If MNDoT can do it…

I’ve already written about MNDoT’s new context-sensitivity and efforts to engage citizens and city officials.  Then I attended a CIMS – that’s Corridor Investment Management Strategy – conference in Owatonna a few months ago dealing with the I-35 corridor and related routes a few months ago.  The latest to come from the CIMS meeting is a website dedicated to gathering citizen input to help MnDOT Develop Evaluation Criteria for the CIMS Advancing Minnesota’s Sustainable Solutions Solicitation.  The “solicitation” is a competition for $30 million to fund trunk highway projects that improve quality of life, environmental health or economic competitiveness and so MNDoT is asking for input to develop the criteria by which quality of life, environment and economic competitiveness are judged.  So far, there are 5 proposed evaluation criteria including whether a project advances multimodal access or improves air quality – go add your own or comment on what’s there (don’t forget to look at the Minnesota GO plan for more information on MNDoT’s planning)

So, if MNDoT can do this on a statewide basis, why couldn’t Northfield do this for budget issues, parks, streets, etc.?


Safety Center financing – big update

Tuesday is a big day in the safety center financing process.  The Council will vote on a resolution to approve the lease-revenue financing transaction – we will vote to close the deal, in other words.

The package of documents is 551 pages, but the collection of documents is quite straightforward, so don’t let the size (or the legalese) overwhelm you (nor the handwaving on Locally Grown) The documents itemize the parts of the deal and allocate risks.  To repeat – the documents describe the deal and are intended to allocate the risks among the parties.  Much of the length is from the repetition of relevant definitions and terms in each document, as well as the requirements of securities law which are extensive.

300 of the pages are the 2011 Comprehensive Annual Financial Report (CAFR) which the Council reviewed and accepted in July (the auditor’s presentation gives a quick summary)

Of the remaining 200 pages:

1-5: Finance director Kathleen McBride’s memo which itemizes everything else in the packet – it’s a good summary of who is involved and the documents in the packet.

6-12: The resolution by which the Council authorizes the transaction and approves the financing documents.  The three provisions (repeated throughout the documents) to highlight are (1) these are not general obligations of the City (the full faith and credit of the City are not pledged to pay these obligations), (2) the City must appropriate payment annually (Failure to appropriate funds annually is at the sole discretion of the Council), and (3) the certificates of participation (COPs) are tax-exempt.

13-25: Ground lease

  • Deal: Northfield has already purchased the property for the project – the Cowles property – on Riverview Drive off Highway 3.  Now the City will lease the land for $1 to US Bank for the duration of the lease-purchase deal below.
  • Risks: Since this is about land, the site lease puts the burden for ensuring good title, proper zoning, etc., and no environmental hazards on the City as owner/lessor.  But the meat of it is the termination section: 3 ways the site lease can terminate, all dependent on the lease purchase agreement: (1) full payment of the lease below (that’s the $6.28 million) at the end of the term, (2) prepayment of the lease, or (3) non-payment either by failing to appropriate the rental payments each year or by default (money appropriated but not paid for some reason).  These termination events are repeated throughout the documents.

26-68: Lease-purchase agreement

  • Deal: The City agrees to pay rent to lease the property resulting in the purchase when the obligation is paid (either at the end of the term or sooner if prepaid); the Trustee agrees to lease the “lease property” which includes “the Project” (design, construction, installation, and equipping of an approximately 26,653 sq.ft. public safety center on the site), site improvements, etc.
  • Lease term: date of issuance to April 2, 2033 and expires at earliest of: full payment, prepayment, or non-payment as above.
  • City makes Base Rental payments and Additional Rentals (utilities, insurance, etc.)
  • City operates and maintains the property in an appropriate manner and other typical language about who owns improvements
  • City constructs the project according to Agreement to Construct (below) which stipulates that
  • Trustee holds title to the property until City completes payment
  • Risks:
  • If lease expires for non-payment, the city has 45 days to vacate the site, deliver equipment (personal property or equipment financed with the proceeds from the sale of the certificates of participation) and any monies already appropriated must be paid.
  • If construction exceeds the $6.28 million, the City must pay any excess costs
  • Nonappropriation may be cured by the City within a reasonable time – so, let’s say a Council fails to appropriate funds in the (statutorily mandated) December 15 budget.  New Council takes its seats on January 1 and could pass a budget amendment to appropriate the rent payments and save the deal.
  • The City is not obligated (because it’s not a general obligation) to make payments or purchase the facility.  The risk here is to the trustee, but in practice, the likelihood of the city walking away is extremely low.
  • City has the burden of maintaining the property and using it only in ways that maintain the tax-exempt status of the investment

69-132: Indenture of trust (having nothing to do with indentured servitude which is about the only use of “indenture” outside the legal world)

  • Deal: an agreement between the City (the bond issuer) and US Bank (the trustee which administers the lease for purchasers) which details the rules and responsibilities of each party.  The trustee receives payments from the City, pays the owners, and manages the legal requirements of the securities (which are substantial).  This document is technical securities market stuff.

133-154: Agreement to construct: just what it sounds like

  • Deal: City agrees to construct the safety center; Trustee agrees to pay for it from the proceeds of the sale of the COPs
  • Risks:
  • Fixed Price if the construction costs exceed the proceeds of the sale of COPs, the city pays.  The city may execute change orders in the project, but the maximum price is fixed.  If the project comes in under budget, the city gets that benefit.
  • Scheduled completion date is October 31, 2014 (actual completion date is when appropriate documentation of completion is delivered).  City uses best efforts to meet this schedule, but it is not a default if the scheduled completion is exceeded.
  • Typical construction contract language defining default in the construction (rather than the payments to the trustee) such as the city failing to use best efforts to meet the date, not constructing the building to the appropriate standards, etc.

155-161: Continuing disclosure undertaking: More securities regulation stuff.  The City agrees to provide annual financial information, reports of “material events” and other documentation intended to give securities holders information about risks involved with their investment (I believe this is required for any bond issue).

162-177: Certificate purchase agreement

  • Deal: Agreement for the City (issuer) to sell the entire issue of COPs – the $6.28 million package – to Dougherty & Co (underwriters) to market to investors by means of the Official Statement; the Official Statement (included as the Preliminary Official Statement below and finalized when the deal closes) is the prospectus or marketing material from Dougherty to investors describing the COPs.  Again, securities regulation stuff describing the actual issuance details.  Also sets the COP amount, rate and yield at closing which will take place tomorrow morning.

178 (Preliminary) official statement describes the terms of the COPs and provides extensive information about the City, the agreements which make up the project for which the COPs are sold described above, the rating from Standard & Poors (AA-) and other information intended to help investors make an informed choice about the risks of the investment and its appropriateness for their portfolio.  The risks include the repetition that these securities are not general obligations and the City is not required to appropriate funds which knowledgeable investors would measure against the AA- rating and their review of the City’s financial outlook as revealed in the 300 page CAFR.

The rest of the packet is copies of earlier materials including the authorizing statute, RFP for the underwriter for the COPS and the scoring of the proposals received, timeline, and the statement issued by the Council to inform the public about our choice of financing.

Public Safety Center financing – live blogging the HRA meeting

The next step in the Safety Center financing is approval of the bonding by the HRA (see the agenda and packet here)

Public comments first.

  • Kris Voh, former Councilmember and former HRA member, “after years and years of deliberation” about this project, Mr Vohs urges the HRA to “do it” and approve the funding mechanism.
  • Victor Summa reiterated his request for objective legal advice and opines that the legal counsel from Kennedy & Graven and Ehlers is not entirely unbiased.  He continues to discuss the “statutory slipperiness” and suggests Council member Erica Zweifel who sits on the HRA and all the Council members have a conflict of interest in this transaction.
  • Don McGee (who is a member of Northfield Citizens Safety Center Task Force along with Jerry Anderson, David Ludescher, Joe Grundhoefer, Ken Malecha, and John Machachek)  with a letter in the Northfield News) “concerns of things I think are happening to you” and talks about the interleaving of actions asserting that the HRA approval comes too late (or the Council’s action came too early).
  • David Ludescher, one of my opponents in the Council race, states “we all know what’s going on here” which is, in his opinion, solely to avoid the voters (he asserts this repeatedly as well as misrepresenting the process and burden on the HRA over on Locally Grown).  He continues to tell the HRA this is a “task you’re really not qualified for” and that the Council has made an “unfair request” of the HRA.
  • Patrick Ganey, Council member, notes “loud voices are not always the correct ones” and urges the HRA to act according to the statute which authorizes this action and not be intimidated by a small number of people.
  • Mayor Mary Rossing “we’re all on the same team” and urges the HRA to act for the good of the community and use this “tool you have in your toolbox” (see the Mayor’s statement from the News, too)

Moving on to the first action item which is to authorize that preparation of documents for issuing the bonds and to request the Council hold a public hearing.  Jenny Boulton, of Kennedy and Graven explains the legal status.  Questions from chair Leota Goodney to clarify what might happen if the City decided not to pay (“non-appropriation” is the term – the City would make an annual appropriation to the HRA to pay the debt); the HRA assets would not be available to the bondholders, but the HRA would own the project, the City’s bond rating would suffer, but bond rating agencies view this as a remote possibility.   Ms Goodney also asks about the time commitment for the HRA and Ms Boulton states that the commitment is only the approval process but nothing else.  Mark Ruff of Ehlers addresses the RFP (page 56 in the Council packet for next week) for the sale and the negotiated sale process.

5:50 pm: The HRA gets to discuss…no questions are asked.  Erica Zweifel states that she is “overwhelmingly” in support of the project and the financing mechanism, especially thanking Councilor Vohs.  She also notes that this financing choice IS a response to voters, rather than avoiding them, by acting as many constituents have asked.

Dayna Norvold, who spoke at the Council meeting (see my previous blog post), says the only issue is “does it fit within out mission”? And the answer for her is “no.”  Kevin Fink, “I don’t think this meets our mission” although he is in favor the project and will also be voting “no.”  Susan Crow only states she wished for more time and some concern about ability to manage the information.  Leota Goodney notes she believes the HRA is part of the City and feels she had her questions about impact on the HRA answered. Michele Merxbauer emphasizes the conduit nature of the financing and not adding to the workload of the HRA.

6:10 pm. Competing readings of the statute lead to a discussion of blight.  Ms Norvold has a firmly held belief about what blight is, I think, and I’m guessing it has something to do with delapidation.  Ms Merxbauer points out that the current site can be considered obsolete and blighted as well as the new property, platted 30 years ago, but too small for many current industrial uses. Jenny Boulton encourages a broader use of “blight” and helping development through this financing mechanism.  In response to Kevin Fink and linking the broader mission to housing: public safety is related to the entire community.  Ms Norvold suggests that approving this bond issue would open the door to the HRA being asked to finance many projects.  Ms. Goodney emphasizes that no housing projects are on the horizon – implying that a housing project would be financed first – so it is available.

6:20 pm. Is it worth putting this action off?  asks Ms. Goodney.  No.  Erica Zweifel moves the suggested motion and it fails for lack of a second.  A disappointing result based, I believe, on misunderstanding of the financing authority.  Back to the Council.


Financing the Safety Center – taking the next steps – UPDATED

UPDATE: Mayor Rossing has a column in the Northfield News on this topic.

On June 5, the Council voted to use lease revenue bonds to finance the Public Safety Center, an action which generated much quiet support for acting to move the project ahead directly and efficiently plus a little public outrage from the same small group of Council watchers.

Between June 5 and Tuesday’s special meeting, city staff recommended the HRA rather than the EDA be asked to issue of the debt and the HRA has received an introduction to the project.  Both the EDA and HRA have the requisite authority to undertake this transaction, so the choice is more related to which group is best able to do the job we’re asking them to do. The EDA has new leadership and is rebuilding, but is still short two members and quorum issues are still very real.

Northfield’s HRA has been quietly effective for many years; the HRA’s ability to work collaboratively and finish projects is significant. Dayna Norvold, HRA member, spoke at the meeting and said this request would “totally hijack our agenda” but she gave no specifics to explain her fear. In fact, the HRA board function will be to review materials and take action at the appropriate points in the process.  The work of drafting documents, preparing materials, etc. will fall to city staff, bond counsel and financial advisors.  The programs of the HRA will continue unaffected, their budget untapped and their ability to carry out their fine (award-winning!) work on housing issues in Northfield uninterrupted.  The Council is asking the HRA to let us tap into their financing authority, as do non-profits in town, but not to take over the project.  The burden to the HRA is small.

So, the Council took three more actions to advance the project; all votes were unanimous (6-0; Erica Zweifel was not present).  We approved the form of an RFP for the negotiated sale of bonds, a resolution to transfer funds internally for cash for the purchase of property and other items, and to authorize staff to proceed on closing on the purchase of the Cowles property (the City had a purchase agreement contingent on financing method) in conjunction with the bond sale.

Is this the right horse for our cart?

We were accused of putting the cart before the horse, but I think that metaphor does not capture the situation.  Right now, we’re deciding which horse to pull the wagon (we’re asking to use the HRA horse, a fine steed), what we need to put in the cart (cash for land purchase, plans, etc.) and when the two should be hitched (following HRA decisions, bond sale, etc.).  This project is complex – the multiple steps (which would be present with any financing mechanism, incidentally) must be correlated with particular transactions and decisions.  Coordinating action by the Council with action by the HRA with our respective meeting schedules, as well as making the decisions, negotiating the bond sale, purchasing the land will all happen at the appropriate time, but the truth is that many are executed by staff between meetings or by the HRA at separate meetings.  By having Council approval in hand, the other decisions can be scheduled and made efficiently.

We got more good news from our financial advisor (Mark Apfelbacher of Ehlers) – because this project is for an essential facility and because we are putting dollars in upfront to purchase the land, the debt issuance costs are likely to be lower because, even if lease revenue bonds are not backed by the full faith and credit of the city, this project already has city commitment and the risk that Northfield would not pay its debt is very low.  Combine that with historically low interest rates and this project is a good deal now.

My opponent has accused the city of “not having the courage” to do the project ourselves. Again, the complain is misplaced.  The City is doing the project and (see above) requesting the HRA assist us as the financing conduit; we’re not transferring responsibility for the project or the debt payment to any other group, but will be making an annual appropriation for payment from property taxes.  The only lack of courage I see was the original compromise on CIP bonds – a choice which I think says the Council has believed all along that this was not a project to send to the voters, but were not bold enough to act to use lease revenue bonds at that time.  Now that we have made more decisions about the project – location, scope, carved off the fire organization and vehicle location – we could and did make the clear financing policy decision.

See also: Council’s statement on the choice of financing method (I’m working to make sure this is the first of a series of statements to the public to clarify decisions and push information to residents, rather than rely only on media coverage).

Financing the Public Safety Center-what and why

How did we get here?

The June 5, 2012 Council agenda included 2 items related to financing the Public Safety Center – a public hearing required before the City could issue Capital Improvement Bonds and approval of a resolution authorizing the use of CIP Bonds for the Safety Center.

The hearing was duly held and the Council heard from members of the Chamber of Commerce, NDDC, and interested citizens who asked for the Council to send the Safety Center issue directly to a referendum rather than using CIP bonds.  The Council did decide not to issue CIP bonds, but also decided not to send the issue to the voters.

Procedurally, the meeting was complicated by Patrick Ganey’s absence.  A motion to use GO referendum bonds and the motion to issue CIP bonds both failed on tie votes (Rhonda Pownell, Suzie Nakasian, and Ivan Imm supported both; Mayor Rossing, Erica Zweifel and I voted no).  Erica Zweifel made a motion – not impromptu as the LWV blog called it, but well thought our and justified – to use EDA/HRA lease revenue bonds; the motion was adopted on a 4-2 vote (Yes – Rossing, Buckheit, Imm, Zweifel; No – Nakasian and Pownell.

Statutory interlude about bond types: skip it if you know this stuff.

Under state statute, cities may issue general obligation (GO) bonds for a wide range of public purposes (except operating expenses) which pledge the full faith and credit of the city to payment of principal and interest (which is why municipal GO bonds are considered such safe investments).  GO Bonds usually require voter approval – a referendum – before the City can issue the debt.

Capital Improvement Bonds (CIP bonds) are a type of GO Bond which may be issued only for building or improving a city hall, library, public safety facility, or public works facility; CIP bonds are also an exception to the voter approval requirement, but citizens may submit a petition calling for a reverse referendum.

In addition to GO bonds, there are financing methods which do not pledge the full faith and credit of the city, but instead use the revenue from the project financed to pay the debt.  The Council chose a type of revenue bond on Tuesday: EDA/HRA lease/revenue bonds. Either the Housing and Redevelopment Authority or Economic Development Authority may issue revenue bonds to pay to construct the facility, and then lease the facility to the City.  The City then makes lease payments to the HRA or EDA to pay off the debt.

Back to the “why?” 

My starting point is a firm belief in representative government and not seeking voter approval for essential projects.  But, as I blogged back in 2010, I did not have much confidence in the Safety Center decision making process and particularly not in the information flow for making the decisions.  I have been extremely sympathetic to the referendum advocates because if I struggled with the project, those without a seat at the table would likely be more confused.

Since 2010, I’ve come to believe that CIP bonds are a strange compromise financing vehicle which can lead to the sort of brinksmanship we saw at the Council meeting with threats (very real ones, I’m sure) of a reverse referendum and its “citizen veto” character.  So, there I was, impaled on the fence between referendum and lease/revenue bonds.

Since 2010, and especially since earlier this year, the Council has made significant progress in defining the scope of the project, cost, location, and creating flexibility to address fire department organization, equipment and facilities issues (June 12 worksession includes a discussion of the possibility of creating a joint powers board to govern a fire district which includes Northfield, Dundas, Dennison and the townships who are members of the current Rural Fire association; the last worksession included information on equipment).  So, while the road to get here has been bumpy, we’re nearing the destination and I’m leaning away from the referendum.

The speakers at the public hearing, however, pushed me over the edge toward lease/revenue bonds.  The general message from the public: we are in favor of this project and want it to succeed.  More information was requested by a few, but, as Mayor Rossing pointed out, the City would not be spending additional money to develop more detailed plans and specifications until we know the project will move ahead which requires the authorization to finance it.  I fell off the fence here.

So, the best way to get this project done, provide more detailed information to the public, get our police officers into a facility which helps rather than hinders their ability to protect us, and save time, professional fees, and possibly increased construction costs would be to proceed directly to the project via lease revenue bonds.  The best way to fix the process problems is to determine what we can learn from it and improve it – hindsight can provide quite a lot of perspective on what we could have done better and differently.

Keep nagging us, however, to get information out and even suggest the best ways to do that.  We’ll keep working to keep the project costs down and build a functional, efficient facility.

Hospital Strategic Futures Task Force meets

On Thursday, May 24 the newly minted Hospital Strategic Futures task force met for the first time.  The League of Women Voters blog has a good summary.

What are we doing?  the Council passed a motion outlining the scope of the discussion in which

The Task force will study the respective contributions of the Hospital and the City to the public health and economic development of the community, and consider models of future collaboration between the Hospital and the City which:

  • ensure that the residents of Northfield continue to have access to a high quality, affordable health care delivery system;
  • make investments that improve community health, fitness, and wellness; and,
  • Promote effect local governance and direction of the health care delivery system

When I blogged about this earlier, I made some suggestions which can fit under those bullet points.  For the initial meeting, however, we simply tried to get organized and acquainted.  The Council members of the task force – Ivan Imm, Patrick Ganey and myself – agreed that we needed more background on the hospital finances and operations to be able to discuss matters on a par with our hospital board colleagues Brett Reese, Jim Schlichting, and Charlie Austin.  The 3 Councilmembers are going to do our homework with hospital staff and then we’ll meet again on June 18, 7 pm with the Hospital Board members.  I am the chair of the group; I see my role as chair as keeping meetings on track and on task with the task force working to define agendas and questions as we go along.

How can you find out what we’re doing?  Meetings will be open to the public and meeting notes will be available on the City website.  Reports from the task force members to their respective bodies will also be given; I’ll try to ensure these reports (and any other supporting material we may rely upon) are on the website, too.

Domestic partnership registry update – an updated update

May 15, 2012: Making progress!  The City Council received the domestic partnership ordinance from the HRC and set the date for the first reading as June 5, 2012 (see the Charter for ordinance procedure) on a 5-1 vote (Rhonda Pownell voted no; Suzie Nakasian was absent).

It was gratifying to see and hear more people speak in favor of this ordinance – thank you all, with particular thanks to Phil Duran from OutFront MN.

April 15, 2012: The Human Rights Commission approved a draft ordinance to create a domestic partnership registry in Northfield.  The forecast of Council agendas puts this issue on the May 15 meeting agenda.

Thanks to the Commission for doing the work, Phil Duran, the legal director for OutFront Minnesota for help with specific language, Dan Hudson for getting this issue moving in Northfield and to all of you who have called or emailed in support.

Hospital study

Why study the hospital/city relationship at all since this is obviously an emotionally charged issue?

The city needs to ask tough, even painful, questions because it has real, structural budget issues which cannot be solved by a few cuts or some temporary austerity.  Even assuming the city keeps receiving local government aid from the state, it cannot maintain the infrastructure and facilities it currently has and struggles to continue services at the same levels.  The council is already facing the need to increase property taxes for the new public safety facilities and it cannot use the tax tool to solve all the problems.

What else can the city do?  Ask tough questions about everything the city owns, provides, and maintains to understand city operations and be able to make better decisions.  Ask if there are different ways to provide services.  Ask what the city can do to enhance its economic development potential.  Ask what tools are available (legally, politically, practically) to help ensure Northfield is a financially resilient city for the long term.

The hospital is our biggest asset.  Over just the last few years, starting in 2005, “the hospital” has grown to be the Northfield Hospital and Clinics in Northfield, Lonsdale, Lakeville, Farmington, and soon in Elko Newmarket.  The council and residents need to know how Northfield city ownership of a regional health system works, then ask what actions we might take to ensure the financial health of city and its healthcare system for the long term.

The City Charter divides up the responsibilities between the council-appointed hospital board and the council.  The hospital board controls and manages all hospitals and related medical facilities, but has no power to construct additional facilities, buy or sell any of these, or to levy taxes.  The council has the powers to construct new facilities, buy and sell them and levy taxes, but has no role in the operation of the hospital.  Despite approving the expansion by approving each land purchase, clinic project, etc., the council has not kept current with hospital strategy in a way that lets it understand what it means to own a regional healthcare system rather than a single hospital.

What basic principles will guide the discussion?  Perhaps some like this:

  • The council will not attempt to study healthcare industry, the future of healthcare, or the success of the hospital (which is shorthand for the entire system) as a healthcare provider – the council has no expertise and the Charter assigns this to the hospital board.
  • No action to benefit the city will be taken which can be foreseen to undermine the hospital’s financial or operational success – the suggestion that the council simply wants to get cash now, regardless of the impact on the hospital and the community is ludicrous.
  • The city values and wants to sustain a hospital in Northfield – in other words, it is important to have a high quality hospital in the city.
  • The city would like to understand more about the hospital, its operations, and strategic planning in order to make better informed decisions within its power as owner.
  • The city would like to develop a better framework for collaborating on decisions which impact both city government and the hospital.

Possible questions:

Basic, broad questions: what are the costs, benefits, and liabilities of owning a regional healthcare system?

Where do city/hospital needs, plans, missions intersect?  For instance:

  • what are the hospital’s infrastructure needs, are they considered in the city’s CIP, and how will costs be assessed?  The fringe location of the hospital increases these costs, so how do we plan for them effectively?
  • What does the city do which impacts public health and could benefit from participation (which could be informational, financial, etc.) by the hospital?
  • What development plans of the city impact the hospital or vice versa?  For example, could earlier conversations about the EMS facility have helped the council decide on a location for the public safety center sooner?  How does creating a public service cluster at that site guide future development?
  • How can the hospital participate in the city’s economic development efforts?  Healthcare has been identified as a target industry in the city’s economic development plan as has the more general objective of retaining existing businesses (and the hospital is one of our largest employers).

How can the city measure what matters about the hospital as it makes policy? In other words, how does the financial information figure in a larger picture of economic, environmental and social sustainability?  We’ve heard a lot about “quality of life” as a goal of city services, as something which attracts residents and businesses, and which contributes to our identity and well-being as a community.  In addition to being worth a lot of money, the hospital has great value for the city.  How does city ownership of the hospital increase the value?

Safety Center decision making

Yelling "Fire" in a crowded Council chamber

“Safety Center Policy Decisions” is first on Tuesday’s worksession agenda.  The staff memo states:

The City Council has three major policy decisions to make related to the new Public Safety Center:

1. Reconfirm the joint Public Safety Center (PSC) Project

2. Choose a site for the PSC

3. Establish a budget and financing for the PSC project

These are important decisions, but these are not policy problems.  These are concrete, implementation problems.  Unfortunately, the Council has not yet really been clear about the underlying policy problems and I consider myself at fault for failing to articulate questions clearly and not finding ways to guide the discussion more fruitfully.   And, of course, hindsight helps, too.   So, from the acres/tons/volumes of raw information we’ve received, here’s how I’m trying to structure my own thinking for the discussion tonight:

1. Let’s review ALL the capital spending we anticipate: I’d love a user-friendly inventory of all existing capital assets, but simply working with our CIP we can construct a forecast of the capital projects, their cost and approximate timing of expenditures.   So far, we’ve discussed the library (CIP includes $7.6 million in 2015).  Street improvements are a regular item on our agendas, but we’re struggling find ways to catch up with street reconstruction/repair.  Goal: make choices for the PSC which will not adversely affect the city’s ability to maintain and replace other capital assets in future years or at least be able to project the limitations the PSC will create.

2. Let’s determine how much debt we can afford.  We’ve begun to discuss the “how much” issue in relation to our street reconstruction projects, but not for the PSC and future facilities projects and not all together.  For an $8.5 million dollar bond issue, our finance director has projected an annual levy of $600,000.  – this levy amount is about 50% of our current debt levy and almost 3x the total levy increase for 2012.  Where will the revenue to pay the add’l debt service come from?  It doesn’t get any easier when our revenue stream is partly in the hands of the state legislature and its decisions on local government aid.

We need help from staff to bring this information together in a useful form so the Council understands the consequences and so we can clearly explain it to you taxpayers since you’ll be paying for it.  So, if we had knew what we needed to replace when AND had developed guidance on how much debt we should reasonably issue relative to our expected revenue, our budget choices would become a lot clearer.  And, if the budget choices were clearer, I suspect the site, design and timeline would also come into focus.

The other large unanswered question not entirely unrelated to the above:  “Partners”: We’ve talked about our partners – colleges, Dundas, rural fire association – but what sort of relationship are we talking about?  We have a rough commitment for a capital contribution of $500,000 from the rural fire association.  However, the service agreement is decades old and Northfield relies on the rural association’s equipment.

The Council is scheduled to receive an update on our partners tonight.  I’m eager for this update since the Council hasn’t had much information about the details of negotiations, so my more cynical self thinks it looks like Northfield tries to see how much we can get our not entirely enthusiastic customers to pay without giving them a great deal of input on what they’re buying.  So far, contract talks seem stalled.  A bolder alternative strategy would be to create a regional fire district governed by a joint powers agreement for services, facilities and equipment?  It would certainly clarify the relationship, support Northfield’s interest in regional solutions, and perhaps build in a more sustainable structure where all parties have a strong stake in helping the fire district succeed.

Land development code issues – update

Really, it's not about the garages

Last week, I was live-blogging the Planning Commission meeting as they considered whether the “new” (about 6 months old now) land development regulations applied to subdivisions which had been approved under the former code.

On Monday, the Council accepted the Planning Commission’s recommendation to allow a broad exemption for lots subject to a development agreement – allowing the projects at or near the building permit stage to move forward – but also directing the Commission to consider how to resolve the issue in the longer term.

The issue is not, as some commenters over on the local newspaper site believe, about permitting 3 car garages.  Nothing in the code says 3 car garages are prohibited.  What’s changed is where the garage can be placed and the proportion of the front facade of the house occupied by garage doors.  The problem is, all the lots were platted (and many graded) on the assumption that the 3 stall, garage out in front, style of home would be built.  Since the platted lots are on wide suburban streets in residential only areas, allowing big front garages on the remaining lots (many of which are zoned as planned unit developments which are clearly exempt from the regulations) does not seem to point toward many problems, or many more problems than are inherent in the subdivision.

Because really, the new code is not about garages at all, but about trying to reverse the rapid horizontal development which makes it more expensive to maintain streets and pipes, manage stormwater, plan transit routes, or walk to school.  To accomplish these goals and save your tax dollars, we’ll have to change streets, setbacks, lot sizes, and larger scale issues than the garage doors.  Garages are just one extremely visible symptom of a development pattern which is economically unsustainable.