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09/28/1992 - City Council Special 7214 AGENDA SPECIAL CITY COUNCIL MEETING Eagan Municipal Center Building Monday September 28, 1992 7:00 I. ROLL CALL & ADOPT AGENDA II. PLAN B FORM OF GOVERNMENT III. DRAFT 1993-1997 C.I.P. (PARTS I & II) IV. DISCUSSION - 1993 GENERAL FUND BUDGET V. OTHER BUSINESS VI. ADJOURNMENT Auxiliary aids for persons with disabilities will be provided upon advance notice of at least 96 hours. If a notice of less than 96 hours is received, the City of Eagan will attempt to provide such aid. • • , MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS FROM: CITY ADMINISTRATOR HEDGES DATE: SEPTEMBER 25, 1992 SUBJECT: SPECIAL CITY COUNCIL MEETING/SEPTEMBER 28, 1992 At the last regular City Council meeting held on Thursday, September 17, the City Council set a special City Council work session for Tuesday, September 29 at 5:00 p.m. A specific reason for holding that special City Council meeting was to address the Statutory Plan B Council Manager form of government item that was addressed at the September 17 regular meeting. After contacting the County Auditor's office concerning the possibility of removing the Plan B form of government item from the ballot on November 3, if the City Council as a result of the work session decided not to proceed with the question this fall, it was learned that Monday, September 28 is the deadline due to the printing of ballots to satisfy the availability of absentee ballots that must be available beginning October 3. Since the ballots will be printed late Monday, September 28, the deadline for the ballot question is noon on Monday, September 28. Mayor Egan and all four (4) members of the City Council were polled and a special City Council meeting has been rescheduled to 7:00 a.m., Monday, September 28 to allow the City Council to have this discussion as originally intended. • The press for both ThisWeek and the Sun Current have been notified of the change. The other two items on the agenda, which include review of the CIP and general fund budget, will be considered at this special Council meeting. The only person who has requested notification of this special work session is John Freeman, who was notified of the change and time and date. STATUTORY PLAN B Enclosed on pages „_ through .Z is a copy of a memo and support information the City Administrator's office has prepared on the Statutory Plan B Council Manager form of government at the request of the City Council. If it is the intention of the City Council to proceed with the ballot question, the City Administrator will prepare a fact sheet on why the City Council is proposing to change the form of government from Plan A to Plan B for advisory commission members, City employees, the Chamber of Commerce and any other appropriate groups. Press releases will be prepared as well. The fact sheet will be distributed to the City Council first to make sure the information correctly represents reasons for considering the change in the form of government. There is no action to be considered on this item unless the City Council decides it is not appropriate to continue with the question on the ballot for the November election. S DRAFT 1993-1997 CIP (PARTS I & II) This item is placed on the agenda for the purpose of reviewing Part I Government Facilities IP and Part H Vehicles and Equipment expenditures that are under consideration in the 1993- 1997 CIP. Enclosed on pages ? through .23_ is a copy of a memo from the City Administrator that provides background on this agenda item. This item is scheduled for review and direction; there is no formal action required. DISCUSSION - 1993 GENERAL FUND BUDGET Enclosed on pages ay through as is a memo that provides additional update on the proposed 1993 general fund budget. The memo also includes notes from the special City Council meeting held September 10 when the City Council raised certain questions about the budget as proposed. Those questions and other issues raised in the memo should be addressed, if time permits, and direction where appropriate. Coffee,juice and rolls will be served for the early morning meeting. If any member of the City Council has questions or would like additional information regarding the special City Council meeting, feel free to contact the City Administrator at home (452-2238) over the weekend. /S/ Thomas L. Hedges • City Administrator • c2 M E M O R A N D U M I TO: CITY ADMINISTRATOR HEDGES FROM: ASSISTANT TO THE CITY ADMINISTRATOR HOHENSTEIN DATE: SEPTEMBER 22, 1992 SUBJECT: STATUTORY PLAN B - COUNCIL-MANAGER FORM OF GOVERNMENT In response to your memorandum of yesterday, the following information expands on previous material provided regarding the change from Statutory Plan A (Council-Administrator) to Statutory Plan B (City Manager) . Attached you will find the previously distributed summary of differences between the two forms. In addition, you will find, as a second attachment, an article from "Minnesota Cities" magazine discussing changes in the form of government. Background In its strictest sense, Statutory Plan A provides for a clerk or administrator with no discretionary authority. In addition to policy issues, all personnel and purchasing decisions remain within the authority of the City Council. Often, when a City establishes a new administrator position, it is constrained within these limited bounds and evolves over time as the Council confers increasing responsibility on the position. This is the case in Eagan where increasingly more duties, responsibilities and discretion have vested in the position of City Administrator over the sixteen years of its existence. In that time, the role of the City Administrator has been expanded by the City Council to include most of the authority statutorily vested in a City Manager. These include budgeting functions, personnel administration short of hiring and termination, purchasing discretion up to $1000 with review by the Council and responsibility for reporting relationships of all City staff. The principal remaining difference is the authority to hire and fire. This expansion of authority has been a natural response to a growing City and municipal organization as well as the increased complexity of the day-to-day management of the organization. In essence and in practice, the City Administrator function in the City of Eagan is the same as the City Manager function as defined by statute with the exception of the power to hire and fire. Since the City Administrator handles all other aspects of screening, hiring, discipline and firing other than the official action of the City Council on the basis of the Administrator's recommendation, a change from Statutory Plan A to Plan B would be relatively minor. Procedural Issues The County Auditor's office has been properly noticed of the City Council's action in this regard. The question as noticed to the Auditor reads: 3 For the City of Eagan, Shall Optional Plan B, providing for the council-manager form of city government, be adopted for the government of the City? The League of Minnesota Cities, Attorney General 's office and the City Attorney indicate that statute requires the question to be substantially in this form. The City may prepare and distribute informational material to better explain what Plan B and the Council-Manager form implies, but it is strongly suggested that such expansion and explanation not be in the question. The ballots for the November 3 election must be printed and in the Auditor's office by Friday, October 2. To accomplish this, the final ballot form is being proofed and sent to the printer on Monday, September 28. The Auditor is currently typesetting ballots including the City's question as outlined above. If the Council were to determine not to move forward with this item, the City can have it removed from the ballot no later than the morning of September 28. Please let me know if you have any questions or require any additional information. As ' sta t to the City Administrator 11/ ADMINISTRATOR--STATUTORY PLAN A • The City of Eagan currently operates as an Optional Plan A Statutory i t under Minnesota Statutes 412. Under this form of government, all legislative and administrative authority vests in the City Council. This body may appoint professional staff and administrative commissions to oversee day-to-day activities and carry out policy direction. Such cities may also appoint a professional City Administrator and delegate non- discretionary, coordinating authority for such responsibilities as supervision of workers, accounting,preparation of reports,factual determinations,and execution of Council policies. In adopting Optional Plan A, Eagan exercised this option. While the Council-Administrator form resembles the Council-Manager form in many respects, the principal difference is that in Administrator cities,discretionary administrative responsibilities such as hiring and firing and most spending decisions remain with the City Council. Under strict interpretations of this form of government, the Administrator is actually a coordinator and departments are ultimately responsible to the City Council. As cities grow and become increasingly complex, councils may find themselves involved in the details and minutia of administration rather than the policy and legislative functions which they must necessarily perform. Currently,Eagan is the largest City in Minnesota with this form of government. MANAGER--STATUTORY PLAN B • The City of Eagan has the option of becoming Plan B Statutory City under the same statute. The Plan calls for a Council-Manager form of government under which the chief administrative officer's duties are expanded to include hiring and firing and purchasing decisions within the parameters of the approved budget. The Council's role is still one of policy and legislation, but is less involved in the minute details of administration. In practice, the City of Eagan has delegated to the City Administrator many duties comparable to those of a City Manager. While all such duties are practical in nature, some may more appropriately be performed under the statutory authority of Optional Plan B. Under this form of government, the following types of business items are handled administratively, without Council action: 1. Enforcing city ordinances and resolutions, 2. Hiring and firing of all department heads and subordinate personnel on the basis of merit and fitness (although the Council could have an advisory role in the case of department heads) 3. Appoint the City Attorney with Council confirmation, 4. Exercising administrative control over all city departments and divisions created by law or by the Council, 5. Attending all meetings of the council, 6. Recommending to the Council such measures necessary for the welfare of the • people and the efficient administration of the city, 7. Making reports on the financial condition and needs of the city, 8. Preparing, if the council directs, an administrative code for Council adoption, 9. Assuming all duties the manager receives under state laws, city ordinances • and council resolutions, 10. Acting as the chief purchasing agent for the city. As purchasing agents, managers are responsible for all purchasing. Managers may, in conformance with the budget but without prior council approval, make purchases and let contracts when the amount does not exceed $1,000. However, city councils must audit claims resulting from such transactions. Larger purchases and contracts still need council approval. Examples of actions which would continue to require Council action: 1. Public Hearings, 2. Feasibility Reports, 3. Large or unbudgeted expenditures, 4. Joint Powers Agreements, 5. Zoning, land use and platting, 6. City Manager Salary, and 7. All other legislative and policy decisions. There are also other differences between administrator and manager plans. 1. With the exception of civil service and joint powers commissions, all boards and commissions under Optional Plan B must be advisory in nature, 2. While it is only reasonable and has been a past practice, Optional Plan B cities require the Manager to prepare an annual budget for public review and Council approval, 3. The Council as a whole and individually are legally prohibited from interfering with the Manager's prerogative to hire employees, 4. The Council is legally required to exert all of its controls through the City Manager and is prohibited from attempting to deal with or directly control any administrative person subordinate to the manager(although this does not preclude council members requesting information pertaining to City business from employees other than the manager), 5. The Manager signs written instruments on behalf of the city instead of the City Clerk. • • f 5 you know?Did Stanley G. Peskar ,- ;1 Changing city government structure f. How could a Plan A statutory purchases and contracts (under$1000) Can a city legally v ty g y ha e a full- city change to a council-manager and the powers to hire and fire city time mayor-manager? form of government? personnel. Not in a statutory city where the t. The change could take place in two Under home rule charter, the chart- council doesn't have authority to assign ii ways. First, the city could switch to er specifies the powers and duties of to the position of mayor any additional Optional Plan B for statutory cities. any administrative officer, whether duties or powers beyond those statutes Plan B is a council-manager form. Min- manager, administrator, or coordina- prescribe. Nor would it be possible in 2 nesota Statutes 412.601-412.751 spell tor. In general, the term "manager" most cases for a person holding the •, out the powers and duties of the man- usually implies a greater degree of position of mayor to simultaneously ager. A switch to Plan B must have discretionary power than does the term hold the position of administrator, voter approval. "administrator." However, some Min- because of common law and statutory The second possibility would be for nesota city charters create positions of prohibitions. the city to adopt a home rule charter administrator which have more exten- But, under a charter, a city could providing for a council-manager form. sive powers than positions of managers assign extensive administrative duties This route gives somewhat more flexi- in other cities. to the mayor and compensate him/her bility because a charter may provide What is the relationship between accordingly. for greater or lesser power to the the city council and the city admin- istrator? Is it advisable for a city to have manager, depending on local prefer- a mayor-administrator? prefer- ence and local conditions. A city administrator in a statutory The only way a city could have a The league has memos which discuss mayor-administrator (strong-mayor) �' procedures for adoption of either form. city is subordinate to the city council would be to have home rule charter and subject to the council's direction at provide for this. The Under what circumstances times. This differs from the status P problem is that at would a city want to change to a of a Plan B city manager who has some point, th e city may not find an council-manager form? certain statutory powers (e.g. person- individual in the city who is 1) eligible Perhaps the key question should be: nel) with which the council may not to run for office, 2) electable, 3) a "Are we experiencing problems which interfere. competent administrator, 4) willing to I a manager form would alleviate?" Such run for and accept a full-time office I problems might include the council What effect will a city adminis- knowing that he/she may not have a spending large amounts of time on trator position have on positions job after the next election. And it is making small contracts and purchases, such as clerk-treasurer and deputy possible that voters would elect a ht and personnel decisions are political clerk-treasurer? ically popular but administratively inept rather than merit related. The effect is almost entirely up to Person to the position. Only a few of What are the essential differ- the council. The council could create a Minnesota's larger cities (St. Cloud, ences between a city manager and position of clerk-treasurer-administra- for example) have adopted strong-may- i a city administrator? tor, eliminating the separate clerk- or charters. I In general, a statutory city council treasurer position; or it could make the Are city administrator positions cannot nnot legally delegate to any other clerk-treasurer subordinate to the cost-effective? t officer or board any discretionary pow- administrator; or create an administra- Because of the large number of er without specific statutory authority. tive position subordinate to the clerk; complex variables involved, this clues- Thus, a city cannot give a statutory or make the administrator and clerk- tion is difficult to answer. Reasons for .' city administrator the power to make treasurer coordinate positions, with hiring an administrator often include purchases, enter into contracts, hire neither subordinate to the other. changing conditions, rapid growth, or and fire employees, and so on, because To decide how to set up an adminis- specific problems. City budgets may or these powers involve the exercise of trator position, the council would have may not show increases with an admin- discretion. to consider the city's needs, the duties istrator, but to attribute an increase Under statutory city Plan B on the the administrator would perform, and solely to the presence of the adminis- other hand, statutes give the manager the skills, abilities, and experience of trator would be overly simplistic. certain discretionary powers. The most the incumbents in the clerk-treasurer Depending on the city's goals, an significant powers are to make small and deputy clerk-treasurer positions. Cont. on page 23 - 7 .,„ . . ; 4,.... ... .., Labor relations Cyrus Sm _ S ttt Court decisions (cont.) •t- 1 . t- ) The ordinance also requires solici- , • i tors, within 30 days, to file a financial Discipline and discharge 1 statement showing costs, amount of ,- i contributions, disbursements relating t f to solicitation, and purposes of the fund disbursement. A previous article on discipline which The courts, however, in a growing a The federal district court found the Minnesota Cities printed in May 1973 number of states, indicate that employ- t ordinance unconstitutional, vague, and repeated in May 1977, advised ers should consider that, for practical ) g overbroad, and lacking procedural safe- cities of the requirements arbitrators purposes, all employees belong to a I guards. On appeal, the circuit court imposed in their review of disciplinary protected class. The costs of ignoring disagreed, and upheld the ordinance as actions employers take. that principle can be large indeed. (For facially constitutional. The court based Continual developments in the disci- example, a verdict of $4.8 million the decision on the fact that the infor- pline area clearly indicate that the involving one employee, Newton v. l mation the city sought was objective courts are extending these require- Kaiser Steel.) and of an identifying nature, and that ments to non-union employees. Cities All supervisors should have training [ the ordinance gave city officials no should exercise the same care in terms in both the substantive and procedural power or discretion to review the infor- of discharging employees without union aspects of discipline. Make sure that j r mation for accuracy or fraud. contracts as they do with union the city's disciplinary procedures: While noting that First Amendment employees. • provide notice to employees of disci- rights of free speech and freedom were A number of recent court decisions plinary action; important in the case, the court found involving discharge actions indicate the • give the employee an opportunity to •L. that the ordinance requirements were court's increased willingness to review speak before the city makes a all minimally intrusive, and were a means allegations of employers' unfair dis- decision; and for the city to attempt to protect its charge action. Many employers have • provide for a review of both the citizens from fraud and harassment. assumed that they need to take great substantive issues of discipline and the The circuit court did, however, care in discharge actions only when the procedures to carry out the discipline kt remand the case for a determination as employee has a union contract or the to make sure they are consistent with to whether the ordinance would be Equal Employment Opportunity Act criteria arbitrators demanded.• Iunconstitutionally burdensome as protects the employee. . e applied to the particular appelant in the w f , case. International Society for Krishna Consciousness of Houston, Inc., v. City of Houston, CA 5, Oct. 18, 1982.■ Minnesota •t Did you know (cont.) Cash Register administrator might have an effect on Distributor For i attracting industry, obtaining grants, Data Terminal Systems ANFINSON, x streamlining city procedures, helping Electronic cash registers HENDRICKSON & CO. t plan city service delivery more effi- - fciently, and eliminating unnecessary • • • CERTIFIED PUBLIC ACCOUNTANTS l city positions. In most cases, any and now open 1 k; attempt to say that city costs are lower The Cash Register audit and - t because of the administrator would be management advisory services t°. pure speculation. Store to cities for over 30 years For further information on these questions and others, write to the • • • 1 i. League office and ask for memos: 612-920-8191 Palk National Bank Bldg Optional Plans of Statutory City Gov- ° ernment, Home Rule Charter Commis- 5614 West 36th Street 5353 Wayzata Blvd • Suite 410 il sion Procedures, and The Pros and Minneapolis, Minn. 55416 Minneapolis. MN 55416 612.545.0421 1 ' Cons of the Council Manager Plan.•. i E • MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS • • FROM: CITY ADMINISTRATOR HEDGES DATE: SEPTEMBER 21, 1992 SUBJECT: DRAFT CAPITAL IMPROVEMENT PROGRAM FOR 1993 - 1997, PART I AND PART II The first comprehensive five (5)year capital improvement program was adopted by the City Council in March, 1992. The document is entitled "Capital Improvement Program 1992- 1996 - City of Eagan, Minnesota." Presentation of the information was divided into three (3) parts: I. General Government Facilities II. Vehicles and Equipment III. All Other Projects Generally Described as Public Enterprise and Parks or Projects Funded through Revenue Bonds, Special Assess- ment Bonds or the Park Site Acquisition and Development Fund For the purpose of this meeting, the City Council will be addressing Part I, General • Government Facilities,and Part H, Vehicles and Equipment. The third part is being revised by staff and will be presented by the City Administrator later in the fall. PART I/GENERAL GOVERNMENT FACILITIES The public facilities portion of the CIP contains four (4) revenue sources which include: • Community Investment Fund • Single Family Bond Fund • GO Bond Referendum • Public Utility User Fees There is little change proposed in the 1993 - 1997 General Government Facilities section of the CIP with the exception that the GO Bond Referendum in the amount of$4,000,000 has been omitted as a revenue source for the ice arena facility and outdoor swimming pool project. Since the use of Community Investment and Single Family Bond funds are discretionary by the City Council, there were no assumptions made to change projects funded by these revenue sources. Obviously, the projects are now being considered in 1993/1994. Attached is a copy of a revised Part I for City Council consideration. Several months ago the City Administrator was given direction to study alternatives for the • construction of an addition for law enforcement and municipal center needs such as rental of store front or office space or the possibility of acquiring and remodelling a building as a redevelopment project within the community. A copy of the analysis is attached for Council review. Because of time restrictions and the agenda proposed for Monday, September 28, a larger segment of time may need be set aside at a future work session in October to address the law enforcement/municipal center expansion plans. Fire Chief Southom is continuing to explore sites for Fire Station#6,however,to date there lir has been no recommendation for a land acquisition. More recently, the bid process on the fire pumper truck and new recruits for volunteer firefighters have been higher priorities for Fire Chief Southom and the Fire Department's executive committee. II. VEHICLES AND EQUIPMENT Each year department heads review their existing equipment and through an evaluation by the City's Central Service Division and its chief mechanic provide a list of vehicles and other equipment that should receive consideration for replacement. There are also occasions when new equipment is desirable for performing certain tasks by various departments throughout the City. The equipment list as presented by Department Heads totals approximately $775,500 for 1993. The requests generally match the equipment that was proposed in the five year CIP, more specifically, for 1993 but not in every case. The amount approved as a guideline for vehicle and equipment spending in 1993 in the five year CIP was $760,700, in comparison to the amount which represents the total submitted by department heads for the same calendar year. At the last budget work session the City Council expressed a cost/benefit philosophy that \ essentially stated to do more and do better is not good enough; more importantly, how will it save money and benefit the community? The City Administrator is suggesting that this philosophy be applied to all aspects of the capital improvements budget which may require some additional budget analysis for equipment proposed in 1993. It is suggested that the / City Council review the Part II and if there are any obvious concerns or issues those should .s Ge shared with the City Administrator and department heads. That part of the process will ,se be followed by more department analysis where it is requested. ' cP o� a reminder, the revenue source for vehicles and equipment is the equipment revolving 1 xa X fund which is totally funded by either a general property tax levy or by the sale of e\," 1 equipment certificates which requires a special levy for debt retirement. ,A 5�� summary, the purpose for presenting the capital improvements program Parts I and II is `C� for discussion and direction the City Council may provide on any of the spending b' considerations. As soon as the Part III is completed that information will be shared with the City Council for review and eventual ratification. It is hopeful the revised capital improvement program along with the general fund budget and public enterprise budget will be considered and adopted in December. C-71/4 City Administrato TLH/jeh • /C/ GENERAL GOVERNMENT FACILITIES . PART I CIP Community Single Investment Family Project Title Fund Pond Fund Total 1993 Land Acqu./Fire Station #6 100,000 Ice_Arena Facility & Outdoor Swimming Pool 500,000 $ 850,000 Municipal Center Site Preparation 500,000 Law Enf./Municipal Center Expansion '2.500,000 __ TOTAL 1993 $3,600,000 $ 850,000 $4,450,000 1994 Fire Station #6 & Equipment 1,400,000 TOTAL 1994 $1,400,000 $1,400,000 1995 None 1996 None 1997 None TOTAL $5,000,000 $ 850,000 $5,850,000 1/ VEHICLES AND EQUIPMENT PART II CIP DEPARTMENT REQUESTS • ADMIN: NONE DATA PROCESSING NO OF UNIT TOTAL ITEM UNITS COST COST 9 4,600 41,400 HPVectra QS25 PC, 4MG RAM 30 MG Harddrive, dual 1ports color monitor HP LasarJet III Printer 2 1,700 3,400 Upgrade IBM/ to 386 4mb ram 2 1,500 3,000 Two HP Ethernet Bridges 2 2,500 5,000 Two DSU/CSUs 2 500 1,000 Novell Network Equipment HP 486 Server (disk dup) 1 7,800 7,800 UPS system w/power cond 1 850 850 Tape Backup 1.2 GB 1 1,900 1,900 Three HP 8 port hubs 3 410 1,230 SMC Ethernet Cards 12 190 2,280 Laser Printer direct cards 2 480 960 Novell 20 user license 1 2, 100 2,100 Network Software WordPerfect 10 user 1 1,000 1,000 Lotus 123 5 user 1 1, 100 1,100 DBase III Plus Lan Pack 1 700 700 Network Mail System 1 2,500 2,500 MSDOS 5.0 upgrade 10 85 850 ARCSERVER (Backup) 1 750 750 Lotus Freelance (Server 1 1,000 1,000 DBase Software 3 440 1,320 Aldus Pagemaker 2 520 1,040 Printer Memory Upgrades , 2 500 1,000 Computer Tables 3 150 450 Fire HazMat Software 1 1,500 1,500 Microsoft Windows w/mouse 4 160 640 PD Incident Forms Software 1 2,000 2,000 MDT Software Changes 1 1,000 1,000 WordPerfect Windows - 8 300 2,400 Upgrade Scheduling Software 1 1,000 1,000 Police Gun Control Software 1 2,000 2,000 PC Testing Software/Upgrade 1 1,500 1,500 Lotus 5 user site license 1 1,500 1,500 Microsoft Windows w/mouse 8 160 1,280 III TOTAL $97,450 /c2- DEPARTMENT REQUESTS ,, PAGE TWO Aft FINANCE: NONE LEGAL: NONE COMMUNITY DEVELOPMENT: Expand Parking Lot - Municipal Center $20,000* Expand Parking Lot - Fire Administration 30,000* Underground Sprinkler System 20,000* Carpet for Open Office - Police Department 8,000* Portable Radios, Chargers 4,400 Vehicle - Inspections 14,000 TOTAL $96,400 CABLE: NONE POLICE: 20 Channel Dig. $ 35, 000 MDT Software Package 10,000 Portable Radios 6,000 (2) Full Size Patrol Cars 29,760 Utility Step Van 30,000 (3) Midsize Investigators Squad 44,040 TOTAL $154,800 FIRE: Fire Prevention Trailer $31.000 TOTAL $31,000 *it is suggested that these capital items be deferred and con- esidered with the Law Enforcement/Municipal Center reconstruction. /3 DEPARTMENT REQUESTS PAGE THREE PUB WKS/ENG: NONE STREETS: 2,500 Gal Tank & Spray Ban $ 6,500 Crack Router 6,500 Hot Air Blower 2.800 4 Yd Snow Bucket 6,000 Airless Paint Sprayer & Trailer 7,500 Hydraulic End Gate 2,200 Truck Mounted Distributor-Tackcoat Applicator 40,000 Skidsteer Loader 25,000 1-Ton Truck w/Plow 30,000 4-Door Sedan (Replacement) 13,500 Single Axle Dump w/Plow & Wing 87,000 TOTAL $227,000 CENTRAL SERVICE MAINTENANCE: High Bay Metal Halide Light Fixture $ 4,200 Electronic Leak Detection/Fuel Tanks 15,000 New Telephone System 30,000 Laser Jet Printer 1,500 Kroy Letter Machine 700 Hydraulic Hose Crimping 3,000 TOTAL $ 54,400 DEPARATMENT REQUESTS PAGE POUR 1 PARKS & RECREATION: Cement Mixer $ 3,500 Single Axle Trailer 3,300 Twin Axle Trailer (Groundmaster) 4,200 Electrical Generator 750 Portable Stage/Trailer 4,200 (2) Groundmasters (Replacement) 28,000 Include Snowblower & Brooms (2) Groundmasters (Replacement) 22,000 3/4 Ton Pickup w/Plow 21,000 Skidsteer Loader 25,000 TOTAL $111,950 • TREE CONSERVATION: Truck Box $ 2,500 TOTAL $ 2,500 TOTAL PART II CIP $775,500 • s MEMORANDUM • TO: CITY ADMINISTRATOR HEDGES FROM: ASSISTANT TO THE CITY ADMINISTRATOR HOHENSTEIN DATE: AUGUST 3, 1992 SUBJECT: MUNICIPAL OFFICES SPACE OPTIONS Several months ago, you asked that I study the potential for the City to meet its projected space needs through alternatives to new construction. In approaching this issue, the following range of options was considered. A brief summary of their relative merits are summarized. Municipal Space Options 1. No Build - The Police Department is currently beyond capacity and City offices are tight and inefficient. Currently, the Police Department occupies approximately 12,700 square feet built in 1977. At the time this space was built, it was estimated to meet the City's needs for ten years or to a population of 30,000. At fifteen years and a population of 50,000, the space is no longer adequate for the department's needs. The various administrative functions, Council Chamber and common areas occupy another 20,500 square feet built in • 1983. This space is above capacity also, although not to the level of severity evident on the police level. 2. Expand Current Building - The City may choose to implement a plan similar to that outlined in the BRW Space Needs Study or • alternative building plans could be developed based on the study's findings. This option would permit retention of some current space and expansion of both the Police and General Government spaces. It would likely be the most disruptive option since both areas would need to continue to function during construction. In addition, the relationship of the secure police functions to the proposed expansion plans would create certain difficulties relative to access and suspect and property control. Revised estimates of this alternative place its cost at approximately $3.3 million, assuming $135/s.f. for police and $80/s.f. for general government. Total cost: $3.3 million 3. Relocate One or More Municipal Functions A. Relocate City Offices - Remodel current facility for Police functions at an estimated cost of $500,000. Utilize remainder of CIP allocation for the purchase and improvement of an existing building to be used as an administrative facility or allocate a comparable • operating amount to a long term lease. 6 Alternative location options raise issues of decentralization and relation to service area. Currently most City functions are centralized and co-located to insure ease of access for residents, businesses and those doing business with the City. Total cost: Average annual cost of $421,000 pet year plus remodel of existing building results in a cost of $4.7 million over the ten year planning horizon, with no factor for inflation. B. Relocate Police Department - Remodel the current facility for general government functions at an estimated cost of $350, 000. Designate the remainder of the CIP allocation to the purchase and improvement or lease of an existing facility. This option presents the same issues as above but internal improvements will be much more involved and their costs will be much higher. Fewer facilities would be appropriate to this use as compared with a straight office use. Costs of remodeling for secured space would be prohibitive. If an investment is to be made in secured space, it would be most cost effective to own the property. Total cost: Not calculated but well in excess 3.A. above. • 4. Build New Facility for One or More Municipal Functions On Site A. Build New Police Facility On Site- Build entirely new police facility to meet needs of City at build out. Remodel current police offices for municipal center use. Avoid costs of remodeling police facility while in use. St. Louis Park is building a 26,000 s.f. police facility for $3 .8 million. Oakdale is building a 14,000 s.f. police facility for $2.3 million and remodeling the old police station for City offices. Based upon these examples and discussions with professionals in the field, a new Eagan Police facility at 25,000 to 30,000 square feet would cost approximately $3.4 to 4 million plus an estimated $350,000 to remodel the existing building for expanded administrative uses. • Total cost: $3.75 to 4.35 million B. Build New Municipal Offices On Site - Remodel current facility for Police functions at an estimated cost of $500, 000. Appropriate the remainder of the Municipal Center Expansion CIP allocation toward a new administrative facility. // 7 The potential exists to share certain of the common areas and retain the Council Chambers for their current use resulting in cost savings as well as certain efficiencies from shared space and functions. Even if this were not the case, at $80/s.f. an expansion of 31,000 square feet would cost approximately $2.5 million including immediate site improvements. Total Cost: $3 million 5. Co-Locate Some/All Police Operations With Countv/Apple Valley - While originally an innovative alternative, the option of cooperating with Apple Valley appears no longer to be feasible, since Apple Valley has elected to build near the County Western Service Center. The option of co-locating with the County's juvenile detention center is still remotely feasible, but it raises significant issues of relationship to service area and location within the respective jurisdictions. There is also a diminished likelihood that any functions could be shared such that it would simply be a co-location with all of the same costs and considerations attendant to building anywhere else. Cost estimates are not available for this option due to its speculative nature. 6. Consolidate Additional Functions at Current Site - It would be •possible to incorporate Fire Administration and or ambulance bays in new facility, presenting the potential to reuse the current fire administration space for meeting areas, senior center, transit hub, athletic uses, parks functions and the like or sell it. This option is not free-standing, but would be dependent on approval of one of the other alternatives. ' . -o .le- - e •=op1- ' p= - - .e - - lo. - -r •rk e y. Build/Lease/Purchase Options In terms of the build or lease/build options, the only feasible alternative appears to be construction at . the currently owned municipal center site. Land costs and/or taxes and profit margins for non-public property has the effect of driving costs for any other new construction beyond the construction only costs available at the current site. In addressing the non-build options, the only apparent feasible approaches were to lease or purchase existing space or to lease a newly constructed building on a - site other than the existing Municipal Center Property. • Staff inventoried the available space within the City which could feasibly meet its administrative office needs. An estimate of 31,000 square feet was used, based on the year 2000 projection from the BRW Space Needs Study. While this is less than the ten year planning horizon anticipated by that study, service and employment growth has been at a pace slightly behind that anticipated as well leading to a conclusion that a space addition of this scale would meet city space and service needs for two to four years beyond that date. • Listing agents were contacted and asked if they could accommodate an unidentified office tenant prospect with such a space requirement. The results of that inventory is outlined below. Relatively few existing properties within the City had available space to meet current needs, and even fewer could meet the projected need. Properties are compared on an annualized cost basis below. SUFFICIENT SPACE Dakota County Average Rent: $9.32/ft Expenses: $6. 34/ft Cost/Year: $485, 500 1380 Corporate Center Drive Nick Conzemius - CB Commercial - 924-4666 Space Available: 40,000 s.f. and other buildings in same price range. Rent: $8.00 net (including improvements) Expenses: $4. 00-5. 00 Cost/Year: $387, 500 Note: Tenant of this size could be lead tenant in a new building. Zagandale Business Campus - 1285 Corporate Center Drive Phil Kluesner/Scott Frederikson - Welsh Companies - 944-5810 Space Available: 60, 000 and 26,000 s.f. Rent: $7.50 net Expenses: $2.71 Utilities: $1.50 Cost/Year: $363,000 plus leasehold improvement balance. Note: Includes $20,000 worth of leasehold improvements. Additional costs of improvements could raise cost by $60, 000 per year over five years - more than that over a shorter lease term. • / 9 Unisys Building - 3140 Neil Armstrong Boulevard 411 ! Shidler Group - 835-1500 Space Available: 120, 000 s. f. (40,000/floor, prefer to• lease whole) Rent: $7.00 gross plus amortized improvements @ about $10/ft Expenses: Included Cost/Year: $360, 000 if 40,000 s.f. is available and improvements were amortized over a five year lease. The Waters - Phase II Russ Crawford - Welsh Companies - 829-3410 • Space Available: 53, 000 s.f. Rent: $8.50 (3-5 year lease) includes lease hold improvements. Expenses: $3 .86 Cost/Year: $383,200 Ipwn Centre/Yankee Square Bruce Miller - Federal Land Company - 452-3303 Space Available: Would build to suit up to 60,000 s.f. Rent: $10.50-12.00 Expenses: $6. 00-7. 00 Cost/Year: $550, 300 D & B Software - 3400 Yankee Drive Jerry Fehn - Dunn & Bradstreet - 681-7000 411 Space Available: Up to 180, 000 s.f. - Entire building by January 1, 1993 Rent: Rates are not yet set, but are expected to be competitive with other office properties. Likely to be near the higher end of ,the range due to the quality of the property and its amenities. INSUFFICIENT SPACE Silver Bell Business Center - Silver Bell Road and Highway 13 Michael Houge - Towle - 835-6775 Space Available: 24 , 000 s. f. in non-contiguous spaces. Rent: $7.50 Expenses: $2.20 Cost/Year: $300,700 if 31,000 s.f. were available. glackhawk Plaza - Diffley & I-35E Rob Taylor - 868-5579 - Number not in service. Space Available: Approximately 22,500 s.f. Note: Currently in foreclosure with ITT Commercial (314) 997-1717 gagan Woods - 2600 Eagan Woods Drive Jeffrey LaFavre - Thorpe - 546-5555 Space Available: 20, 000 s.f. on two floors Rent: $12. 00-14 . 50 Expenses: $8.00 Cost/Year: $659, 000 if 31,000 s. f. were available. C O . Country Club Market - Cedarvale Phil Kluesner - Welsh Companies - 829-3409 Space Available: 20, 000 (Warehouse type property) Rent: $3.50/ft net Expenses: $2.55/ft Cost/Year: $121, 000 for entire space (Asking $640,000 for purchase) rirstar Office Building - 3900 Sibley Memorial Highway Neilsen and Associates - 636-2812 Space Available: 13,900 s.f. Cost/Year: For Sale at $650,000 Dakota County Western Service Center - Cliff Road and Rahn Way Space Available: 14, 000 s.f. Yankee Square Offices - 3442-3470 Washington Drive Federal Land, CB Commercial and Bill Brandt Space Available: 8, 000 s: f. or less piscussion In the short term, the potential to lease space may appear to present certain cost savings until it is considered over the planning horizon for this exercise. In addition, as with any option between leasing and purchasing, the principal benefit in the • : lease occurs if there is no long term value to the asset or if flexibility has more value than the cost of the investment. In this analysis, not only is leasing the most expensive option, it leaves the City with no tangible asset after the expenditure of public dollars over the life of the lease. In addition, the significant asset of the municipal center campus, owned free and clear, puts all other options at a competitive disadvantage when considered on the basis of cost. Several factors are important considerations in approaching a decision in this regard. First, there is the perception that use of existing space in community could be cost efficient. The need for private properties to account for property taxes and profit prevents this. It is probable that property owners may give more favorable rates if they knew that the prospect is a municipal client, but costs would increase over time to insure profit and account for inflation. Understanding that any taxable commercial space has to allow for the cost of internal improvements, taxes and a profit margin, it appears that the City can build a new building for less. In circumstances where the location or ultimate size or configuration of new municipal facilities is in doubt, a medium term lease may be appropriate, the long term cost considerations do 0 not justify this alternative. c2/1 There is also a perception that municipal relocation could encourage commercial development and/or redevelopment.. As noted above, relatively few available buildings within the City can accommodate the City's general government functions due to its scale. While a build to suit option would spur development, costs would be at a premium since, by definition, it would not be a distressed property. In addition, relocation would leave the municipal center site underutilized and, were it not to be used for public facilities, land use at current location would become a significant issue since some use would continue at its location. Since parceling out City functions to multiple locations would unnecessarily decentralize them and result in significant inefficiencies and control problems, it would appear that the most cost effective alternatives continue to be one of several options for expansion or new construction at the municipal center site. In order of estimated cost, the options are: 1. Build New Municipal Offices/Remodel Existing Space for Police Department - $3 million. 2. Expand Municipal Offices and Police Department - $3.3 million. 3. Build New Police Department/Remodel Existing Facility for Municipal Offices - $3.75 - 4.35 million. 4. Relocate/Lease New Municipal Offices/Remodel Existing . Space for Police Department - $4.7 million. In terms of dislocation, the least disruptive alternative would be construction of a new police facility since it would not require significant breaches of security or interruptions of service. The • construction or relocation of the municipal offices would be the next least disruptive. Expansion and remodeling of the existing facility would be the most disruptive. 7inancina Options The current Eagan Five Year CIP identifies two line items for the Police/Municipal Center Expansion and site improvements. They are $500,000 from the Community Investment Fund designated for site improvements in 1992 and $2.5 million from the same source for the expansion in 1993. Presuming that a substantial number of the site improvements, such as completion of the loop street and general parking, would serve not only the Municipal Center but any future use for the remainder of the site, a total of $3 million is currently allocated to this purpose. While this alternative remains the primary assumption for funding any improvements, four other alternatives bear consideration. First, the removal of levy limits does permit the City Council to levy an amount for operating expenses but not for capital debt. As a consequence, the City could lease property without a referendum and levy the lease costs even though it would cost more in the long run than construction would. (Qa 1. .. • Second, the City Council could consider increasing the contribution from the Community Investment Fund to this project. This alternative requires significant care and analysis, however, because it places the project in direct competition with other identified priorities. Third, the City Council may wish to submit an additional amount to the voters by referendum to cover amounts over the $3 million allocated. This may be necessary if the direction chosen is construction of a completely new Police Facility. Such a facility is more expensive than the other construction options, but it is also likely to be more palatable to the voters. A final alternative would be the issuance of essential purpose bonds or similar tax exempt bonds through the HRA. Such bonds require no referendum, but would require a clean opinion from a bond counsel as to the essential purpose being served. Other government units utilize such bonds for essential projects such as County jails or for less essential projects which still meet the test and are deemed appropriate by the local unit of government. The City may move forward on the basis of the current allocation if the least expensive construction alternative is preferred or alternative funding means can be considered if one of the other alternatives better meets the City's long term needs. • Conclusions It would appear that the most cost-effective alternative would be the construction of new municipal offices with the remodeling of the current facility for police purposes. Despite its higher cost, the construction of a new police facility ; also presents a significant opportunity because it would not require compromises which might be necessary in remodeling and would result in the least dislocation of public safety and overall City operations. The City may move forward with feasibility analysis of one or more of the alternatives if directed by the City Council. Staff will also review additional, specific aspects of these or other alternatives at the Council 's direction. If you have any questions about this information, please let me know. sist nt to the City Administrator 410 • t • �rt�IL � A'MdNfIF IL MEMO • ofea an _city 9 MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS FROM: CITY ADMINISTRATOR HEDGES DATE: SEPTEMBER 22, 1992 SUBJECT: PROPOSED 1993 GENERAL FUND BUDGET At the September 10, 1992 Special City Council meeting, action was taken by the City Council to certify a proposed 1993 general fund budget and proposed levy to Dakota County. Both the proposed budget and levy have been certified to the County and based on that information, truth in taxation notices will be prepared for a public hearing to be held December 1. At the September 10 meeting there were questions and directions given to the City Administrator in regard to the draft budget. The following is a list of those issues/questions: • Are new positions absolutely necessary - is money • being saved in the long run. -- Can we meet program demands in Parks and Recreation with existing personnel. -- Number of building inspectors. -- Finance Department clerical - quantify benefits. • Mayor/City Council salaries. • Association Dues. • Oak Wilt - Forestry Budget. • Value of lawsuits - Legal Budget. • Fire Department - Station mix of personnel. • Kroy machine versus computer program. • Compliance with ADA. • Dust control - can it be assessed or picked up as a service charge. • Overall the budget appears to be okay - some shifting may be required. ` • PROPOSED 1993 GENERAL FUND BUDGET SEPTEMBER 22, 1992 PAGE TWO Staff is in the process of reviewing the items so additional information can be provided to the City Council. Certain of the items such as the Mayor/City Council salaries require specific direction if changes are to be pursued. At the most recent City Council meeting, City Councilmember Pawlenty discussed the concept of "right sizing" city government. As a result of that discussion, the City Administrator was directed by the City Council to access additional information on right sizing as a methodology for examining City services and the organization (personnel compliment) that provides those services. The City Administrator has contacted Slavin, Nevins and Associates and will comment further on his findings at the special City Council work session. The City Administrator has provided a further refinement to the general fund budget. The net effect of those changes is to reduce the contingency account from $30,000 to $15,700. The changes are due to numerous line item adjustments that were made to capital expenditures, insurance and other accounts being finalized for the final budget ratification. • Although the purpose of the special work session is to discuss the plan B form of • government and a review of the capital improvements program budget revisions for 1993 through 1997, information on the general fund budget is presented so that certain policy considerations such as the "right sizing" study could be further examined. City A inistrator TLH/jeh • cQ