effectively communicate information about the EDA within city government, to the community and to people and businesses outside of Farmington. Communication is an essential function of the EDA.Communication with the city council promotes collaboration on shared objectives and builds the foundation for the financial resources required by the EDA. Communication with the community explains the work of the EDA,highlights the positive impact on the community and offsets potential misinformation. Communication informs the business community,both within and outside of the community, about the opportunities to do business in Farmington and the assistance available from the EDA. The city's website is the most important communication tool for the EDA.The website is the place people look for information about the EDA.Farmington's online presence for economic development should be guided by several factors: • Information about the EDA and economic development in Farmington must be easy to find on the website. • The information on the website must be useful. • The form and content of the pages devoted to economic development should convey a positive message that creates interest in Farmington. Tactics 1. Utilize the city's website as the primary point of information about the EDA and economic development in Farmington. 2. Ensure that the website contains useful information for businesses evaluating potential development in Farmington. 3. Make use of the newsletter and other ongoing city communications to provide information about the EDA. 2019 Action Plan 1. Review other websites to identify elements that could be incorporated into Farmington's website. 2. Review and enhance the city's webpage(s)related to Economic Development. 3. Develop one or more new communications tools to relay the messages and work of the EDA. 4. Shift the monthly"Director's Report" in the EDA packet to a more public-facing newsletter. 5. Develop a social media strategy to promote the work of the EDA. January 2019 EDA Strategic Plan 2019-2021 14 Objective: Conduct the business of the EDA to maximize its effectiveness. While this objective seems obvious,it is important to make it a stated objective of the Strategic Plan.The EDA operates with limited resources in terms of funding,staff time and board responsibilities. All decision-making must consider the effective use of these limited resources. Tactics 1. Provide consistent information to the EDA about its financial condition and existing obligations. 2. Provide the EDA with consistent updates on the status of the action plans for the Strategic Plan and other ongoing initiatives of the EDA. 3. Annually update the action plans in the Strategic Plan. 2019 Action Plan 1. Provide annual comprehensive review of the EDA's finances in March. 2. Develop a standardized template for providing specific project updates. 3. Explore ways to enhance the effectiveness of monthly board meetings. 4. Create a process to annually review and update action plans in the Strategic Plan. January 2019 t 0 0. a cc p) co4-4 a n o a o ac a,L. 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