12/08/1980 - City Council Special F
MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: DECEMBER 8, 1980
SUBJECT: SPECIAL CITY COUNCIL MEETING/INFORMATIONAL
SPECIAL CITY COUNCIL MEETING
Enclosed is the agenda for the special City Council meeting
scheduled for tomorrow evening, December 9, 1980, at 7:00 p.m.
in the City Council Chambers.
Enclosed is a memorandum from Paul Hauge, City Attorney, that pro-
vides some legal interpretation for several questions raised at
a meeting with the Finance Committee and representatives of Hewitt
& Associates regarding the proposed annuity plan for the Firemens
Relief Association. After reviewing the memorandum from the City
Attorney' s office, the Firemens Relief Association proposal and
the study performed by Hewitt & Associates , please contact this
office if any additional information is required prior to the
meeting tomorrow evening.
The City Administrator would like a few minutes of time with the
City Council after the special City Council meeting to discuss
the position of City Clerk, regarding the vacancy that is to be
created by Alyce Bolke upon her retirement on December 31 , 1980.
INFORMATIONAL
Enclosed for review is a copy of the letter that was read by John
Klein at the City Council meeting on December 2, 1980.
Enclosed is the official invitation from Dick Stevenson for the
14th Annual Dakota County Development Association Christmas Party
to be held at the Lost Spur Country Club. Dick Stevenson has invi-
ted the Mayor, City Councilmembers , Chief of Police DesLauriers
and the City Administrator to be his guests at the Christmas party;
and if any member of the City Council is unable to attend, please
contact this office so Mr. Stevenson is properly notified.
Enclosed is a copy of the most recent report by Banco Mortgage
Company regarding the current status of the Tax Exempt Housing
Program.
Enclosed in each packet is a copy of the Association of Metropolitan
Municipalities Policy for Legislative Proposals for 1981-82 .
C-
N4VW .a 4,
City A mini.strator
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NOTICE OF
SPECIAL CITY COUNCIL
MEETING
Please be advised that a special meeting of the Eagan City Council
is scheduled for Tuesday, December 9, 1980, at 7 :OO p.m. at the
City Hall .
AGENDA
1. Firemens Relief Pension Fund
2 . Other
PA L H
u HA L
uG & ASSOCIATES, P. A.
ATTORNEYS AT LAW
3908 SIBLEY MEMORIAL HIGHWAY
EAGAN (ST. PAUL), MINNESOTA 55122
PAUL H. HAUGE December 81980 AREA CODE 612
,
BRADLEY SMITH TELEPHONE 454-4224
KEVIN W. EIDE
Eagan City Council
CITY OF EAGAN
3795 Pilot Knob Road
Eagan, MN 55122
RE: Eagan Fire Relief Association
Defined Benefit Plan vs. Defined Contribution Plan
Gentlemen:
The City Council is considering recommending a change in the Relief Associa-
tion benefit structure from a defined benefit plan currently in existence to
a defined contribution plan; the latter of which was authorized by Laws 1979,
Chapter 201. The defined contribution plan or "Share the Pie" approach to
benefits is intended to simplify the complex Relief Association pension re-
quirements. It should also be noted that a revision in the benefits allowed
Eagan firefighters was approved by the Minnesota Legislature under House File
2219 in 1978.
Under the defined contribution plan, each firefighter is given an individual
account which is credited each year with his pro rata share of the fund that
will be available to pay the portion of his eventual pension earned by ser-
vice that year. The four sources of his share consist of 1) fire state aid
received by the Relief Association, 2) City contributions and local taxes or
other revenue sources, 3) assets from the fund attributable to any former
member who left without meeting minimum service requirements for a pension,
and 4) assets of the fund credited to a member who retired without obtaining
a full nonforfeitable interest in the amount credited to his account.
At the current time, the Eagan firefighter is entitled to $160 per month with
an additional sum of $8 per month for each year of active service over 20,
but not to exceed $240 per month. The alternative is a lump sum computed on
the basis of $1,200 per year up to a maximum of $36,000. The Eagan Relief
westing period is from 10-14 years, 79%; 15-19 years, $100%.
Under the "Share the Pie" plan, the advantages include the following:
I. The person is given an individual account which is credited each
year with his pro rata share of the fund.
2. The fund is always funded.
3. Actuarial surveying and recording requirements are simplified greatly.
4. No member needs to worry about manipulation of the benefit structure
since his share is always certain.
5. The Association can then spend more time on increasing the return on
Eagan City Council
December 8, 1980
Page 2.
investments and less on benefit formula changes.
In the event of a change, it is necessary to amend the By-Laws of the Associa-
tion and a copy of the original By-Laws, together with any revision, must be
filed with the Commissioner of Insurance according to M.S.A.424A.02, subd. 10.
You have asked some additional questions as follows:
1. Must the interest rate be 5% or can it be increased? Under M.S.A.
356.215, subd. 4(4) , each actuarial valuation shall include an interest assump-
tion of 5% and thus the reason Hewitt has used that percentage.
2. Can a revision be made to the current By-Laws to permit the use of
the defined contribution plan? The statute appears to provide for an amend-
ment to the By-Laws and the accounts then apparently can be set up for each
of the firefighters on the basis of his pro rata share at that time. However,
according to information I have received, there probably is no Association in
the State that has switched over as yet, although Hopkins had special legisla-
tion to authorize the plan. The League of Cities is quite interested in assist-
ing in a changeover by any city in the State. The Legislative did not give
direction as to how to convert the plan and although some cities have consider-
ed converting such as Excelsior, probably none have done so. If there are no
retirees under the Fund to date, the conversion is simpler.
3. When can the firefighter take the money from the fund? It appears
that the vesting provisions will remain the same as under the former plan and
the benefits would be paid on the same basis.
4. Must vesting take place under either of the plans? The vesting re-
quirements are set up under M.S.A.424A.02 and it also appears that the same
vesting schedule would continue as currently applied to the Eagan Association.
5. Is there an age that is determined for vesting purposes? Vesting
would. continue to be effective under the same schedule as existed prior to
a change to a defined contribution plan, which is the schedule now in exist-
ence for the Eagan Relief Association.
6. Does an annuity plan in the public sector apply to the vesting plan
the same as in the private sector? There are vesting requirements under both
public and private corporate plans, but the timing differs. Under private
plans, the vesting must begin sooner such as after 3 years of employment.
7. Can present assets be allocated to this annuity plan? From the in-
formation I have received, the present assets are simply converted to each
member's individual account. I would recommend, though, that a waiver of
benefit form be submitted to each firefighter so that he accepts his current
portion in writing.
There are other complex issues, but the important step of firefighter accept-
ance can best be met by assuring them of a certain level of giving or provid-
ing for a regular City contribution. Possibly giving the firefighters a lump
sum inducement at the time of the switchover might be helpful.
Very tru you s,
PHH:me au H. Haug
.n _A _
John J. Klein
1495 Lone Oak Road
Eagan, Minnesota 55121
December 2, 1980
Mayor and Councilmen
City of Eagan
3795 Pilot Knob Road
Eagan, Minnesota 55122
Dear City Council:
. On three previous occasions, I have registered an official complaint relative to
violations of the Eagan Zoning Ordinance taking place at 2850 Pilot Knob Road,
Lot 7 and Lot 99 Block 99 Country Home Heights Addition. I am hereby again reg-
istering this complaint. This property is zoned R-19 Residential Single Family,
and is being used for the operation of a business, industrial in nature, which is
an unequivocal violation of the Zoning Ordinance of the City of Eagan.
Evidence of the hereinabove stated violation follows:
1. Photographs of the violation have previously been submitted as evidence.
2. Letter dated December 49 1978 to the City of Eagan signed by Roger D. Olson
and Shirley H. Olson claiming pest of the Zoning Ordinance to be "null and
void", but admitting to having vehicles on Lot 99 Block 9.
3. A leLal opinion, dated May 15, 1979, to the City from the City Attorney, Paul
H. Hauge, that the ordinance is not "null and void" as claimed by the Olsons.
The lezal opinion very clearly states the Eagan Zoning Ordinances No. 6 and
No. 52 have been in effect from the commencement of the Olsons' violations.
It also states that none of the conditional uses under these ordinances would
apply to the present situation. He further states in his opinion, that the
city not only has the right to enforce the ordinance, but that under Minnesota
Statutes Section 462.357, Subd. 69 the city "may not permit as a variance any
use that is not permitted under the ordinance for property in the zone where
the affected Aerson's land is located."
The Conclusion of his legal opinion is, "The Eagan City Zoning Ordinances Num-
bers 6 and 52, do not provide for a conditional use or variance from the esta-
blished use under the ordinance, which would allow the storage of heavy duty
commercial vehicles in an P.-1 zoned area. The provisions of the Minnesota
Statutes would appear to state that the Eagan City Council is without the powe
to giant either a conditional use permit or a use variance for the storage of
trucks under these circumstances."
4• May 15� 1979 Eagan City Council Meeting Packet, (^age 23). "According to
City Planner Runkle, the storage of heavy or commercial equipment on Lot 7,
Block 9 or Lot 9, Block 99 Country Home Heights was in violation of Ordinance
6 and is in violation of Ordinance 52 as interpreted by the Planning Departme
5. Eagan 191-40 Phone Directory:
Page 54 -- Roger D. Olson --- 2850 Pilot Knob Road -- 454-5435
Pare 75 -- wade Construction Co. - 2850 Pilot Knob Road -- 454-6932
Mayor and Councilmen •
City of Eagan
December 29 1980
Page 2
6. Eagan Zoning Ordinance Section 52 05, Subd. 4 (pa:,e 29) and Section 52.05,
Subd. 2CC, Residential Districts (rage 6)9 prohibit the industrial use of
residentially zoned property.
7. Only in Section 52.059 Subd. 152 I-1, Limited Industrial District (page 49)9
do we find the permitted use which applies to the Olsons' use of the property
on which they park and store heavy earth moving equipment on a semi-trailer
flatbed truck, large trucks with various kinds of construction debris, panel
trucks, and other construction equipment.
5
.0
Section5 2Subd. 15, I-1, Limited Industrial District
C.3 Contractor Yards
D.5 Truck Parking and Open Storage (even under this zoning, they do not
comply with the screening provisions of the ordinance
It has been over two years since this ordinance violation was first brought to the
attention of the City Council and the Olsons. The Olsons have had ample time to
comply with the ordinance. The part of their industrial operation that intrudes
on the residential integrity and visibly violates the ordinance can be moved to
their industrial land in less than an hour or two. Their claim to a hardship does
not hold water, for they have admitted to owning over 20 acres of industrially zoned
land in the Sibley Terminal Industrial Park less than two miles away. For some
reason they feel secure in violating Eagan's laws, and that the Council will not
enforce them.
No Mace can I find in the Zoning Ordinance that if a person brings in a few friends,
as the Olsons did at the May 159 1979 Eagan City Council meetingf who do not object
to their violating our laws, that it is ok for them to do so. If that is the way
Eagan is to be governed, then a person who gets ticketed for speeding or breaking
any other laws need only bring in a few friends who do not object'.to`it:in order to
get away with violations.
Zoning laws have been established in Eagan, in part, for the protection of the
residents and businesses. The integrity of the residential ouality of life in Eagan
is dependent upon the unilateral enforcement of those laws. If this city council
does not enforce the residential zoning ordinance, then no residential area in Eagan
has the protection of the ordinance. It is then meaningless! There will be no
assurances to the residents in Timberline, Cedar Grove, Wilderness Run, Woodgate,
Thomas Lake, Highview, Duck- wood Estates, St. Francis Wood, Carlson Lake, and all the
other residential areas that they will have protection under the zoning laws against
loss of their ou-nlity of life and against erosion of their property values.
Madam Mayor and City Council Members, all of you took a solemn oath of office to
uphold the laws of Eagan. You have a report from the City Planner that there is a
violation, the City Attorney's legal opinion that you can not grant -a''variance-or-co
ditional use, and under Minnesota law you must enforce the ordinance, and a register.
comelaint from a citizen for the fourth time in over two years.
If you continue to violate your oath of office and refuse to shoulder your responsi-
bility under the law, it is my firm intention to bring appropriate charges against
you, collectively and individually.
Sincerely, - -
J ohn Y e'
DATE: December 2, 1980
CITY Cr EAGM
$16,940,000--7nount of Program
Dollar Amount of Funds Remaining $ 444,570 **
Low Income $ 303,450
Basic Income $ 141,120
Single Family Funds Remaining $ 105,820 (Closed)
Condo Funds Remaining - $ 261,150
Townhouse Funds Remaining $ 77,600 (Closed)
mobile Hone Funds Remaining $ 444,570
( Inclusive--Not a Separate Account)
Conventional 95% Funds Remaining $ 444,570
(91-95% Conventional Loans)
Graduated Conventional Funds P.miining $ 101,350 (Closed)
Graduated 95% Conventional Funds Remaining $ 101,350 (Closed)
Total Pre-Cornnitinent At*.iount $ 8,401,925 **
Total Reserved (Yet to be Pre-Committed) $ 8,093,505 **
$ 16,940,000 **
DATE: December 2, 1980
CITY OF EAGAN
Statistical Data-- Amount of Program $16,940,000
Total Amount of Pre-Cannitted Loans $ 8,401,925
Percentage of Loans Pre-Committed 50
Low Income Basic Income
Total Number of Loans 103 51
Average Mortgage Amount 51,745 $ 60,238
Average Sale Price 57,297 64,726
Average Appraisal Value 57,639 65,888
Average Adjusted Gross Income 20,219 24,892
Average Gross Income 21,437 26,485
Type of Loan:
Insured Conventional 6 9
Uninsured Conventional b 4
FHA 2b 26
VA 11 11
Graduated Pledge 54 1
Average Loan to Value Ratio:
Insured Conventional 90% 90%
Uninsured Conventional 72%
Number of New Construction Loans 76 32
Number of Existing Loans 27 19
Type of Dwelling:
Single Family 46 35
Townhouse 17 11
Condominium 40 5
Mobile Hanes 0 0
Average Previous Residents 160 270
Number of Renters 76 36
Number of Owners 27 15
Sex:
Male E3 47
Female 40 4
Average Family Size 1.7 2.3
Average Number of Children .3
Marital Status:
Married 39 31
Single 58
Joint 3
Divorced
FUNDING: 3
Dollar Amount of Loans Funded
Nm,ber or Loans 52
6 7
y: 8
BOARD OF DIRECTORS
President
Richard Asleson
Apple Valley association of c0
Vice President metropolitan .�
James Krautkremer municipalities
Brooklyn Park Decembe I
Past President
David Hozza Dear City Official:
St. Paul
Recently, you received a letter, dated November 25, 1980, from the
Mary Anderson Chairman of the Metropolitan Council which was accompanied by a new
Golden Valley draft of the proposed "Metropolitan Council Guidelines for Reviewing
Ronald Backes Local Comprehensive Plan Amendments." A prior draft of those guide-
St. Louis Park lines was the subject of a public hearing last summer, but that draft
was discarded. Since that time, several local government officials
William Barnhart
Minneapolis and the ADI have been actively working with the Metropolitan Council
staff to develop an amendment process that is reasonable.
Bea Blomquist
Eagan Considerable confusion has surrounded this effort and we have heard
some local officials comment that the guidelines are an attempt by
Jerry Dulgar the Metropolitan Council to gain more control over local decision
Anoka making. I would like to assure you that this is not true, in my opinion.
I _
Jan Haugen
Shorewood The impetus to develop REASONABLE plan amendment guidelines came from
local officials and the AM. We believe that reasonable guidelines
Sally Howard
Minneapolis are necessary and have pressed the Metropolitan Council to develop them.
Without them, any amendment to an approved Comprehensive Plan would be
Jack Irving processed the same as an initial plan; a process that could take up to
Crystal 10 months! Obviously, that amount of time is intolerable and a dras-
JamesLacina tically reduced time span is necessary.
Woodbury
I would like to point out that the amendment process, whatever its final
Judy Rowley form, is applicable to a local government only when that local unit
Mounds View makes its own determination that its proposed action may be in conflict
Dennis Schneider with its own Comprehensive Plan. In other words, if a local unit deter-
Fridley mines that its proposed action is not in conflict with its own plan, no
submittal is necessary under the guidelines.
Thomas Spies
Bloomington The proposed guidelines you received from Chairman Weaver have not been
Brad Stanius endorsed by the AMM. With your help, perhaps they can be improved. I
White Bear Lake would like to encourage you and your city to closely review the guide-
lines and then offer your comments to the Council's Physical Development
Robert Thistle Committee at its December 11th meeting. The AMM would appreciate re-
ceiving a copy of your comments also.
Stephen Wellington
St. Paul The AMM's Metropolitan Agencies Committee and Board of Directors will
be reviewing these guidelines closely over the next several weeks and
Executive Director your participation in this process would be appreciated.
Vern Peterson
( over )
300 hanover bldg.480 cedar street,st. paul, minnesota 55101 (612) 222-2861
December 1, 1980
Page 2
This letter is being sent to the Mayors and chief administrative of-
ficials of A.MMI 'member cities as well as to the Mayors of non-member
cities for their information. Please contact either Vern Peterson
(222-2861) or me (432-0750) should you have any questions on these
proceedings.
Sincerely,
ASSOCIATION OF METROPOLITAN MUNICIPALITIES
( Richard G. Asleson
President
RGA/jf
xc: Mr. Charles 'heaver
Ms. 'Marcia Bennett
Mr. James Barton
A:-Q1 Board Members