CR 92-32 Ramsgate Townhome Purchase
January 17, 1992
Council Report # 92-32
RAMSGATE TOWNHOME PROPERTY PURCHASE - BUDGET
AND SOURCE OF FUNDS
Proposed Action
staff recommends adoption of the following motion: Move to establish a
budget of $125.000 for the purchase of the Ramsgate Townhome property
and $75.000 to pay the city's ex~enses for pursuing eminent domain
should it become necessary. AdditionallY. that the source of funds
for this purchase be from private donations to the City.
Overview
The City Council has requested that staff pursue the purchase of the
Ramsgate townhome property. At a recent Council meeting, the City
Council instructed staff to: 1) undertake an appraisal of the
property, 2) Initiate discussions with Mr. Jones on the purchase and
3) prepare the proper resolutions in preparation for eminent domain
proceedings.
The staff has received an appraisal of the property at a total value
of $124,700. Staff has also had an initial meeting with
representatives of Mr. Jones and they have indicated a desire to
negotiate the purchase of the property. To date, we have not received
an official response or counter-offer to our initial offer.
staff is requesting that the Council establish, a budget and
determine the source of funds for this purchase." We are recommending
that $125,000 be budget for the actual land purchase and that $75,000
be budgeted for the City's legal expenses should it become necessary
to pursue eminent domain. The staff also recommends that the source
of funds be private donations to the City and that failure to receive
enough private donations to cover this budget result in the City
discontinuing its pursuit of the purchase of this property.
staff has also attached a petition which was received on January 16th
in opposition to the proposed purchase.
Primary Issues to consider
o What options exist for the source of funds?
o How did the staff arrive at the proposed budget figures?
o Why must the funds be donated to the City by February 18th?
Supporting Information
o Staff analysis of issues
o Petition against the use of public funds for the Ramsgate
property purchase.
~~
Seven C. Mielke, city Manager
page 2
Council Report 92-32
Ramsgate
staff Analysis Issues
The staff has the following primary issues to consider.
o What options exist for the source of funds?
In previous correspondence, the staff has identified several
possible sources of funds for the Ramsgate property
purchase. They include a Park Bond referendum, use of
general fund reserves, internal borrowing, special
assessments, and private donations.
In reviewing each of these sources, the City Attorney has
determined that a special assessment process would not be a
viable option from a legal standpoint. The other options
have varying degrees of feasibility.
To initiate a Park Bond Referendum on this issue, while
legally possible, is practically inefficient in that the
cost associated with the referendum would be exorbitantly
high in contrast to the amount of money to be raised. This
source is also not certain to be successful which may call
for the City to use an alternative source if it isn't
successful.
The use of general fund reserves is both legally permissible
and easily applied, however, the balance in the general fund
is at or below what is considered to be a desirable level.
Should this sort of funds be chosen by the Council, I would
recommend a specific plan in which to replenish the general
fund over time from future tax levies.
To internally borrow from other funds to the general fund is
'also legally permissible and I would also suggest that the
Council plan on expending future general fund dollars to
repay whichever fund is~selected and borrowed from. In this
particular instance, the staff would recommend that interest
be paid to the borrowing fund.
,The possibility of private donations to the city is also
both legally permissible and has the least impact on city
finances.
Previous discussion to the city council from advocates of
the purchase have indicated a strong community interest in
purchasing this property. That being the case, the use of
private donations would be a viable source of funds to
complete this purchase.
In all cases, it will be necessary for the City to determine
whether or not it will pursue eminent domain proceedings by
the 18th of February. At that time, the Council will need
to act on the follow plat and landscaping plan of the
townhome proposal and sUbject to an agreed extension by Mr.
Jones, council will be forced to approve or deny the issues
at that time. Should private donations be the source of
funds, it is important that funds be in hand prior to making
the decision to proceed with eminent domain so that the city
is assured of the capabilities of private donations. This
issue should be discussed with the proponents of the
property purchase.
o How did staff arrive at the proposed budget
figures?
The staff is recommending that $125,000 be budgeted for the
purchase of the townhome property. This is consistent with
the appraisal by the city and offers a reasonable price to
the property owner. Since negotiations have not been
completed, the staff is unable to inform the Council of the
developer's response to the appraisal.
We have estimated the cost of legal fees on the part of the
city to be no more than $25,000 should we need to proceed
with eminent domain. It is quite possible that we will have
to proceed in order to obtain the property at the budgeted
price and the City should budget for that anticipated legal
action.
o Why must the funds be to the city by February
18th?
The Council is obligated to take action on the developer's
final plat landscaping plan by February 23rd. As such the
last Council meeting prior to that date is February 18th.
If the city is to pursue eminent domain proceedings, staff
is recommending that action take place prior to the approval
of the final plat and landscaping plan. It may be possible
to extend that deadline should Mr. Jones be willing to
extend the deadline for negotiating purpose, but we cannot
assure the Council that would be successful and thereforell
in the worst case, February 18th would be our last chance to
take action.
January 15, 1992
Honorable Mayor and City Council~
The attached petition has been circulated randomly around
the City within a very short period of time. We hope that
this will express to you the degree of concern among Hopkins
residents regarding the Hiawatha land purchase. There seems
to be a strong feeling that this is not an appropriate use
of public funds. We would also like to note that of all the
people contacted, there was only one citizen who expressed
support for the public purchase of this land.
We hope that this will be of some value to you in your
consideration of this issue. You may contact us if you wish
to discuss this further.
Respectfully submitted,
Kathy Caouette
314 - 8th Ave. N.
935-5852
Joyce Picha
314 - 12th Ave. N.
935-9359
Donald Bren
626 West Park Valley Rd.
933-5853
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We the undersigned citizens and tax payers in the City of Hopkins
are strongly opposed to the use of public funds for the purchase
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of land on the east side of the Mark Jones property. We believe
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the acquisition of the property. Therefore the land should be
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