Harmony council approves
creation of new TIF district
Wednesday, January 22, 2014 6:10 AM
At the first Harmony City Council meeting of the year, held Tuesday, Jan. 14, the council addressed items relating to a new sidewalk assessment policy, the First Avenue Southwest street and utility project and a new tax-increment financing district to support a proposed expansion at Harmony Enterprises.
New TIF district
Mike Bubany, a financial planner from David Drown Associates, and Chris Giesen, representing the Harmony Economic Development Authority (EDA), were on hand at a public hearing to explain the proposed TIF District 1-6.
The Harmony-based company Harmony Enterprises had requested for TIF assistance through the city for a roughly $175,000 development project. That portion of the project would expand the business by 5,500 square feet with the project beginning this spring.
The business had asked the city for up-front TIF funding amounting to around $68,000. It had been determined that Harmony Enterprises would not be able to move the project forward unless the TIF money was made available. The company had not yet decided whether it would accept the deal with the city or not.
Bubany explained the new TIF district would freeze the current value on the property, which is at $929,000. Once the project is completed, the value will be at a projected $1.27 million dollars. The city would be able to collect approximately $9,000 in new taxes every year for nine years starting in 2016. These tax collections would pay back the city, with Harmony Enterprises agreeing to pay any balance left at the end of the nine years.
The structuring of the new TIF district required the council to amend the TIF district 1-5. The new district will include Harmony Enterprises and seven other parcels within the "antique mall" district. The council approved two resolutions that amended the boundaries of the previous TIF district and created the new district with the seven additional parcels.
Bubany noted the company had agreed to indemnify the city in the event of an accident occurring during construction.
Giesen mentioned that the project could be one of the first in the state to take advantage of the Minnesota Job Creation Fund, which allows industrial businesses to do capital improvements over a seven-year span and be rebated based on business performance. Harmony Enterprises is expecting to add around five jobs.
City Administrator Jerome Illg remarked that the project would most likely bring good public relations to the city and the company because it would be one of the first.
Council members and engineer Brett Grabau discussed the city's sidewalk assessment policy in lieu of the First Avenue Southwest project, which is slated to start construction early next summer.
An assessment policy approved in December stated that "costs associated with sidewalk replacement will be assessed at 100 percent to the benefitting property owner." The language also stated that cost payments for sidewalk overwidth would be considered on a case-by-case basis. A proposed change to that language was presented, which would have newly installed sidewalks be assessed according to the street improvement policy, which is set at 40 percent for the property owner.
Mayor Steve Donney expressed that he didn't' "like the idea of a resident paying for a sidewalk that is a benefit for the city as a whole."
Grabau said the language in the original policy didn't make any sense and wouldn't work. He added that residents would still get assessed for the concrete driveway aprons and curb and gutter work.
More discussion followed with council members questioning whether the costs of a city-installed sidewalk should be borne entirely by the city or be assessed similar to streets. Donney stated that sidewalks are only put in if the city considers the area to have a need for increased public safety.
He made a motion to have costs associated with sidewalks installed for public safety to be 100 percent paid for by the city. The motion was passed with a 3 to 1 vote.
CSAH 35 street/utility improvement
Grabau, at the meeting for Stantec Consulting Services, presented the feasibility report for the County-State Aid Highway 35/First Avenue Southwest project. The project will commence in June and be funded by the issuance of general obligation improvement bonds.
Improvement assessments were outlined. It will cost around $41 per linear foot (LF) for urban street improvements and $26/LF for rural street improvements. Residential water service assessments are $1,307 per service and $2,077 per non-residential water service. All assessments will raise roughly $265,000, which is about 25 percent of the total project cost. The total project cost is about $1.058 million dollars.
The project area runs from the corner by the Harmony Foods IGA south to Highway 44.
The four-inch water main between Center Street and Third Street will be replaced with eight-inch DIP/PVC pipe. Residential properties will be supplied with a one-inch copper water service and school and church properties will have a four- to six-inch DIP/PVC service.
Storm water catch basins will be replaced. Both storm water and sanitary sewer structures will be adjusted for the new road surface.
The road from Center Street to Eighth Street Southwest will be reconstructed using both new and existing aggregates and remain at its original width. The Eighth Street to Highway 44 will be narrowed to 32 feet. Sidewalk and curb ramps will be reconstructed along the street as well.
Since the road is owned by the county, the county will be picking up approximately $758,000 of the total cost.
In other matters, the council handled the following issues at its meeting last week.
The council approved a $25 per meeting compensation for those council members who are present at quorum-led meetings. The approval was retroactive to the beginning of the year.
The council approved the recommendation made by Fire Chief Rod Johnson to appoint Matt Haugerud to the Fire Department.
Connection fees and zoning permit costs were approved to be waived for those homes which are newly built.
Illg reported the no maintenance would be done on toilets found within several classrooms in the community center, since they are never used.