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HomeMy WebLinkAbout_11 07 2022 City Council Agenda Packet11/7/2022 Council Worksession From Amended Budget 2021 2022 2022 2023 2023 2023 BUDGET ACTIVITY ORIGINAL AMENDED PROPOSED PROPOSED PROPOSED CLASSIFICATION BUDGET BUDGET BUDGET AMT CHANGE %CHANGE Fund 101 GENERAL FUND TAXES 9,462,313 10,227,232 10,227,232 12,161,475 1,934,243 18.91 CHARGES FOR SERVICES 2,102,785 2,022,200 2,022,200 2,041,444 19,244 0.95 INTERGOVERNMENTAL 2,322,956 2,585,932 2,585,932 2,833,610 247,678 9.58 MISCELLANEOUS REVENUES 635,157 257,200 257,200 292,500 35,300 13.72 SALE OF ASSETS 30,022 TRANSFERS IN 523,000 546,000 546,000 555,000 9,000 1.65 DEBT ISSUED LICENSES AND PERMITS 999,906 897,323 897,323 894,370 2,953)0.33) FINES AND FORFEITURES 38 TOTALS FUND 101 16,076,177 16,535,887 16,535,887 18,778,399 2,242,512 13.56 DEBT SERVICE FUNDS TAXES 3,005,284 3,455,529 3,455,529 3,357,481 98,048)2.84) MISCELLANEOUS REVENUES 617,006 495,204 495,204 507,498 12,294 2.48 DEBT ISSUED 8,880,053 OTHER FINANCING SOURCES 1,326,441 TRANSFERS IN 2,595,069 1,342,764 1,342,764 1,094,701 248,063)18.47) TOTALS DEBT SERVICE FUNDS 16,423,853 5,293,497 5,293,497 4,959,680 333,817)6.31) Fund 210 CABLE FRANCHISE FUND CHARGES FOR SERVICES 23,252 23,800 23,800 22,000 1,800)7.56) MISCELLANEOUS REVENUES 103 TOTALS FUND 210 23,355 23,800 23,800 22,000 1,800)7.56) Fund 225 CAPITAL PARK FUND CHARGES FOR SERVICES 653,652 586,500 586,500 586,500 INTERGOVERNMENTAL 250,000 250,000 MISCELLANEOUS REVENUES 9,868 22,000 22,000 20,400 1,600)7.27) TOTALS FUND 225 663,520 608,500 608,500 856,900 248,400 40.82 Fund 240 EDA SPECIAL REVENUE FUND TAXES 350,284 360,000 360,000 370,000 10,000 2.78 CHARGES FOR SERVICES 8,582 24,360 24,360 24,588 228 0.94 INTERGOVERNMENTAL MISCELLANEOUS REVENUES 20,092 5,400 5,400 2,600 2,800)51.85) TRANSFERS IN 20,969 TOTALS FUND 240 399,927 389,760 389,760 397,188 7,428 1.91 Fund 410 REVOLVING EQUIPMENT FUND TAXES 838,173 700,000 700,000 750,000 50,000 7.14 INTERGOVERNMENTAL MISCELLANEOUS REVENUES 681 6,800 6,800 10,000 3,200 47.06 SALE OF ASSETS 114,480 TRANSFERS IN 310,000 217,500 217,500 217,500 DEBT ISSUED UNK_REV TOTALS FUND 410 1,263,334 924,300 924,300 977,500 53,200 5.76 Fund 430 REVOLVING PARK EQUIP FUND TAXES 377,113 405,000 405,000 440,000 35,000 8.64 INTERGOVERNMENTAL 299,000 299,000 MISCELLANEOUS REVENUES 1,628 13,800 13,800 13,700 100)0.72) TRANSFERS IN 49,358 49,358)100.00) TOTALS FUND 430 378,741 418,800 468,158 752,700 284,542 60.78 BUDGET REPORT City of Prior Lake Revenues Summary 11/7/2022 Council Worksession From Amended Budget 2021 2022 2022 2023 2023 2023 BUDGET ACTIVITY ORIGINAL AMENDED PROPOSED PROPOSED PROPOSED CLASSIFICATION BUDGET BUDGET BUDGET AMT CHANGE %CHANGE BUDGET REPORT City of Prior Lake Revenues Summary Fund 440 FACILITIES MANAGEMENT FUND TAXES 80,072 105,000 105,000 155,000 50,000 47.62 INTERGOVERNMENTAL 535,000 535,000 535,000)100.00) MISCELLANEOUS REVENUES 594 6,300 6,300 14,600 8,300 131.75 TRANSFERS IN 930,000 24,600 24,600 24,600)100.00) DEBT ISSUED ENERGY LEASE ISSUED TOTALS FUND 440 1,010,666 670,900 670,900 169,600 501,300)74.72) Fund 450 PERMANENT IMPROVEMENT REVOLVING FUND TAXES 120,108 CHARGES FOR SERVICES 1,050,000 1,050,000 1,068,000 18,000 1.71 MISCELLANEOUS REVENUES 149,094 156,431 156,431 116,235 40,196)25.70) TRANSFERS IN DEBT ISSUED TOTALS FUND 450 269,202 1,206,431 1,206,431 1,184,235 22,196)1.84) Fund 601 WATER FUND CHARGES FOR SERVICES 5,569,918 4,787,099 4,787,099 5,409,044 621,945 12.99 INTERGOVERNMENTAL 1,066 MISCELLANEOUS REVENUES 48,102 67,400 67,400 72,900 5,500 8.16 SALE OF ASSETS TRANSFERS IN DEBT ISSUED UNK_REV 888 OTHER FINANCING SOURCES 16,762 TOTALS FUND 601 5,636,736 4,854,499 4,854,499 5,481,944 627,445 12.93 Fund 602 STORM WATER UTILITY CHARGES FOR SERVICES 1,205,516 1,197,920 1,197,920 1,360,333 162,413 13.56 INTERGOVERNMENTAL 33,300 MISCELLANEOUS REVENUES 7,881 22,800 22,800 25,100 2,300 10.09 TRANSFERS IN UNK_REV 361 STORM WATER CHARGES 1,050 TOTALS FUND 602 1,248,108 1,220,720 1,220,720 1,385,433 164,713 13.49 Fund 604 SEWER FUND CHARGES FOR SERVICES 4,934,563 5,176,621 5,176,621 5,440,957 264,336 5.11 INTERGOVERNMENTAL MISCELLANEOUS REVENUES 36,271 31,200 31,200 38,400 7,200 23.08 SALE OF ASSETS TRANSFERS IN DEBT ISSUED UNK_REV 842 OTHER FINANCING SOURCES 16,762 TOTALS FUND 604 4,988,438 5,207,821 5,207,821 5,479,357 271,536 5.21 TOTAL ALL FUNDS 48,382,057 37,354,915 37,404,273 40,444,936 3,040,663 8.13 3,090,021 8.27 From Original Budget 11/7/2022 Council Worksession From Amended Budget 2021 2022 2022 2023 2023 2023 BUDGET ACTIVITY ORIGINAL AMENDED PROPOSED PROPOSED PROPOSED CLASSIFICATION BUDGET BUDGET BUDGET AMT CHANGE %CHANGE Fund 101 GENERAL FUND 41110.00 MAYOR COUNCIL 71,698 75,528 75,528 81,421 5,893 7.80 41130.00 ORDINANCE 5,820 6,000 6,000 6,000 41320.00 ADMINISTRATION 315,334 390,765 390,765 366,822 23,943)6.13) 41330.00 BOARDS COMMISSIONS 7,613 11,365 11,365 15,471 4,106 36.13 41400.00 CITY CLERK FUNCTIONS 121,818 129,697 129,697 128,217 1,480)1.14) 41410.00 ELECTIONS 690 62,200 62,200 43,240 18,960)30.48) 41520.00 FINANCE 566,980 596,290 596,290 688,150 91,860 15.41 41530.00 ACCOUNTING 41540.00 INTERNAL AUDITING 40,333 42,200 42,200 43,700 1,500 3.55 41550.00 ASSESSING 223,111 231,135 231,135 239,135 8,000 3.46 41610.00 LEGAL 181,237 190,000 190,000 210,000 20,000 10.53 41820.00 HUMAN RESOURCES 323,916 332,139 332,139 346,102 13,963 4.20 41830.00 COMMUNICATIONS 159,303 174,261 178,261 170,008 8,253)4.63) 41910.00 COMMUNITY DEVELOPMENT 345,584 385,472 385,472 369,784 15,688)4.07) 41920.00 INFORMATION TECHNOLOGY 383,533 398,081 404,081 447,224 43,143 10.68 41940.00 FACILITIES CITY HALL 523,557 553,195 553,195 551,155 2,040)0.37) 42100.00 POLICE 5,411,230 6,013,802 6,141,802 6,548,159 406,357 6.62 42200.00 FIRE 1,135,252 1,242,376 1,242,376 1,972,848 730,472 58.80 42400.00 BUILDING INSPECTION 718,118 816,265 816,265 885,893 69,628 8.53 42500.00 EMERGENCY MANAGEMENT 1,220 16,190 16,190 18,920 2,730 16.86 42700.00 ANIMAL CONTROL 28,800 28,800 28,800 28,800 43050.00 ENGINEERING 426,592 419,812 419,812 447,188 27,376 6.52 43100.00 STREET 1,225,910 1,384,871 1,464,261 1,490,433 26,172 1.79 43400.00 CENTRAL GARAGE 446,731 518,031 561,831 553,623 8,208)1.46) 45100.00 RECREATION 477,153 512,825 512,825 545,771 32,946 6.42 45200.00 PARKS 1,473,941 1,760,303 1,777,913 1,893,220 115,307 6.49 45500.00 LIBRARIES 59,289 70,446 70,446 85,227 14,781 20.98 80000.00 Transfers to other Funds 1,112,697 223,838 223,838 633,888 410,050 183.19 TOTALS FUND 101 15,787,460 16,585,887 16,864,687 18,810,399 1,945,712 11.54 DEBT SERVICE FUNDS 47000.00 DEBT SERVICE INTEREST AND OTHER 1,140,627 1,035,199 1,035,199 1,016,813 18,386)1.78) PRINCIPAL 3,949,859 4,325,713 4,325,713 4,261,693 64,020)1.48) ESCROW PRINCIPAL 10,048,295 PREMIUM ON DEBT ISSUED CURRENT EXPENDITURES 80000.00 Transfers to other Funds 1,442,801 233,000 233,000 25,000 208,000)89.27) TOTALS DEBT SERVICE FUNDS 16,581,582 5,593,912 5,593,912 5,303,506 290,406)5.19) Fund 210 CABLE FRANCHISE FUND 41340.00 PUBLIC CABLE ACCESS CURRENT EXPENDITURES 1,407 11,000 11,000 CAPITAL OUTLAY 3,641 39,780 39,780)100.00) TOTALS FUND 210 5,048 39,780 11,000 28,780)72.35) Fund 225 CAPITAL PARK FUND 45040.00 PIKE LAKE PARK 1,197 45148.00 HWY 13 TRAIL GAP 3,117 45200.00 PARKS 745,871 3,200 3,200 653,400 650,200 20,318.75 80000.00 Transfers to other Funds TOTALS FUND 225 750,185 3,200 3,200 653,400 650,200 20,318.75 Fund 240 EDA SPECIAL REVENUE FUND 46500.00 ECONOMIC DEVELOPMENT 261,519 620,557 623,857 627,615 3,758 0.60 46503.00 TECH VILLAGE INCUBATOR 1,232 TOTALS FUND 240 262,751 620,557 623,857 627,615 3,758 0.60 BUDGET REPORT City of Prior Lake Expenditures Summary 11/7/2022 Council Worksession From Amended Budget 2021 2022 2022 2023 2023 2023 BUDGET ACTIVITY ORIGINAL AMENDED PROPOSED PROPOSED PROPOSED CLASSIFICATION BUDGET BUDGET BUDGET AMT CHANGE %CHANGE BUDGET REPORT City of Prior Lake Expenditures Summary Fund 410 REVOLVING EQUIPMENT FUND 41830.00 COMMUNICATIONS 32,455 42100.00 POLICE 342,143 298,900 298,900 314,100 15,200 5.09 42200.00 FIRE 343,771 188,000 618,000 299,000 319,000)51.62) 42400.00 BUILDING INSPECTION 38,000 38,000 43050.00 ENGINEERING 43100.00 STREET 238,885 65,000 65,000 97,000 32,000 49.23 43400.00 CENTRAL GARAGE 19,937 20,000 20,000 20,000 45200.00 PARKS 397,945 349,500 349,500 604,500 255,000 72.96 49400.00 WATER 48,875 49420.00 WATER QUALITY 49450.00 SEWER 116,932 80000.00 Transfers to other Funds TOTALS FUND 410 1,540,943 921,400 1,351,400 1,372,600 21,200 1.57 Fund 430 REVOLVING PARK EQUIP FUND 45200.00 PARKS 36,422 158,000 158,000 1,155,000 997,000 631.01 45500.00 LIBRARIES 38,000 38,000)100.00) 80000.00 Transfers to other Funds 414,000 TOTALS FUND 430 450,422 158,000 196,000 1,155,000 959,000 489.29 Fund 440 FACILITIES MANAGEMENT FUND 41910.00 COMMUNITY DEVELOPMENT 41940.00 FACILITIES CITY HALL 180,215 70,000 70,000 41960.00 GESP 42100.00 POLICE 167,000 167,000 233,000 66,000 39.52 42200.00 FIRE 25,085 700,000 700,000 185,500 514,500)73.50) 43100.00 STREET 43400.00 CENTRAL GARAGE 29,289 86,000 86,000 86,000)100.00) 45100.00 RECREATION 3,360 60,000 60,000 60,000)100.00) 45500.00 LIBRARIES 125,000 125,000 49400.00 WATER 80000.00 Transfers to other Funds TOTALS FUND 440 237,949 1,013,000 1,013,000 613,500 399,500)39.44) Fund 450 PERMANENT IMPROVEMENT REVOLVING FUND 43100.00 STREET 80000.00 Transfers to other Funds 287,150 282,751 282,751 203,100 79,651)28.17) TOTALS FUND 450 287,150 282,751 282,751 203,100 79,651)28.17) Fund 601 WATER FUND 41520.00 FINANCE 111,366 112,766 112,766 121,121 8,355 7.41 47000.00 DEBT SERVICE 24,825 49400.00 WATER 3,125,717 3,203,946 3,203,946 3,937,746 733,800 22.90 80000.00 Transfers to other Funds 1,801,456 912,425 912,425 938,963 26,538 2.91 TOTALS FUND 601 5,063,364 4,229,137 4,229,137 4,997,830 768,693 18.18 Fund 602 STORM WATER UTILITY 49420.00 WATER QUALITY 730,212 1,049,425 1,049,425 1,376,655 327,230 31.18 80000.00 Transfers to other Funds 451,795 118,600 118,600 110,000 8,600)7.25) TOTALS FUND 602 1,182,007 1,168,025 1,168,025 1,486,655 318,630 27.28 Fund 604 SEWER FUND 41520.00 FINANCE 111,332 112,296 112,296 120,598 8,302 7.39 47000.00 DEBT SERVICE 24,825 49450.00 SEWER 3,279,211 4,155,827 4,155,827 4,162,414 6,587 0.16 80000.00 Transfers to other Funds 1,031,690 334,750 334,750 330,750 4,000)1.19) TOTALS FUND 604 4,447,058 4,602,873 4,602,873 4,613,762 10,889 0.24 TOTALS ALL FUNDS 46,595,919 35,178,742 35,968,622 39,848,367 3,879,745 10.79 4,669,625 13.27 From Original Budget 1 2023 Proposed Tax Levy Components Attachment 2 LEVY CHANGE TO MAINTAIN CURRENT SERVICE LEVELS AND ADD FT FIRE STAFF – 12.98% FT Fire staffing model with NO SAFER Grant – 5.62% FT Fire Personnel New Personnel and Benefit Costs 658,000 FT Fire Unscheduled OT 29,000 FT Fire workstations/equipment/uniforms 29,000 POC firefighters’ reduction due to FT staffing (78,000) Additional fire service agreement revenue (181,000) Incremental tax levy increase to prepare for future FT Fire costs 400,000 Total FT Fire levy impact with NO SAFER Grant $857,000 For the transition to full-time Fire staffing, the financial plan assumes that the city does not receive the SAFER grant and hires the firefighters for a mid-year start of July 1, 2023. Under this scenario, the tax levy impact of FT fire staffing is 5.62% of the tax levy increase. The funding request includes an incremental tax levy increase of $400k in 2023 to prepare for future full-year fire department costs. Additional Personnel Adds: .71% Police Property Room Manager $93,000 Eliminate PT Community Service Officer and seasonal CSOs (93,000) Headcount add but budget neutral - 0 - The immediate need for the Police Dept is the addition of one civilian FTE to manage the property room. The property room is currently staffed by a part-time CSO which is not in line with any best practice. The integrity required and liability associated with property room oversight must be second to none. This position can be created in a budget neutral way by repurposing the CSO PT and seasonal positions. Financial Analyst - $68,000 This position will help support all aspects of financial planning and management, including capital project expenditure monitoring and debt management. Financial and accounting activity levels are growing along with new reporting requirements and governmental accounting standards. Mechanic - $41,000 The part-time mechanic position would become full-time for fleet maintenance as well as to provide additional support for snow and ice control operations. With continued growth in the city, vehicles and equipment are being added. Preventative maintenance is critical to enhance the life of the City’s assets. Capital Improvement Program (CIP) Tax Levy Components - .88% Equipment Replacement funding - $50,000 The Equipment Replacement Plan (ERP) utilizes general tax levies to support replacement of the City’s equipment and vehicle fleet. The ten-year annualized cost for the plan is about $1.47M. The financing plan reflects a gradual increase in the tax levy until the annual levy reaches our annual funding goal. The proposed total levy for 2023 is 975k. Since the proposed levy increase is gradual, bonding may be required for the plan to meet our funding needs. Park Equipment Replacement funding -$35,000 The Revolving Park Plan funds capital replacement projects, park amenities, and trail, sidewalk, and boardwalk replacement. The plan proposes a phased increase in the tax levy to cover the capital projects in the plan. 2023 projects include Ponds phase I, Ponds playground replacement, the Northwood basketball court maintenance, and the Sand Point Beach renovation study. Facilities Management Plan funding -$50,000 The Facility Management Plan (FMP) was developed to plan for major repairs, replacements, and upgrades for all city facilities on a long-term basis (25 years). It does not cover minor expenses for repairs and maintenance. Those will continue to be funded through the operating budgets. 2023 includes carpet, overhead doors and irrigation system at the Police Station, phase II of the library remodel, irrigation system and vehicle exhaust system at FS #1, carpet and infrared tube heater at FS #2, and wall coverings at City Hall. Mandatory Items – 5.77% 2 STAFFING Wage/COLA and Benefits - $382,000 The budget includes a proposed cost of living adjustment (per labor agreements), city payroll taxes and health insurance premium contribution increase. Election Judges – ($54,000) There are no elections in 2023. CURRENT EXPENDITURES Fuel - $204,000 Increase in funding due to the rising cost of gas and diesel fuel. Software Service Contracts – $132,000 Most of this cost ($96k) is for Public Safety: police cameras, video storage technology, SEIM tool, mobile device management and encrypted cards and reader. Supplies – $95,000 Increase in funding for supplies due to price increases due to inflation, technology upgrades and repairs to aging playgrounds/parks. Capital Outlay - $56,000 $36k for mandatory poll pad replacement and new tabulators for the precinct; copier/printer replacements. Utilities - $79,000 72% estimated increase in electric and street/park lighting. Professional Services/Maintenance/Other – ($105,000) Decrease in maintenance agreements (due to 2022 one-time expenses and Public Works reductions), professional services (decreases in legal expenses and LMCIT property insurance rate reduction; as well as 2022 one-time expense for the community survey); and other services. OTHER Other Items - 91,000 88,000) reduction in debt service. 128,000) levy reduction due to net increase in non-tax revenue sources (primarily for additional Minnesota state aid for Street Maintenance, Police and Fire of $102,000) 297,000 increase in tax levy in 2023 due to less use of reserves as compared to the 2022 budget. We need to levy for expenditures that were funded with reserves in the prior year. The EDA budget includes a funding increase of $10,000 to bring the EDA tax levy to $370,000. This is an incremental increase in funding primarily for wages, property taxes and maintenance costs for 2023 EDA owned properties including 4662/4662 Dakota St SE and 16298 Main Ave SE. GENERAL FUND RESERVE Background information: The city’s comprehensive financial management plan calls for maintaining a fund balance between 40-50% to ensure adequate reserves for cash flow, unplanned expenditures, and to maintain the city’s credit worthiness (AA+ credit rating). Staff recommends the use of reserves for one-time expenditures or revenue shortfall; otherwise, the fund balance could drop below the level stated in the comprehensive financial management plan over time. The total 2022 use of reserves is $328,800 comprised of the following items: 54,000 for the community survey 6,000 for maintenance and updates of the council chambers equipment to televise the council meetings 43,800 to increase the fuel budget Several items were carried forward from the 2021 budget as the work could not be done due to supply chain issues 3 13,000 for emergency siren maintenance costs and training – carry forward from prior year due to supply chain issues 115,000 for police department expenditures 79,390 for the street department and $17,610 for the parks department. Staff was not able to complete sidewalk maintenance at the police department and on Willow Lane 2023 Planned Use of Reserves is $32,000 to fund the following items: Election equipment –poll pad replacement and new tabulators for the precinct added In 2023, the City of Prior Lake will transition from a paid-on-call to a full-time Fire Department. This is necessary to better response times, provide a safer environment, and enhance public education. Members of the community who are paid-on-call firefighters respond to emergency calls, like car accidents, medical assistance, and fires. Our firefighters respond to calls over a 74 square mile area in Prior Lake, Credit River, and Spring Lake Township, providing services to over 37,000 people. City leaders from all three communities are working together to develop a plan to move forward with a full-time department. The proposed department would add 12 full-time firefighters to provide 24/7 emergency response. The Department already has a full-time Fire Chief and Assistant Fire Chief along with paid-on-call firefighters who will continue to support the Department. Full-Time Fire Department CITY OF PRIOR LAKE Why does the City need a full-time Fire Department? Recruitment and Retention Emergency calls occur at all hours which is difficult for paid-on-call firefighters with full-time employment and families. The Department budgets for 50 paid-on-call firefighters but only 33 positions are currently filled. The most recent hiring process saw only four applications and, in the end, none were able to serve. Over the past five years, 27 firefighters retired or resigned and only 19 were hired to replace them. J U L Y 2 0 2 2 Enhanced Safety Programs Currently many requests for public education visits go unanswered due to staffing challenges. Full-time staff will be readily available for fire prevention and education giving our community a better understanding of fire safety. Full-time staff will also develop a life safety inspection and pre-plan program of high occupancy facilities and commercial buildings. This program will give our firefighters better working knowledge of target hazards in and around properties to work more efficiently and safely. Funding for the transition to a full-time Department will be a blend of general fund tax levy and contracts with Credit River and Spring Lake Township. The City has applied for a federal grant to help staffing costs for the first three years. Response Times A fire can engulf a home in less than five minutes. After eight minutes, the chance of surviving a heart attack is reduced by 60 percent. Paid-on-call firefighters get paged for emergencies and respond from wherever they are, they could be at home, work, shopping, etc., traveling to the fire station adds critical minutes to response times. Travel time to the station adds almost six minutes to each call response. Full time firefighters, on duty 24/7, will be on the scene much faster to aid in saving lives and limiting property loss. Growth As the population grows, so does the demand for services. Calls have increased by 44 percent over the past five years, especially medical calls. What worked in the year 2000 simply cannot meet the needs of a larger community in 2022 and beyond. With a service area population projected to be over 49,000 by 2040, the Department needs to be prepared to meet the needs of a growing community. Staffing has decreased 36% *Calls have increased 44% * Data collected from 2017-2022 How will this be funded? J U L Y 2 0 2 2 Full-Time Fire Department CITY OF PRIOR LAKE CHECK REGISTER FOR CITY OF PRIOR LAKE 1/11Page: 10/31/2022 09:24 AM User: jringberg DB: Prior Lake CHECK DATE FROM 10/08/2022 - 10/28/2022 AmountDescriptionVendorNameVendorCheckCheckDate Bank 1 General Bank 1,554.682022DentalClaimsDELTADENTAL000272139090(E)10/11/2022 1,265.90Sep2022MerchantFeesINVOICECLOUD000280919091(E)10/11/2022 216.87Sep2022MerchantCardFeesTRANSFIRST000206939092(E)10/11/2022 36.98UBrefundforaccount: 30406400ALBRECHTJERALDREFUND-UB11101710/14/2022 390.00SirenRepairANCOMTECHNICALCENTER0000165511101810/14/2022 141.81UBrefundforaccount: 40686304BEAUCAGEERIKAREFUND-UB11101910/14/2022 23.50UBrefundforaccount: 40865102CABILLOTJEANREFUND-UB11102010/14/2022 107.88UBrefundforaccount: 40586104CAMERONKIMBERLYREFUND-UB11102110/14/2022 114,270.79 #2 FS #1RenovationCENTURYCONSTRUCTION0002820511102210/14/2022 105.00Sep2022TaiChiInstructorCHRISTINETMORGAN0002731611102310/14/2022 3,625.08Sep2022UBBillingCSGSYSTEMSINC0002750611102410/14/2022 250.00Peppin - 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10/28/2022 AmountDescriptionVendorNameVendorCheckCheckDate 406.13PaperSuppliesNETWORKSERVICESCOMPANY000143819128(A)10/21/2022 191.25Mileage - GFOAConferenceNICOLEKLEKNER000282519129(A)10/21/2022 39.509260WaterchutebracketNOVAKCOMPANIES000149009130(A)10/21/2022 69.60Rock - Watermain Break at EdgewaterCirPENTAGONMATERIALSINC000274269131(A)10/21/2022 400.00Oct2022ROWayAppPERRILL000065029132(A)10/21/2022 282.70StockbrakepadsWOLFMOTORCOINC000236759133(A)10/21/2022 11,086.50TRN20-000001 Fish Pt Road EngSvcsWSB & ASSOCIATESINC000237809134(A)10/21/2022 560.00MarkleyLakeMonitoring 1,004.50Kiehm170thStreetReplacementPlanRevi 172.00ReverePlaceWCAReview 12,823.00 65.00PestControl - FS #2XTREMEPESTSOLUTIONSINC000271169135(A)10/21/2022 140.00FallInvaders - WTP 90.00FallInvaders - City Hall 90.00FallInvaders - PD 90.00FallInvaders - FS #1 140.00FallInvaders - Maint Ctr 90.00FallInvaders - Lakefront Pavilion 705.00 441.218502FMBladeKitZIEGLERINC000265009136(A)10/21/2022 2,800.90Parts 8,736.48GeneratorServiceRepairs 11,978.59 1,159.29Sep2022AdminFeesDELTADENTAL000272139141(E)10/21/2022 1,650.91Oct2022PhoneBillsNUVERA000193049142(E)10/21/2022 195.002022DentalClaimsDELTADENTAL000272139143(E)10/24/2022 87,922.77Nov2022HealthInsurancePremiumsMNPEIP000279099144(E)10/24/2022 23,713.46Oct2022ElectricBillsMNVALLEYELECTRIC000137389145(E)10/24/2022 360.00Oct2022HSAAdminFeesALERUS000013759146(E)10/26/2022 78.62CoffeeARAMARKREFRESHMENTSERVICES0000177211111110/28/2022 2,500.0022-0059 4831 Bennett StreetSEBRANDLANDERSONHOMESMISC-CD11111210/28/2022 2,500.0022-0186 4812 Benett Street SE 2,500.0021-2828 4801 Benett Street SE 7,500.00 346.26MtceCenter1stAidSuppliesCINTAS0000350611111310/28/2022 2,500.0022-0107 3159 Sunshine CurveNWDRHORTONMISC-CD11111410/28/2022 2,500.0021-2780 3094 Sunflower Way NW 5,000.00 2,500.0021-1457 3315 Thornton DriveSWETERNITYHOMESMISC-CD11111510/28/2022 2,867.16WaterMetersFERGUSONWATERWORKS #25160000623111111610/28/2022 1,319.40WaterMeters 77.22WaterMeters 166.63WaterMeters 166.63WaterMeters 430.99WaterMeters 31,650.00AnnualAMRSSoftwareLicense 36,678.03 CHECK REGISTER FOR CITY OF PRIOR LAKE 9/11Page: 10/31/2022 09:24 AM User: jringberg DB: Prior Lake CHECK DATE FROM 10/08/2022 - 10/28/2022 AmountDescriptionVendorNameVendorCheckCheckDate 1,106.20Parts - Island ViewParkGAMETIME0000708211111710/28/2022 27.62AerosolGRAINGERINC0002303011111810/28/2022 390.00CutlerHammerDriveIDEALSERVICEINC0000923611111910/28/2022 1,350.00Parts 1,740.00 318.38PartsJOHNHENRYFOSTERMNINC0001049111112010/28/2022 2,500.0021-2694 17818 Meadows WaySEKEYLANDHOMESMISC-CD11112110/28/2022 7,860.00CurbStopReplacement - 46564 HarborVieKRUEGEREXCAVATING0001182811112210/28/2022 7,518.00FiveHawksPrairieLandRestorationLANDBRIDGEECOLOGICAL0002824711112310/28/2022 905.002016-2017 WC RetroCloseoutLEAGUEMNCITIESINSTRUS0001243511112410/28/2022 1,070.17ConcretePlantInspectionMNDEPTOFTRANSPORTATION0001382611112510/28/2022 529.86ConcretePlantInspections 1,600.03 984.98Sept2022RepairPartsNAPAAUTOPARTS0001406011112610/28/2022 17.85InterpreterServicesOFFICEOFMNITSERVICES0000439611112710/28/2022 2,500.0021-2618 17652 Jett CircleSEONETENTENHOMESMISC-CD11112810/28/2022 185.67785CouplersPOWERPLAN0002243511112910/28/2022 532.22785HydraulicFluid 717.89 5,219.90SportsCampInstructorREVOLUTIONARYSPORTSLLC0002785511113010/28/2022 1,960.252012LincolnMKZ #824612SCOTTCOUNTYATTORNEY0001923211113110/28/2022 11,373.73Oct2022DieselSTAPLESOILCO0002819311113210/28/2022 11,589.40Oct2022Unleaded 22,963.13 73.99WeedwhippartsTIM'S SMALL ENGINE REPAIRINC0002051011113310/28/2022 126.89518AirCylinderTOWMASTER0002065911113410/28/2022 166.24Arts & Culture CommitteeConsultantURBANEDRKCONSULTING0002797611113510/28/2022 4,918.50ToweringWoodsBOLTON & MENKINC000026379147(A)10/28/2022 306.93466BatteriesBOYERFORDTRUCKSINC000027109148(A)10/28/2022 1,379.94CarpetCleaning - LibraryCOMMERCIALSTEAMTEAM000037259149(A)10/28/2022 9.54ConcretesawFuelPumpCONCRETECUTTING & CORING000037859150(A)10/28/2022 7.18ConcretesawFuelPump 16.72 2,064.00PartsCORE & MAIN000273289151(A)10/28/2022 6,371.04Unit7114squadsuppliesEMERGENCYAUTOMOTIVETECHINC000054809152(A)10/28/2022 4,471.88TurfChemApplicationFARMERSMILL & ELEVATORINC000276329153(A)10/28/2022 4,968.75TurfChemApplication 4,511.63TurfChemApplication 13,952.26 1,140.00FirefighterGlovesFIREEQUIPMENTSPECIALTIESINC000064559154(A)10/28/2022 74.918743GeneratorDecalsGRAFIXSHOPPE000076159155(A)10/28/2022 2,441.00Ponds & Memorial ParkImprovementsHOISINGTONKOEGLERGROUPINC000087309156(A)10/28/2022 742.50SpringLakeParkMasterPlan 3,183.50 CHECK REGISTER FOR CITY OF PRIOR LAKE 10/11Page: 10/31/2022 09:24 AM User: jringberg DB: Prior Lake CHECK DATE FROM 10/08/2022 - 10/28/2022 AmountDescriptionVendorNameVendorCheckCheckDate 116.58CustomNamePlates, NametagsINNOVATIVEOFFICESOLUTIONSLLC000271499157(A)10/28/2022 114.57MiscOfficeSupplies 231.15 215.00Parts & LaborLOCKSAFE000108559158(A)10/28/2022 2,612.80784VactorPartsMACQUEENEQUIPMENTINC000130549159(A)10/28/2022 88.72504FuelFilterMTIDISTRIBUTINGINC000139519160(A)10/28/2022 28.57Aug2022RepairPartsO'REILLY AUTOPARTS000150889161(A)10/28/2022 264.19Sep2022RepairParts 292.76 4,295.86FS #1CamerasPRO-TEC DESIGNINC000274299162(A)10/28/2022 217.88FS #1 Key Card Repair 4,513.74 460,538.48 #6 Downtown SouthReconstructionRYANCONTRACTINGCO000281539163(A)10/28/2022 191.07PartsVIKINGELECTRICSUPPLY000226309164(A)10/28/2022 43.26Parts 198.84Parts 64.25Parts 43.06Parts 33.73Parts 249.30Parts 3.748743Generator 32.688743Generator 507.87GFI 1,367.80 381.25LeakLocatesWATERCONSERVATIONSVCSINC000232009165(A)10/28/2022 38.66FilterWOLFMOTORCOINC000236759166(A)10/28/2022 14.49Squadcabinfilters 53.15 116.25KiehmStorageWSB & ASSOCIATESINC000237809167(A)10/28/2022 38.75VillasatCrestWoods 503.75ReverePlace 1,496.00GeneralEngineeringSupport 743.00SpringLakeRidge 1,305.75TH13TrailPlanningAnalysis 167.002022Misc. Sidewalk Improvements 1,265.00CaribouCabin 8,644.00PikeLakeLandingPost-Construction Supp 2,627.25ChaseREGalleryAptTrafficStudy 3,086.75MeadowGreen 19,993.50 2,783.86PartsZIEGLERINC000265009168(A)10/28/2022 8,693.57Oct2022NaturalGasBillsCENTERPOINTENERGY000135709169(E)10/28/2022 53,903.24Oct2022ElectricBillsXCELENERGY000147209170(E)10/28/2022 1 TOTALS: 1,325,884.83Totalof200Checks: CHECK REGISTER FOR CITY OF PRIOR LAKE 11/11Page: 10/31/2022 09:24 AM User: jringberg DB: Prior Lake CHECK DATE FROM 10/08/2022 - 10/28/2022 AmountDescriptionVendorNameVendorCheckCheckDate 1,325,884.83Totalof200Disbursements: 0.00Less0VoidChecks: YTM @ Cost Cost Value Days to Maturity of Portfolio 0 1 Month 2.107 14,876,365 2 31.57% 1 3 Months 2.291 1,217,392 55 2.58% 3 6 Months 2.875 490,000 120 1.04% 6 9 Months 2.555 694,135 214 1.47% 9 12 Months 1.784 4,034,555 321 8.55% 1 2 Years 1.943 6,362,211 576 13.36% 2 3 Years 1.337 6,159,516 905 12.91% 3 4 Years 0.971 4,969,423 1,259 10.25% 4 5 Years 2.333 7,365,167 1,630 15.95% 5 10 Years 2.927 1,046,476 1,887 2.32% Total Average 1.914 47,215,240 661 100.00% CITY OF PRIOR LAKE,MINNESOTA Investment Portfolio Diversification,by Maturity Range September 30,2022 Description City of Prior Lake Quarterly Investment Report YTM @ Cost Cost Value Days to Maturity of Portfolio Cash 1,188,423 1 2.52% Certificate of Deposit 2.151 14,132,029 742 30.03% FFCB Bond 0.892 2,070,383 1,275 4.35% FHLB Bond 1.103 2,659,017 1,406 5.66% FHLMC Bond 0.500 200,000 801 0.42% LGIP 2.244 12,752,942 1 27.06% Municipal Bond 1.849 13,478,903 962 28.26% Treasury Note 2.193 733,543 1,613 1.70% Total Average 1.914 47,215,240 661 100.00% CITY OF PRIOR LAKE,MINNESOTA Investment Portfolio Diversification,by Security Type September 30,2022 Description City of Prior Lake Quarterly Investment Report Change from one 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 year prior Market Value 14,412,610 13,628,317 11,451,561 13,722,257 13,941,365 (471,245) 111110 0.02% 0.03% 0.07% 0.90% 2.05%2.03% Fixed Income Assets 29,577,498 30,895,588 31,360,176 32,321,683 33,273,875 3,696,377 29,891,353 30,920,003 30,387,293 30,910,391 31,173,111 1,281,758 951 970 887 897 938 (13) 800 895 822 838 831 31 1.66% 1.58% 1.57% 1.68% 1.85%0.19% Total Portfolio Value 43,990,108 44,523,905 42,811,737 46,043,940 47,215,240 3,225,132 44,303,963 44,548,320 41,838,854 44,632,648 45,114,476 810,513 132,849 104,243 137,024 105,209 145,337 12,488 313,855 24,415 972,783 1,411,292 2,100,764 (2,414,619) 638 671 648 629 661 23 536 619 601 587 586 50 1.12% 1.11% 1.17% 1.45% 1.91% 0.78% BENCHMARK 90 Day T Bill 0.04% 0.06% 0.52% 1.72% 3.33% 3.29% 0.05% 0.19% 1.06%2.51% 3.92% 3.87% 0.09% 0.39% 1.63%2.80% 4.05% 3.96% Weighted Average Yield to Maturity @ Cost 6 Month Treasury 1 Year Treasury Cost Value Market Value Accrued Interest Unrealized Gain Loss WAM 1)in Days WAM Callable 1)in Days Weighted Average Yield to Maturity @ Cost CITY OF PRIOR LAKE,MINNESOTA Quarterly Investment Report September 30,2022 Local Government Investment Pools Money Market Quarterly WAM 1)in Days Weighted Average Yield to Maturity Cost Value Market Value WAM 1)in Days WAM Callable 1)in Days City of Prior Lake Quarterly Investment Report City of Prior Lake | 4646 Dakota Street SE | Prior Lake MN 55372 CITY COUNCIL AGENDA REPORT ITEM: 5C MEETING DATE: November 07, 2022 PREPARED BY: Jason Etter, Senior Accountant Nicole Klekner, Assistant Finance Director PRESENTED BY: Cathy Erickson, Finance Director AGENDA ITEM: Approval of 3rd Quarter Financial Report GOAL AREA OBJECTIVE: High-Value City Services 1. Establish financial stability for all funds. RECOMMENDED ACTION: Approve the 2022 3rd Quarter Financial Report as presented. BACKGROUND: Introduction: Staff has prepared preliminary summary financial reports (attached) as of September 30, 2022, for the following funds: • General Fund • Debt Service Funds • Cable Fund • Capital Park Fund • Revolving Equipment Fund • Facilities Management Fund • Permanent Improvement Revolving Fund • Water Fund • Sewer Fund • Water Quality Fund • Economic Development Authority Special Revenue Fund The reports reflect revenue and expenditure activity during the third quarter 2022. The reports are preliminary, unaudited and may change. The attached memorandum provides a summary of the significant issues. As requested by the City Council, comparative information has been included for the same period of the prior year. ALTERNATIVES: 1. Motion and second as part of the consent agenda to approve the 2022 3rd Quarter Financial Report as presented. 2. Motion and second to remove the Financial Report from the consent agenda for additional discussion. ATTACHMENTS: Item 5C Page | 2 1.2022 3rd Q Memorandum (attach 1) 2.2022 3rd Q Financial Report (attach 2) MEMORANDUM DATE: November 7, 2022 TO: Prior Lake City Council FROM: Cathy Erickson, Finance Director RE: Financial Report dated 09/30/2022 The financial reports presented as part of this agenda item reflect activity during the third quarter of 2022. The significant issues identified at this time are summarized below. General Fund Projection Staff has prepared a financial projection for the General Fund. Our assumptions and projections are based on the information we have today and may change as we get updated information. The estimated reduction in (use of) General Fund reserves is $546k. Shown below is a summary of the components of the estimated net decrease in Fund balance. The drivers of the net reduction in fund balance are summarized below: Estimated Revenue Shortfall - $618k • Building permits/fees - $300k unfavorable to budget: Building permits/fees are at 60% of budget through Q3. Staff estimates that total year revenue for building permits/fees will be about $300k unfavorable to budget based on 2022 projected building permits/fees for 92 units. Single family residential building is down, but the city has three multi-family residential building projects in the development phase (Preserve at Jeffers Pond/197 units, Prior Lake Lofts/98 units and Rachel Development /140units). However, the multifamily residential projects are estimated to finalize in 2023 not 2022. • Intergovernmental revenue - $136k favorable to budget: This is due to state road aid above budget by $80k (city budget based on prior year actual) and grant revenue not budgeted of $48k (builder inspector and election grants). General Fund Projection - 2022 2022 Projection Total Revenues 15,918,000 Total Expenditures 16,554,000 Net Change-Reduction in Fund Balance (636,000) 2022 Year End Estimated Fund Balance Reserve % 52.1% Components of Estimated Reduction in Fund Balance: Revenue below budget (618,000) Expenditures less than budget 310,000 Planned Use of Reserves (328,000) Net Change -Reduction in Fund Balance (636,000) Page 2 • Unrealized loss on investments - $515k unfavorable to budget: As rates increase, the market value of the existing securities will decrease. As of September 30, 2022, the cost value of the portfolio is more than the market value of the investments by $2.1M. The year- to-date change in the fair value of the securities of $515k is adjusted against interest earnings in each of the funds. This is a paper loss for the third quarter of 2022; no actual gain/loss is realized because the city holds the securities until maturity • Charges for Services - $75k favorable to budget: This is due to temporary lease extensions requested by Sprint and AT&T totaling $47k and recreation program revenue above budget by $28k. Estimated Expenditures less than budget - $310k • Expenditures are projected to be 98% of budget due to open positions across departments (City clerk, Communications, IT, Comm. Dev., Police and Streets). Currently, all positions are filled. Planned Use of Reserves - $329k • IT department professional services of $6,000 for the regular maintenance and updates of the council chambers equipment to televise the council meetings. • Emergency Management department expenditures of $13,000 for emergency siren maintenance costs and training. • Police department expenditures of $115,000. There were many supplies and equipment that the police department ordered in 2021 but have not received due to global supply chain issues. • Central Garage department: Carryforward the 2021 fuel budget savings of $43,800 to be used a funding source for the city’s rising fuel costs. • Streets and Parks department: Staff was not able to complete sidewalk maintenance at the police department and on Willow Lane. A budget amendment for Streets of $79,390 and for Parks of $17,610 is needed to carryforward the expenditures to 2022. • Community Survey and Strategic Plan of $54,000 General Fund Activity through September 30th Preliminary financial information reflects expenditures exceeding revenues by $777,447. This is primarily due to building permits/fees at 60% of budget and there is a $515k decrease in the fair value of the securities. This is a paper loss; no actual loss is realized because the city holds the securities until maturity. Additionally, expenditures are at 67% of budget due to open positions across departments (City clerk, Communications, IT, Comm. Dev., Police and Streets). See Attachment 2 for the 3rd Quarter 2022 Financial Report. General Fund Revenues Property taxes are received in June, December, and January. Revenue from taxes is recognized on a cash basis for the General Fund. Therefore, tax revenue collected in June are reflected in this financial report. Building permits (single family and townhomes) were budgeted at 150 for 2022. Revenues associated with building permits and plan check fees are approximately $160k lower than year to date through 3rd quarter 2021 and 60% of the annual budget. The following table provides a breakdown of the activity year to date through September for each year shown. Page 3 Year Single Family Townhomes Commercial / Industrial Other Permits Total Change from PY 2022 74 4 1 1870 1949 (13%) 2021 102 0 4 2150 2256 (2%) 2020 118 4 3 2200 2325 29% 2019 105 49 2 1640 1796 (8%) 2018 85 57 1 1810 1953 66% The first half payments were received for Municipal State Aid and the township fire agreements. SMSC Police Aid of $750k has been received for 2022 which equals 75% of the $1,000,000 budget for this line item. First and second quarter franchise fees are included in this report. Third quarter franchise fees will be collected in October and reported in the fourth quarter report. Project engineering fees are currently at 82% of its annual budget. The 2022 project admin/engr. fee is the cost for internal work done on city construction projections. City staff time on the projects is charged over the life of the project, which is typically three years and includes planning, construction, and project closeout. Recreation revenues (including Park admission fees and facility rental) are higher than the 3rd quarter of 2021 primarily due to the increase in facility rentals and Recreation program fees. Interest earnings are at 109% of its budget. The report also reflects a $515k decrease in the fair value of the securities. This is a paper loss; no actual loss is realized because the city holds the securities until maturity. The miscellaneous revenue category includes planned developer agreement fee revenue which is collected to cover the city’s internal cost to administer the development projects. Developer agreement fee revenue is unfavorable to budget by $70k as several development projects have shifted from 2022 to 2023. General Fund Expenditures/Transfers General Fund expenditures for 2022 represents 67% of the $16,864,687 amended budget due to open positions across departments. Currently there are only two Police positions open. The level of expenditures (as a percent of budget) is consistent with the same period in 2021. Key points related to expenditures for the 3rd quarter of 2022 are: • Admin is higher than the same period in 2021 due to the community survey of $24k and the addition of an admin assistant. • Police and Fire personal services now include additional staff as compared to this same period last year. • Streets general maintenance agreements are favorable by $190k compared to this same time last year. • Parks maintenance agreements are higher than the same period last year by $87k. At this point in the year, there are no other significant variances to report. Debt Service Funds Property taxes and special assessments are received in June, December, and January (final tax settlement). Prepayments have been received for special assessments. Scheduled bond payments (interest) were made in June. Other bond payments (principal and interest) will be due mid-December. Page 4 Bond proceeds for the Downtown South Street project of $ 2,148,360 were received in August and deposited in the Construction Fund. Cable Fund First and second quarter franchise fees are included in this report. Third quarter franchise fees will be collected in October and reported in the fourth quarter report. Capital Park Fund Park Dedication Fees are less than compared to the same time in 2021 by $356k. Contract payments of $13k have been incurred in 2022 compared to $197k in 2021. Revolving Equipment Fund Property taxes, the primary funding source, are received in June, December, and January (final tax settlement). Vehicle and equipment purchases were approved at council meetings earlier in the year, but most of the equipment is purchased and received in the 2nd and 3rd quarter. Revolving Park Equipment Fund The planned infrastructure improvements and the Lakefront renovation study will be completed in the 3rd and 4th quarter. $88k has been spent so far in 2022. Facilities Management Fund The planned Police, Fire, Central Garage and Club Prior facility work will be completed in the 3rd and 4th quarter. $138k has been spent so far in 2022, $127k of which is for the fire station #1 remodel. The fire station #1 remodel work will be supported by $400k of ARPA grant revenue funding. Permanent Improvement Revolving Fund There are no approved street overlay projects scheduled for 2022. The Council approved the 2022 Fee Schedule increase in gas and electric franchise fees dedicated to the city’s pavement management plan. The first and second quarter collections are $504k. Third quarter collections will be received in October. Water Fund The financial report for the Water Fund reflects four billing cycles. Operating revenues are at 61% of budget. This is consistent with prior years. Consumption is consistent with 2021 and operating revenues are behind the prior year by $188k. Summer water and sewer consumption from May 21 through July 20 were billed on August 1 and reflected in this report. Operating expenditures and transfers are at 76% of budget which is slightly higher than prior years due to the city experiencing several watermain breaks, resulting in expenditures higher than budget by $149k for the water distribution maintenance line item. Sewer Fund The financial report for the Sewer Fund reflects four billing cycles. Operating revenues are at 49% of budget. This is a slight decrease from prior years. The August billing cycle includes the summer sewer rate break. The rate break will also be reflected on the October 1 billing which is recorded in the 4th quarter. Consumption decreased slightly from 2021 (approximately 3%) and operating revenues are behind the prior year by $23k. Operating expenditures and transfers for 2022 are at 63% of the approved budget which is consistent with prior years. Page 5 Water Quality Fund The financial report for the Water Quality Fund reflects four billing cycles. Water Quality revenues are based on flat rates per billing cycle. Operating revenues are at 57% of budget. This is consistent with prior years. Operational expenditures and transfers are at 59% of budget which is consistent with prior years. Economic Development Authority Special Revenue Fund Property taxes are received in June, December, and January (final tax settlement). Facility rental payments have been received from Sebastian Automotive. Personnel, commissioner per diems, and professional services expenditures comprise the expenditures and are at 18% of budget as of the end of the third quarter. The budget includes $385k for property acquisition that will not occur in 2022, and the spending will shift to 2023. City of Prior Lake Treasurers Report September 2022 Fund 9/1/2022 9/30/2022 Fund Type & Name No. Balance Receipts Disbursements Balance Business-Type Funds Water Fund 601 6,391,709.96$ 162,084.01$ 528,141.99$ 6,025,651.98$ Sewer Fund 604 3,898,319.87 78,982.15 314,072.44 3,663,229.58 Water Quality Fund 602 2,347,240.04 19,652.88 149,356.27 2,217,536.65 Total Business-Type Funds 12,637,269.87$ 260,719.04$ 991,570.70$ 11,906,418.21$ Governmental-Type Funds General Fund 101 10,338,507.68$ 846,088.78$ 1,456,510.94$ 9,728,085.52$ Special Revenue Funds Cable Franchise Fund 210 80,304.11$ 104.65$ -$ 80,408.76$ Capital Park Fund 225 1,670,362.13 3,878.75 103.00 1,674,137.88 Police Forfeiture Fund 235 149,319.39 691.76 2,666.25 147,344.90 EDA Special Revenue 240 180,997.31 2,272.21 11,756.14 171,513.38 Econ Dev Federal Revolving Loan Fund 250 134,882.02 175.77 - 135,057.79 Econ Dev MN Revolving Loan Fund 255 - - - - Developer Agreement Fund 260 1,417,235.19 - 22,549.90 1,394,685.29 Federal ARPA Fiscal Recovery Fund 265 2,987,194.29 5,408.49 - 2,992,602.78 Total Special Revenue Funds 6,620,294.44$ 12,531.63$ 37,075.29$ 6,595,750.78$ Capital Project Funds Tax Increment 402 -$ -$ -$ -$ TIF #1-3 413 130,749.72 170.38 - 130,920.10 TIF #3-1 414 402,753.94 - - 402,753.94 TIF #5-1 416 11,226.85 14.63 - 11,241.48 TIF #6-1 417 489,028.76 637.26 - 489,666.02 TIF #1-4 418 - - - - TIF #1-5 419 41,157.31 53.63 - 41,210.94 Revolving Equipment Fund 410 708,551.56 64,489.15 80,745.10 692,295.61 Revolving Park Equipment Fund 430 1,346,790.12 1,706.49 37,244.13 1,311,252.48 Facilities Management Fund 440 1,365,441.82 7,937.34 - 1,373,379.16 Permanent Impr Revolving Fund 450 890,712.61 1,654.54 - 892,367.15 Construction Fund 501 418,333.29 2,061,959.62 556,435.20 1,923,857.71 Trunk Reserve Fund 502 5,545,473.31 31,574.93 - 5,577,048.24 Street Oversize Fund 503 1,433,564.44 1,868.10 - 1,435,432.54 Water Storage Fund 505 - - - - Total Capital Project Funds 12,783,783.73$ 2,172,066.07$ 674,424.43$ 14,281,425.37$ Debt Service Funds 314-351 & 549-573 $ 4,095,531.92 17,834.64$ -$ 4,113,366.56$ Agency Fund 801 720,387.50$ 46,625.00$ 102,350.00$ 664,662.50$ Total Governmental Type Funds 34,558,505.27$ 3,095,146.12$ 2,270,360.66$ 35,383,290.73$ Internal Service Funds 7xx 674,119.38$ 4,318.38$ -$ 678,437.76$ Total All Funds 47,869,894.52$ 3,360,183.54$ 3,261,931.36$ 47,968,146.70$ Investment Pool & Ratio as of 9/30/2022 98.19% 47,099,055.45$ This report does not reflect financial obligations from contracts, agreements, purchases, services received, etc. TREASURER’S REPORT FUND DESCRIPTIONS General Fund - Represents the resources to support general operating budget expenditures of the City. The year- end fund balance represents dollars that have accumulated over a period of time. The City Council has designated a minimum of 45% of the current operating budget, for working capital to finance city operations. Water Fund - For the collection of water billing utility revenue. This enterprise fund balance is allocated for the operational costs of the Water departments and normally reserved for large capital municipal system expenses. Sewer Fund - For the collection of sewer billing utility revenue. This enterprise fund balance is allocated for the operational costs of the Sewer department and normally reserved for large capital municipal system expenses. Water Quality Fund - An enterprise account funded by the storm water charge that is generated on the bi-monthly water and sewer utility bills. The funds in the account are dedicated to finance water quality improvements including departmental administration, storm water maintenance operations and improvement projects related to water quality. Cable Franchise Fund - Acts as a clearing house for funds received from the cable franchise company as specified by ordinance. Capital Park Fund - Dedicated funds received from developers in accordance with the City’s Park Dedication requirement when land is platted. Funds are collected for the purpose of developing the City’s neighborhood park and trail system. These dollars are programmed throughout the course of the City’s Capital Improvement Program. Police Forfeiture Fund – Special revenue fund created to track criminal and DWI forfeiture revenues and expenditures. ED Special Revenue – Reserved and expended at the direction of the Prior Lake Economic Development Authority for specific economic development activity as allowed by MN Statute. The purpose is to provide economic incentives for new business expansion within the community. ED Fed/MN Loan Funds - Accounts for the proceeds of economic development grants received either from the federal government or the State of Minnesota to provide seed money for a revolving loan account. This provides economic incentive for new business expansion within the community. DAG Special Revenue Fund - Special revenue fund related to costs the City incurs in connection with a subdivision. Fees are paid to the City by the developer when the Development Contract and Final Plat are approved by City Council. Revenues are used to pay for legal expenses incurred with review and approval of the plat and inspection services on developer installed-utilities for newly approved subdivisions within Prior Lake. Federal ARPA Fiscal Recovery Fund – Special revenue fund created to track American Rescue Plan Act funds received by the City. Water Revenue Bond Fund – PW Bldg - Debt service fund to pay bonds issued to construct the public works maintenance building. The capital facility charge generated on the utility bill provides the funding for the bond payments which occur semi-annually. Funds are transferred from Sewer and Water Fund. Water Revenue Bond Fund – WT Plant - Debt service fund to pay bonds issued to construct the water treatment plant. Revenue from the utility bills provides the funding for the bond payments which occur semi-annually. Funds are transferred from Sewer and Water Fund. Tax Increment Funds - Represents an accumulation of funds such as bond proceeds and project administration fees charged to companies requesting project write-downs in the form of tax increment financing for new and/or redevelopment. The TIF district property taxes are then deposited in a number of tax increment funds established to track their respective revenue. Revolving Equipment Fund - A regular replacement schedule for equipment needs of the City in excess of $5,000 has been adopted. Periodic fund transfers are appropriated to provide a funding source for the acquisition and purchase of new and replacement vehicles and equipment. Revolving Park Equipment Fund – Consists of funds reserved for the replacement of park equipment. Facilities Management Fund – Established in conjunction with the Facilities Management Plan (FMP). The FMP provides a schedule of major repairs, replacements and upgrades to all of the City facilities. Permanent Improvement Revolving Fund – Consists of funds available for annual street mill and overlay projects with any remaining funds to be used to provide upfront funding for future improvements. Construction Fund - Represent unexpended bond proceeds that are reserved to pay for improvement projects approved by the City Council on an annual basis. These dollars are necessary to complete outstanding construction contracts and related engineering and professional services. Street Oversize Fund - Consists of dedicated revenue generated by fees associated with new development and new construction building permits for the funding of pedestrian related improvements i.e., bikeways, sidewalks, trails plus right of way acquisition along collector streets and occasional collector street links. Trunk Reserve Fund - Consists of dedicated revenue generated from utility connection permits and acreage fees assessed at time of sewer and water installation for the recovering of trunk oversizing costs and central municipal system improvements i.e., wells lift stations, force mains, etc. These dollars are programmed throughout the course of the City’s capital improvement plan. Water Storage Fund - Accounts for the water tower fee that is charged and collected on building permits. This fund balance is 100% reserved for the construction of elevated and ground water storage facilities. Debt Service Funds - Represents prepayments of special assessments, property tax collections and special levies needed to pay the outstanding bonded indebtedness of the City. This fund balance is 100% reserved for the payment of bond principal and interest. Agency Fund - Accounts for the residential building permit deposit that is refunded to the building contractor upon final inspection. This provides financial assurance that the property site will be adequately cleaned up and debris free before an occupancy permit is granted. Severance Compensation Fund – Internal Service Fund established to partially fund the City’s compensated absence liability associated with the accrued vacation and sick leave for employees upon termination as recommended by the State Auditor’s Office. Insurance Fund – Internal Service Fund established to track revenues and expenditures related to insurance funds. City of Prior Lake Treasurers Report September 2022 Fund Type & Name Fund Balance Classification Constraints Business-Type Funds Water Fund Unrestricted Identified on utility bill for this purpose Sewer Fund Unrestricted Identified on utility bill for this purpose Water Quality Fund Unrestricted Identified on utility bill for this purpose Governmental-Type Funds General Fund Unassigned Cash flow, emergencies, one-time opportunities Special Revenue Funds Cable Franchise Fund Assigned for communications Statutory obligation to use for PEG access Capital Park Fund Assigned for capital improvements Contractually obligated; park dedication fees EDA Special Revenue Assigned for development Economic Development Econ Dev Federal Revolving Loan Fund Restricted for economic development Economic Development Econ Dev MN Revolving Loan Fund Restricted for economic development Economic Development Developer Agreement Fund Assigned for development Contractually obligated; Federal ARPA Recovery Funds Restricted for equipment and improvements Contractually obligated Capital Project Funds Tax Increment Restricted for tax increment Contractually obligated by tax increment agreements TIF #1-3 Restricted for tax increment Contractually obligated by tax increment agreements TIF #1-4 Restricted for tax increment Contractually obligated by tax increment agreements TIF #3-1 Restricted for tax increment Contractually obligated by tax increment agreements TIF #4-1 Restricted for tax increment Contractually obligated by tax increment agreements TIF #5-1 Restricted for tax increment Contractually obligated by tax increment agreements TIF #6-1 Restricted for tax increment Contractually obligated by tax increment agreements Revolving Equipment Fund Assigned for capital improvements Identified for equipment replacement Revolving Park Equipment Fund Assigned for capital improvements Identified for park equipment replacement Facilities Management Fund Assigned for capital improvements Identified for funding Facilities Management Plan Permanent Improvement Revolving Fund Assigned for capital improvements Identified for funding street improvement projects Construction Fund Restricted for capital improvements Construction projects in progress Trunk Reserve Fund Assigned for capital improvements Contractually obligated by developer agreements Street Oversize Fund Assigned for capital improvements Contractually obligated by developer agreements Water Storage Fund Assigned for capital improvements Contractually obligated by developer agreements Debt Service Funds Restricted for Debt Service Reserved for contractually obligated debt service Agency Fund N/A Escrows to be reimbursed to depositors Internal Service Funds Unrestricted Identified as payment for severance compensation and insurance Fuel Consortium Program - Overview Attachment A The current Contract with Mansfield Oil is set to expire January 31, 2023. Due to market conditions and the solicitation process, the procurement team is exploring pricing options for a new program that will begin February 1, 2023. In order to achieve this, participants must submit their quantities for the Fixed Price Fuel Program no later than November 11, 2022. Fixed Price Fuel Program – Agencies participating in the Fixed Price Fuel Program are required to take 100% of its monthly quantity committed and the Contractor is required to provide 100% of the monthly quantities contracted. The program will be for 12 months, from February 1, 2023 through January 31, 2024. If the original purchaser is unable to take all of the monthly committed gallons, the Contractor will be responsible for contacting other location participating the Fixed Price Fuel Contract to determine if they are able to take additional gallons. If the Contractor is able to ship the unused gallons from the original participating purchaser to another participating agency, there will be no cost to the original participating agency. If the Spot Price is less than the Fixed Price, participants are not required to take more than the monthly amount they committed to. If the Contractor is unable to ship the unused gallons from the original participating purchaser to another participating agency, they may sell the unused gallons on the open market and either debit or credit the difference in price back to the original participating purchaser based on the open market sell price. If the Contractor is unable to provide all of the monthly committed gallons to a participating member by the due date and time, the participating member may purchase the product on the open market and charge the Contractor for any actual additional costs incurred. Spot Price Program – In addition to the Fixed Price Program, we will include a Spot Price Program for Participants to handle extra fuel needs over and above the committed quantities in the Fixed Price Program. Only Participants in the Fixed Price Program may use the Spot Prices offered by the Contractor. If the Contractor is unable to provide the order quantity to a State agency or CPV member by the required due date and time, the State agency or CPV member may purchase the product on the open market and charge the Contractor for any actual additional costs incurred. The signature below and/or submission of the Order Form (Attachment B) certify that your Entity agrees to all terms, conditions, and prices of any Contract agreement entered into on its behalf by the State of Minnesota, which includes, by is not limited to, taking 100% of the monthly fuel quantities submitted for the Fixed Price Program on the Fuel Order Form (Attachment B). There is no requirement to take any product(s) using the Spot Price Program. Agency Name: _____________________________________________________________________________________ Address: _________________________________________________________________________________________ Contact Person: _____________________________________ Title: _________________________________________ Phone No.: ______________________ Fax: _____________________ Email: _________________________________ Authorized Signature: ______________________________________________________________________________ City of Prior Lake, MN 4646 Dakota St SE, Prior Lake, MN 55372 Christine Watson Public Works Coordinator 952-447-9855 N/A cwatson@PriorLakeMN.gov 2020-2021 Fuel Consortium Purchase Program Page 1 of 2 Return Excel Version of Order Form to jack.moore@state.mn.us *Blank cells will be considered '0' gallons for that specific type and month Due Date: November 11, 2022 *500 Gallon minimum delivery QTY NOTE: 20% biodiesel mandated April through September, otherwise 5% biodiesel. February (2023)3000 2000 March 3000 2000 April 3000 2000 May 3000 2000 June 3000 2000 July 3000 2000 August 3000 2000 September 3000 2000 October 3000 2000 November 3000 2000 December 3000 2000 January (2024)3000 2000 Totals 36000 0 0 0 12000 12000 0 Fuel Type Gasoline E-85 Diesel 10000 Estimated Annual Usage In Gallons) Spot Price Program - For Informational Purposes Only Gasoline E-85 Date: November 7, 2022 Agency: City of Prior Lake, MN Name: Christine Watson Provide an estimate of the number of gallons you might purchase from the contract using the Spot Price Program. There is no commitment implied by providing the estimated usage - this is for informational purposes only. *500 gallon minimum per delivery. 5000 B20 B5 WinterB10B15 Premium Diesel Fixed Price Program PLEASE NOTE: Agencies should consider the amount of its annual usage it wants to commit to this program. It is not recommended that you commit all of your fuel needs to the Fixed Price Program. The Spot Price Program may be used for additional fuel requirements. Participants must have a capacity for taking at least 500 gallons per delivery. Participation in the Fixed Fuel Program requires the State agency or CPV member located in the nine (9) county metropolitan area to take 100% of the quantity pledged on this Fuel Order Form. Fixed Price Program Commitment Quantities by Gallon (by Month, by Fuel Type) Submission of this form certifies that your Entity agrees to all terms, conditions, and prices of any Contract agreement entered into on its behalf by the State of Minnesota which includes, but is not limited to, taking 100% of the monthly fuel quantities submitted for the Fixed Price Program on the Fuel Order Form. There is no requirement to take any product using the Spot Price Program. C A R R I A G E H I L L S P K W Y N E C O A C H M A N C T N E COACH M A N L N N E CARRIAGECTNEC H ESTN U TLN N ECARRIAGELNNESURREYLNNELANDAU LN NE F O X H U N T C T N E TROTTERSTRLNECANTERLNNEScott County GIS 16 27 12 83 42 44 17 82 18 78 14 21 This product is for informational purposes and is not suitable for legal, engineering, or surveying purposes. This product has been produced by the City of Prior Lake for the sole purpose of geographic reference. No warranty is made by the City of Prior Lake regarding specific accuracy or completeness.0 0.04 0.08 0.1 0. 2 Miles Carriage Hills 5th Addition Council Item Location Map 11/07/ 150 South Fifth Street, Suite 3300, Minneapolis, MN 55402 Main: (612) 851-5900 / Direct: (612) 851-4964 / Email: tomdal@northlandsecurities.com Member FINRA and SIPC | Registered with SEC and MSRB MEMORANDUM To: Casey McCabe, Community Development Director From: Tammy Omdal, Managing Director Date: October 26, 2022 Re: Proposed Tax Increment Financing District No. 1-6 (Prior Lake Lofts) The city received an application from Prior Lake B Squared Ventures, LLC (the “Developer”) for public financial assistance to assist with the construction by the Developer of an approximate 98-unit apartment building, a street front restaurant of approximately 2,600 square feet, a rooftop deck for restaurant customers, a separate rooftop deck for tenants, with 134 in-building parking stalls and 28 surface stalls (the “Project”). The Project is to be located on an approximate one-acre site located on Dakota Street SE adjacent to the Prior Lake City Hall (the “Property”). Subject to approval of the request for public financial assistance, the Developer plans to commence construction of the Project by June 1, 2023, and barring unavoidable delays the Project will be substantially completed by December 31, 2024. The cost for the Project is estimated at approximately $32 million (see Exhibit A), which is based on the Developer’s pro forma as of August 2022. The Developer’s request for public financial assistance is to assist with the extraordinary costs of redevelopment. The Developer has represented that it will not undertake the Project as proposed without public financial assistance. It is Northland’s opinion that the Project as proposed, which includes in-building parking, is unlikely to occur but for the proposed public financial assistance, inclusive of the tax increment financing (TIF). Without public financial assistance, the Project is not expected to achieve the level of debt service coverage and returns needed to secure the necessary private financing and equity. Without the enclosed parking, the Project as proposed would not be feasible and the density (number of housing units) would not be possible. Northland finds that it is reasonable for the city to consider public financial assistance for the Project as necessary so that development by private enterprise will occur on the Property. The Project, inclusive of the higher level of density, is possible only with the construction of the enclosed parking, which will not occur solely through private investment within the reasonably foreseeable future. Public Financial Assistance Due to the extraordinary costs associated with acquisition and development of the Project, the Developer is seeking public financial assistance from the city in the form pay-go tax increment financing assistance. The tax increment revenue is proposed to come from the establishment of a new Tax Increment Financing (Redevelopment) District No. 1-6 (the “TIF District”) within the modified Development District No. 1. Prior Lake TIF October 26, 2022 Page 2 Based on Northland’s analysis of the financial information provided by the Developer, the following terms for assistance to the Developer for the Project are proposed: TIF “pay-go” revenue note (the “TIF Note”) to be issued to reimburse of $3,000,000 of qualified costs for the Project plus interest at rate of 4.5% from the date of issue per annum to the earlier of maturity or prepayment. Project costs to be reimbursed include $1,176,000 for land acquisition and $1,824,000 for site improvements. Total estimated payments to the Developer over a period not to exceed 15 years is estimated to be approximately $4.4 million, including principal and interest payments. Proposed terms for assistance to the Developer will be subject to a Development Agreement the “Agreement”) by and between the Developer and the city. The Agreement may be approved by the city council at any date following the approval of the resolution establishing the TIF District. The Agreement must be executed in advance of the Developer incurring project costs to be reimbursed from tax increments. TIF Note will be payable solely from net available semi-annual tax increments. TIF Note will not be a general obligation of the city. Net available semi-annual tax increments shall be based on 90% of the tax increment collected from the Project within the TIF District. TIF Note shall bear simple, non-compounding interest from the date that the city has determined paid invoices, as paid by the Developer, in compliance with the terms to be included in the Agreement. Property within the TIF District will not be subject to a minimum assessment agreement. The Developer will assume the risk that future tax increments will be sufficient to repay the TIF Note. City will retain 10% of the increment collected to repay itself for qualified costs of the Project, if any, and to cover administrative costs. After the termination date of the TIF Note, the city may retain 100% of the increment collected from the TIF District for the remaining duration of the TIF District, pursuant to the planning document for the TIF District and the TIF Act (TIF Act means Minnesota Statutes, Sections 469.174 through 469.1794, as amended). The draft Tax Increment Financing Plan for the TIF District (the “TIF Plan”) provides for a maximum 26 years of tax increment collection. The TIF Act provides for 25 years of tax increment collection after the first year of collection for a total of 26 years. Exhibit B provides a summary of the estimated tax increment cash flow from the TIF District available to reimburse the Developer for eligible costs for the Project over a 15-year term. Exhibit C provides a preliminary estimated sources and uses for the TIF, based on 15-year duration and 26-year duration. Review of Application for Assistance Northland conducted a review and analysis of the pro forma submitted by the Developer, along with other information provided by the city and the Developer. Northland reviewed project cost estimates to ensure all anticipated sources and uses for the Project were properly included. Exhibit B provides information on the sources and uses of funds for the Prior Lake TIF October 26, 2022 Page 3 Project. Based on a review of the pro forma for the Project and under current market conditions, we find that the Project, as proposed, may not reasonably be expected to occur solely through private investment within the reasonably near future. Due to the costs associated with redevelopment of the proposed site and site improvement costs, the Project as proposed is feasible only through assistance, in part, from TIF. Exhibit C provides a summary pro forma for the Project, as prepared by Northland. The conclusion on the need for the public financial assistance is supported by the following: The Developer plans for the approximate $32 million of project cost for the Project to be funded from a combination of debt (80%), equity (20%). The present value of the estimated future tax increment revenue from the TIF Note payments to the Developer reduces the effective cost of the Project by an additional $3.0 million, or nearly 10% of the total project costs. Based on estimated net operating income, the effective return without the public financial assistance is not at a level the Project would proceed. The total estimated cost per housing unit for the Project is $324,637 for the construction of 98 luxury apartment) units, including the cost of the parking. The Project will include 16 studio units, 31 one-bedroom units, 9 one-bedroom plus den units, 39 two-bedroom units, and 3 two- bedroom plus den units. Based on market conditions and Northland's understanding of the Project and given the location, we find the estimated cost per unit to be reasonable. The estimated average gross monthly rent for the housing units, in the first stabilized year of the Project, is estimated at approximately $2,028 per month. The annual total gross rental income for the Project is estimated at $2,384,700 in the first year of stabilized occupancy, before adjusting for estimated apartment vacancy and rental loss of 5%. The estimated annual income from rental of the commercial-retail space is approximately 100,000. The total annual expense, including operating and non-operating costs, as well as management fees, is estimated at $6,654 per unit. This average estimated cost per unit is reasonable. The estimated average debt service coverage with tax increment financing is estimated to reach 1.21X in year six of stabilized operations, and without financial assistance is estimated to be 1.07X. The coverage for the mortgage without the tax increment, prior to year thirteen of the district, is not at a level that we would expect the Project to proceed. The financing of this type of project would be expected to be at a minimum of 1.2X coverage. The cash-on-cash return is projected to reach an estimated 9.4% by year ten of stabilized operations with financial assistance and 4.6% without assistance. Prior Lake TIF October 26, 2022 Page 4 Total % of Total Per Unit Sources of Funds First Mortgage $22,314,401 70.1%$227,698 Second Mortgage (TIF Note)$3,000,000 9.4%$30,612 Equity $6,500,000 20.4%$66,327 Total Sources of Funds $31,814,401 100.0%$324,637 Uses of Funds Land Acquisition $1,176,000 3.70%$12,000 Construction Costs $25,337,331 79.64%$258,544 Construction Loan Costs $541,434 1.70%$5,525 Cash Accounts $580,950 1.83%$5,928 Professional Services $1,381,747 4.34%$14,099 Closing Costs $75,210 0.24%$767 Entitlement Costs $965,230 3.03%$9,849 Developer Fee $1,568,000 4.93%$16,000 Marketing Fees $188,500 0.59%$1,923 Total Uses of Funds $31,814,401 100.00%$324,637 Number of Units 98 Square Feet of Commercial-Retail 2500 Prior Lake, MN EXHIBIT A The Beard Group Developer Sources and Uses of Funds for Construction 98 Unit Residential Apartment Building Prior Lake TIF October 26, 2022 Page 5 10.00%90.00%4.50% 1 2025 13,000,000 152,244 98.71% 149,744 14,974 134,770 126,543 2 2026 26,267,800 319,028 98.71% 313,788 31,379 282,409 380,173 3 2027 26,538,358 322,409 98.71% 317,114 31,711 285,403 625,335 4 2028 26,811,703 325,825 98.71% 320,474 32,047 288,427 862,310 5 2029 27,087,864 329,276 98.71% 323,868 32,387 291,481 1,091,371 6 2030 27,366,869 332,762 98.71% 327,297 32,730 294,568 1,312,782 7 2031 27,648,748 336,285 98.71% 330,762 33,076 297,686 1,526,798 8 2032 27,933,530 339,844 98.71% 334,262 33,426 300,836 1,733,665 9 2033 28,221,245 343,439 98.71% 337,799 33,780 304,019 1,933,621 10 2034 28,511,924 347,072 98.71% 341,372 34,137 307,234 2,126,897 11 2035 28,805,597 350,742 98.71% 344,982 34,498 310,483 2,313,715 12 2036 29,102,294 354,449 98.71% 348,628 34,863 313,766 2,494,291 13 2037 29,402,048 358,195 98.71% 352,313 35,231 317,082 2,668,833 14 2038 29,704,889 361,980 98.71% 356,036 35,604 320,432 2,837,541 15 2039 30,010,850 365,803 98.71% 359,796 35,980 323,816 3,000,611 TOTAL = 4,858,235 485,824 4,372,412 3,000,611 Key Asssumptions for Cash Flow: 1 2 3 4 5 6 Exhibit B Available TIF from District is after deductin the State Auditor fee of 0.36% of the total TIF from the Property. Present Value (PV) of Net Available TIF calculated based on semi-annual payments and rate of Original Tax Rate 2 PV Net Available TIF Net Available TIF Available TIF from District Captured Tax Capacity for TIF TIF Retained by City TIF District Year Taxes Payable Year Taxable Market Value TMV) The Beard Group Projected Tax Increment Financing (TIF) Cash Flow Base Tax Capacity is calculated based on a TMV = $733,500. Includes three parcels owened by Taxable market value (TMV) annual growth assumption = 1.0% Original Tax Capacity Rate estimated based on Taxes Payable Year 2022. Tax Increment Financing District No. 1-6 (Redevelopment) City of Prior Lake Election for captured tax capacity is 100.00%. Captured tax capacity is estimated based election for Fiscal Disparity contribution to be paid from TIF District. Development includes housing and Prior Lake TIF October 26, 2022 Page 6 Total Based on 26-Year Duration for TIF District Total Based on 15-Year Duartion for TIF District Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the county $9,080,000 $4,860,000 Interest and investment earnings $50,000 $50,000 Total Estimated Tax Increment Revenues $9,130,000 $4,910,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition $1,176,000 $1,176,000 Site improvements/preparation costs $1,824,000 $1,824,000 Other qualifying improvements $1,850,000 $385,000 Administrative costs $150,000 $100,000 Estimated Tax Increment Project Costs $5,000,000 $3,485,000 Interest expense $4,130,000 $1,425,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment $9,130,000 $4,910,000 Estimated Financing Total amount of bonds to be issued $5,000,000 $3,485,000 Prior Lake Lofts Exhibit C City of Prior Lake Tax Increment Financing District No. 1-6 Projected Tax Increment Prior Lake TIF October 26, 2022 Page 7 DRAFT CITY OF PRIOR LAKE, MINNESOTA MODIFIED DEVELOPMENT PROGRAM FOR MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 (PRIOR LAKE LOFTS) WITHIN MUNICIPAL DEVELOPMENT DISTRICT NO. 1 PUBLIC HEARING DATE: _______________________, 2022 PLAN APPROVED DATE: _____________________, 2022 PLAN CERTIFICATION REQUEST DATE: ____________, 2022 PLAN CERTIFIED DATE: _____________, 2022 Northland Securities, Inc. 150 South Fifth Street, Suite 3300 Minneapolis, MN 55402 800) 851-2920 Member NASD and SIPC Registered with SEC and MSRB TABLE OF CONTENTS ARTICLE I – INTRODUCTION AND DEFINITIONS .........................................................1 Section 1.01 Introduction ......................................................................................1 Section 1.02 Definitions .........................................................................................1 Section 1.03 Plan Preparation ...............................................................................2 ARTICLE II - DEVELOPMENT PROGRAM .......................................................................3 Section 2.01 Overview ...........................................................................................3 Section 2.02 Statement of Objectives ...................................................................3 Section 2.03 Boundaries of Development District .............................................4 Section 2.04 Development Activities ...................................................................4 Section 2.05 Payment of Public Development Costs .........................................4 Section 2.06 Environmental Controls; Land Use Regulations .........................4 Section 2.07 Park and Open Space to be Created ..............................................4 Section 2.08 Proposed Reuse of Property ...........................................................4 Section 2.09 Administration and Maintenance of Development District ......5 Section 2.10 Amendments .....................................................................................5 ARTICLE III - TAX INCREMENT FINANCING PLAN ......................................................6 Section 3.01 Statutory Authority ..........................................................................6 Section 3.02 Planned Development .....................................................................6 3.02.1 Development Description ...............................................................6 3.02.2 City Plans and Development Program ..........................................6 3.02.3 Land Acquisition ..............................................................................6 3.02.4 Development Activities ...................................................................6 3.02.5 Need for Tax Increment Financing ................................................6 Section 3.03 Tax Increment Financing District ...................................................7 3.03.1 Designation .......................................................................................7 3.03.2 Boundaries of TIF District ...............................................................7 3.03.3 Type of District .................................................................................7 Section 3.04 Plan for Use of Tax Increment ........................................................8 3.04.1 Estimated Tax Increment .................................................................8 3.04.2 Development Costs ..........................................................................9 3.04.3 Estimated Sources and Uses of Funds...........................................9 Figure 3-1 ...........................................................................................9 3.04.4 Administrative Expense ................................................................10 3.04.5 County Road Costs.........................................................................10 3.04.6 Bonded Indebtedness.....................................................................10 3.04.7 Duration of TIF District .................................................................11 3.04.8 Estimated Impact on Other Taxing Jurisdictions .......................11 3.04.9 Prior Planned Improvements .......................................................11 ARTICLE IV – ADMINISTERING THE TIF DISTRICT ....................................................12 Section 4.01 Filing and Certification ..................................................................12 Section 4.02 Modifications of the Tax Increment Financing Plan ..................12 Section 4.03 Correcting Redevelopment Conditions ......................................12 Section 4.04 4-Year Knockdown Rule ................................................................13 Section 4.05 Pooling/5-Year Rule........................................................................13 Section 4.06 Financial Reporting and Disclosure Requirements ...................14 Section 4.07 Business Subsidy Compliance ......................................................14 EXHIBITS..........................................................................................................................15 Exhibit I Present Value Analysis ..................................................................15 Exhibit II Projected Tax Increment ................................................................16 Exhibit III Impact on Other Taxing Jurisdictions..........................................17 Exhibit IV Estimated Tax Increment Over Duration of District .................18 Exhibit V Map of Boundaries of TIF District and Development District 19 Exhibit VI Inspection Report of Property and Coverage Test Analysis ....21 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 1 ARTICLE I – INTRODUCTION AND DEFINITIONS SECTION 1.01 INTRODUCTION The City of Prior Lake proposes to provide tax increment financing assistance through the establishment of Tax Increment Financing (Redevelopment) District No. 1-6 (Beard Group) the “TIF District”) within Modified Municipal Development District No. 1 to provide public financial assistance for the redevelopment of property for construction by a private developer of an approximate 98-unit apartment building with commercial-retail component, consisting of studio, one-bedroom and two-bedroom units, with 134 in-building parking stalls and 28 surface stalls (the “Project”). The Project is to be located on an approximate 1-acre (43,500 square feet) site on Dakota Street SE adjacent to the Prior Lake City Hall. This document contains the plan for the Modified Development Program for Municipal Development District No. 1 and the Tax Increment Financing Plan for the TIF District located within Municipal Development District No. 1. SECTION 1.02 DEFINITIONS For the purposes of this document, the terms below have the meanings given in this section, unless the context in which they are used indicates a different meaning: 1. “Authority” means the Prior Lake Economic Development Authority. 2. “City” means the City of Prior Lake, Minnesota. 3. “City Council” means the City Council of the City. 4. “County” means Scott County, Minnesota. 5. “County Auditor” means the County Auditor/Treasurer of the County. 6. “Developer” means the party undertaking construction of the Development in the TIF District, which is anticipated to be Prior Lake B Squared Ventures, LLC, its successors or assigns. 7. “Development” means the construction and development of an approximate 98-unit apartment building with commercial-retail component, consisting of studio, one-bedroom and two-bedroom units, with approximately 134 in-building parking stalls and 28 surface stalls . 8. “Development District” means Municipal Development District No. 1, within the City, established and modified pursuant to the Development District Act. 9. “Development District Act” means Minnesota Statutes, Sections 469.124 through 469.134, as amended and supplemented from time to time. 10. “Development Program” means the Development Program for the Development District, as amended and supplemented from time to time. 11. “Project Area” means the geographic area of the Development District. 12. “Public Development Costs” means the cost of the development activities that will or are expected to occur within the Project Area or TIF District. 13. “School District” means Prior Lake-Savage Area School, Independent School District No. 719. 14. “State” means the State of Minnesota. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 2 15. “TIF Act” means Minnesota Statutes, Sections 469.174 through 469.1794, as amended, both inclusive. 16. “TIF District” means Tax Increment Financing (Redevelopment) District No. 1-6 (Prior Lake Lofts). 17. “TIF Plan” means the tax increment financing plan for the TIF District (this document). SECTION 1.03 PLAN PREPARATION This document was prepared for the City by Northland Securities, Inc. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 3 ARTICLE II - DEVELOPMENT PROGRAM SECTION 2.01 OVERVIEW The Development Program included in Artile II provides information on the plan for Municipal Development District No. 1 pursuant to the Develoment District Act. Tax increment financing districts are established within the boundaries of Muncipal Develpoment District No. 1 pursuant to the TIF Act. The City established the Development District and the related Development Program as a tool to achieve the objectives described in Section 2.02. The Development District was first approved in March, 1985, and has been modified subsequently. The Development District serves as the Project Area for tax increment financing districts established within its boundaries. The Development Program describes the City’s objectives for the development of this area and the use of tax increment financing. This current modification to the Development Program include budget revisions to coincide with the TIF Plan relating to the TIF District and is intended to restate and expand on the original Development Program and all prior amendments hereto, which are incorporated herein by reference. Nothing in this modification is intended to supersede or alter the activities described in the original Development Program. SECTION 2.02 STATEMENT OF OBJECTIVES The modifications of the Development District in the City pursuant to the Development District Act are necessary and in the best interests of the City and its residents and are necessary to give the City the ability to meet certain public purpose objectives that would not be obtainable in the foreseeable future without intervention by the City in the normal development process. The Development is consistent with the established “Statement of Objectives” documented by the original Development Program and prior amendments hereto, which are incorporated herein by reference. The established “Statement of Objectives” for the Development Program provide the City with the ability to achieve certain public purpose goals not otherwise obtainable in the foreseeable future without City intervention in the normal development process. The public purpose goals include: restore and improve the tax base and tax revenue generating capacity of the Development District; increase employment and housing opportunities; realize comprehensive planning goals; remove blighted conditions; revitalize the property within the Development District to create an attractive, comfortable, convenient, and efficient area for residential, commercial and industrial, and related uses. The City seeks to achieve the following Development District program objectives: 1. Promote and secure the prompt development of certain property in the Development District, which property is not now in productive use or in its highest and best use, in a manner consistent with the City’s Comprehensive Plan and with the minimum adverse impact on the environment, and thereby promote and secure the development of other land in the City. 2. Promote and secure additional employment and housing opportunities within the Development District and the City for residents of the City and the surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Secure the increase of commercial/industrial property subject to taxation by the City, School, County and other taxing jurisdictions in order to better enable such entities to pay for TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 4 governmental services and programs required to be provided by them. 4. Provide for the financing and construction of public improvements in the Development District necessary for the orderly and beneficial development of the Development District and adjacent areas of the City. 5. Promote the concentration of commercial, office, and other appropriate development in the Development District so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, and development, whenever possible. 7. Create a desirable and unique character within the Development District thorough quality land use alternatives and design quality in new and remodeled buildings, including residential and commercial buildings. 8. Encourage and provide maximum opportunity for private redevelopment of existing areas and structures that are compatible with the Development Program. 9. Encourage redevelopment of substandard buildings, to improve employment opportunities in the Development District and the City, where compatible with other planning and development goals. SECTION 2.03 BOUNDARIES OF DEVELOPMENT DISTRICT The boundaries of the Development District are depicted in Exhibit V. The boundaries of the Development District are coterminous with the municipal boundaries of the City. The City has previously established Tax Increment Financing District Numbers 1 through 5, inclusive, within the boundaries of the Development District. SECTION 2.04 DEVELOPMENT ACTIVITIES The proposed development activities within the Development District, the Development, are consistent with the goals, objectives, and plans expressed by the Development Program. The modification to the Development Program relate to plans by the Developer to redevelop property within the City that will increase residential housing choices within the City. SECTION 2.05 PAYMENT OF PUBLIC DEVELOPMENT COSTS The Public Development Costs and the plan for their payment are described in the tax increment financing plans for the respective tax increment financing districts within the Development District. Public Development Costs of the Development Program will be paid from tax increments from the respetive tax increment financing districts with the Development District. SECTION 2.06 ENVIRONMENTAL CONTROLS; LAND USE REGULATIONS All municipal actions, public improvements and private development shall be carried out in a manner consistent with existing environmental controls and all applicable land use regulations of the City. SECTION 2.07 PARK AND OPEN SPACE TO BE CREATED Park and open space within the Development District if created will be created in accordance with the City’s Comprehensive Plan and zoning and subdivision ordinances. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 5 SECTION 2.08 PROPOSED REUSE OF PROPERTY The City or Authority may acquire property and reconvey or convey property to private developers or another entities for purpose of achieving the objectives of the Development Program. The City and Authority will require the execution of a binding development agreement with respect thereto and evidence that tax increments or other funds will be available to pay Public Development Costs associated with the proposed acquisition. Appropriate restrictions regarding the reuse and redevelopment of property shall be incorporated into any development agreement to which the City or Authority is a party. SECTION 2.09 ADMINISTRATION AND MAINTENANCE OF DEVELOPMENT DISTRICT Maintenance and operation of the Development District will be the responsibility of the City Manager who shall serve as administrator of the Development District. Each year the administrator will submit to the Council the maintenance and operation budget for the following year. The administrator will administer the Development District pursuant to the provisions of Section 469.131 of the Development District Act; provided, however, that such powers may only be exercised at the direction of the City Council. No action taken by the administrator pursuant to the above-mentioned powers shall be effective without authorization by the City Council. SECTION 2.10 AMENDMENTS The City reserves the right to alter and amend the Development Program, subject to the provisions of state law regulating such action. The City specifically reserves the right to enlarge or reduce the size of the Development District, among other modifications that may be approved. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 6 ARTICLE III - TAX INCREMENT FINANCING PLAN SECTION 3.01 STATUTORY AUTHORITY The TIF District and this TIF Plan are established under the authority of the TIF Act. SECTION 3.02 PLANNED DEVELOPMENT 3.02.1 Development Description The Developer proposes to undertake the construction and development of an approximate 98- unit apartment building with commercial-retail component, consisting of studio, one-bedroom and two-bedroom units, with approximately 134 in-building parking stalls and 28 surface stalls. 3.02.2 City Plans and Development Program In addition to achieving the objectives of the Development Program, the Development is consistent with and works to achieve the development objectives of the City. The TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole. The City has adopted land use controls to guide the use of property. The development plans for the Development in the TIF District have been reviewed by the Planning Commission and the City Council, and conform to current land use controls. 3.02.3 Land Acquisition The Developer will acquire the property within the TIF District. 3.02.4 Development Activities The activities proposed in the TIF Plan will be subject to a written agreement with the Developer. The City anticipates entering into a contract with the Developer to construct the Development and provide tax increment financing assistance to the Developer to reimburse Public Development Costs financed and incurred by the Developer. 3.02.5 Need for Tax Increment Financing In the opinion of the City, the Development would not reasonably be expected to occur solely through private investment within the foreseeable future and the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the Development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan. The reasons and facts supporting this finding include the following: The Development requires public financial assistance to offset land and building acquisition, site improvement and preparation costs, and other development costs to allow for the Developer to proceed with construction of the Development. A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments has been performed as described above and is shown in Exhibit I. This analysis indicates that the increase in estimated market value of the Development (less the present value of the projected tax increments for the maximum duration permitted by the TIF Plan) exceeds the estimated market value of the site prior to the establishment of the TIF District. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 7 SECTION 3.03 TAX INCREMENT FINANCING DISTRICT 3.03.1 Designation This TIF District is designated as Tax Increment Financing (Redevelopment) District No. 1-6 Beard Group). 3.03.2 Boundaries of TIF District The boundaries of the TIF District are depicted in Exhibit V. The parcels within the boundaries of the TIF District presently include the following parcels: 259010570 259010550 259010560 Portion of 259010582 The property within the boundaries of the TIF District is in the process of being platted into two parcels. Upon completion of platting and the establishment of the TIF District there will be two parcels within the boundaries of the TIF District. The Developer will acquire the two parcels from the Authority for the Development and then seek to combine the two parcels (or lots) into one parcel for the Development. The property within the TIF District is described as follows and is inclusive of the immediate adjacent roads and right-of-way: Description to be inserted here in final adopted TIF Plan upon completion of the platting of property. 3.03.3 Type of District The TIF District is established as a “redevelopment district” pursuant to Section 469.174, subdivision 10 of the TIF Act. The City has determined that the property in the TIF District meets the statutory criteria for a redevelopment district. Section 469.174, subdivision 10 (a) (1) of the TIF Act requires two tests for occupied parcels be met to qualify as a “redevelopment district”: a conditions test and coverage test. For a redevelopment district” more than 50% of the buildings, not including outbuildings, must be found to be structurally substandard to a degree requiring substantial renovation or clearance. The conditions test for structurally substandard is defined under Section 469.174, subdivision 10(b) of the TIF Act. For purposes of that subdivision, “structurally substandard” means containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Section 469.174, subdivision 10(c) of the TIF Act. A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15% of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of evidence that support such a conclusion that the building is not disqualified include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 8 Furthermore, parcels consisting of 70% of the area of the district must be occupied by buildings, streets, utilities, or paved or gravel parking lots to meet the required coverage test. The coverage required by the parcel to be considered occupied is defined under Section 469.174, subdivision 10(e) of the TIF Act. For purposes of such subdivision, a parcel is not occupied by buildings, streets, utilities, or paved or gravel parking lots unless 15% of the area of the parcel contains building, streets, utilities, or paved or gravel parking lots. As summarized in the table below, 100% of the area of the TIF District is occupied by improved parcels, and 100% of the buildings within the TIF District are found to be substandard. The substandard buildings are reasonably distributed. The detailed results of the building inspection and analysis performed by the City’s Building Official, Alan Ernste (License #1935) and the City’s Planning Department are contained in the reports included in Exhibit VI of the TIF Plan. In summary the findings are as follows: Number of Parcels.............................................................................................................2 Site Area Included (square feet without roads) ...................................................43,500 Area of Improved Parcels (square feet) ................................................................43,500 Percent of Area Improved ........................................................................................100% Number of Parcels with Buildings .................................................................................2 Number of Buildings found Substandard .....................................................................2 Percent of Buildings found Substandard ...............................................................100% SECTION 3.04 PLAN FOR USE OF TAX INCREMENT 3.04.1 Estimated Tax Increment The original net tax capacity of value of the TIF District will be set by the County upon request for certification. For the purposes of the TIF Plan, the estimated original net tax capacity is $ 9,169. This amount is estimated based on the most recent published estimated market value of $733,500 for the parcels within the boundaries of the TIF District with tax capacity value calculated for residential-apartment classification. The total tax capacity value of the property after completion of the Development (for taxes payable in 2026) is estimated at $330,242. This amount is based on a total estimated taxable market value of $26,267,800 with property classified as residential-apartment. The estimated difference between the total tax capacity value after completion of the Development and the original net tax capacity value is the captured tax capacity value in the amount of $319,028 for the creation of tax increment (for taxes payable in 2026). The total local tax rate is estimated at 98.71% based on the tax rates for taxes payable in 2022. The TIF Plan assumes that this rate will be set as the original local tax rate for the TIF District. At the time of the certification of the original net tax capacity for the TIF District, the County Auditor shall certify the original local tax rate that applies to the TIF District. The original local tax rate is the sum of all the local tax rates, excluding that portion of the school rate attributable to the general education levy under Minnesota Statutes Section 126C.13, that apply to a property in the TIF District. The local tax rate to be certified is the rate in effect for the same taxes payable year applicable to the tax capacity values certified as the TIF District’s original tax capacity. The resulting tax capacity rate is the original local tax rate for the duration of the TIF District. Under these assumptions, the estimated annual tax increment after completion is $314,922 (for taxes payable in 2026) before deducting for the State Auditor’s fee (0.36% of the captured tax increments). The actual tax increment will vary according to the certified original tax capacity TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 9 value and original tax rate, the actual property value produced by the Development and the changes in property value and State tax policy over the duratino of the TIF District. The City will retain 100% of the captured tax capacity value for the duration of the TIF district, pursuant to Section 469.177, Subd. 2 of the TIF Act. Exhibit II contains the projected tax increment over the druation of the TIF District. 3.04.2 Public Development Costs The City will use tax increment to pay Public Development Costs. A written agreement between the City and the Developer will define the means for verifying Public Development Costs financed and incurred by the Developer that will be eligible for reimbursement from tax increments from the TIF District and the terms for payment of tax increments collected by the City to the Developer. The City will use tax increment to pay financing costs. The interest rate payable on bonds issued will be set pursuant to terms within the written agreement with the Developer. 3.04.3 Estimated Sources and Uses of Funds The estimated sources of revenue, along with the estimated Public Development Costs of the TIF District, are itemized in Figure 3-1 that follows. Such costs are eligible for reimbursement from tax increments, and other listed sources of revenue from the TIF District. The City reserves the right to administratively adjust the amount of any of the Public Development Cost items listed in Figure 3-1, so long as the Estimated Tax Increment Project Costs amount, not including financing costs, is not increased. FIGURE 3-1ESTIMATEDSOURCESAND USES OF FUNDS Total Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the county $9,080,000 Interest and investment earnings $50,000 Total Estimated Tax Increment Revenues $9,130,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition $1,176,000 Site improvements/preparation costs $1,824,000 Utilities $0 Other qualifying improvements $1,850,000 Administrative costs $150,000 Estimated Tax Increment Project Costs $5,000,000 Estimated financing costs Interest expense $4,130,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment $9,130,000 Estimated Financing Total amount of bonds to be issued $5,000,000 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 10 3.04.4 Administrative Costs The City plans to use tax increment revenues to pay for administrative expenses for the TIF District. The use of tax increment revenues to pay administrative expenses will not exceed the maximum amount of 10% of tax increment revenues pursuant to the TIF Act. The City will use these monies to pay for and reimburse itself for costs of administering the TIF District as allowed by the TIF Act. The estimated amount of tax increment revenue planned to pay administrative expense is shown in Figure 3-1. Anticipated administrative expenses of the TIF District include annual audit of the fund for the TIF District, preparation of annual reporting, legal publication of annual report, and administration of the development agreement. 3.04.5 County Road Costs The Development will not substantially increase the use of county roads and necessitate the need to use tax increments to pay for county road improvements. 3.04.6 Bonded Indebtedness Bonds are broadly defined in the TIF Act and are the primary methods of financing Public Development Costs within a tax increment financing district. Any bond to which payment for tax increment is pledged is a tax increment bond. A tax increment bond issued in connection with “any project for which tax increment financing has been undertaken” must be one of the types of bonds expressly authorized by Section 469.178 of the TIF Act.2 The types of bonds expressly authorized by Section 469.178 are: general obligation bonds; revenue bonds (including pay-as-you-go, or PAYG, obligations); and interfund loans or advances. The total amount of bonds that may be issued to finance the Public Development Costs for the TIF District is shown in Figure 3-1. The City does not plan to issue general obligation bonds as a result of the TIF Plan. Pursuant to Section 469.178, subdivision 7 of the TIF Act, the City may advance or loan money to finance expenditures under Section 469.176, subdivision 4 of the TIFAct, from the general fund of the City or any other legally authorized fund under which it has legal authority to do so, subject to the following provisions: a) Not later than 60 days after money is transferred, advanced, or spent, whichever is earliest, the loan or advance must be authorized by resolution of the City. b) The resolution may generally grant to the City the power to make interfund loans under one or more tax increment financing plans or for one or more districts. The resolution may be adopted before or after the adoption of the tax increment financing plan or the creation of the tax increment financing district from which the advance or loan is to be repaid. c) The terms and conditions for repayment of the loan must be provided in writing. The written terms and conditions may be in any form, but must include, at a minimum, the principal amount, the interest rate, and maximum term. Written terms may be modified or amended in writing by the City before the latest decertification of any tax increment financing district from which the interfund loan is to be repaid. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or 549.09 are from time to time adjusted. Loans or advances may be structured as draw- down or line-of-credit obligations of the lending fund. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 11 d) The City shall report in the annual report submitted under Section 469.175, subdivision 6 of the TIF Act: 1) the amount of any interfund loan or advance made in a calendar year; and 2) any amendment of an interfund loan or advance made in a calendar year. 3.04.7 Duration of TIF District The City elects the maximum duration of the TIF District pursuant to the TIF Act. The collection of tax increments will not exceed twenty-five (25) years from the date of receipt of the first tax increment for a total of twenty-six (26) years of tax increment collection. Under the current schedule for development, the first tax increment will be collected in 2025 (construction commencement in 2023) creating the authority to collect tax increments through 2050. The anticipated decertification date based on the estimated first year of tax increment collection is December 31, 2050. 3.04.8 Estimated Impact on Other Taxing Jurisdictions Exhibits III and IV show the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City believes that there will be no adverse impact on other taxing jurisdictions during the duration of the TIF District, since the Development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the Development therein becomes part of the general tax base. The City anticipates minimal impact of the Development on City-provided services. There may be minimal borrowing costs to the City for the Development. A manageable increase in water and sewer usage is expected. It is anticipated that there may be a slight but manageable increase in police and fire protection duties due to the Development. 3.04.9 Prior Planned Improvements There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. The City will include this statement with the request for certification to the County Auditor. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 12 ARTICLE IV – ADMINISTERING THE TIF DISTRICT SECTION 4.01 FILING AND CERTIFICATION The filing and certification of the TIF Plan consists of the following steps: 1. Upon adoption of the TIF Plan, the City shall submit a copy of the TIF Plan to the Minnesota Department of Revenue and the Office of the State Auditor. 2. The City shall submit a request to the County Auditor to certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. 3. If applicable, the City shall send the County Assessor any assessment agreement establishing the minimum market value of land and improvements within the TIF District and shall request that the County Assessor review and certify the assessment agreement as reasonable. SECTION 4.02 MODIFICATIONS OF THE TAX INCREMENT FINANCING PLAN The City reserves the right to modify the TIF District and the TIF Plan. Under current State law, the following actions can only be approved after satisfying all the necessary requirements for approval of the original TIF Plan (including notifications and public hearing): Reduction or enlargement in the geographic area of the Development District or the TIF District. Increase in the amount of bonded indebtedness to be incurred. Increase in the amount of capitalized interest. Increase in that portion of the captured net tax capacity to be retained by the City. Increase in the total estimated Public Development Costs, including administrative costs of the City. Designation of additional property to be acquired by the City. Other modifications can be made by resolution of the City. In addition, the original approval process does not apply if (A) (1) the only modification is elimination of parcels from the TIF District and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District’s original net tax capacity, or (B) the City agrees that the TIF District’s original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. SECTION 4.03 CORRECTING REDEVELOPMENT CONDITIONS Section 469.176, subdivision 4j of the TIF Act requires that at least 90% of the revenues derived from tax increments from the TIF District be used to finance the cost of correcting conditions that allow designation of the TIF District as a redevelopment district. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 13 or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary for the development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the City, including the cost of preparation of the development action response plan, may be included in the qualifying costs. SECTION 4.04 FOUR-YEAR KNOCKDOWN RULE The provision of the TIF Act referred to as the Four-Year Knockdown Rule requires development activity to take place on each parcel within a tax increment financing district within four years from the date of certification of the original net tax capacity of such tax increment financing district. If development activity on a parcel has not begun within the required time frame, no additional tax increment may be collected from that parcel and its value must be excluded from the district’s original net tax capacity. Development activity includes demolition, rehabilitation, renovation or site improvement, including a qualified improvement of an adjacent street, on a parcel located within the TIF District. If no development activity has occurred within four years from the date of certification then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. The City must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the City or owner of the parcel subsequently commences any of the above activities, the City shall recertify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. SECTION 4.05 POOLING AND FIVE-YEAR RULE An amount equal to at least 75% of the total revenue derived from tax increments paid by properties in the TIF District must be expended on activities in the TIF District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities in the TIF District or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25% of the total revenue derived from tax increments paid by properties in the TIF District may be expended, through a development fund or otherwise, on activities outside of the TIF District but within the defined geographic area of the Project Area except to pay, or secure payment of, debt service on credit enhanced bonds. Revenue derived from tax increments paid by properties in the TIF District are considered to have been “spent” within the TIF District if such amounts are: actually paid to a third party for activities performed within the TIF District within five years after certification of the district; used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district; or TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 14 used to reimburse a party for payment of eligible costs (including interest) incurred within five years from certification of the district. It is anticipated that all revenue derived from tax increments paid by properties in the TIF District will be spent or obligated within the first five years after certification of the TIF District and spent on Public Development Costs within the boundaries of the TIF District. SECTION 4.06 FINANCIAL REPORTING AND DISCLOSURE REQUIREMENTS The City will comply with the annual reporting requirements of the TIF Act pursuant to the guidelines of the Office of the State Auditor. Under current law, the City must prepare and submit a report on the TIF District on or before August 1 of each year. The City must also annually publish in a newspaper of general circulation in the City an annual statement for the TIF District, in the format as prescribed by the Office of the State Auditor. The reporting and disclosure requirements outlined in this section begin with the year a tax increment financing district is certified, and shall end in the year in which both the district has been decertified and all tax increments have been spent or returned to the County for redistribution. Failure to meet these requirements, as determined by the State Auditors Office, may result in suspension of distribution of tax increments. SECTION 4.07 BUSINESS SUBSIDY COMPLIANCE The City will comply with the business subsidy requirements specified in Minnesota Statutes, Sections 116J.993 to 116J.995, as amended. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 15 469.175(3)(2) of the TIF Act 1 Estimated Future Market Value w/ Tax Increment Financing 33,591,715 1 2 Payable 2022 Market Value 733,500 3 Market Value Increase (1-2)32,858,215 4 Present Value of Future Tax Increments 5,281,646 5 Market Value Increase Less PV of Tax Increments 27,576,568 6 Estimated Future Market Value w/o Tax Increment Financing 947,674 1 7 Payable 2022 Market Value 733,500 8 Market Value Increase (6-7)214,174 9 Increase in MV From TIF 27,362,394 2 1 Assume 1.03% annual appreciation over 26 year life of district. 2 Exhibit I City of Prior Lake Statutory compliance achieved if increase in market value from TIF (Line 9) is greater than or equal to zero. Present Value Analysis As Required By Section Tax Increment Financing District No. 1-6 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 16 1 2025 13,000,000 163,438 9,169 152,244 98.71%150,285 (541) 149,744 141,581 2 2026 26,267,800 330,242 9,169 319,028 98.71%314,922 (1,134) 313,788 426,742 3 2027 26,538,358 333,643 9,169 322,409 98.71%318,260 (1,146) 317,114 703,735 4 2028 26,811,703 337,080 9,169 325,825 98.71%321,632 (1,158) 320,474 972,793 5 2029 27,087,864 340,552 9,169 329,276 98.71%325,038 (1,170) 323,868 1,234,142 6 2030 27,366,869 344,059 9,169 332,762 98.71%328,480 (1,183) 327,297 1,488,002 7 2031 27,648,748 347,603 9,169 336,285 98.71%331,957 (1,195) 330,762 1,734,588 8 2032 27,933,530 351,184 9,169 339,844 98.71%335,470 (1,208) 334,262 1,974,107 9 2033 28,221,245 354,801 9,169 343,439 98.71%339,019 (1,220) 337,799 2,206,760 10 2034 28,511,924 358,455 9,169 347,072 98.71%342,605 (1,233) 341,372 2,432,744 11 2035 28,805,597 362,147 9,169 350,742 98.71%346,228 (1,246) 344,982 2,652,250 12 2036 29,102,294 365,877 9,169 354,449 98.71%349,888 (1,260) 348,628 2,865,463 13 2037 29,402,048 369,646 9,169 358,195 98.71%353,586 (1,273) 352,313 3,072,562 14 2038 29,704,889 373,453 9,169 361,980 98.71%357,322 (1,286) 356,036 3,273,723 15 2039 30,010,850 377,300 9,169 365,803 98.71%361,096 (1,300) 359,796 3,469,115 16 2040 30,319,961 381,186 9,169 369,666 98.71%364,909 (1,314) 363,595 3,658,902 17 2041 30,632,257 385,112 9,169 373,569 98.71%368,762 (1,328) 367,434 3,843,246 18 2042 30,947,769 389,079 9,169 377,512 98.71%372,654 (1,342) 371,312 4,022,301 19 2043 31,266,531 393,086 9,169 381,496 98.71%376,586 (1,356) 375,230 4,196,220 20 2044 31,588,576 397,135 9,169 385,520 98.71%380,559 (1,370) 379,189 4,365,149 21 2045 31,913,939 401,226 9,169 389,586 98.71%384,573 (1,384) 383,189 4,529,230 22 2046 32,242,652 405,358 9,169 393,694 98.71%388,628 (1,399) 387,229 4,688,603 23 2047 32,574,752 409,534 9,169 397,844 98.71%392,724 (1,414) 391,310 4,843,402 24 2048 32,910,272 413,752 9,169 402,037 98.71%396,863 (1,429) 395,434 4,993,758 25 2049 33,249,247 418,013 9,169 406,273 98.71%401,045 (1,444) 399,601 5,139,798 26 2050 33,591,715 422,319 9,169 410,553 98.71%405,270 (1,459) 403,811 5,281,646 TOTAL = 9,108,361 (32,790) 9,075,571 5,281,646 Key Assumptions for Cash Flow: 1 2 3 4 Captured TIF Original Tax Rate 2 Less State Fee Available TIF from District Exhibit II The Beard Group Projected Tax Increment Financing (TIF) Cash Flow Captured Tax Capacity for TIF Base Tax Capacity is calculated based on a TMV = $733,500. Taxable market value (TMV) annual growth assumption = 1.0% Original Tax Capacity Rate estimated based on Taxes Payable Year 2022. Taxes Payable Year Tax Capacity Original Base Tax Capacity Taxable Market Value TMV) Tax Increment Financing District No. 1-6 (Redevelopment) City of Prior Lake Election for captured tax capacity is 100.00%. Captured tax capacity is estimated based election for Fiscal Disparity contribution to be paid from TIF District. Development includes housing and commercial. Only commercial valuation is subject to Fiscal Disparities. PV Available TIF TIF District Year TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 17 Estimated Annual Captured Tax Capacity (Full Development)$410,553 Payable 2022 Local Tax Rate 98.713% Estimated Annual Tax Increment $405,270 Net Tax Capacity NTC) Captured Tax Capacity Percent of Total NTC City of Prior Lake 44,570,254 410,553 0.92% Scott County 224,178,978 410,553 0.18% ISD 719 72,006,648 410,553 0.57% Net Tax Capacity NTC) of Total Tax Increment Share Added Local Tax Rate City of Prior Lake 30.465%30.862%125,075 0.281% Scott County 30.488%30.885%125,168 0.056% ISD 719 27.877%28.240%114,450 0.159% Other 9.883%10.012%40,576 Totals 98.713%100.000%405,269 NOTE NO. 1: Assuming that ALL of the captured tax capacity would be available to all taxing jurisdictions even if the City does not create the Tax Increment District, the creation of the District will reduce tax capacities and increase the local tax rate as illustrated in the above tables. NOTE NO. 2: Assuming that NONE of the captured tax capacity would be available to the taxing jurisdiction if the City did not create the Tax Increment District, then the plan has virtually no initial effect on the tax capacities of the taxing jurisdictions. However, once the District is established, allowable costs paid from the increments, and the District is terminated, all taxing jurisdictions will experience an increase in their tax base. Annual Tax Increment Exhibit III Impact on Other Taxing Jurisdictions Taxes Payable 2022) Percent of Tax Base City of Prior Lake Tax Increment Financing District No. 1-6 Dollar Impact of Affected Taxing Jurisdictions TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 18 Based on Pay 2022 Tax Rate = 98.713%30.465% 30.488% 27.877%9.883% New Estimated City County School Other TIF Taxes Taxable New Base Captured Total TIF TIF TIF TIF District Payable Market Tax Tax Tax Tax Related Related Related Related Year Year Value Capacity Capacity Capacity Increments Share Share Share Share 1 2025 13,000,000 163,438 9,169 152,244 150,285 46,381 46,416 42,441 15,047 2 2026 26,267,800 330,242 9,169 319,028 314,922 97,192 97,264 88,936 31,530 3 2027 26,538,358 333,643 9,169 322,409 318,260 98,222 98,295 89,878 31,865 4 2028 26,811,703 337,080 9,169 325,825 321,632 99,263 99,336 90,830 32,203 5 2029 27,087,864 340,552 9,169 329,276 325,038 100,314 100,389 91,792 32,543 6 2030 27,366,869 344,059 9,169 332,762 328,480 101,376 101,452 92,764 32,888 7 2031 27,648,748 347,603 9,169 336,285 331,957 102,449 102,526 93,746 33,236 8 2032 27,933,530 351,184 9,169 339,844 335,470 103,533 103,611 94,738 33,588 9 2033 28,221,245 354,801 9,169 343,439 339,019 104,629 104,707 95,741 33,942 10 2034 28,511,924 358,455 9,169 347,072 342,605 105,735 105,814 96,753 34,303 11 2035 28,805,597 362,147 9,169 350,742 346,228 106,854 106,933 97,776 34,665 12 2036 29,102,294 365,877 9,169 354,449 349,888 107,983 108,063 98,810 35,032 13 2037 29,402,048 369,646 9,169 358,195 353,586 109,124 109,206 99,854 35,402 14 2038 29,704,889 373,453 9,169 361,980 357,322 110,277 110,359 100,909 35,777 15 2039 30,010,850 377,300 9,169 365,803 361,096 111,442 111,525 101,975 36,154 16 2040 30,319,961 381,186 9,169 369,666 364,909 112,619 112,703 103,052 36,535 17 2041 30,632,257 385,112 9,169 373,569 368,762 113,808 113,893 104,140 36,921 18 2042 30,947,769 389,079 9,169 377,512 372,654 115,009 115,095 105,239 37,311 19 2043 31,266,531 393,086 9,169 381,496 376,586 116,223 116,309 106,350 37,704 20 2044 31,588,576 397,135 9,169 385,520 380,559 117,449 117,536 107,472 38,102 21 2045 31,913,939 401,226 9,169 389,586 384,573 118,687 118,776 108,605 38,505 22 2046 32,242,652 405,358 9,169 393,694 388,628 119,939 120,028 109,750 38,911 23 2047 32,574,752 409,534 9,169 397,844 392,724 121,203 121,294 110,907 39,320 24 2048 32,910,272 413,752 9,169 402,037 396,863 122,481 122,572 112,076 39,734 25 2049 33,249,247 418,013 9,169 406,273 401,045 123,771 123,863 113,257 40,154 26 2050 33,591,715 422,319 9,169 410,553 405,270 125,075 125,168 114,450 40,577 Total 9,108,361 2,811,038 2,813,133 2,572,241 911,949 Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of 0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State Auditor's fee. Exhibit IV City of Prior Lake Tax Increment Financing (Redevelopment) District No. 1-6 Estimated Tax Increments Over Maximum Duration of TIF District TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 19 Exhibit V Map of Boundaries of Tax Increment Financing District No. 1-6 and Municipal Development District No. 1 Boundaries of Municipal District No. 1 are coterminous with the municipal boundaries of the City of Prior Lake) TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 20 Exhibit V - Continued TIF District 1-6 Dakota Street Redevelopment Prior Lake B Squared Ventures, LLC TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 21 Exhibit VI Inspection Report of Property and Coverage Test Analysis TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 22 PROPERTY INSPECTION REPORT FOR THE PURPOSE OF DETERMINING CONDITION OF BUILDINGS TEST AS DEFINED BY MN STATUTES, SECTION 469.174, SUBDIVISION 10 1. Building Name: 4662 Dakota Street SE 2. Parcel No: 250010570 3. Building Address: 4662 Dakota Street SE, Prior Lake, MN 55372 4. Inspector(s) Name(s): Alan Ernste 5. Inspection Date: October 22, 2021 6. Inspection Time: 1:30 PM 7. Inspection Type: Interior Yes Exterior Yes 8. Building Vacant: Yes X No 9. Estimated Replacement Cost: $171,456 10. Estimated Cost to Correct Building Code Deficiencies: $81,661 11. Percentage of Replacement Cost: 47.63% Note: Details supporting the calculation of Items 9 and 10 above should be included as an attachment to the report. DESCRIPTION OF CONDITION DEFICIENCIES: Minnesota Statutes, Section 469.174, Subdivision 10, states that a building is Structurally Substandard if it contains “defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” 12. Details on Defects in Structural Elements: There are cracks in the building foundation; the rear cedar deck is rotting and needs to be replaced; the roof is approximately 23 years old with curling shingles and needs to be replaced; the front stoop is in disrepair and needs to be replaced; and floor joists are over spanned 13. Combination of Deficiencies: 1. Essential Utilities and Facilities Main level restroom sink is not properly vented Kitchen sink is not properly vented TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 23 No smoke or carbon monoxide detectors exist Window on west building wall needs to be replaced Window on north building wall needs to be replaced No electrical service is provided to the property 2. Light and Ventilation No bath fan in lower-level restroom 3. Fire Protection/Adequate Egress East building wall overhang is within 5 feet of side property line and not properly fire rated East building wall has window and door openings that exceed 25% of wall area 4. Layout and Condition of Interior Partitions/Materials Floor joists are over spanned Lower-level stair to main level needs to be replaced as it does not meet riser height, run, or head clearance Main-level stair to upper level needs to be replaced as it does not meet riser height, run, or head clearance 5. Exterior Construction Front stoop is in disrepair and needs to be replaced Roof is approximately 23 years old with curling shingles and needs to be replaced Rear cedar deck is rotting and needs to be replaced Soffit repairs needed on west building wall Exterior siding in poor condition; residing of home is needed Cracks in foundation 6. Other 14. Overview of Condition Deficiencies: The home is in poor condition and has not been maintained. There are foundation cracks, siding in disrepair, soffit falling away, gutters are full of debris and not properly draining stormwater from the home, rotting windows, rotting decking material, roof in need of replacement, front stoop in need of replacement, and several plumbing repairs needed. 15. Description of Code Deficiencies: Floor joists are over spanned and need to be corrected; restroom fan is needed; two stairwells exist and neither meets required riser height, run, or head clearance; proper venting is needed on restroom and kitchen sinks; smoke and CO detectors are needed throughout the home; rear deck is a hazard and needs to be replaces; and adequate repairs are needed to make sure exterior walls are properly fire rated and meet codes related to percentage of wall openings. 16. Energy Code The city may decide is does not want to count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b)) defined as “structurally substandard. The city will need to provide direction to the Inspector as to whether energy code deficiencies should be counted toward meeting the conditions test.] Energy code deficiencies were not specifically evaluated. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 24 17. Photographs Documenting Interior and Exterior of Building Attached to this report are photos of the subject property offered as supporting documentation to the information included in this report. 18. Summary of Inspector’s Qualifications: Al Ernste is a Minnesota Certified Building Official and currently serves as the Building Official for the City of Prior Lake. Mr. Ernste’s experience includes 20 years working in the construction industry, serving as a laborer, carpenter, and Project Superintendent. Mr. Ernste operated his own Residential Construction Contracting and Estimating business for nine years and has 24 years of experience in building inspections, including 21 years serving as a Building Official for the cities of Faribault and Prior Lake. 19. Summary of Deficiencies: It is my professional opinion that this building is Substandard as defined by Minnesota Statutes, Section 469.174, Subdivision 10c. a) Building Code deficiencies total more than 15% of replacement cost. b) Substantial renovation is required to correct conditions found. Date 10/27/2021 Title Building Official License # 1935 Name Alan Ernste Signature TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 25 Condition of Building Test Interior and Exterior Photo Documentation 4662 Dakota Street SE, Prior Lake, MN 55372 Photo #Description Photo Estimated Cost of Repair / Replacement Description 1 Exterior foundation crack $4,511 The average cost to repair foundation problems is $4,511, with most homeowners spending between $2,318 and $6,750. Minor crack repairs cost $620 or more to fix, while major repairs that require hydraulic piers can cost $10,000 to $15,000 2 3 4 Soffit repairs needed $400 Soffit repairs are estimated at $20 to $30 per linear foot. This area is approximatley 20 linear feet. 10,750Exteriorsidingrepairs needed The cost to side a house, including materials, installation and site cleanup, typically ranges from $5,400 to $16,000, or about $10,750 on average. Common siding materials include vinyl siding, which costs about $3 to $12 per square foot. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 26 5 Exterior openings exceeding 25% and located within 5 feet of side property line 2,000 estimated cost of $2,000 to close existing opening(s). 6 Overhang within 5 feet of side property line and not properly fire rated 1,500 Estimated cost of $1500 to properly fire rate the wall. 7 New window needed $625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 175). 8 Rear deck repairs needed to replace rotting wood $15,200 A cedar deck can cost $20-$75, or more, per square foot; average ($47.50). The deck is 320 SF, with a replacement cost of 15,200. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 27 9 No electrical service to the property $2,500 Electrical repairs are estimated at $2,500. 10 Roof in poor condition and needs to be replaced; approx. age 23 years 7,000 A typical range for roof replacement costs for a home of this size is between $5,100 and $10,000. 11 12 Repairs or replacement of front stoop needed $2,500 Full stoop replacement is anticipated at an estimated cost of $2,500. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 28 13 14 15 16 Window replacement or combination window needed 625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 175). Main level stair to upper level needs to be replaced; does not meet riser height, run or head clearance 5,000 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000. Repairs or replacement of front stoop needed $2,500 Full stoop replacement is anticipated at an estimated cost of $2,500. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 29 17 There are no smoke and carbon monoxide detectors in the home 1,200 $1,200 is estimated to install smoke and CO detercters throughout the home. 18 Plumbing: kitchen sink not properly vented $1,000 Estimated cost to properly vent sink is 400 plus $600 for the wall patch. 19 Plumbing: bathroom sink not properly vented $1,000 Estimated cost to properly vent sink is 400 plus $600 for the wall patch. 20 No bath fan in lower level restroom $850 Estimated cost of $850 to install a fan, including labor. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 30 21 22 23 24 Estimated cost to correct, repair, or replace $81,661 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000. Over spanned floor joists $20,000 Costs to correct over spanned floor joists can run $10,000 to $30,000 or more for a typical home, depending on the size and the ease of access to repair. Lower level stair to main level needs to be replaced; does not meet riser height, run or head clearance 5,000 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 31 Replacement Cost Estimate 4662 Dakota Street SE Prior Lake, MN 55372 SINGLE FAMILY ATTACHED: 1st Floor Wood Frame $109.00 x =-$ 2nd Floor $57.00 x 0 =-$ SINGLE FAMILY DETACHED: 1st Floor Wood Frame $118.00 x 1140 =134,520.00$ 2nd Floor $60.00 x 195 =11,700.00$ GARAGE: Wood Frame $47.80 x 0 =-$ Slab On Grade Garage $22.00 x 0 =-$ BASEMENT: Finished $30.00 x 0 =-$ Unfinished $23.00 2 972 =22,356.00$ Crawl Space $22.00 x 0 =-$ 3 Season Porch $47.00 x 0 =-$ Screen Porch or front Stoop $32.00 x 0 =-$ Deck $15.00 x 192 =2,880.00$ Fireplace: Masonry $7,000.00 x 0 =-$ Stacked Masonry $5,000.00 x 0 =-$ Gas $3,000.00 x 0 =-$ Other Total Valuation 171,456.00$ Contractor's Valuation TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 32 PROPERTY INSPECTION REPORT FOR THE PURPOSE OF DETERMINING CONDITION OF BUILDINGS TEST AS DEFINED BY MN STATUTES, SECTION 469.174, SUBDIVISION 10 1. Building Name: 4664 Dakota Street SE 2. Parcel No: 250010550 3. Building Address: 4664 Dakota Street SE, Prior Lake, MN 55372 4. Inspector(s) Name(s): Alan Ernste 5. Inspection Date: October 22, 2021 6. Inspection Time: 2:15 PM 7. Inspection Type: Interior Yes Exterior Yes 8. Building Vacant: Yes X No 9. Estimated Replacement Cost: $148,368 10. Estimated Cost to Correct Building Code Deficiencies: $69,915 11. Percentage of Replacement Cost: 47.12% Note: Details supporting the calculation of Items 9 and 10 above should be included as an attachment to the report. DESCRIPTION OF CONDITION DEFICIENCIES: Minnesota Statutes, Section 469.174, Subdivision 10, states that a building is Structurally Substandard if it contains “defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” 12. Details on Defects in Structural Elements: There are several cracks in the building foundation; the rear cedar deck is rotting and needs to be replaced; the roof is approximately 23 years old with curling shingles and needs to be replaced; and floor joists are over spanned 13. Combination of Deficiencies: 1. Essential Utilities and Facilities Main level restroom sink is not properly vented Kitchen sink is not properly vented TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 33 No carbon monoxide detectors exist Several windows need to be replaced Flat sanitary sewer line needs to be corrected Existing 60 Amp electrical service needs to be upgraded to 100 Amp Water heater not connected and is not vented properly New furnace is needed Basement plumbing not vented properly 2. Light and Ventilation 3. Fire Protection/Adequate Egress 4. Layout and Condition of Interior Partitions/Materials Floor joists are over spanned Lower-level stair to main level needs to be replaced as it does not meet riser height, run, or head clearance Main-level stair to upper level needs to be replaced as it does not meet riser height, or run 5. Exterior Construction Roof is approximately 23 years old with curling shingles and needs to be replaced Rear cedar deck is rotting and needs to be replaced Several cracks in all sides of the home foundation Chimney repair and roof vents are needed 6. Other 14. Overview of Condition Deficiencies: The home is in poor condition and has not been maintained. There are foundation cracks, rotting windows, rotting decking material, roof in need of replacement, and several plumbing repairs needed. 15. Description of Code Deficiencies: Floor joists are over spanned and need to be corrected; two stairwells exist and neither meets required riser height, run, or head clearance; proper venting is needed on restroom and kitchen sinks; CO detectors are needed throughout the home; and rear deck is a hazard and needs to be replaces. 16. Energy Code The city may decide is does not want to count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b)) defined as “structurally substandard. The city will need to provide direction to the Inspector as to whether energy code deficiencies should be counted toward meeting the conditions test.] Energy code deficiencies were not specifically evaluated. 17. Photographs Documenting Interior and Exterior of Building Attached to this report are photos of the subject property offered as supporting documentation to the information included in this report. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 34 18. Summary of Inspector’s Qualifications: Al Ernste is a Minnesota Certified Building Official and currently serves as the Building Official for the City of Prior Lake. Mr. Ernste’s experience includes 20 years working in the construction industry, serving as a laborer, carpenter, and Project Superintendent. Mr. Ernste operated his own Residential Construction Contracting and Estimating business for nine years and has 24 years of experience in building inspections, including 21 years serving as a Building Official for the cities of Faribault and Prior Lake. 19. Summary of Deficiencies: It is my professional opinion that this building is Substandard as defined by Minnesota Statutes, Section 469.174, Subdivision 10c. a) Building Code deficiencies total more than 15% of replacement cost. b) Substantial renovation is required to correct conditions found. Date 10/28/2021 Title Building Official License # 1935 Name Alan Ernste Signature TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 35 Condition of Building Test Interior and Exterior Photo Documentation 4664 Dakota Street SE, Prior Lake, MN 55372 Photo #Description Photo Estimated Cost of Repair / Replacement Description 1 2 3 4 The average cost to repair foundation problems is $4,511, with most homeowners spending between $2,318 and $6,750. Minor crack repairs cost $620 or more to fix, while major repairs that require hydraulic piers can cost $10,000 to $15,000. Due to extensive foundation work needed on the entire foundation, repair costs are estimated at $8,000 8,000Exteriorfoundationcracks TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 36 5 6 7 8 Front deck in disrepair and needs maintenance $1,000 The areas in need of repair are approximatley 50 SF, plus railing repairs; estimated repair cost is $1,000 A cedar deck can cost $20-$75, or more, per square foot; average ($47.50). The deck is 204 SF, with a replacement cost of 9,690 9,690Reardeckrepairsneeded to replace rotting wood TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 37 9 10 11 12 Additional roof venting needed $900 Installing a roof vent costs between $300 and $650 on average, including labor and materials; three additional vents at $300 ea. = $900 A typical range for roof replacement costs for a home of this size is between $5,100 and $10,000. 7,000 Roof in poor condition and needs to be replaced; approx. age 23 years TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 38 13 Chimney is rusted and should be replaced $600 Average repair costs, including labor, for a metal chimney is $250 - $1,200 14 There are no carbon monoxide detectors in the home 1,200 $1,200 is estimated to install smoke and CO detercters throughout the home 15 Plumbing: kitchen sink not properly vented $1,000 Estimated cost to properly vent sink is 400 plus $600 for the wall patch 16 Plumbing: main level restroom sink not properly vented no photo $1,000 Estimated cost to properly vent sink is 400 plus $600 for the wall patch TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 39 17 Window in front porch not tempered glass and needs to be replaced 625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 175). 18 Window by stairwell not tempered glass and needs to be replaced 625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 175). 19 Upper window by stairwell not tempered glass and does not meet egress requirements; needs to be repaired and replaced 625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 175). 20 Lower level stair to main level needs to be replaced; does not meet riser height, run, or head clearance 5,000 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 40 21 Main level stair to upper level needs to be replaced; does not meet riser height and run 5,000 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000 22 Upper level does not provide adequate clearance; ceiling or roof would need to be raised to make habitable The estimated cost of this repair far exceeds the value that would result. For this reason, this space is viewed as non- habitable and no cost estimate is provided 23 Plumbing repairs needed to correct flat sanitary sewer line 400 Plumbing repairs to correct this issue are estimated at $400 24 Basement plumbing not propely vented $1,000 Estimated cost of $1,000 to properly vent plumbing TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 41 25 Over spanned floor joists $20,000 Costs to correct over spanned floor joists can run $10,000 to $30,000 or more for a typical home, depending on the size and the ease of access to repair 26 Existing 60-amp electrical service needs to be upgraded to 100 Amp 1,500 Average cost, inlcuding labor, to install a 100 Amp service is $1,200 - $2,500 27 Furnace not functioning and needs to be replaced $4,000 A furnace replacement costs $2,000 to 5,400 on average for a new home furnace and installation labor 28 Water heater not connected $750 Estimated cost of $750 to correct this issue and replace venting Estimated cost to correct, repair, or replace $69,915 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 42 Replacement Cost Estimate 4664 Dakota Street SE Prior Lake, MN 55372 SINGLE FAMILY ATTACHED: 1st Floor Wood Frame $109.00 x 0 =-$ 2nd Floor $57.00 x 0 =-$ SINGLE FAMILY DETACHED: 1st Floor Wood Frame $118.00 x 1044 =123,192.00$ 2nd Floor $60.00 x 0 =-$ GARAGE: Wood Frame $47.80 x 0 =-$ Slab On Grade Garage $22.00 x 0 =-$ BASEMENT: Finished $30.00 x 360 =10,800.00$ Unfinished $23.00 2 492 =11,316.00$ Crawl Space $22.00 x 0 =-$ 3 Season Porch $47.00 x 0 =-$ Screen Porch or front Stoop $32.00 x 0 =-$ Deck $15.00 x 204 =3,060.00$ Fireplace: Masonry $7,000.00 x 0 =-$ Stacked Masonry $5,000.00 x 0 =-$ Gas $3,000.00 x 0 =-$ Other Total Valuation 148,368.00$ Contractor's Valuation TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 202243Tax TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 202244NOTES TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 202245I= 954. 85GF F EEEEEEEEG G G G XX X X X G G GGXXXXXXXXXXXXXXXXXXXGG GGGGGGGGGGGGGGGGGCCCCCCCC C G GGGGGGGGGGGGGGGGGGGGGGGGG G E E E EEEEEEEEEEEEEEE E E E EE>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>NOTRESPASSINGSI GNPIPEINTAKEFROMACUNITBOULDERBOULDERBOULDERBOULDERVISITORPARKINGSI G N OVERHANGOUTLETOUTLETHANDICAPPEDPARKINGSIGNVISITORPARKING SIGNROCKSBOULDER METAL STATUEBOULDERMEMORIALPLAQUEBOULDERCONDUITWATERFALLF E A T U R E STATUEONCONBOULDERPARKRULESSIGN15PVCFIREPITCHAINLINKFE N C E 4 HEIGHTBITBITBITBITBITBITBITBITCON ELEC. TRANSFOR M ER635x355ON CON C R E T EBASE CON CONCONCONCONCONCONCRETE CONCRETECONCONCONWOOD STEPSCONCON CONCONPAVERSCONCONCRETEC&GCONCRETEC& GSTOP SIGNNOPARKINGSIGNPEDCROSSINGSIGNSTOPSIGNNOPARKINGSIGNLANDSCAPINGMULCHMULCH,P LANTSTRIMLANDSCAPINGMULCH WITHROCKEDG I N G RAIN GA R D E N WITH ROCKEDGING LANDSCAP IN GLANDSCAPINGLAN D S C A P IN G MULCH PLAN T ST RIMBOULDER RET. WALLRE T WAL L BOULDERRETWA L LCONCRETERET. WALLWOODRET. WALLBLOCK RE T W A LLBLOCK RE TW A LL BLOCKRET WA L L BLOCK RET. WALLBLOCK RET. WALL6" PVC15" R CP15 R C P 12" PVC12" PV C 12" PVC10" PVC6" PVC10PV C 6" PVCOVERHEADPARK ENTRANCESIGN12" RCP12" RCP8" VCP8" VCP 8" VCP 8" VCP8" VCP8" VCP8" VCP 10" PVC8 V CP 8" VCP6" PV C BITBENCHMARKTOP NUTHYDRANTELEV: 963.81 ( NAVD88) BENCHMARKTOP NUT HYDRANTELEV: 965. 48 (NAVD 88)BENCHMARKTOP NUT HYDRANTELEV: 964.70 (NAVD 88)BENCHMARKTOPNUT H Y DR ANT ELEV: 96 0 9 2 N A V D88C-DC-DC- DC-DC-DC-DC-DC-DC-DC-DC- DC- DC-DC-DC-DC- DC-DC-DC- DC-DC-DC-DC-DC-DC- DC-D C-DC-D C- D C- D C-DC-DC- DC-DC-DC-DC-DC-DC-DMEDIACOMPRIOR LAKE CITY HALLCENTERPOINT ENERGYCENTERPOINT ENERGYXCELENERGYPILLAR GRATEWOOD WALKWAYWITH RAILINGPLANTERBOXBRICKWALLGENERATOR (5.25' HEIGHT)TRANSFORMER ( 5' HEIGHT)ELEC. METER5H E IGHTGARAGESHED12" PVC8" PVCBUILDINGOVERHANGBOULDER BOULDEROVERHANGPILLARDECKDECKPAVERSPAVERSDECKDECKHOUSEHOUSEWOODSTEPS RAILING CHAIN LIN K F E NCERAILINGCONSTEP SCONCRETESTEPSWOOD S TEP SLANDSCAPINGWOOD RET.WALLOVERHANGCONBITCONCRET E CG15" RCP15" RCPMETAL GATE>>>>>>OUTLETCITYVEHICLEPARKINGSIGNEDGE OF WATERWATERELEV. ON10/13/ 2020 = 920. 99 (NAVD 88)WOODF E NCEMULTIPLE TE NAN TBUILD IN GDECKDECKlllllllllllllllllllllllllllll ll15" RCPBUILDINGOVERHAN GMHSNR=955.50I=E (8" VCP)950.30I= I=I=I=I=MHSNR=962.28I= S (8" VCP)W (8" VCP)N (8" VCP)W (8" VCP)945.72945.49I=I=945.53I=949.68I=I=CBCCR=948.87I=W (15" RCP)NE (15" RCP)943.91943.97I=I=I=I=I=MHSTR=943.04I=N (15" RCP)SW (15" RCP)938.14938. 10I=I=I=I=I=CBCCR=929.02I=NE (15" PVC)W (6" PVC)S (15" RCP)SUMP927.02925.36I=I=924.94I=919.22I=I=MHSNR=958.08I=N (8" VCP)S (8" VCP)E (8" VCP)945.43945.45I=I=945.79I=I= I=MHSNR=959.78I=S (8" VCP)E (8" VCP)W (8" VCP)N (6" VCP)949.04948.83I=I=948.46I=948.74I=I=MHSNR=957.21I=E (8" VCP) W ( 8" VCP) 946. 11946. 12I=I= I= I=I=CBCCR=956.00I=SW (6" PVC)NE ( 10" PVC) 951. 16951.20I= I= I= I= I= MHSNR= 956. 77I= S ( 8" VCP)E (8" VCP)W (8" VCP)SW (8" VCP)946.10946.09I= I=951.17I=946.35I=I=CBCCR=950.77I=N (12" PVC)S ( 12"PVC)946.83946.76I=I=I=I=I=CBCCR= 929.42I=SW (15" PVC)926.69I=I=I=I=I=CBCCR=952. 68I=S (10" PVC)N (12" PVC)949.83949.88I=I=I=I=I=MHSTR=958.48I=N (15" RCP)W ( 15" RCP)951.33951.32I=I=I=I=I=MHSTR=957.06I=NW (15" RCP) E (15" RCP)951.35951.36I=I=I=I=I=MHSTR= 956.97I= N (15" RCP)S (15" RCP)950.72947.06I=I=I=I=I=CBCCR=948.56I=E (15" RCP)SW (15" RCP)SE (10" PVC)944. 46944.46I=I=944.51I=I=I=MHSTR=949.75I=S ( 15" RCP) General Location Map Waters Edge Marina PIDs: 251910040 & 251530030) 1 Casey McCabe From:reneeschmid@comcast.net Sent:Tuesday, October 25, 2022 10:12 AM To:Casey McCabe Subject:Request Mr. Casey McCabe Community Development Director City of Prior Lake Dear Mr. McCabe, The low water levels in Prior Lake have continued to be an issue in 2022. Water levels continued to drop throughout the summer. Navigation in Boudin’s Bay and the exit channel to lower Prior Lake has been exceedingly difficult with numerous boaters becoming stuck and/or damaging their boats or motors. We walked the bay several times to move rocks and added numerous navigation buoys to keep all boaters in Boudin’s Bay safe. Waters Edge Marina was granted a temporary dock extension by the City of Prior Lake in the spring of 2022. The DNR’s preference was to extend docks before pursuing dredging options. Even with the dock extension, over half of our boat slips were no longer navigable by late August. Any v-hull boats were being pulled out as early as July. Waters Edge Marina has worked with the DNR to secure a permit for dredging in Boudin’s Bay around our marina docks and through the channel in the middle of the bay. The cost to dredge is very significant and will benefit not only our marina but all users and residents of Boudin’s Bay. The dredging plan is based on the current location of the dock. The extended dock location is supported by the DNR to reduce the amount of dredging required. The economics of this investment are challenging without a guarantee that we will be able to keep the dock extension. We have already invested in the dock extension in 2022 and our dock is a floating system that is not easily moved. Dredging will require us to move the dock at additional costs. These costs are not sustainable without support from the City of Prior Lake. Waters Edge Marina is requesting the City of Prior Lake to consider the following: Grant Waters Edge Marina a permanent dock extension as previously approved Grant Waters Edge an additional six slips to help offset part of the dredging costs. These would only be added as water levels rise and are able to support the additional slips. At a minimum, grant Waters Edge Marina an additional one- year temporary dock extension for 2023. Without a permanent extension, dredging will not be feasible. Please let us know if you have any questions. Thank you for your consideration of this request. Sincerely, Renee and Dan Schmid Schmid Family LLC dba Waters Edge Marina SECURITY NOTICE: This email originated from an external sender. Exercise caution before clicking on any links or attachments and consider whether you know the sender. For more information please contact Helpdesk@PriorLakeMN.gov. Approximate Dock Configuration showing temporary 48-foot extension) Waters Edge Marina Permit Number 2022-2853MNDNRPERMITTINGANDREPORTINGSYSTEM Public Waters Work Permit Expiration Date: 12/31/2022 Pursuant to Minnesota Statutes, Chapter 103G, and on the basis of statements and information contained in the permit application, letters, maps, and plans submitted by the applicant and other supporting data, all of which are made part hereof by reference, PERMISSION IS HEREBY GRANTED to the applicant to perform actions as authorized below. Resource:Watershed:County:Project Name: Waters Edge Marina Scott Lower Minnesota River Lake: Lower Prior 70002600) Authorized Action:Purpose of Permit: Waterward Navigation Channel Excavation Conduct maintenance dredging along 940 ft of the historic channel location, with a width of 30 ft and 5:1 slopes and around the mooring facility slips. Excavation will be no lower than the elevation 896 ft. Dredged material will be dewatered in parking lot of the mooring facility and final disposal at Prior Lake Aggregates. All work shall be done in accordance with the plans and supporting materials on file. AUSTEN ADRIAENS 27301 VERDIN ST NW ISANTI, MN 55040 763) 444-6103 austen@nswaterways.com JETHRO CARPENTER 27301 VERDIN ST NW ISANTI , MN 55040 612) 685-7337 jethro@mtcarpenter.com DAN SCHMID 527 VISTA RIDGE LANE SHAKOPEE, MN 55379 612) 201-5783 reneeschmid@comcast.net Permittee:Authorized Agents (2): Property Description (land owned or leased or where work will be conducted): UTM zone 15N, 469427m east, 4954146m north (centroid), Meandered water body of Section 30, T115N, R21W 10/14/2022 10/14/2022 12/31/2022IssuedDate:Effective Date:Expiration Date: AreaHydrologistTaylorHuinker 651-259-5790taylor.huinker@state.mn.us Authorized Issuer:Title:Email Address:Phone Number: This permit is granted subject to the following CONDITIONS: APPLICABLE FEDERAL, STATE, OR LOCAL REGULATIONS: The permittee is not released from any rules, regulations, requirements, or standards of any applicable federal, state, or local agencies; including, but not limited to, the U.S. Army Corps of Engineers, Board of Water and Soil Resources, MN Pollution Control Agency, watershed districts, water management organizations, county, city and township zoning. NOT ASSIGNABLE: This permit is not assignable by the permittee except with the written consent of the Commissioner of Natural Resources. CONDITIONS continued on next page...(MPARS revision 20180129, Permit Issuance ID 103663, printed 10/14/2022) CONDITIONS (Continued from previous page ) NO CHANGES: The permittee shall make no changes, without written permission or amendment previously obtained from the Commissioner of Natural Resources, in the dimensions, capacity or location of any items of work authorized hereunder. SITE ACCESS: The permittee shall grant access to the site at all reasonable times during and after construction to authorized representatives of the Commissioner of Natural Resources for inspection of the work authorized hereunder. TERMINATION: This permit may be terminated by the Commissioner of Natural Resources at any time deemed necessary for the conservation of water resources of the state, or in the interest of public health and welfare, or for violation of any of the conditions or applicable laws, unless otherwise provided in the permit. COMPLETION DATE: Construction work authorized under this permit shall be completed on or before the date specified above. The permittee may request an extension of the time to complete the project by submitting a written request, stating the reason thereof, to the Commissioner of Natural Resources. WRITTEN CONSENT: In all cases where the permittee by performing the work authorized by this permit shall involve the taking, using, or damaging of any property rights or interests of any other person or persons, or of any publicly owned lands or improvements thereon or interests therein, the permittee, before proceeding, shall obtain the written consent of all persons, agencies, or authorities concerned, and shall acquire all property, rights, and interests needed for the work. PERMISSIVE ONLY / NO LIABILITY: This permit is permissive only. No liability shall be imposed by the State of Minnesota or any of its officers, agents or employees, officially or personally, on account of the granting hereof or on account of any damage to any person or property resulting from any act or omission of the permittee or any of its agents, employees, or contractors. This permit shall not be construed as estopping or limiting any legal claims or right of action of any person other than the state against the permittee, its agents, employees, or contractors, for any damage or injury resulting from any such act or omission, or as estopping or limiting any legal claim or right of action of the state against the permittee, its agents, employees, or contractors for violation of or failure to comply with the permit or applicable conditions. EXTENSION OF PUBLIC WATERS: Any extension of the surface of public waters from work authorized by this permit shall become public waters and left open and unobstructed for use by the public. WETLAND CONSERVATION ACT: Where the work authorized by this permit involves the draining or filling of wetlands not subject to DNR regulations, the permittee shall not initiate any work under this permit until the permittee has obtained official approval from the responsible local government unit as required by the Minnesota Wetland Conservation Act. CONTRACTOR RESPONSIBILITY: The permittee shall ensure the contractor has received and thoroughly understands all conditions of this permit. Contractors must obtain a signed statement from the property owner stating that permits required for work have been obtained or that a permit is not required, and mail a copy of the statement to the regional DNR Enforcement office where the proposed work is located. The Landowner Statement and Contractor Responsibility Form can be found at: https://bwsr.state.mn.us/sites/default/files/2019-01/Wetland_WCA_Contractor_Responsibility_Form.doc INVASIVE SPECIES - EQUIPMENT DECONTAMINATION: All equipment intended for use at a project site must be free of prohibited invasive species and aquatic plants prior to being transported into or within the state and placed into state waters. All equipment used in designated infested waters, shall be inspected by the Permittee or their authorized agent and adequately decontaminated prior to being transported from the worksite. The DNR is available to train inspectors and/or assist in these inspections. For more information refer to the "Best Practices for Preventing the Spread of Aquatic Invasive Species" at http://files.dnr.state.mn.us/publications/ewr/invasives/ais/best_practices_for_prevention_ais.pdf. Contact your regional Invasive Species Specialist for assistance at www.mndnr.gov/invasives/contacts.html. A list of designated infested waters is available at www.mndnr.gov/invasives/ais/infested.html. A list of prohibited invasive species is available at www.mndnr.gov/invasives/laws.html#prohibited. EROSION AND SEDIMENT CONTROL: In all cases, methods that have been determined to be the most effective and practical means of preventing or reducing sediment from leaving the worksite shall be installed in areas that slope to the water and on worksite areas that have the potential for direct discharge due to pumping or draining of areas from within the worksite (e.g., coffer dams, temporary ponds, stormwater inlets). These methods, such as mulches, erosion control blankets, temporary coverings, silt fence, silt curtains or barriers, vegetation preservation, redundant methods, isolation of flow, or other engineering practices, shall be installed concurrently or within 24 hours after the start of the project, and will be maintained for the duration of the project in order to prevent sediment from leaving the worksite. DNR requirements may be waived in writing by the authorized DNR staff based on site conditions, expected weather conditions, or project CONDITIONS continued on next page...Page 2 - Permit Number 2022-2853 CONDITIONS (Continued from previous page ) completion timelines. FISHERY PROTECTION - EXCLUSION DATES: No activity affecting the bed of the protected water may be conducted between April 1 and June 30, to minimize impacts on fish spawning and migration. If work during this time is essential, it shall be done only upon written approval of the Area Fisheries Manager. See contact list at: http://files.dnr.state.mn.us/fisheries/management/dnr_fisheries_managers.pdf. Should work begin elsewhere in the project area within these dates, all exposed soils that are within 200 feet of Public Waters and drain to those waters must complete erosion control measures within 24 hours of its disturbance to prevent sediment from entering Public Waters. MAINTENANCE: Maintenance of this project to originally authorized conditions may be authorized by amendment to this permit. WILDLIFE FRIENDLY EROSION CONTROL MATERIALS: Due to entanglement issues with small animals, use of erosion control blanket shall be limited to ‘bio-netting’ or ‘natural-netting’ types, and specifically not products containing plastic mesh netting or other plastic components. Also be aware that hydro-mulch products may contain small synthetic plastic) fibers to aid in its matrix strength. These loose fibers could re-suspend and make their way into Public Waters. As such, mulch products containing plastic fiber additives should not be used in areas that drain to Public Waters. See this website for additional resources: https://www.dot.state.mn.us/environment/erosion/rolled-erosion-prevention-products.html NOTIFICATION OF PROJECT START & COMPLETION: Notification shall be given to the area hydrologist 3 days prior to commencing the project and upon completion of the project. John Gleason, EWR District Manager James Fogarty, Conservation Officers, Prior Lake Alyssa Core, BWSR Wetland Specialists, Scott Bridgette Timm, DNR Regional Nongame Specialists, Region 3 - South Melissa Collins, DNR Regional Environmental Assessment Ecologist, Region 3 Bob Fashingbauer, DNR Wildlife, Vermillion River Complex Daryl Ellison, DNR Fisheries, West Metro Area Marty Schmitz, County, Scott Joni Giese, Watershed District, PRIOR LAKE-SPRING LAKE WD Corps of Engineers, Corps of Engineers, Scott Willie Peters, SWCD, Scott SWCD Troy Kuphal, SWCD, Scott SWCD Pete Young, City, Prior Lake cc: Page 3 - Permit Number 2022-2853