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STAFF AGENDA REPORT
DATE: MARCH 17, 2003
AGENDA #: 9 A
PREPARED BY: RALPH TESCHNER, FINANCE DIRECTOR
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING
NEGOTIATED SALE OF $1,975,000 GENERAL OBLIGATION
IMPROVEMENT BONDS OF 2003
DISCUSSION: Introduction
The City's bond and fiscal consultant Steve Mattson from Northland
Securities will be present during the Council meeting to request
Council approval to negotiate the sale of general obligation bonds in
the amount of $1,975,000 to finance improvements associated with
the Ring Road phase (Project 02-06) and 150th Street/Mitchell Ponds
street reconstruction project (Project 03-10.
History
The City Council approved Resolutions 03-13 & 03-14 on January
21, 2003 that accepted the feasibility reports for the reconstruction
of various streets along 150th Street and within the Mitchell Ponds
area during 2003 plus construction phases II & III of the Ring Road
that would be financed by a combination of general obligation
bonds, trunk, enterprise and water quality fund appropriations. A
summary of those improvements and their costs in round numbers
are listed below:
Project Description Project Financing
1. 150th/Mitchell Ponds G.O. Bonds ... $1,975,000.00
street reconstruction Trunk Reserve ... $535,000.00
(Project 03-11) Enterprise Fund ... $637,000.00
Collector Street ... $867,000.00
MSA funds ... $2,150,000.00
MnDOT ... $378,000.00
Scott County ... $400,000.00
2. Ring Road Phases 2&3
(Project 02-06) Project Totals... 6,942,000.00
Subsequently, the public hearings for these 2003 improvement
projects were conducted on February 18, 2003 and Resolutions 03-
22 & 03-23 ordering the improvements were approved.
Current Circumstances
In previous sales the Council has authorized a negotiated bond sale
directly from Northland Securities. Staff would propose a similar
16200 Ea§le Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
H:\BONDS~A03bonds. DOC
process for this sale. The advantage of the negotiated sale method
versus public sale is the flexibility it affords the City because our
fiscal consultant, Steve Mattson would attempt to time the sale of
bonds with the market in an effort to obtain the lowest interest rate
possible. It is anticipated that a sale on March 31, 2003 would
provide the lowest interest rates based on the existing financial
market. Also, the City saves itself the fiscal fee of $13,500.00.
The structure of the bond issue itself would be based upon the
following components in rounded amounts:
Total project costs* $6,942,000.00
* (inc. 17% cng, 5% admin & 4% financing costs)
Project Total ... $6,942,000.00
Less ... Trunk Reserve Fund Contribution <$535,000.00>
Less ... Enterprise Fund Contribution <$637,000.00>
Less ... Collector Street Fund Contribution <$867,000.00>
Less... MSA funds <$2,150,000.00>
Less ... MnDot share <$378,000.00>
Less ... Scott County share <$400,000.00>
Net Bond Issue Total ... $1,975,000.00
Approximately 46% of the bonds will be recovered through special
assessments. The remainder of the bonds will be levied against the
overall property taxes within the City. If bid today, a net effective
interest rate of 3.04% with an average bond coupon rate of 3.33%
would probably be a close estimate. We anticipate scheduling a
special meeting for Monday at 5:00 p.m. (March 31) because
normally there is very little selling competition for bonds within the
last full week of the month that would benefit the city as interest
rates should be lower.
The bond issue will probably be dated 4/1/03, with maturities each
year of December 1, depending upon the sale date, and will be
structured 10 years in length. The following is a schedule of tax
levies/assessment terms and their corresponding amounts necessary
to amortize the bond debt:
10 year assessment stream $900,000.00
10 year property tax levy $1,075,000.00
Total... $1,975,000.00
Attached is a worksheet from Northland Securities that provides
additional detail with respect to debt service principal/interest
payments, projected assessment stream and annual special tax levies
necessary to amortize this bond issue. The second page lists the
estimated coupon and net effective interest rates for this bond issue
plus it identifies the financing costs and other miscellaneous
information.
H:\BONDS~A03bonds. DOC
Financial Impact
The estimated special tax levy calculation associated with this bond
issue is $117,000.00 and will added to the City's proposed general
fund operating budget levy, revolving equipment fund levy and
other special debt levies for payable 2004 property taxes in
December of this year.
ALTERNATIVES: The following altematives are available to the City Council:
1. Approve a Resolution Authorizing Negotiated Sale of
$1,975,000 General Obligation Improvement Bonds of 2003.
2. Delay financing to a future time as determined by the City
Council.
RECOMMENDED
MOTION: Motion and second to approve a Resolution Authorizing Negotiated
Sale of $1,975,000 General Obligation Improvement Bonds of 2003.
Steve Mattson will be present at the meeting to discuss the
resolution and answer any questions the Council may have with
respect to the bond issuance process.
REVIEWED BY: 1~~
Attachments: 1. Reso Negotiated Sale of $1,975,000 General
Obligation Improvement Bonds of 2003
2. Northland Securities Bond Analysis
RESOLUTION 03-XX
RESOLUTION AUTHORIZING NEGOTIATED SALE
OF $1,975,000 GENERAL OBLIGATION IMPROVEMENT BONDS OF 2003
MOTION BY: SECOND BY:
WHEREAS, The City of Prior Lake has conducted the appropriate public hearings to consider
comments regarding those public improvement projects deemed necessary for
construction in 2003; and
WHEREAS, The City Council has determined that such construction projects scheduled for 2003
are consistent with the City's Capital Improvement Plan (CIP); and
WHEREAS, The City of Prior Lake has complied with all requirements of Chapter 429 of
Minnesota State Statutes with respect to special assessment improvement projects;
and
WHEREAS, Actual construction is scheduled to begin in early summer of 2003; and
WHEREAS, It is necessary to issue general obligation bonds for the purpose of financing these
construction improvements.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that it has
determined it is in the best interest of the City of Prior Lake to enter into a negotiated sale with
Northland Securities, in an effort to obtain the lowest interest rate possible, for the issuance of
$1,975,000 of general obligation improvement bonds, and the City Manager is hereby authorized to
convene a special meeting to approve the bond sale pursuant to the procedural requirements of State law.
Passed and adopted this 17th day of March, 2003.
YES NO
Haugen Haugen
Blomberg Blomberg
LeMair LeMair
Petersen Petersen
Zieska Zieska
{Seal} City Manager
City of Prior Lake
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
HABONDS~Res03. DOC
CITY COUNCIL AGENDA REPORT
MEETING DATE: March 17, 2003 _~,~
AGENDA #: 9B
PREPARED BY: Frank Boyles, City Mana
AGENDA ITEM: CONSIDER APPROVAL OF REPORT REGARDING THE POSITION OF THE
PLANNING COMMISSION AND LAKE ADVISORY COMMITTEE WITH
RESPECT TO THE 75 FOOT SETBACK FROM THE ORDINARY HIGH WATER
LEVEL.
DISCUSSION: History: At the February 18, 2003 meeting, the City Council received and
considered a report from Community Development Director Don Rye regarding
the zoning ordinance 75 foot setback requirements from the ordinary high water
level. After considering the report and discussing the matter, the City Council
directed that the input of the Planning Commission and Lake Advisory Committee
be solicited.
Current Circumstances: Both the Lake Advisory Committee and Planning
Commission have discussed this issue. On February 21, the Planning
Commission voted 4-1 to recommend that the existing 75 foot setback be
maintained. Attached are the minutes from that meeting which convey the
discussion at the meeting.
Also attached is a memo from the City Engineer Sue McDermott reporting the
results of the Lake Advisory Committee meeting. Like the Planning Commission,
the Lake Advisory Committee recommends that the existing 75 foot setback be
maintained and the reasons are articulated in the memo.
ALTERNATIVES: (1) Receive the recommendations of the Planning Commission and Lake
Advisory Committee and take no action.
(2) Receive the recommendations of the Planning Commission and Lake
Advisory Committee and direct staff to conduct additional research.
RECOMMENDED
MOTION: Alternative (1).
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R:~AGENDA REPORTS\2003 DRAFTS\75 FTA~FP..~'~I~:}~K,.~OJN~TY EMPLOYER
PLANNING COMMISSION MINUTES
MONDAY, FEBRUARY 24, 2003
1. Call to Order:
]tamson called the February 24, 2003, Planning Commission to order
at 6:30 were Commissioners Atwood, Criego, Ringstad and
Stamson, ~ Development Director Don Rye and Rec, Secretary Connie
Carlson.
2. Roll Call:
Atwood
Criego Pre
ernke
3. Approval of Minutes:
The Minutes from the February 10, 2003 Commission meeting were approved
as presented.
4. Consent: None
5. Public Hearings:
Commissioner the Public Hearing Statement meeting.
A. Case #03-09 David is requesting an appeal to the ting
Administrator's d~ fion to deny a building permit for the located at 14958
Pixie Point.
Community I Director Don Rye stated the applicant submitted on
Friday, 21, 2003, requesting to continue the matter to the March 10,
Planning ~g.
New Business:
Discussion of Water setback Prior Lake.
Ordinary
High
on
Community Development Director Don Rye presented the staff report on file in the office
of the City Planning Department.
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Planning Comrnission Meeting
February 24. 2003
The City Council directed staff to go ahead and submit a report on the Ordinary High
Water Mark on Prior Lake. Basically, research the difference between the current 75 foot
setback and the possibility of a 50 foot setback.
The 75 foot lakeshore setback in Prior Lake predates the shoreland ordinance by 10
years. The zoning ordinance adopted in 1975 provided for a 75 foot setback from all
lakes in the City. This setback was retained until May, 1997, when the Council adopted
an amendment to the zoning ordinance changing the setback to 50 feet. The change came
about as a result of a variance case and the change was initiated by the Council at that
time. Both staff and the Planning Commission recommended against the amendment.
Staff felt there significant reasons why the 75 foot setback should be retained, although
ultimately it is a policy issue to be decided by the City Council. Changing the setback to
50 feet would be allowed by the State shoreland rules. However, it could be argued that
the impervious surface and building height rules then should also be amended to be
compliant with the State rules.
There were no comments from the public on this matter.
Comments from the Commissioners:
Stamson:
· Was on the Commission when the ordinance was changed to 50 feet and when it
changed back. My initial reaction.was "Been there, done that." There was a great
deal of discussi on on this issue.
· The PI anning Commission was largely against this change and it did not pass.
The City Council passed the change to 50 feet.
· My recollection was a lot of public outcry not to change it. There was a negative
response from the public on the change. That is why it is back to 75 feet.
· Surprised to see this matter back since there is nothing to change the
circumstances.
· After consideration, this part of the ordinance, (75 or 50 foot setback) is not a
stand alone issue - it is the foundation of what a lot of our Shoreland ordinance is
based upon. This setback gives us a leeway for other setbacks. We should look at
the entire Shoreland ordinance as a whole and not just this issue. The appropriate
time to discuss this is when the City reviews the entire ordinance.
· Personal opinion is that 75 feet is appropriate. It actually predates the DNR
ordinances. The City has had the 75 feet in place for a long time and it works.
Nothing significant has come in to change the ordinance.
Rye said the Shoreland Ordinance is based on State rules and the City has very little
leeway in deviating from that rule. In this case, the City has been more restrictive than
the State but on impervious surface, the City is less restrictive. At one time, it was
thought that was the tradeoff, they gave us the flexibility because the City went 75 feet as
a setback, they would give us 30% impervious surface. In talking to the DNR that was
L:\03 Files\03 Planning Comm\03pcMinutes\MNFEB24.doc 2
Planning Commission Meeting
February 24, 2003
not the case. It could be changed back to 50 feet and be in compliance with the State but
look at the application of 75 feet over the last 30 years.
Stamson:
· The 75 feet justifies the 30% impervious surface the City allows. When the
Commission looks at variances, it builds on one another. If we start dealing with
homes 50 feet from the lake, I would take a different approach to variances given
the closer setback to the lake. Even if the DNR did not state it in writing, the
Shoreland ordinances all play together.
Criego:
· For several reasons stay at 75 feet:
The lake water quality will deteriorate if setbacks are reduced.
Aesthetics or the beauty of the lake will be reduced. The Prior Lake American
(dated 2/22/03) published an article stating the need for a lake management plan
to clean up the problems with algae and aquatic plants. Need further study from
the DNR, Watershed District and Lake Advisory.
· The 75 foot setback has been enforced for over 30 years, many homes have
been built and remodeled based on this ordinance. There could be many issues
with a new home built with a 50 foot setback next to an existing home with a 75
foot setback.
· Setback averaging is another issue. In some cases it is as much as the 50 foot
setback.
· Follow DNR Rules - If the City goes back to 50 feet and 25 impervious
surface, the City should follow their 25 foot height restriction. The City now
has a 35 foot high restriction.
· He believes if the 50 foot setback and 25% impervious surface is enacted, there
will be a greater negative impact on building and remodeling. Many lots have a
difficult time achieving 30% impervious surface.
· In addition, many homes are building to 35 feet high to.obtain their square
footage needs. If it is 25 feet, this becomes another issue.
· There will several variances requests.
· It will be difficult to build under the DN'R's rUles.
· Why do so many other lake communities have 75 and 100 foot setbacks?
Believes for the reasons above.
· There is no compelling reason or public benefit to change the setback. Why
change when this issue has been discussed several times.
Atwood: · When I first read this my reaction was, "If it ain't broke, don't fix it."
· Was not on the Commission at that time, but remembers the impassioned letters
and conversations from the community to maintain a 75 setback.
· To revisit this issue, it does not make sense.
· What benefit is it to the public? Bill's comments are accurate - what an uproar it
would cause for residents.
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Planning Commission Meeting
February 24, 2003
· This is a conservative but necessary setback.
· Agreed with Tony - if we want to revisit this issue it should be with the entire
Shoreland Ordinance.
Ringstad: · It has all been said. Agreed with Commissioners' comments.
· Maintain the 75 foot setback.
· It is more beneficial for water quality, better lake aesthetics for the lake dwellers
and community. And more importantly, except for a 2 year window, the 75 foot
setback worked for the community.
· Not knowing the complete discussions in 1997 with the Planning Commission
and City Council, changing to back to 75 feet shortly after the discussion,
indicates to me it did not work. A mistake was made.
· In favor of keeping the 75 foot setback.
Lemke:
· Going to be on the losing end on this one. Heard water quality talked about and
on the face of it, it seems obvious, but has a hard time believing a 50 foot setback
would harm the lake. The DNR has a 50 foot setback.
· Would there be some benefit for a 75 foot setback over a 50 foot setback? I'm
sure but don't know if you could quantify it.
· My view is - would like to see rather an "either/or" an "and" a dual standard. If
there is going to be a 30% impervious surface then have a 75 foot setback, or a 50
setback with a 25% impervious surface. That would take care of the concerns on
water quality.
· As far as aesthetics, today at least anywhere near a weekend, if you're driving
around the lake, you probably shouldn't be looking at the shore. Too much
traffic. There is a reason this is a general development lake. The housing and
general development is allowed. It will never be the Boundary Waters.
· Ringstad gave a scenario of what could happen with a sliding scale ordinance.
Lemke responded that is why there is the Board of Adjustments. Not every
situation is black and white.
· Can accept a sliding scale but maintain the 75/30 ratio.
· Personally would rather see a small house 50 feet from the lake than a 35 foot
high house with 30% impervious surface.
Open Discussion:
· That's contrary to current real estate building practices. What the Commissioners
hear with the variances is that residents can not get a big enough house. No one
wants a smaller house.
· The price of land is going up as fast as we can write notes.
· 50 feet is awfully close to the lake. If you look at the cabin lots and smaller
homes, 50 feet from the lake is not so bad, but the style of homes being built now
pushing to 50 feet, is too close to the lake. The huge homes with a 50 foot setback
don't work. There is a lot of redevelopment going on the lake.
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Planning Comlnission Meeting
Februaw 24, 2003
· One of the biggest concerns of neighbors of variance requests, is the homes and
additions going to close to the lake blocking views.
· The City has a variance setback averaging process and leeway to allow up to 50
feet in situations where it warrants. Not saying anyone can build up to 50 feet.
· It is not unreasonable to keep it at 75 feet. It has been in force for over 30 years.
It is a community standard.
· The DNR has ordinances to protect water, but they also write ordinances for
political reasons. Guessing 50 feet is not a magic number.
· This has been discussed before. A lot of communities surrounding the Twin
· Cities are 100 feet from the lake. It is not uncommon.
· The implications for changing would wreak havoc with all the lake residents.
· It was not well received from the community.
· Rye pointed out discussions started a year before the ordinance was changed
back.
· The change actually slipped through the Planning Commission because two
Commissioners who were soundly against it were absent. It would have never
passed if there was a quorum.
· That issue was blasted in the newspaper because the Planning Commission did
not have a full quorum.
· Granted, the lake has gotten crowded beyond belief, it's not just for the boaters
looking at the shoreline, it's for the homeowners as well.
· The change will not create a flood of homes 50 feet from the lake. It will facilitate
residents building decks and additions. It will help some of the substandard lots
add additions. There are very often requests for 50 feet just to build something.
There shouldn't be noticeable difference, even in 5 to 10 years, except for a deck
here or there.
· Ringstad questioned Rye if there was a noticeable to difference in lake additions
du.ring the 2 year ordinance change back to 50 feet. Considering it took almost a
year to change it back. Rye said he did not notice a lot of activity.
· Nobody has a crystal ball - should err on the side of what is in place and worked.
· If the City adopts the DNR rules, the result will be smaller homes than they would
under the City's existing rule.
· The land costs for lake lots make it difficult to give people the extra space to
build.
· There are not many lots left on the lake - 15 or 20 that will be able to add on
decks.
· Most cabins and seasonal homes are gone. There are a lot of homes 20 years or
more old. With the land prices, there is going to be a lot of redevelopment. It is
not unreasonable to see people tear down $300,000 to build $500,000 or $600,000
homes. You are going to see homes 75 feet from the lake being rebUilt at 50 feet.
· Agreed with Lemke that in the next 5 years there may not be a noticeable big
difference but long term, it will be a big issue. The look of the lake would be
drastically different than it is now.
· Lemke agreed.
L:\03 Files\03 Planning Comm\03pcMinutes\MNFEB24.doc 5
Planning Commission Meeting
February 24, 2003
Lake quality over the number of years is significant. The DNR did studies "up
north" on floods and the drainage. It didn't take a lot of land to make fairly
substantial impacts. Remembered being surprised by their results.
· The Lake Advisory has not met on this issue yet..
· Rye explained the City Council just wanted to refer it back to the Planning
Commission and Lake Advisory because they had positions before. Basically they
just wanted to verify that those positions have not changed.
MOTION BY ATWOOD, SECOND BY RINGSTAD, TO RECOMMEND TO THE
CITY COUNCIL TO MAINTAIN THE 75 FOOT SETBACK BASED ON THE
FOLLOWING:
· LAKE WATER QUALITY WILL DETERIORATE IF SETBACKS ARE
REDUCED.
· THE 75 FOOT SETBACK HAS BEEN AROUND FOR OVER 30 YEARS AND
HAS BEEN A PART OF OUR COMMUNITY.
· OUR CURRENT ORDINANCE ALLOWS LEEWAY WITHIN THE 75 FOOT
AREA IN APPROPRIATE CIRCUMSTANCES.
· THERE HAS BEEN NO CHANGE OR APPARENT PUBLIC BENEFIT FOR
THE CHANGE.
Vote taken indicated ayes by Atwood, Ringstad, Criego and Stamson. Lemke nay.
MOTION CARRIED.
Rye said there is no application, this is just for Council's information.
Stamson suggested all the groups get together for a workshop on this matter if this
becomes an issue.
8. Announcements and Correspondence:
9. Adjournment:
The meeting adjourned at 7:11 p.m.
Donald Rye Connie Carlson
Community Development Recording Secretary
Director
L:\03 Files\03 Planning Comm\03pcMinutes\MNFEB24.doc 6
DATE: March 5, 2003
TO: Frank Boyles, City Manager
FROM: Sue McDermott, City Engineer,.~J~
CC: Lake Advisory Committee
RE: 75-foot Lake Setback
As requested by the City Council, the Lake Advisory Committee discussed the 75-foot
lake setback versus a 50-foot setback. They voted to recommend keeping the 75-foot
setback for the following reasons:
1. Aesthetics
2. Increased runoff due to impervious areas closer to the lake.
3. Dead lake due to potential loss of air circulation because of the height of
structures closer to the lake.
4. Lake creep
G:\Water Info,LAC\setbacks.DOC