DISCLAIMER

 

06-0237R


RESOLUTION DECLARING CITY COUNCIL AND DEDA POLICY FOR THE REVIEW AND APPROVAL OF CERTAIN DEVELOPMENT AGREEMENTS PURSUANT TO WHICH THE CITY OF DULUTH PROMISES TO PROVIDE PHYSICAL IMPROVEMENTS.

BY COUNCILORS GILBERT AND JOHNSON:

     BE IT RESOLVED, by the city council of the city of Duluth, Minnesota (the city) as follows:

     Section 1. PURPOSE.

     The purpose of this resolution is to provide a policy to be followed by the Duluth city council and DEDA regarding the information each will require before approving certain development agreements requiring the city to provide physical improvements in aide of one or more specific development projects. It is appropriate for the city to encourage and engage in development and, as a part of that activity, in certain circumstances, to promise to provide physical improvements necessary to one or more development projects. It is also essential, however, that before making any such promise the city should be fully informed about the cost of fulfilling the city’s promises, based upon the best information available at the time the promises are made.

     Section 2. DEFINITIONS.

     (a)  Development agreement means any agreement entered into between”

           (1)  The city, DEDA or any city department, agent or official (acting in his or her official capacity); and

           (2)  At least one other person in which the city agrees to provide physical improvements in aide of one or more specific development projects.

     It does not mean a contract for general community betterment, such as a grant agreement for a state financed social program, or an agreement to build or repair public facilities, streets, sewers or other physical improvements, that is not related to a specific development project. It does not mean a contract for the actual construction of an improvement;

     (b)  Development project means a project to be carried out by a person which is intended to accomplish economic development goals and activities addressed in Chapter 469 of Minnesota Statutes, as it may be amended, including, without limitation, commercial investment, land development, employment or business activity within the city of Duluth;

     (c)  Person means any individual or any association, corporation, general partnership, limited partnership, limited liability company, joint stock association, joint venture, trust, business trust, cooperative and any foreign association of like structure;

     (d)  Physical improvement means any repair, alteration or construction of buildings, structures, public facilities, streets, sewers or other infrastructure or physical improvements, whether or not for public use, and any remediation of adverse environmental conditions;

     (e)  Public activity summary means a document, on a form approved by the finance director, which contains the following information about the development agreement:

           (1)  A brief statement describing the development project;

           (2)  A brief statement describing the public purpose and expected public benefits of the development project;

           (3)  The identity of each party to the development agreement;

           (4)  A description of the physical improvements the city is promising to provide;

           (5)  A good faith estimate, based upon information currently available, of the total cost to all parties of completing the physical improvements, including interest, professional fees, financial fees, bonding costs, the value of donated land or property and, for each item, identifying the source of the estimate;

           (6)  A good faith estimate of a reasonable reserve for foreseeable contingent costs, such as unexpected site engineering, environmental remediation or regulatory penalties, that were not included in (5) above or, if none, the reason why no contingency fund is included;

           (7)  The estimated total gross expenditure (total disbursements) by the city and/or DEDA under the proposed development agreement including (5), (6) and any business subsidies, pass through money, grants, loans or tax increment financing not reflected in (5) and (6) above;

           (8)  The amount and source, by fund if applicable, of each revenue of the city that will be used to pay the expenditures that make up the total gross expenditure (total disbursements) shown in (7) above; and

           (9)  A good faith report by the city’s chief administrative officer, his or her designee or the city’s auditor that each amount and source identified in (8) above is expected to be available for use at the time needed under the development agreement and has been secured and, if the city council or DEDA approves the development agreement, will be dedicated for the proposed use or, if not, what source of funds is expected to be used to meet the city’s promises for the development project in place of the planned for funds if they are not available, or if the money is to be received as reimbursement for costs actually paid, an explanation of the steps to be taken to obtain the money.

     Section 3. PUBLIC ACTIVITY SUMMARY REQUIRED.

     Whenever a development agreement that provides for gross expenditures by the city or DEDA in excess of $500,000 is presented for review or approval to DEDA or the city council, it shall have attached to it a public activity summary that substantially conforms to the requirements set forth above. The public activity summary, or a corrected or updated one, shall also be filed with the city clerk as a public document. It will be the policy of DEDA and of the city council not to vote on any development agreement, or any part of or amendment to any development agreement, unless the most current public activity summary applicable to the development agreement has been on file with the city clerk as a public document for at least five days before the date of the vote (counting both the date of the filing and the date of the vote).


STATEMENT OF PURPOSE:  In order to encourage prudent fiscal management and accountability, this resolution adopts a policy to be followed by the city council and DEDA requiring the preparation of a public activity summary before the city council or DEDA will vote on certain development agreements pursuant to which the city promises to provide physical improvements necessary to a development project.