Loading...
HomeMy WebLinkAboutItem 09City of Lakeville Finance Department Memorandum To: Mayor and City Council From: Jerilyn Erickson, Finance Director Copy: Justin Miller, City Administrator Date: July 27, 2020 Subject: Lakeville Arenas – APEX Improvements The City Council approved a contract with Apex Facility Solutions (APEX) on April 6, 2020 for improvements to Lakeville Arenas. The contract included design services and a “notice to proceed” provision that the City must pre-approve before the construction portion of the project would commence. APEX has indicated that to begin construction of the footings this Fall, they must receive the notice to proceed by September 1, 2020. The APEX contract covers the following: Design $ 239,680 Construction $7,693,605 Total $7,933,285 In April 2020, the City’s municipal advisor, Northland Securities, prepared an estimate for this debt issuance with the assumption that the City issued General Obligation Tax Abatement Bonds (tax exempt) for this project later this Fall. The average annual debt service payment was determined to be approximately $540,000. Based on this estimate, Staff recommends that both entities (City and ISD#194) approve a 2021 property tax levy which appropriates $270,000 for the repayment of this debt. Staff presented a draft JPA to ISD#194 at their workshop on July 21, 2020. The JPA provides that the debt and debt-related costs are paid 50/50 by the City and ISD#194. The draft JPA also includes the waiver of any notice or procedural requirements under Minnesota Statutes, Sections 469.1813-469.1814, with respect to the Abated Properties. The Board indicated that they intended to approve the JPA at their August 11, 2020 regular meeting. Staff would then request Council approval at the August 17, 2020 council meeting. For reference, a copy of the draft JPA is attached to this memo. City staff is seeking direction regarding the “notice to proceed” for the APEX contract. Attachment: Draft Joint Powers Agreement 1 4834-1882-0027\5 JOINT POWERS AGREEMENT BETWEEN THE CITY OF LAKEVILLE, MINNESOTA AND INDEPENDENT SCHOOL DISTRICT NO. 194 AGREEMENT made this [____] day of [____], 2020, by and between the CITY OF LAKEVILLE, a Minnesota municipal corporation (the “City”) and INDEPENDENT SCHOOL DISTRICT NO. 194 (the “District,” together with the City, the “Parties”). 1. AUTHORITY. This Agreement is made and entered into pursuant to Minnesota Statutes, section 471.59. 2. PURPOSE. The purpose of this Agreement is to provide the authority for the District to contribute annually appropriated funds to the City, so that the City may decrease the abatement levy (the “Abatement Revenues”) with respect to certain properties (the “Abated Properties”) pledged to debt service on certain general obligation tax abatement bonds (the “Bonds”) to be issued by the City. The City’s first abatement levy is anticipated to occur in 2021. 3. THE BONDS. The proceeds of the Bonds will be used to finance certain energy saving improvements to the Ames and Hasse ice arenas (the “Facilities”) in the City, which Facilities are used for the benefit of qualified 501(c)(3) organizations, including but not limited to the Lakeville Hockey Association, other hockey and figure skating associations, the general public, the City, and the District. The Facilities are operated pursuant to a Joint Powers Agreement for Lakeville Arenas dated July 17, 2006, between the City and the District. 4. PAYMENT FOR BOND RELATED COSTS. The District and the City hereby agree that 50% of each payment of principal of and interest on the Bonds and all costs related to the Bonds shall be the responsibility of the District and 50% of each payment of principal of and interest on the Bonds and all costs related to the Bonds shall be the responsibility of the City. 5. DISTRICT CONTRIBUTION OF FUNDS; SUBJECT TO ANNUAL APPROPRIATION. The District hereby agrees that it will contribute funds to the City to meet its 2 4834-1882-0027\5 obligation in Section 4 above, so that the City may decrease the Abatement Revenues on a year by year basis. The contribution amount and schedule will be determined after the issuance of the Bonds, and the contribution will be from legally available funds of the District appropriated annually by the Board of the District and shall not be payable from, or be secured by any pledge of, any other funds, revenues, assets or taxing power of the District. 6. CONTRIBUTED FUNDS NOT SECURITY FOR CITY BONDS. The annually appropriated funds of District contributed to the City will not be pledged as security for the Bonds; the funds from the District are only intended to decrease the amount of Abatement Revenues required to be applied to debt service on the Bonds. 7. WAIVER OF CERTAIN ABATEMENT PROCEEDINGS. The District hereby waives any notice or procedural requirements under Minnesota Statutes, Sections 469.1813-469.1814, with respect to the Abated Properties. 8. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 9. BINDING EFFECT. This Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective successors and assigns. 10. SEVERABILITY. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 11. AMENDMENTS, CHANGES AND MODIFICATIONS. This Agreement may be amended or any of its terms modified only by written amendment authorized and executed by the Parties. The Mayor and City Clerk are authorized to execute and deliver amendments and any documents related to this Agreement on behalf of the City. The Chair and District Clerk are authorized to execute and deliver amendments and any documents related to this Agreement on behalf of the District. 3 4834-1882-0027\5 12. CAPTIONS. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope of intent of any provisions or sections of this Agreement. 13. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without giving effect to the conflicts-of-laws principles thereof . CITY OF LAKEVILLE BY: Douglas P. Anderson, Mayor AND Charlene Friedges, City Clerk INDEPENDENT SCHOOL DISTRICT NO. 194 BY: Zach Duckworth, School Board Chair AND Lynn Gorski, School Board Clerk