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11/16/1996 - City Council Special MINUTES OF A SPECIAL MEETING OF THE 004 ,j6 EAGAN CITY COUNCIL • EAGAN, MINNESOTA December 16, 1996 A special meeting of the Eagan City Council was held on Monday, December 16, 1996 at 5:30 p.m., at the Eagan Municipal Center Building. Present were Mayor Egan and City Councilmembers Awada, Hunter, Masin and Wachter. Also present were Assistant to the City Administrator Duffy, Chief of Police Geagan, Director of Finance VanOverbeke,Senior Planner Freese and City Administrator Hedges. VISITORS'ragg HEARD Mayor Egan asked if there were any visitors to be heard. There was no one present. EXECUTIVESESSION Mayor Egan acknowledged an executive session for the purpose of discussing union negotiations that are pending with the police dispatchers. ©BG;FUNDING Senior Planner Freese discussed the status of the CDBG funding and provided various alternatives as to how the dollars are to be allocated for 1997. She stated that the total CDBG funding level estimated for 1997 is $239,564. Mayor Egan asked whether this amount includes the ALOHA funding approved in the City's livable communities grant program. Senior Planner Freese stated that the • ALOHA amount for 1997 is$46,554. She further stated that the total available funding for CDBG including reallocation of previous unused funds is $289,564 of which $150,000 is proposed for senior housing, $129,084 of which is proposed for housing rehabilitation, and $10,500 for the Wescott Square Junior Program. Mr. Louis Besser, president of OWABOPTE Industries, appeared before the City Council and presented a request for $125,000 of CDBG funds for the construction of their facility. He stated that OWABOPTE is a non-profit organization in Eagan providing employment programs, vocational services and training to persons with developmental disabilities, mental illness, traumatic brain injuries and other challenges. He stated that their plans are to vacate and sell a building in Lakeville and vacate leased space in Eagan and consolidate their operation into a new facility in the Eagandale Corporate Center. Mayor Egan asked whether people in the program are using public transit and, more specifically, about the reverse commute from core cities. Mr. Besser stated that there are several persons that are involved in the reverse commute and, further, would like more people to use the public transit offered by the MVTA. Mayor Egan asked if OWABOPTE meets the eligibility criteria for CDBG funding. Mark Ulfers, executive director, stated that the patients do meet the 80%test median income or within a neighborhood that meets the income level. He further stated that persons who are involved in the OWAPOBTE program do meet the criteria. City Councilmember Hunter asked how many people are employed with OWAPOBTE. Mr. Besser stated that OWABOPTE helps more than 230 individuals on an annual basis that experience daily challenges to independence and employment. City Councilmember Masin asked whether service organizations are providing funding to OWABOPTE. Mr. Besser stated that the Lion's Club has been very generous to OWABOPTE. City Councilmember Wachter asked what percentage of OWABOPTE'S business is related to transportation. The amount is approximately 25%. Mr. Besser further stated that programs are crowded, the numbers are growing and space needs are critical. City Councilmember Hunter stated that in his opinion the capital building request by • OWABOPTE meets the CDBG criteria by benefiting low and moderate income levels which also helps Special Eagan City Council Minutes 00457 December 16, 1996/Page Two • people who are working and living in the community. He proposed that the City consider a $52,000 allocation from the CDBG annual appropriation to help defray capital costs for OWABOPTE. City Councilmember Hunter stated that his calculation was based on the fact that 31 of the 230 live in the City of Eagan. In other words, 13%will be directly benefited by the expansion proposed by OWAPOBTE. He further stated that the$52,000 appropriation was calculated by a multiplier of the 13% Eagan benefit times the $400,000 capital needs which equals an Eagan share of$52,000. City Councilmember Awada asked whether a funding appropriation to OWABOPTE is a priority and, if so, what program will be reduced by the $52,000. Mayor Egan stated that it is his opinion that the City should provide funding toward the OWABOPTE capital drive as presented by City Councilmember Hunter. City Councilmember Hunter stated that it is his suggestion that the housing rehab proposal be adjusted from $129,084 to $77,084. City Councilmember Awada stated that it is a concern of hers to allocate money to a non-profit organization, however, stated she would support this request but is concerned about future precedence. Mayor Egan stated that this is a one-time capital decision and would not look at the funding as any future precedence. Mr. Besser thanked the City Council for their support. Mayor Egan stated that the allocation for CDBG, as modified by the City Council, will be presented for modification at the January 7, 1997 City Council meeting. PHASE II SENIOR HOUSING PROJECT City Administrator Hedges stated that under the Community Development Block Grant Funding allocations in recent years, the City has set aside funds for the second phase of its senior housing facilities. He further stated that the Oakwoods facility has a waiting list representing over three times the number of units available and demand for senior housing within Dakota County and the City of Eagan is expected to triple in the next three years. Senior Planner Freese stated that there are three alternatives the City staff and Dakota County HRA have discussed regarding alternatives to provide additional senior housing facilities within the City. She stated that those alternatives include 1) construct a second senior housing facility in 1997 with rent levels and equity participation to be determined by the City Council, 2) delay the construction of a second Eagan facility in order to coordinate with the second phase of the Dakota County Senior Housing Program or 3) construct the second facility in 1997 with City equity and the third facility as part of the County's second phase of its senior housing program. City Councilmember Awada asked how rental rates are determined. Mark Ulfers, executive director of the HRA stated that the rental costs are based on 30% of a person's income between an average of a low $270 and a high $550 per month. City Councilmembers discussed excitement about both sites stating that shopping and transportation is excellent in both locations. Mr. Ulfers stated that the County is also giving consideration to a senior housing facility that would include assisted living units. Mr. Ulfers reviewed options for financing a second senior housing complex, stating that one option is to finance the addition through the HRA's common bond fund financing program and a second financing option is for the City of Eagan to pledge its general obligation authority as additional security for the bonds issued by the HRA. City Councilmembers discussed merits of various financing options stating that they would give consideration to the financing options presented by the HRA. City Councilmember Wachter stated that he is behind the project and would like to see the HRA proceed ahead and review the finance and details at a later time. City Administrator Hedges proposed that the assisted care facilities be distributed between both sites as one consideration. Mayor Egan stated that if the City pledges the full faith and credit of GO Bonds, it would seem that there could be no change of use without City Council action. Mr. Ulfers concurred. City Councilmember Hunter asked whether there was any concern in acquiring a favorable bond rating. Director of Finance VanOverbeke stated that there should be no problem with either Standard and Poors or Moody's given the makeup of this issue. Special Eagan City Council Minutes 00458 December 16, 1996/Page Three • Mayor Egan summarized the proposed senior housing by proposing that the HRA should be directed in collaboration with City staff to look at a 65 unit building, a feasibility report should be prepared for reviewing the pros and cons of both sites and, further, that the City and County should consider GO lending as an alternative for financing. orieR BUSINESS There being no further business, the meeting was adjourned at 6:25 p.m. . �. TLH December 16, 1996 I Dated City Clerk 411